Finding 2025‑1 Criteria HUD program requirements and project regulatory agreements require each property to maintain separate books and records and ensure that only expenses benefiting the property are charged to that property. Statement of condition During our testing, we noted that the Corporation paid two invoices totaling $14,974 on behalf of a related party, even though the expenses related exclusively to the related party. Questioned costs $14,974 Effect or potential effect The Corporation’s financial activity was misstated, and project funds were used for costs that did not benefit the Corporation, resulting in non-compliance with HUD requirements and increasing the risk of improper use of project resources. Cause The error occurred because controls over invoice review and property level cost allocation were insufficient to prevent or detect misallocated expenses. Recommendation: We recommend management implement stronger controls over invoice coding and approval, including property specific reviews, to ensure expenses are charged only to the benefiting property and misallocations are identified and corrected promptly. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding and is committed to strengthening our internal controls. We will review and enhance our invoice coding and approval procedures to ensure expenses are properly allocated to the correct property and to prevent similar issues from occurring in the future. We believe the improvements underway will further support accurate financial reporting and continued compliance with HUD requirements.