Audit 41507

Finding Reference Number: 2022-001 Type of Finding: FA Finding Resolution Status: Unresolved Information on Universe Population Size: The finding was not a result of a sampling procedure. Sample Size Information: The finding was not a result of a sampling procedure. Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding. Criteria: Approved releases from replacement reserve were loans to be repaid upon receipt of subsidy from HUD. Statement of Condition: Required balance in the replacement reserve is deficient in the amount of $45,897. Cause: Procedures in place to ensure that loan repayments are made were not followed. Effect or Potential Effect: Replacement reserve is deficient. Auditor Non-Compliance Code: N Questioned Costs: There are no questioned costs. The finding does not relate to an undocumented transaction or unreasonable expenditure. Reporting Views of Responsible Officials: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future. Context: Required deposits to the replacement reserve are deficient in the amount of $45,897. Recommendation: Management should repay replacement reserve loans when subsidy is received for which the loan was made. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future. Response Indicator: Agree Completion Date: March 3, 2023 Response: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future.

Finding Reference Number: 2022-002 Type of Finding: FA Finding Resolution Status: Unresolved Information on Universe Population Size: The finding was not a result of a sampling procedure. Sample Size Information: The finding was not a result of a sampling procedure. Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding. Criteria: The regulatory agreement requires that the balance in the security deposit account cannot be less than the security deposit obligation. Statement of Condition: The security deposit account is not fully funded. Cause: Procedures in place to ensure that tenant security deposits are fully funded were not followed. Effect or Potential Effect: The security deposits account does not have sufficient funds to make refunds to all tenants. Auditor Non-Compliance Code: M Questioned Costs: There are no questioned costs. The finding does not relate to an undocumented transaction or unreasonable expenditure. Reporting Views of Responsible Officials: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future. Context: The security deposit account is not fully funded. Recommendation: Management should compare the reconciled cash account to the security deposit listing to ensure that there is enough cash to refund all tenant deposits. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future. Response Indicator: Agree Completion Date: March 3, 2023 Response: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future.

Finding Reference Number: 2022-001 Type of Finding: FA Finding Resolution Status: Unresolved Information on Universe Population Size: The finding was not a result of a sampling procedure. Sample Size Information: The finding was not a result of a sampling procedure. Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding. Criteria: Approved releases from replacement reserve were loans to be repaid upon receipt of subsidy from HUD. Statement of Condition: Required balance in the replacement reserve is deficient in the amount of $45,897. Cause: Procedures in place to ensure that loan repayments are made were not followed. Effect or Potential Effect: Replacement reserve is deficient. Auditor Non-Compliance Code: N Questioned Costs: There are no questioned costs. The finding does not relate to an undocumented transaction or unreasonable expenditure. Reporting Views of Responsible Officials: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future. Context: Required deposits to the replacement reserve are deficient in the amount of $45,897. Recommendation: Management should repay replacement reserve loans when subsidy is received for which the loan was made. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future. Response Indicator: Agree Completion Date: March 3, 2023 Response: Management agrees with the finding. The replacement reserve deficiency will be funded in the amount of $45,897. Management will ensure that the replacement reserve loan repayments are made on a timely basis in the future.

Finding Reference Number: 2022-002 Type of Finding: FA Finding Resolution Status: Unresolved Information on Universe Population Size: The finding was not a result of a sampling procedure. Sample Size Information: The finding was not a result of a sampling procedure. Identification of Repeat Finding and Finding Reference Number: This is not a repeat finding. Criteria: The regulatory agreement requires that the balance in the security deposit account cannot be less than the security deposit obligation. Statement of Condition: The security deposit account is not fully funded. Cause: Procedures in place to ensure that tenant security deposits are fully funded were not followed. Effect or Potential Effect: The security deposits account does not have sufficient funds to make refunds to all tenants. Auditor Non-Compliance Code: M Questioned Costs: There are no questioned costs. The finding does not relate to an undocumented transaction or unreasonable expenditure. Reporting Views of Responsible Officials: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future. Context: The security deposit account is not fully funded. Recommendation: Management should compare the reconciled cash account to the security deposit listing to ensure that there is enough cash to refund all tenant deposits. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future. Response Indicator: Agree Completion Date: March 3, 2023 Response: Management agrees with the finding. The security deposit deficiency will be funded in the amount of $874. Management will ensure that the security deposits are properly funded in the future.