Audit 41495

Section 223(f) Loan Program, CFDA 14-157 Finding# 2022-001 Criteria: Pursuant to the Regulatory Agreement, any residual receipts realized from the operation of the Project shall be deposited into a separate residual receipts account within 90 days after year end. Statement of Condition: Residual receipts in the amount of $16,464 as of March 31, 2021, was not deposited into a separate residual receipts account within 90 days after year end. Cause: The Company had cash flow shortfalls after paying other operating expenses. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required residual receipts deposits. Context: This was not a sampling audit procedure. Amount of Questioned Costs $-0- Recommendation: Make the deposit to the residual receipts account as required and ensure that all future residual receipts amounts are deposited within 90 days after year end. Auditor?s Non-Compliance Code: B - Owners must deposit residual receipts into a separate account within 90 days after year end. Reporting Views of Responsible Officials: The Company could not make the residual receipt deposit due to cash shortfalls. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator Accepted Completion Date Open Response: Management has been waiting to receive prior months delinquent PRAC voucher requests and has been unable to make the residual receipts deposit. Contact Person David Cooper

Section 223(f) Loan Program, CFDA 14-157 Finding# 2022-002 Criteria: The Regulatory Agreement requires the Owner to properly maintain the Project. Statement of Condition: The Project received a REAC Physical Inspection score of less than 60 on July 28, 2021. Cause: The Company did not adequately maintain the Property. Effect: The Company was not in compliance with the terms of the Regulatory Agreement. Context: This was not a sampling audit procedures. Auditor?s Non-Compliance Code: I - Open Physical Inspection Amount of Questioned Costs $-0- Recommendation: The management agent should ensure the Project is properly maintain. Reporting View of Responsible Officials: Management did not anticipate or expect that the property would receive a failing REAC score. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator Accepted Completion Date Unresolved Response: Management is in the process of addressing the various items noted in the REAC inspection report. Contact Person David Cooper

Section 223(f) Loan Program, CFDA 14-157 Finding# 2022-001 Criteria: Pursuant to the Regulatory Agreement, any residual receipts realized from the operation of the Project shall be deposited into a separate residual receipts account within 90 days after year end. Statement of Condition: Residual receipts in the amount of $16,464 as of March 31, 2021, was not deposited into a separate residual receipts account within 90 days after year end. Cause: The Company had cash flow shortfalls after paying other operating expenses. Effect: The Company was not in compliance with the Regulatory Agreement relative to the required residual receipts deposits. Context: This was not a sampling audit procedure. Amount of Questioned Costs $-0- Recommendation: Make the deposit to the residual receipts account as required and ensure that all future residual receipts amounts are deposited within 90 days after year end. Auditor?s Non-Compliance Code: B - Owners must deposit residual receipts into a separate account within 90 days after year end. Reporting Views of Responsible Officials: The Company could not make the residual receipt deposit due to cash shortfalls. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator Accepted Completion Date Open Response: Management has been waiting to receive prior months delinquent PRAC voucher requests and has been unable to make the residual receipts deposit. Contact Person David Cooper

Section 223(f) Loan Program, CFDA 14-157 Finding# 2022-002 Criteria: The Regulatory Agreement requires the Owner to properly maintain the Project. Statement of Condition: The Project received a REAC Physical Inspection score of less than 60 on July 28, 2021. Cause: The Company did not adequately maintain the Property. Effect: The Company was not in compliance with the terms of the Regulatory Agreement. Context: This was not a sampling audit procedures. Auditor?s Non-Compliance Code: I - Open Physical Inspection Amount of Questioned Costs $-0- Recommendation: The management agent should ensure the Project is properly maintain. Reporting View of Responsible Officials: Management did not anticipate or expect that the property would receive a failing REAC score. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Auditee agreed with auditor?s findings. Response Indicator Accepted Completion Date Unresolved Response: Management is in the process of addressing the various items noted in the REAC inspection report. Contact Person David Cooper