Audit 385295

S3800-011 - Title and ALN Number of Federal Program - 14.157 - Supportive Housing for the Elderly; S3800-015 - Type of Finding - Federal Award Finding; S3800-016 - Finding Resolution Status - In process; S3800-017 - Information on Universal Population Size - N/A; S3800-018 - Sample Size Information - N/A; S3800-019 - Identification of Repeat Finding and Finding Reference Number - N/A; S3800-020 - Criteria - Pursuant to the requirements of the Regulatory Agreement, The Project is required to comply with all HUD regulations and other requirements. The Regulatory Agreement establishes the requirement to fund a replacement reserve in an amount deteremined by HUD; S3800-030 - Statement of Condition - During the year ended September 30 2025, the reserve deposits totaling $36540 were not made as required by the Regulatory Agreement; S3800-032 - Cause - The Project did not fund the replacement reserve account during the year ended September 30 2025; S3800-033 - Effect or Potential Effect - The Project is not in compliance with the terms of the Regulatory Agreement; S3800-035 - Auditor Non-Compliance Code - N. Reserve for Replacement Deposits; S3800-040 - Questioned Costs - $36540; S3800-045 - Reporting Views of Responsible Officials - The monthly deposits were not made following change in management agent; S3800-050 - Context - The Project did not make all the required m onthly deposits; S3800-080 - Recommendation - The delinquent deposits should be funded or a deposit suspension requested from HUD. All Future deposits should be made timely; S3800-090 - Auditor's Summary of the Auditee's Comments on the Findings and Recommendation - Auditor agrees with the auditee's comments on the finding and recommendations; S3800-130 - Response Indicator - Agree; S3800-140 - Completion Date - 09/30/2026; S3800-150 - Response - The Salvation Army submitted a BBRI which requested increased rents and releases from reserves to pay accounts payable as well as approval of loans from the Sponsor to cover accounts payable that could not be paid from reserves. This would enable the reserves to be paid on a go forward basis. In addition, the next step will be a BBRI for the RAD for PRAC conversions.

S2700-006 - Finding Resolution Status - In Process; S2700-007 - Information on Universal Population Size - N/A; S2700-008 - Sample Size Informatino - N/A; S2700-009 - Noncompliance Information - N/A; S2700-010 - Statement of Condition - At September 30 2025, the resident security deposit account did not equal or exceed the deposits collected from residents by $1187; S2700-020 - Criteria - Pursuant to the requirements of the PRAC, the Company is required to comply with all HUD regulations and other requirements. PRAC regulations and State laws require resident security deposits to be funded in a separate account in an amount no less than the amount of security deposits received from residents; S2700-030 - Effect or Potential Effect - The Company is not in compliance with the terms of the PRAC. Failure to fully fund the security deposit account could result in the inability to return security deposits to residents upon lease terminations; S2700-040 - Cause - Management did not transfer sufficient funds to the security deposit account in order to equal or exceed the liability listing; S2700-050 - Recommendation - management should transfer $1187 to the security deposit account and closely monitor the liability listing to ensure that the asset account is adequately funded; S2700-055 - Auditor Non-Compliance Code - M; S2700-065 - Amount of Questioned Costs - $1187; S2700-100 - Reporting Views of Responsible Officials - Agree; S2700-070 - Concur or Do Not Concur with this Finding - Concurs; S2700-075 - Agree or Disagree with auditor recommendations - Agrees; S2700-080 - Completion Date or Proposed Completion Date - 09/30/2026; S2700-090 - Actions Taken or Planned on the Finding - The security deposit discrepancy will be rectified.