Audit 401017

(2024-001) Reserve for Replacements Condition - The reserve for replacements account is underfunded by $24,744 at June 30, 2024. Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157-Supportive Housing for the Elderly, the Company is required to deposit $1,031 in a reserve for replacements account on a monthly basis. Effect - The Company was not in compliance with the above HUD regulations. Cause - The reserve for replacements account was not adequately funded during the year. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding - This is a repeat of finding 2023-002 from the prior year. Recommendation - We recommend that the delinquent deposits totaling $24,744 for the year ended June 30, 2024 be deposited into the reserve for replacements account as soon as possible. Management's Reply - (1) Finding 2024-001 (a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation, please see below for action taken. (b) Action taken: Management will deposit the underfunded amounts when a cash flow surplus is realized. Management is actively working with HUD to collect retroactive subsidy payments.

(2024-002) Residual Receipts Condition - The residual receipts account was not maintained by management and is underfunded by $29,285 at June 30, 2024. Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 -Supportive Housing for the Elderly, non-profit owners and owners of limited distribution projects shall establish a residual receipts account and make required deposits into the account within 90 days after the close of the fiscal year. Effect - The Company was not in compliance with the above HUD regulations. Cause - The residual receipts account was surplus cash not opened resulting in the balance of $29,285 for the year ended June 30, 2022 not being deposited into the account. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding - This is a repeat of finding 2023-003 from the prior year. Recommendation - We recommend that a residual receipts account be opened and the delinquent deposit totaling $29,285 at June 30, 2024 be deposited into the residual receipts account as soon as possible. Management’s Reply -(2) Finding 2024-002 (a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation, please see below for action taken. (b) Action taken: Management will deposit the underfunded amounts when a cash flow surplus is realized. Management is actively working with HUD to collect retroactive subsidy payments