Audit 378592

Finding reference number: #2025-001 Assistance Listing title and number (Federal award identification number and year): Project Based Rental Assistance, Assistance Listing No. 14.195 and Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects No. 14.155 Identification number Property Year of award Questioned costs CO99T881006 REDI V 2017 $2,452 C099T841008 REDI VI 2017 $988 C099T841007 / 101-11323 1221 Pearl 2022 $426 Auditor non-compliance code: N – Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $3,866 Repeat Finding: No Statement of condition #2025-001 (Assistance Listing No. 14.195): The Corporation did not make $3,866 of the total required reserve for replacements deposits during the year ended March 31, 2025. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2024, the reserve for replacements account is underfunded by $3,866. Cause: Management did not make the required monthly reserve for replacements deposits. Recommendation: Management should make all required deposits to the reserve for replacements funds. Management should transfer $3,866 from the operating accounts to the reserve for replacements funds. Completion date: December 31, 2025 Management response: Agreed. Management concurs with the finding and the auditor's recommendation. The Corporation made additional deposits totaling $3,866 to the reserve for replacements funds.

Finding reference number: #2025-002 Assistance Listing title and number (Federal award identification number and year): Project Based Rental Assistance, Assistance Listing No. 14.195 and Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects No. 14.155 Identification number Property Year of award Questioned costs CO99T881007 / 101-11323 1221 Pearl 2017 $1,174 Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $1,174 Repeat Finding: No Statement of condition #2025-002 (Assistance Listing No. 14.195): For the year ended March 31, 2025, 1221 Pearl paid management fees to the Agent in excess of the fees earned resulting in prepaid management fees of $1,174 at March 31, 2025. The HUD approved management certification provides for the payment of management fees subsequent to collections. Effect or potential effect: 1221 Pearl is not in compliance with the terms of the HUD approved management certification and 1221 Pearl's cash position has been reduced by $1,174. Cause: 1221 Pearl inadvertently paid fees in excess of the amount earned. Recommendation: The Agent should repay the prepaid management fee balance. Completion date: December 31, 2025 Management response: Agreed. 1221 Pearl concurs with the finding and agrees with the auditor's recommendation. The Agent transferred $1,174 to 1221 Pearl to refund the overpayment.