Audit 409351

Finding reference number: 2025-001 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EE136-WAH-NP and 2001 Auditor non-compliance code: N – Reserve for Replacement Deposits Finding resolution status: Resolved Universe population size: 12 months of deposits to the reserve for replacements Sample size information: 12 months of deposits to the reserve for replacements Statistically valid sample: Yes Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $27,908 Statement of condition 2025-001: As of December 31, 2025, deposits to the reserve replacement account of $27,908 has not been made. Criteria: Pursuant to item 5(a) of the Regulatory Agreement (form HUD-92466), the Corporation shall make monthly deposits into a separate reserve for replacements account in the amount prescribed by HUD. At December 31, 2025, $27,908 of the required monthly deposits had not been made. Effect: The Corporation is not in compliance with the regulatory agreement and the reserve for replacements is underfunded by $27,908 at December 31, 2025. Cause: The Corporation did not increase the monthly deposit according to the HUD approved 9250 requiring the increase in reserve for replacement deposits Recommendation: Management should make a deposit to the reserve for replacements for $27,908 for the delinquent deposits. In future periods, management should fund the reserve for replacements on an annual basis as required by the regulatory agreement. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. Management made the delinquent deposit on March 11, 2026.

Finding reference number: 2025-002 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EE136-WAH-NP and 2001 Auditor non-compliance code: H – Unauthorized distribution of project assets Finding resolution status: Resolved Universe population size: The universe population size is not applicable to this finding Sample size information: The sample size information is not applicable to this finding Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $7,680 Statement of condition 2025-002: The Corporation paid entity costs of $7,680 from operating cash. Criteria: The Corporation shall not without the written approval of HUD disburse or payout any funds except for operation of the Property as provided in the Regulatory and Capital Advance Agreements. Effect: The Corporation is not in compliance with terms of the Regulatory and Capital Advance Agreements and the Property's operating account is underfunded by $7,680. Cause: Management oversight. Recommendation: The Sponsor should reimburse the Corporation $7,680 or management should request HUD approval for funds to be reimbursed from the reserve for replacement. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. Management requested reimbursement from the reserve for replacement. HUD approval was received on February 25, 2026.