Audit 53818

Finding Type - Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program - 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects (Section 207/223(f)) Finding Resolution Status - Resolved Information on Universe and Population Size - Population includes current year reserve for replacement deposits. Sample Size Information - N/A - Population includes all current year reserve for replacement deposits into the account. Identification of Repeat Finding and Finding Reference Number - Not a repeat finding Criteria - The Corporation should have made 12 monthly deposits of $3,411 into the reserve for replacements account, as required by the Regulatory Agreement. Statement of Condition - The Corporation failed to make the required reserve for replacements deposits in the current fiscal year. Cause - The Corporation failed to monitor the cash requirements of the reserve for replacement account, as specified by the Regulatory Agreement. Effect or Potential Effect - The replacement reserve account was underfunded in the current fiscal year by $876. Auditor Noncompliance Code - N - Reserve for replacements deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported. Context - During testing of reserve for replacement account, it was noted that the property did not update the deposit amounts to the reserve account based on the approved HUD 9250 as of July 1, 2021. Recommendation - All required deposits should be made in accordance with the Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator - Agree Completion Date-August 16, 2022 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit the underfunded amount of $876 in fiscal year 2023.

Finding Type - Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program - 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects (Section 207/223(f)) Finding Resolution Status - Resolved Information on Universe and Population Size - Population includes prior year surplus cash to be deposited into the residual receipts account. Sample Size Information - N/A - Population includes all prior year surplus cash to be deposited into the residual receipts account. Identification of Repeat Finding and Finding Reference Number - Not a repeat finding. Criteria - The Corporation should deposit surplus cash within the required time frame specified in the FRAG Guide. Statement of Condition - The Corporation deposited prior year surplus cash after the deadline, as stated in the Real Estate Assessment Center?s Summary of Financial Reporting and Auditing Guidance for HUD (FRAG Guide) under Section 2.8. Cause - The Corporation failed to monitor the cash requirements of the residual receipts account, as specified by HUD. Effect or Potential Effect - The residual receipts account was not funded in the time frame specified by HUD. Auditor Noncompliance Code - B - Failure to make required residual receipt deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported. Context - During testing of the residual receipts account, it was noted that the property did not make the prior year surplus cash deposit within 90 days of year end, as required by HUD. Recommendation - Management should ensure surplus cash amounts be deposited within 90 days of year end, as required by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management agrees with the finding and recommendation as reported. Response Indicator - Agree Completion Date - October 4, 2021 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management deposited the surplus cash amount of $43,488 into the residual receipts account on October 4, 2021.

Finding Type - Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program - 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects (Section 207/223(f)) Finding Resolution Status - Resolved Information on Universe and Population Size - Population includes current year reserve for replacement deposits. Sample Size Information - N/A - Population includes all current year reserve for replacement deposits into the account. Identification of Repeat Finding and Finding Reference Number - Not a repeat finding Criteria - The Corporation should have made 12 monthly deposits of $3,411 into the reserve for replacements account, as required by the Regulatory Agreement. Statement of Condition - The Corporation failed to make the required reserve for replacements deposits in the current fiscal year. Cause - The Corporation failed to monitor the cash requirements of the reserve for replacement account, as specified by the Regulatory Agreement. Effect or Potential Effect - The replacement reserve account was underfunded in the current fiscal year by $876. Auditor Noncompliance Code - N - Reserve for replacements deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported. Context - During testing of reserve for replacement account, it was noted that the property did not update the deposit amounts to the reserve account based on the approved HUD 9250 as of July 1, 2021. Recommendation - All required deposits should be made in accordance with the Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator - Agree Completion Date-August 16, 2022 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit the underfunded amount of $876 in fiscal year 2023.

Finding Type - Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program - 14.155 U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects (Section 207/223(f)) Finding Resolution Status - Resolved Information on Universe and Population Size - Population includes prior year surplus cash to be deposited into the residual receipts account. Sample Size Information - N/A - Population includes all prior year surplus cash to be deposited into the residual receipts account. Identification of Repeat Finding and Finding Reference Number - Not a repeat finding. Criteria - The Corporation should deposit surplus cash within the required time frame specified in the FRAG Guide. Statement of Condition - The Corporation deposited prior year surplus cash after the deadline, as stated in the Real Estate Assessment Center?s Summary of Financial Reporting and Auditing Guidance for HUD (FRAG Guide) under Section 2.8. Cause - The Corporation failed to monitor the cash requirements of the residual receipts account, as specified by HUD. Effect or Potential Effect - The residual receipts account was not funded in the time frame specified by HUD. Auditor Noncompliance Code - B - Failure to make required residual receipt deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported. Context - During testing of the residual receipts account, it was noted that the property did not make the prior year surplus cash deposit within 90 days of year end, as required by HUD. Recommendation - Management should ensure surplus cash amounts be deposited within 90 days of year end, as required by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management agrees with the finding and recommendation as reported. Response Indicator - Agree Completion Date - October 4, 2021 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management deposited the surplus cash amount of $43,488 into the residual receipts account on October 4, 2021.