Audit 393062

Finding Reference Number: 2025-002 Assist Listing Title: Supportive Housing for the Elderly Program Assistance Listing Number: 14.157 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Award Identification Number (FAIN): Federal Award Year: 2025 Pass-Through Entity: N/A Criteria: The Corporation must provide insurance coverage for real property and equipment acquired or improved with Federal funds, as required by the Federal award. Condition: For the year ended September 30, 2025, the Corporation did not maintain the required amount of property insurance coverage for certain portions of the year. Cause: The bill was not paid, which resulted in cancellation of the policy. Effect or Potential Effect: Noncompliance with HUD regulations and 2 CFR 200.310, creating risk of inadequate protection for federally funded property. Questioned Costs: $- Perspective Information: This issue was also noted in the prior audit and remains unresolved, indicating a potential systemic condition or that prior corrective actions were not fully effective. Continued monitoring and additional corrective measures are necessary to prevent recurrence. Repeat Finding: Yes Recommendation: Management should ensure that an insurance policy is in place and that coverage amounts meet HUD requirements consistently throughout the year. Views of Responsible Officials: Management agrees with the finding and has reinstated the insurance policy with required coverage amounts. Auditor's Summary of Auditee's Comments: Management reinstated the insurance policy as of December 10, 2024, and implemented controls to prevent future lapses. Response Indicator: Agree Completion Date: 12/10/2024 Response: Management has obtained an insurance policy with sufficient coverage and has increased controls around payment of premiums to ensure there are no future lapses.

Finding Reference Number: 2025-003 Assist Listing Title: Supportive Housing for the Elderly Program Assistance Listing Number: 14.157 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Award Identification Number (FAIN): Federal Award Year: 2025 Pass-Through Entity: N/A Criteria: In accordance with HUD regulations, entities should not make unauthorized distributions of Project funds. Condition: The Project paid expenses for an adjacent project. Cause: The Corporation paid non-project expenses from Project funds due to inadequate review of vendor invoices and insufficient controls over payment authorization. Effect or Potential Effect: The Project is noncompliance with HUD regulatory agreement. Questioned Costs: $6,293 Perspective Information: This issue was also noted in the prior audit as Finding 2024-001, and remains unresolved, indicating a potential systemic condition or that prior corrective actions were not fully effective. Continued monitoring and additional corrective measures are necessary to prevent recurrence. Repeat Finding: Yes Recommendation: Management should review and strengthen procedures surrounding vendor payments to ensure that only allowable project expenses are paid from the funds. Implement additional review controls prior to disbursement. Views of Responsible Officials: Management agrees with the finding and acknowledges that amounts were paid for non-project expenses. Auditor's Summary of Auditee's Comments: Agree with management's assessment. Response Indicator: Agree Completion Date: 9/30/2026 Response: Management is in agreement with the finding, amounts were paid for non-project expenses.

Finding Reference Number: 2025-004 Assist Listing Title: Supportive Housing for the Elderly Program Assistance Listing Number: 14.157 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Award Identification Number (FAIN): Federal Award Year: 2025 Pass-Through Entity: N/A Criteria: The Corporation must provide fidelity bond or employee dishonesty coverage for all principals of the agent, all persons who participate directly or indirectly in the management and maintenance of the property and its assets, accounts and records. Coverage should be a minimum of two months of gross potential income. Condition: Fidelity bond coverage lapsed on September 11, 2025, during the audit period ending September 30, 2025. Coverage was reinstated on November 12, 2025. Cause: Failure to pay premiums timely resulted in lapse of fidelity bond coverage. Effect or Potential Effect: Noncompliance with HUD insurance requirements, exposing the corporation to risk of loss without adequate protection during the lapse period. Questioned Costs: $- Perspective Information: This appears to be an isolated instance; no systemic issue identified. Repeat Finding: No; not a repeat finding. Recommendation: Management should ensure continuous fidelity bond coverage that meets HUD standards throughout the audit period. Policies must be reviewed regularly for compliance. Views of Responsible Officials: Management agrees with the finding and has reinstated coverage as of November 12, 2025. Auditor's Summary of Auditee's Comments: Management confirmed reinstatement of fidelity bond coverage and implementation of monitoring controls to prevent future lapses. Response Indicator: Agree Completion Date: 11/12/2025 Response: Management has obtained fidelity bond coverage and strengthened internal controls over premium payments to ensure continuous compliance.