Audit 41455

Finding reference number: #2022-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 113-EE072 and 2011) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Pending Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size 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: $73,025 Statement of condition #2022-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended March 31, 2022. Criteria: Pursuant to Section 5(a) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $73,025 at March 31, 2022. Cause: The Corporation experienced a cash flow shortage at year end and did not make the required replacement reserve deposits for the months of November 2021 - March 2022. Recommendation: Management should make an additional deposit in future years until all required deposits have been made or request approval from HUD to suspend the required reserve for replacement deposits. Completion date: N/A Management's response: Agree. Management has requested suspension of required reserve for replacement deposits. As of the report date, HUD has not approved this request.

Finding reference number: #2022-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 113-EE072 and 2011) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Pending Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size 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: $73,025 Statement of condition #2022-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended March 31, 2022. Criteria: Pursuant to Section 5(a) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $73,025 at March 31, 2022. Cause: The Corporation experienced a cash flow shortage at year end and did not make the required replacement reserve deposits for the months of November 2021 - March 2022. Recommendation: Management should make an additional deposit in future years until all required deposits have been made or request approval from HUD to suspend the required reserve for replacement deposits. Completion date: N/A Management's response: Agree. Management has requested suspension of required reserve for replacement deposits. As of the report date, HUD has not approved this request.

Finding reference number: #2022-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 113-EE072 and 2011) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Pending Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size 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: $73,025 Statement of condition #2022-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended March 31, 2022. Criteria: Pursuant to Section 5(a) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $73,025 at March 31, 2022. Cause: The Corporation experienced a cash flow shortage at year end and did not make the required replacement reserve deposits for the months of November 2021 - March 2022. Recommendation: Management should make an additional deposit in future years until all required deposits have been made or request approval from HUD to suspend the required reserve for replacement deposits. Completion date: N/A Management's response: Agree. Management has requested suspension of required reserve for replacement deposits. As of the report date, HUD has not approved this request.

Finding reference number: #2022-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 113-EE072 and 2011) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Pending Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size 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: $73,025 Statement of condition #2022-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended March 31, 2022. Criteria: Pursuant to Section 5(a) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $73,025 at March 31, 2022. Cause: The Corporation experienced a cash flow shortage at year end and did not make the required replacement reserve deposits for the months of November 2021 - March 2022. Recommendation: Management should make an additional deposit in future years until all required deposits have been made or request approval from HUD to suspend the required reserve for replacement deposits. Completion date: N/A Management's response: Agree. Management has requested suspension of required reserve for replacement deposits. As of the report date, HUD has not approved this request.