Audit 391894

S3800-010 Finding Reference Number 2024-001 S3800-011 Title and CFDA Number of Federal Program Supportive Housing for the Elderly - Section 202 Capital Advance 14.157 S3800-015 Type of Finding Federal Award Finding S3800-016 Finding Resolution Status In process S3800-017 Information on Universe 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 The Regulatory Agreement sets forth specific requirements on the establishment and maintenance of various funds (i.e. security deposits, residual receipts, replacement reserve). Security deposit accounts must be funded at least equal to the related liability. S3800-030 Statement of Condition During our audit of the year ended July 31, 2024, we noted that although separate accounts for the replacement reserve and security deposits were established, residual receipts continue to be maintained in the Project’s operating bank account rather than in a separate designated account. In addition, the tenant security deposit account was underfunded, with the liability balance exceeding the restricted cash available at yearend. S3800-032 Cause Management did not establish a separate residual receipts account and has not ensured that the tenant security deposit account is fully funded. S3800-033 Effect or Potential Effect Ida B. Wells’ is not in compliance with the Regulatory Agreement. S3800-035 Auditor Non-Compliance Code N – Special Tests and Provisions S3800-040 Questioned Costs $0 S3800-045 Reporting Views of Responsible Officials Management agrees with this finding. S3800-037 FHA/Contract number 017EE058 S3800-038 Questioned Costs $0 S3800-050 Context For the year ended July 31, 2023, the Project transitioned to a new management agent. At that time, the security deposits, residual receipts, and replacement reserve funds were transferred into the new agent’s operating account, and separate accounts were not set up timely. For the year ended July 31, 2024, management established a separate account for the replacement reserve; however, residual receipts continue to be held in the operating account and the security deposit account remains underfunded. S3800-080 Recommendation- We recommend management establish and maintain a separate bank account for residual receipts in accordance with HUD requirements and ensure that the tenant security deposit account is fully funded to cover the liability at all times. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management will set up a separate bank account for the residual receipts and make the required deposit to the security deposits bank account. S3800-130 Response Indicator Agree S3800-140 Completion Date December 15, 2024 S3800-150 Response- Management has established a separate bank account for the residual receipts, and the required deposit to the security deposits bank account has been made.

S3800-010 Finding Reference Number 2024-002 S3800-011 Title and CFDA Number of Federal Program Supportive Housing for the Elderly - Section 202 Capital Advance 14.157 S3800-015 Type of Finding Federal Award Finding S3800-016 Finding Resolution Status In process S3800-017 Information on Universe 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 The audit must be completed, and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse nine months after their fiscal period end. The due date for the submission was April 30, 2025. S3800-030 Statement of Condition The audit and reporting package were not submitted by the due date April 30, 2025. Finding is a significant deficiency. S3800-032 Cause Ida B. Wells experienced a change in the management agent and accounting processes and internal controls over financial reporting were not functioning timely to support generating complete and accurate financial information. S3800-033 Effect or Potential Effect The audit and federal reporting package were not filed on time. S3800-035 Auditor Non-Compliance Code L – Reporting S3800-040 Questioned Costs $0 S3800-045 Reporting Views of Responsible Officials Management agrees with this finding. S3800-037 FHA/Contract number 017EE058 S3800-038 Questioned Costs $0 S3800-050 Context The financial statements and federal single audit were not able to be completed by the due date. S3800-080 Recommendation We recommend that all necessary efforts be taken to ensure timely submission of the audit and financial reporting package. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management will ensure that there is an adequate level of appropriately trained and experienced personnel and that internal controls over financial reporting will function properly. S3800-130 Response Indicator Agree S3800-140 Completion Date N/A S3800-150 Response Management has maintained appropriately trained and experienced personnel to ensure the financial close process has been completed accurately and timely.