Finding reference number: 2025-001 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EE034-WAH-NP and 1995 Auditor non-compliance code: J – Unauthorized management fees Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the 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: $11,586 Statement of condition 2025-001: Management fees of $11,586 were prepaid at December 31, 2025. Criteria: In accordance with the HUD approved Management Agent Certification (form HUD-9839-B), the management agent earns a fee based on an established rate of 16.50% of residential and miscellaneous income collected. However, HUD sent communications limiting management fees to $121.24 per unit per month effective March 1, 2024 and $121.40 per unit per month effective March 1, 2025. Effect: The Corporation's cash position at December 31, 2025 has been reduced by $11,586. Cause: The Corporation was paying fees in accordance with Section 1(b) of the HUD approved Management Agent Certification (form HUD-9839-B), which has been in effect since July 1, 2003. After receiving a notification from HUD applying Section 1(e) of the HUD approved Management Agent Certification (form HUD-9839-B), the Corporation requested HUD to clarify its reduction of management fees. While waiting for such clarification from HUD, the Corporation did not reduce management fees pursuant to HUD’s notification. Recommendation: The Corporation should reduce management fees to the limits communicated by HUD going forward and the Agent should repay the amount prepaid at December 31, 2025. Management's response: Management concurs with the finding. On June 17, 2026, HUD clarified its notification regarding Section 1(e) of the HUD approved Management Agent Certification (form HUD-9839-B). At that point, the Agent took prompt corrective action. The identified prepayment was returned to the Corporation in full on July 15, 2026.