Audit 7286

Information on the Universe Population Size-One (1) surplus cash deposit Sample Size-One (1) surplus cash deposit Identification of Repeat Finding Reference Number-N/A Criteria-The regulatory agreement requires surplus cash payments to be deposited in the residual receipts reserve within 90 days of the fiscal year end Statement of Condition-The 2022 required surplus cash deposit of $22,035 was not made with 90 days of the fiscal year end Cause-The reason the deposit was not made is due to management oversight due to a change in management personnel positions Effect or Potential Effect-The requirement to deposit surplus cash within 90 days of the fiscal year was not met Auditor Non-Compliance Code- B-Failure to make required residual receipts deposits Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-The Entity’s policy has been to make surplus cash deposits after the final audit has been issued Going forward the focus will be to work with the auditor and owner to get the audits finalized earlier so adequate time is left for the deposits to be made. In instances where the final is not going to be issued and allow enough time, the deposit will be made based on the reviewed draft FHA Contract number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that management ensures the surplus cash deposit is done timely in the future or request a waiver from HUD Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations-Management agrees with the finding and has made the required surplus cash deposit to the residual receipts account and has established a system in order to prevent any untimely surplus cash deposits going forward Response-Management agrees with the finding and has made the required surplus cash deposit to the residual receipts account and has established a system in order to prevent any untimely surplus cash deposits going forward

Security Deposit Funding Information on the Universe Population Size-Security deposit activity was reviewed throughout the audit period and at year-end Sample Size-Security deposit activity was reviewed throughout the audit period and at year-end Identification of Repeat Finding Reference Number-N/A Criteria-The regulatory agreement requires that security deposits received from residential tenants are deposited separately in a federally insured financial bank account Statement of Condition-Security deposit balance maintained by the Entity in the bank account was below the amount of residential tenant deposits recorded by the Entity Cause-The reason the deposit was not made is due to management oversight due to a change in management personnel positions Effect or Potential Effect-The security deposit fund is underfunded by a total of $84 Auditor Non-Compliance code-M-Security Deposits Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-Auditee agrees with this finding and will make the required deposits timely going forward FHA Contract Number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that the Entity fund the bank account immediately to fund the shortfall and create a better system of controls to ensure no future occurrences Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations- The Entity agrees with the finding and has made an additional deposit to the security deposit account in order to fund the shortfall prior to the issuance of the financial statements. They have established a system in order to ensure no further occurrences Response-Management agrees with the finding and has made a deposit to the security deposit account to fund the shortfall prior to the issuance of the financial statements and have established a system in order to ensure no further occurrences

Failure to use EIV Third Party Income Verification Information on the Universe Population Size-Seventeen (17) EIV reports not run for tenants Sample Size-Seventeen (17) EIV reports not run for tenants Identification of Repeat Finding Reference Number-N/A Criteria-The client files should reflect HUD’s Rules and Regulations set forth in the 4350.3 Rev.1 HUD Multifamily Occupancy Handbook (the “Handbook”), Chapter 9 Enterprise Income Verification (“EIV”). Mandatory EIV applies to all programs covered by this Handbook listed in Chapter 1. Statement of Condition-Tenant files were missing information and did not comply with HUD Rules and Regulations Cause-The reason the EIV requirement was not followed is due to management oversight due to a change in management personnel positions Effect or Potential Effect-Incorrect calculations of tenant and subsidy rents Auditor Non-Compliance Code Z-Other Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-Auditee agrees with this finding. Going forward, the auditee will run the EIV reports for tenants FHA Contract Number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that management run tenant’s EIV reports based on the HUD requirements for the 811 PRAC program during annual certifications Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations-Auditee agrees with this finding. Going forward, the auditee will run the EIV reports for tenants Response-Management agrees with the finding and will run EIV reports during annual certifications

Information on the Universe Population Size-One (1) surplus cash deposit Sample Size-One (1) surplus cash deposit Identification of Repeat Finding Reference Number-N/A Criteria-The regulatory agreement requires surplus cash payments to be deposited in the residual receipts reserve within 90 days of the fiscal year end Statement of Condition-The 2022 required surplus cash deposit of $22,035 was not made with 90 days of the fiscal year end Cause-The reason the deposit was not made is due to management oversight due to a change in management personnel positions Effect or Potential Effect-The requirement to deposit surplus cash within 90 days of the fiscal year was not met Auditor Non-Compliance Code- B-Failure to make required residual receipts deposits Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-The Entity’s policy has been to make surplus cash deposits after the final audit has been issued Going forward the focus will be to work with the auditor and owner to get the audits finalized earlier so adequate time is left for the deposits to be made. In instances where the final is not going to be issued and allow enough time, the deposit will be made based on the reviewed draft FHA Contract number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that management ensures the surplus cash deposit is done timely in the future or request a waiver from HUD Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations-Management agrees with the finding and has made the required surplus cash deposit to the residual receipts account and has established a system in order to prevent any untimely surplus cash deposits going forward Response-Management agrees with the finding and has made the required surplus cash deposit to the residual receipts account and has established a system in order to prevent any untimely surplus cash deposits going forward

Security Deposit Funding Information on the Universe Population Size-Security deposit activity was reviewed throughout the audit period and at year-end Sample Size-Security deposit activity was reviewed throughout the audit period and at year-end Identification of Repeat Finding Reference Number-N/A Criteria-The regulatory agreement requires that security deposits received from residential tenants are deposited separately in a federally insured financial bank account Statement of Condition-Security deposit balance maintained by the Entity in the bank account was below the amount of residential tenant deposits recorded by the Entity Cause-The reason the deposit was not made is due to management oversight due to a change in management personnel positions Effect or Potential Effect-The security deposit fund is underfunded by a total of $84 Auditor Non-Compliance code-M-Security Deposits Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-Auditee agrees with this finding and will make the required deposits timely going forward FHA Contract Number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that the Entity fund the bank account immediately to fund the shortfall and create a better system of controls to ensure no future occurrences Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations- The Entity agrees with the finding and has made an additional deposit to the security deposit account in order to fund the shortfall prior to the issuance of the financial statements. They have established a system in order to ensure no further occurrences Response-Management agrees with the finding and has made a deposit to the security deposit account to fund the shortfall prior to the issuance of the financial statements and have established a system in order to ensure no further occurrences

Failure to use EIV Third Party Income Verification Information on the Universe Population Size-Seventeen (17) EIV reports not run for tenants Sample Size-Seventeen (17) EIV reports not run for tenants Identification of Repeat Finding Reference Number-N/A Criteria-The client files should reflect HUD’s Rules and Regulations set forth in the 4350.3 Rev.1 HUD Multifamily Occupancy Handbook (the “Handbook”), Chapter 9 Enterprise Income Verification (“EIV”). Mandatory EIV applies to all programs covered by this Handbook listed in Chapter 1. Statement of Condition-Tenant files were missing information and did not comply with HUD Rules and Regulations Cause-The reason the EIV requirement was not followed is due to management oversight due to a change in management personnel positions Effect or Potential Effect-Incorrect calculations of tenant and subsidy rents Auditor Non-Compliance Code Z-Other Questioned Costs-There were no known questioned costs Reporting Views of Responsible Officials-Auditee agrees with this finding. Going forward, the auditee will run the EIV reports for tenants FHA Contract Number- 000-HH005/CMI Context-The finding represents an isolated instance of management oversight due to a change in management personnel positions Recommendations-We recommend that management run tenant’s EIV reports based on the HUD requirements for the 811 PRAC program during annual certifications Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations-Auditee agrees with this finding. Going forward, the auditee will run the EIV reports for tenants Response-Management agrees with the finding and will run EIV reports during annual certifications