Audit 415603

2025-001 – Special Tests and Provisions U.S. Department of Housing and Urban Development CFDA #: 14.157 – Supportive Housing for the Elderly Other Matter/Significant Deficiency Criteria In accordance with HUD regulations, Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. All earnings including interest on the reserve must be added to the reserve. An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition The Organization did not make all of the required monthly deposits into the replacement reserve account. The Organization has delinquent deposits to reserve for replacement account in the amount of $15,655. Cause The Organization does not generate sufficient cash flow to make the required monthly deposits. Questioned Costs None identified. Context The Organization is required to make monthly deposits into the reserve for replacement account based on an amount as required by HUD. Effect or Potential Effect The Organization’s reserve for replacement account is not sufficiently funded. Repeat Finding Yes – see prior year finding 2024-001. Recommendation Management should review the Organization’s budget to ensure that the replacement reserve is funded in accordance with HUD regulations. Auditee’s Response and Planned Corrective Action See Corrective Action Plan.

Finding 2025-002 - Timely Filing of Single Audit Report Type of Finding Significant Deficiency and Compliance – Other Matter Criteria or Specific Requirement According to 2 CFR Section 200.512(a) of the Uniform Guidance, auditees are required to submit the audit report and Data Collection Form (DCF) to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after the reports are received from the auditor or nine months after the end of the audit period. Condition The fiscal year 2025 DCF was not submitted by its due date of March 31, 2026. Cause The audit was not scheduled with sufficient time to allow completion of the audit and filing by the required date. Effect or Potential Effect The timing of the audit resulted in the FAC deadline being missed. Failure to submit the DCF and single audit report timely constitutes noncompliance with federal audit requirements and could impact subsequent federal funding. No questioned costs are reported as this requirement is administrative in nature. Recommendation The Organization should allow sufficient time for the audit process to occur in order to ensure the DCF and single audit report are submitted by the due date. Views of Responsible Officials Management’s corrective action plan is included at the end of this report.