Audit 415041

Statement of Condition: The financial statements for the year ended May 31, 2025 were not filed electronically with HUD’s Real Estate Assessment Center within 90 days of fiscal year end. Criteria: HUD requires that the financial statements be electronically submitted to HUD’s Real Estate Assessment Center within 90 days of fiscal year- end. Questioned Cost: None. Cause: During a portion of the year ended May 31, 2025, the books were not kept complete in a condition that easily permitted an audit and meet the HUD annual reporting deadlines. Effect: Management is not in compliance with the requirement to timely submit the financial statements to HUD’s Real Estate Assessment Center. Recommendations: Management should institute procedures to ensure that the financial statements are filed with HUD’s Real Estate Assessment Center within 90 days of year-end. Auditor Noncompliance Code: Z – Other View of Responsible Officials: Management agrees with the finding. Management will establish procedures and monitor compliance with those procedures to ensure that the financial statements are filed electronically with HUD’s Real Estate Assessment Center within 90 days of fiscal year end.

Statement of Condition: During the year ended May 31, 2026, the Project did not make all of the required monthly deposits to the replacement reserve, resulting in delinquent deposits of $34,321 as of May 31, 2026. Criteria: HUD requires monthly deposits to the replacement reserve in the approved amount. Questioned Cost: None. Cause: An administrative oversight led to management not making the required replacement reserve deposits. Effect: As a result of the underfunded replacement reserve, the property may not have sufficient funds available to cover the cost of major capital replacements as they become necessary, which could jeopardize the physical condition of the property and its ability to continue providing safe and decent housing. Continued underfunding increases the risk of deferred maintenance, unbudgeted special assessments, or the need for additional financing, and represents noncompliance, which could result in findings by HUD, required corrective action, or in severe cases, administrative sanctions. Recommendations: Management should make a deposit to the replacement reserve in the amount of $34,321, as well as any additional missed deposits after May 31, 2026, and institute procedures that ensure replacement reserve deposits will not be missed. Auditor Noncompliance Code: N – Reserve for replacements depositsView of Responsible Officials: Management agrees with the finding. Management will review internal control policies to ensure monthly replacement reserve deposits are made in accordance with HUD requirements.

Statement of Condition: The audited financial statements for the Corporation were not filed electronically to the Federal Audit Clearinghouse (FAC) for the year ended May 31, 2025. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that non-federal entities that expend $1,000,000 or more in federal funds must submit a single audit to the FAC within 30 days of the audit report date or within 9 months of the end of the audit period, whichever is earlier. Questioned Cost: None. Cause: Management did not have controls in place to timely file its financial statements. Effect: Management was not in compliance with the requirement to timely submit the single audit report to FAC. Recommendations: Management should institute procedures to ensure that the financial statements are electronically filed with the FAC within 30 days of the audit report date or within 9 months of the end of the audit period, whichever is earlier.Auditor Noncompliance Code: Z – Other View of Responsible Officials: Management agrees with the finding. Management will establish procedures and monitor compliance with those procedures to ensure that the audited financial statements, schedule of expenditures of federal awards, and other required information is filed with the Federal Audit Clearinghouse by required due dates.