Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly (Assistance Listing No. 14.157, 2025) Auditor non-compliance code: N – Reserve for Replacements Deposits Finding resolution status: Resolved Universe population size: 12 months of deposits to the reserve for replacement Sample size information: 12 months of deposits to the reserve for replacement Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $19,826 Statement of condition #2025-001: During the year ended December 31, 2025, the Corporation did not make the HUD required total amount of deposits to the reserve for replacements. Criteria: Pursuant to the HUD regulations, the Corporation shall make monthly deposits into a separate reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. The reserve for replacements account is underfunded by $19,826 at December 31, 2025. Cause: The Corporation received notice of a large increase and catch up deposits were delayed while confirming with HUD the new deposit amount was accurate and appropriate.. Recommendation: Management should transfer $19,826 from the operating account to the reserve for replacements account. Management's response: Management concurs with the finding and recommendation. On February 3, 2026, management transferred $20,258 from the operating account to the reserve for replacements.