Audit 376453

Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Bishop Harrison Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $96,667 for the year ended March 31, 2024 was not made within the 60 day timeline. Context: We reviewed the residual receipts deposits during the year. Cause: Bishop Harrison Apartments’ surplus cash was not performed timely. Effect: Bishop Harrison Apartments was not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Bishop Harrison Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Bishop Harrison Apartments agrees with the finding and the required payment was made on June 27, 2024.

Finding 2025‑002: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 and entity-wide Criteria: New York Not‑for‑Profit Corporation Law (N‑PCL) §519 requires non-profit organizations to have at least an annual meeting of the board of directors. Condition: Bishop Harrison Apartments did not hold an annual meeting of the board of directors during the fiscal year ended March 31, 2025. Context: This issue was entity‑wide and not limited to a single federal program. Cause: The Board did not prioritize or schedule the annual meeting due to competing operational priorities, and there were insufficient procedures to ensure compliance with statutory governance requirements (e.g., a corporate calendar with compliance checkpoints). Effect: Weakening of the control environment and governance oversight, increases the risk that noncompliance, errors, or irregularities may go undetected. Noncompliance with state corporate law requirements regarding annual meetings and the annual report of directors. Potential reputational and regulatory risk, including scrutiny from state regulators (e.g., NY Charities Bureau) and possible challenges in demonstrating effective oversight to federal pass‑through entities or awarding agencies. Recommendation: Schedule and hold an annual meeting of the board of directors and document minutes and the annual report of directors. Additionally, Bishop Harrison Apartments should adopt a board governance calendar with statutory checkpoints (annual meeting, director elections, policy reviews) and assign responsibility for compliance tracking. Views of management and planned corrective action: The Board agrees with the finding. The board secretary will convene an annual meeting as soon as possible, minutes will be recorded and the annual report of directors prepared and filed with the corporate records in accordance with N‑PCL §519. A governance calendar will be implemented and monitored monthly.