Audit 413861

Finding No. 2024-001 – Single Audit Report Filing – Other Matter Criteria: The Project must file a federal single audit the earlier of thirty calendar days after receiving the auditors’ report or nine months after the end of the audit period. Condition: The Project did not file its federal single audit for the years ended December 31, 2024 and 2023, by the due dates of September 30, 2025 and 2024, respectively. Effect: The Project is not in compliance with the reporting requirement. Cause: Significant delays in the audit process resulting in the late filing. Recommendation: The Project should implement a process to ensure the single audit is filed timely. Reporting Views of Responsible Officials: Management agrees with the finding, see the Corrective Action Plan.

Finding No. 2024-002 – Board Oversight – Other Matter Criteria: Board of directors should convene on a regular basis to fulfill their fiduciary duties and provide governance to the Project. Board of directors should be active and oversee responsibilities of the Project. Condition: During our audit testing, we noted that the board of directors were not holding board meetings regularly. Effect: Board of directors may not be providing sufficient oversight of the management company and the Project’s financial transactions. Cause: Board of directors are not meeting on a regular basis. Recommendation: We recommend that the board of directors meet on a regular basis to fulfill their fiduciary duties. Reporting Views of Responsible Officials: Management agrees with the finding, see the Corrective Action Plan.

Finding No. 2024-003 – Identity-of-Interest Form RD 3560-31 – Other Matter Criteria: United States Department of Agriculture Rural Development (“USDA-RD”) regulations require borrowers participating in the Rural Rental Housing (Section 515) program to disclose any identity-of-interest relationships with suppliers, contractors, management agents, or other parties associated with the Project through filing Form RD 3560-31, Identity-of-Interest Disclosure Certificate. Condition: During our audit, we noted that the Project did not file the required Identity‑of‑Interest Disclosure Certificate with USDA‑RD. Effect: The Project is not in compliance with the reporting requirement. Cause: The Project does not have adequate controls to ensure all required USDA‑RD compliance forms are completed and submitted in a timely manner. Recommendation: The Project should implement a process to ensure the timely filing of all required USDA-RD forms and other filings. We also recommend the Project submit Form RD 3560-31 promptly to USDA-RD. Reporting Views of Responsible Officials: Management agrees with the finding, see the Corrective Action Plan.

Finding No. 2024-004 – Reserve Account Funding – Other Matter Criteria: The Project’s reserve account must be fully funded in accordance with the budget as approved by USDARD and maintained in a separate bank account. Condition: During our audit testing, we noted that while the Project maintained a separate bank account for reserve funds, it was not funded in accordance with the budget. Effect: Reserve bank account is underfunded. Cause: Budgeted transfers were not made before yearend to ensure the account is fully funded. Recommendation: The Project should implement controls to ensure that the reserve bank account is fully funded. Reporting Views of Responsible Officials: Management agrees with the finding, see the Corrective Action Plan.