Sunray Communities, Inc.’s capital advance balance outstanding as of December 31, 2025, was $2,352,900 and is included in the federal expenditures presented in the schedule.
Finding 2025-001: Significant Deficiency Finding #2025-001: Supportive Housing for the Elderly, Assistance Listing 14.157 Condition: The Company expensed management fees during 2025 in excess of the maximum amount of management fees approved by HUD. Criteria: The Company’s property management fees must follow the HUD approved management agreement. Effect: The Company expensed management fees in excess of approved HUD Form 9839. Questioned Cost: $4,578 Cause: Oversight Repeat Finding: Yes Recommendation: The Company should monitor property management fees to ensure the management fees follow the terms set forth in the property management agreement. Auditor’s Comment: An adjusting journal entry was made to reduce property management fees to be in compliance with HUD and an accounts receivable - other from the property management company was created for the overpayment.