Corrective Action Plans

Finding 2025-002: Reporting – HUD 50058 Housing Choice Vouchers View of responsible officials: The City agrees with the finding. Corrective action plan: Management acknowledges that the filings with HUD were not timely. Staff will work to ensure filings take place within 60 days of the effective date. Implementation dates: September 30, 2026 Responsible person: Lola Ogunremi, Chief Financial Officer

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Finding No. 2025-002; Eligibility - Material Weakness PUBLIC HOUSING Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Public Housing Operating Fund Assistance Listing Number: 14.850 Federal Award Identification Number and Year: NC012-00000325D; NC012-00000625D; NC012-00000825D; NC012-00000925D; NC012-00001225D; NC012-00002125D; NC012-00002225D; NC012-00003025D; NC012-00003125D; NC012-00003225D; NC012-00034325D; NC012-00003525D; NC012-00003625D; NC012-00003725D; NC012-00003825D; NC012-00004025D; NC012-00004125D Criteria: In accordance with Uniform Guidance, internal controls are required to be in place to ensure compliance with federal requirements and to maintain complete and accurate participant files as noted in 24 CFR 5.233. Condition and Context: Our testing of 40 participant files noted the following: • No electronic income verification was done within the required time period for 20 of 40 participant selections. Effect or Potential Effect: The Housing Authority of the City of Winston-Salem (“ASPIRE”) is not in compliance with federal requirements regarding Eligibility. Cause: Tenant lease files were not maintained, and tenant eligibility was not determined in accordance with Uniform Guidance. Questioned Costs: Unknown Identification as a Repeat Finding: This finding is not a repeat finding. Recommendation: ASPIRE should maintain complete and accurate participant files to ensure compliance with federal requirements. Views of Responsible Official(s) and Planned Corrective Actions: ASPIRE will improve internal controls to maintain complete and accurate participant files to ensure compliance with federal requirements. CORRECTIVE ACTION TO BE TAKEN: 1. No electronic income verification was done within the required time period for 20 of 40 participant selections. Response: Electronic Income Verification (EIV) reports were not completed within the required timeframe for 20 of the 40 public housing tenant files selected for review. The delays were the result of staff oversight and a lack of adequate monitoring to ensure EIV reviews were completed and documented within HUD-required timeframes. To address this issue, Public Housing staff have been retrained on EIV requirements, including HUD-required review and documentation deadlines. Management has reinforced expectations regarding the timely completion of EIV reviews and implemented additional monitoring procedures to ensure compliance. The Assistant Director has also established a tracking system and compliance calendar to assist staff in monitoring and completing required EIV reviews within the prescribed deadlines. In addition, the Assistant Director of Compliance conducts monthly reviews of a random sample of tenant files to verify compliance with EIV requirements and identify any deficiencies including the 120-day move in EIV reports and requires corrective action. Any findings are addressed through staff coaching, corrective action, and additional training as necessary. These measures are intended to strengthen internal controls, improve compliance monitoring, and ensure EIV reviews are completed in accordance with HUD requirements.

Audit Firm: CohnReznick Period Covered by Audit October 1, 2024 - September 30, 2025 Corrective Action Plan Prepared By: Name: Nancy Thomas Position Chief Financial Officer and Executive Vice President Telephone Number: 336-917-6066 Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2025-001; Eligibility and Reporting - Material Weakness-HCV Voucher Program Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster (Section 8 Housing Choice Vouchers Program; Mainstream Vouchers Program) Assistance Listing Number: 14.871; 14.879 Federal Award Identification Number and Year: NC012VO 2025; NC012EF 2025; NC012DV 2025 Criteria: In accordance with Uniform Guidance, internal controls are required to be in place to ensure compliance with federal requirements and to maintain complete and accurate participant files as noted in CFR 5.233, 982.151, 982.405(d), and 982.516. Condition and Context: Our testing of 40 participant files noted the following: • No support was able to be provided regarding tenant lease files for 4 of 40 participant selections. • No tenant addendum was able to be provided for 1 of 40 participant selections. • No HAP contract was able to be provided for 2 of 40 participant selections. • No electronic income verification was done within the required time period for 13 of 40 participant selections. • Annual recertifications were not completed timely for 3 of 40 participant selections. Effect or Potential Effect: The Housing Authority of the City of Winston-Salem (“ASPIRE”) is not in compliance with federal requirements regarding Eligibility and Reporting. Cause: Tenant lease files were not maintained, and tenant eligibility was not determined in accordance with Uniform Guidance. Questioned Costs: Unknown Identification as a Repeat Finding: Repeat finding 2024-001 Recommendation: ASPIRE should maintain complete and accurate participant files to ensure compliance with federal requirements. Views of Responsible Official(s) and Planned Corrective Actions: ASPIRE will improve internal controls to maintain complete and accurate participant files to ensure compliance with federal requirements. CORRECTIVE ACTION TO BE TAKEN: 1. No support was able to be provided regarding tenant lease files for 4 of 40 participant selections. Response: The agency underwent a relocation of its main office and experienced the loss of five Housing Choice Voucher Specialists, which necessitated the engagement of a contractor to assume responsibility for more than 1,800 participant case files. Due to the transition of these caseloads to the contractor and the limited storage capacity at the agency's new office location, physical participant files were transferred to an off-site storage facility. During the process of boxing, inventorying, and relocating more than 5,000 physical files, four participant files were inadvertently misplaced. Upon discovery, management took immediate action to reconstruct the missing files using available electronic records, third-party documentation, and information maintained within Yardi. To mitigate the risk of future file loss and strengthen document retention practices, the agency implemented enhanced procedures effective January 1, 2025. Staff are now required to electronically upload and attach all supporting documentation to the applicable HUD Form 50058 action within Yardi, in addition to maintaining the required physical file. This dual-record retention process ensures that participant documentation is preserved in both electronic and hard-copy formats, providing redundancy and improving accessibility, accountability, and compliance with record retention requirements. 2. No tenant addendum was able to be provided for 1 of 40 participant selections. Response: The absence of the tenant addendum was the result of an oversight by the Housing Choice Voucher Specialist. To prevent similar occurrences in the future, staff have been reminded of the requirement to maintain complete participant files, including all required HUD forms and addenda. In addition, the agency now requires that tenant addendums and all supporting documentation be maintained in both the participant's electronic file within Yardi and the physical file. This dual-record retention process provides an additional level of quality control and helps ensure that required documentation is readily available for future reviews and audits. 3. No HAP contract was able to be provided for 2 of 40 participant selections. Response: The agency was unable to provide a copy of the HAP Contract for two of the forty participant files selected for review. This was the result of an oversight in the maintenance of the participant files. Upon notification, management conducted a review of the files and implemented corrective measures to strengthen document retention practices. Staff have been retrained on the requirement to maintain complete participant files, including all required Housing Assistance Payment (HAP) Contracts and supporting documentation. In addition, the agency now requires that HAP Contracts be maintained in both the participant's electronic file within Yardi and the physical file. Management has also implemented periodic file reviews to verify that required documentation is present and properly retained. These measures are intended to improve recordkeeping controls and prevent similar occurrences in the future. 4. No electronic income verification was done within the required time period for 13 of 40 participant selections. Response: Electronic Income Verification (EIV) reports were not completed within the required timeframe for 13 of the 40 participant files selected for review. The delays were the result of staff oversight and workload challenges experienced during a period of significant staffing turnover within the Housing Choice Voucher Program. To address this issue, Housing Choice Voucher staff have been retrained on EIV requirements, including required timeframes for obtaining and reviewing EIV reports. Management has reinforced expectations regarding timely completion and documentation of EIV reviews. Additionally, the department auditor conducts monthly reviews of a random sample of participant files to verify compliance with EIV requirements and identify any deficiencies requiring corrective action. These measures are intended to strengthen compliance monitoring and ensure EIV reviews are completed within HUD-required timeframes. 5. Annual recertifications were not completed timely for 3 of 40 participant selections. Response: Annual recertifications were not completed within the required timeframe for three of the forty participant files selected for review. The delays were primarily attributable to staffing shortages and caseload transitions that occurred during the audit period, resulting in increased workloads and processing delays. To address this issue, staff have been retrained on annual recertification requirements and processing timelines. Management has reinforced expectations regarding the timely completion of annual recertifications and implemented additional monitoring procedures to track upcoming and overdue recertifications. The Director has also developed an Annual Recertification Calendar for staff to follow. This calendar outlines each step of the annual recertification process and establishes deadlines to ensure timely completion of all required actions. In addition, the department auditor conducts monthly reviews of a random sample of participant files to verify compliance and identify any deficiencies requiring corrective action. These measures are intended to improve timeliness, strengthen oversight, and ensure annual recertifications are completed in accordance with HUD requirements.

U.S. Department of Housing and Urban Development Housing Voucher Cluster: ALN-14871 Section 8 Housing Choice Vouchers and ALN-14.879 Mainstream Vouchers Noncompliance - Eligibility A. Comments on Findings and Recommendations: We concur with the auditor’s suggestions for maintaining supporting documentation to provide evidence of the Agency’s compliance with requirements applicable to each program funded under Uniform Guidance requirements. B. Actions Taken or Planned: Management implemented changes to ensure that upon move-ins a copy of the executed lease is obtained, and management has included on the check list completed with each move in a reference to obtaining and scanning the new lease. The lease is scanned into the Corporation’s web-based system and retained for as long as the person remains on the program. Management will continue to evaluate their controls with respect to current federal awards and requirements to ensure accurate information captured, reported and maintained. Anticipated completion date: 9/30/26 Responsible party: Michelle Worthington, Section 8 Housing Director

The Authority will adopt a formal written policy requiring at least quarterly review of each open Capital Fund grant, tracking obligation deadlines and percentage obligated by Budget Line Item. Quarterly reports will be presented to the Board of Commissioners. Management will implement written contracting procedures requiring a fully executed contract or purchase order on file before any Capital Fund draw is initiated in eLOCCS. Contracts will be executed no later than 60 days before the obligation end date. Management will conduct an immediate review of all open Capital Fund grants to confirm compliance with obligation and expenditure deadlines and identify any remaining penalty exposure. Results will be reported to the Board. The Authority will adopt a written cash management policy requiring staff to document anticipated disbursements, expected disbursement dates, and a review of current cash balances before each Federal drawdown. Draws will be limited to amounts needed within three business days in accordance with 2 CFR § 200.305(b)(3), regardless of the source of drawdown instructions. I, as the Executive Director will complete documented training on Federal cash management requirements under 2 CFR §§ 200.302 and 200.305. To ensure that the Authority is prepared for the future, the Housing Administrator will also complete documented training on Federal cash management to prepare for current Executive Director’s retirement come May 2027.

The Authority will adopt a formal written policy requiring at least quarterly review of each open Capital Fund grant, tracking obligation deadlines and percentage obligated by Budget Line Item. Quarterly reports will be presented to the Board of Commissioners. Management will implement written contracting procedures requiring a fully executed contract or purchase order on file before any Capital Fund draw is initiated in eLOCCS. Contracts will be executed no later than 60 days before the obligation end date. Management will conduct an immediate review of all open Capital Fund grants to confirm compliance with obligation and expenditure deadlines and identify any remaining penalty exposure. Results will be reported to the Board. The Authority will adopt a written cash management policy requiring staff to document anticipated disbursements, expected disbursement dates, and a review of current cash balances before each Federal drawdown. Draws will be limited to amounts needed within three business days in accordance with 2 CFR § 200.305(b)(3), regardless of the source of drawdown instructions. I, as the Executive Director will complete documented training on Federal cash management requirements under 2 CFR §§ 200.302 and 200.305. To ensure that the Authority is prepared for the future, the Housing Administrator will also complete documented training on Federal cash management to prepare for current Executive Director’s retirement come May 2027.

2025-005 Allowability – Interprogram Activity Public Housing Operating Fund ALN 14.850 Significant Deficiency in Internal Control Other matter required to be reported in accordance with Uniform Guidance Condition: The Authority maintains a material interprogram receivable balance in the asset management program (“AMP”), which is due from other programs of the Authority. This interprogram receivable increased by $373,091 from the September 30, 2024 balance of $433,981, for a total receivable balance of $807,072 as of September 30, 2025. Auditor Recommendations: We recommend that the Authority immediately discontinue using Public Housing Operating Fund resources to fund costs or cash shortfalls of other programs or component units. The Authority should prepare a detailed reconciliation of all interprogram receivable and payable balances by program and implement a repayment plan to restore the Public Housing Operating Fund. We further recommend that the Authority implement written cash management and interprogram accounting procedures to prevent future unauthorized advances. These procedures should include monthly reconciliation of all interprogram balances, supervisory review, and approval of interprogram activity. Management Response: Management acknowledges and accepts responsibility for the deficiencies in internal control over allowability and eligibility and are committed to implementing corrective actions that address missing documentation and lack of verifiable procurement procedures to ensure compliance. Reconcile intercompany balances • CHA is currently working with its fee accountant to complete this process Cease Additional Borrowing • Effective immediately, CHA will discontinue the practice of increasing interprogram borrowings from AMP 1 except where expressly authorized by HUD regulations. Implementing a Repayment Plan • CHA will implement a repayment plan to prioritize repayment from unrestricted or otherwise eligible funding sources in compliance with HUD requirements. Monthly Interprogram Reconciliation • Finance staff and fee accountant will reconcile all interprogram receivable and payable balances monthly. • Any new interprogram activity will be reviewed by the Executive Director and Fee Accountant to ensure allowability before recording. Strengthen Budget Monitoring • Management will perform monthly budget-to-actual reviews for every program to identify operating deficits before they require interprogram borrowing. • Programs experiencing budget shortfalls will implement corrective spending measures or identify alternative eligible funding sources. Improve Cash Flow Management • With the assistance of the fee accountant, CHA will prepare monthly cash flow projections for each program to monitor liquidity and prevent the use of restricted Public Housing Operating Funds for other programs. Implement Internal Control Procedures • Written procedures governing interprogram transactions will be incorporated into the Authority's financial policies. • All interprogram transactions will require documentation supporting the purpose, funding source, and regulatory allowability. Oversight by Fee Accountant • The Authority's Fee Accountant will review interprogram balances during monthly financial statement preparation and report unusual activity or growing receivable balances to management. Board Oversight • The Board of Commissioners will receive monthly financial reports that include interprogram receivable and payable balances to provide ongoing oversight of repayment progress and compliance. Monitoring • The Executive Director and Finance Department will monitor compliance with this corrective action plan monthly and adjust operating budgets as necessary to eliminate future interprogram borrowing. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, Michelle Guidry, Finance Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

2025-004 Eligibility Housing Voucher Cluster Material Weakness in Internal Control Other matter required to be reported in accordance with Uniform Guidance (Repeated in part from prior year, Finding No. 2024-004) Condition: Out of a population of 377 Housing Voucher Cluster tenants, we selected 40 tenants for testing and the following deficiencies were noted: • 6 files had incorrect income calculations, 5 of which impacted the HAP received; • 2 files were missing signatures on their 9886 form; • 2 files were missing 214 declarations for members of the household; • 1 file was missing identification for adults and dependents in the household; • 1 file had the incorrect utility allowance applied; • 1 file was delayed in receiving an annual recertification (13-month recertification); and, • 1 file did not have an annual recertification performed when due, and not able to be provided for testing. Auditor Recommendations: The Authority should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Management Response: Management acknowledges the findings and the material weakness in internal control for eligibility. We accept responsibility for the deficiencies in internal control over eligibility and are committed to implementing corrective actions that address missing documentation and lack of verifiable procurement procedures to ensure compliance. • CHA will perform a 100% review of all remaining Housing Choice Voucher participant files not included in the audit sample to determine whether the deficiencies identified are isolated or systemic. Any additional errors or missing documentation discovered during that review will be corrected promptly, and any financial impact will be evaluated. • Correct utility allowances are being applied. • CHA has begun to review and correct all deficiencies identified in the auditor’s sampled files. This includes obtaining missing documents where possible, completing or correcting forms, verifying income, utility allowances, payment standards, inspections, rent reasonableness, identification documents, and 50058 submissions. Any unsupported payments or eligibility determinations will be recalculated and resolved. • CHA uses a mandatory file documentation checklist for all new admissions, interim recertifications, annual recertifications, moves, and contract rent changes. • No file will be finalized and no HAP action processed until a supervisor or designated reviewer verifies completeness, accuracy, and compliance with HUD requirements. This review will be documented and retained in the file. • With the implementation of new housing software in the late summer of 2026, CHA will implement a software-based tickler system to monitor annual recertification due dates, interim actions, inspection due dates, and expiring documents. The system will provide advanced reminders to staff to ensure recertifications and related actions are completed within required timeframes. In addition, the same system will be used to improve inspection monitoring/tracking. • All Housing Choice Voucher staff involved in eligibility, recertifications, inspections, file maintenance, and payment processing will continue to receive training on HUD eligibility requirements, documentation standards, file retention, rent calculations, utility allowances, payment standards, rent reasonableness, and 50058 reporting. • Management will conduct periodic internal quality control reviews of tenant files throughout the year to test compliance and identify issues before year-end. Results of these reviews will be documented, discussed with staff, and used to provide additional coaching or corrective action where needed. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, and Daporsha Abernathy, HCVP Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

2025-003 Procurement Material Weakness in Internal Control (Repeated in part from prior year, Finding No. 2024-003) Condition: For two of the four contracts tested, the contracts were not solicited in accordance with the Authority’s procurement policy. The contracts did not go through a formal solicitation process, and instead three informal bids were received. Additionally, none of the contracts tested contained quality control documentation to support internal controls. Auditor’s Recommendations: The Authority should strengthen their internal controls over procurement by implementing standardized procurement procedures, including documentation checklists and supervisory review processes to ensure compliance with procurement requirements. The Authority should also provide training to staff involved in the process to ensure they are aware of the requirements and processes. Management Response: Management acknowledges the findings and the material weakness in internal control and material noncompliance in procurement. We accept responsibility for the deficiencies in internal control over procurement and are committed to implementing corrective actions that address missing documentation and lack of verifiable procurement procedures to ensure compliance. • Implement Standardized Procurement Procedures: Update and implement a formal, written procurement policy that clearly outlines the procedures for sealed bids, proposals, and small purchases. • CHA has established and uses a procurement register to manage the lifecycle of acquired goods and services to ensure payment status and contract compliance. • Mandatory Documentation Checklist: Create a procurement file checklist for every contract to ensure all required documents—such as the independent cost estimate, advertisement, bidder list, evaluations, and justification for award—are included in the procurement file. • Supervisory Review Process: A supervisor will review and sign off on the procurement file document before the good or service is purchased. • Staff Training: Provide comprehensive training to all staff involved in procurement to ensure they understand HUD’s procurement standards, including requirements for full and open competition and proper record-keeping. o CHA is scheduled to have a reputable HUD procurement trainer give a one-and-a-half-day procurement training to staff and a half day board procurement training to help improve compliance and staff knowledge. • CHA is in the process of having a professional third-party vendor update its procurement and disposition policies. • Maintain Records: Ensure that all documentation for the full procurement cycle is maintained, including evidence that contractors are not debarred or suspended. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, and Natalie Hawks, Procurement Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

2025-002 Payroll Significant Deficiency in Internal Control (Repeated from prior year, Finding No. 2024-002) Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at the properly approved rates for the periods tested and that internal controls were operating effectively. Auditor’s Recommendations: The Authority should implement internal controls over payroll and human resources to ensure complete and accurate personnel files are maintained on an ongoing basis for all employees. The Authority should review all current employee payroll files to ensure their files are up to date and include documentation supporting their approved pay rates and all subsequent compensation changes. Management Response: Management acknowledges the findings and the significant deficiency in internal control. We accept responsibility for the deficiencies in internal control over payroll reporting and are committed to implementing corrective actions as follows to ensure a robust control environment that ensures payroll transactions are verified against authorized documentation. Action(s) Taken: • Comprehensive File Reviews: • Immediately initiated a full review of all current employee payroll files to confirm completeness. • Acknowledge that some documentation predating the implementation of Paycom may remain incomplete; however, CHA is making every effort to ensure files are as complete as possible. • Documentation Verification: • Began verifying that each employee file contains proper documentation, including: • initial pay rates, • compensation changes, and • job descriptions and offer letters, where applicable. • Implemented a checks-and-balances review process to ensure that: • time is entered accurately, • timesheets are reviewed and signed by both the employee and the employee's supervisor, and • Authority leadership conducts a pre-payroll audit prior to processing. • Internal Controls: • The Authority utilizes a third-party provider, Paycom, for payroll administration and recordkeeping. • Timesheets are submitted, reviewed, and approved electronically within the system. • Pre-payroll audits are performed by the Executive Director prior to final payroll approval. • All payroll records are securely stored, easily searchable, and fully traceable through the electronic system. • Final payroll approval by the Executive Director through an approval memo to the HR Director before payments are allowed to be made. • Ongoing Compliance: • The HR Director will conduct semi-annual internal audits of a sample of employee files to verify and document ongoing compliance. • Staff responsible for inputting and reviewing payroll will receive ongoing compliance training. • A standardized file documentation checklist will be used to support consistent and complete recordkeeping. Name of Responsible Person(s): Jackie Otto, Executive Director, Sherdana Wade, Director of Operations, and Natalie Hawks, HR Director Projected Completion Date: Some of the corrective activities are underway. We anticipate full compliance ahead of the June 30, 2027 audited submission.

Finding ref number: 2025-002 Finding caption: The Housing Authority did not have adequate internal controls for ensuring compliance with Housing Quality Standard inspection requirements. Name, address, and telephone of Housing Authority contact person: Wendy Westby 600 Park Avenue Bremerton, WA 98337 (360) 616-7111 Corrective action the auditee plans to take in response to the finding: BHA agrees with the finding. BHA acknowledges that certain biennial HQS inspections were not completed within required timeframes due to a Yardi notification and scheduling issue, staffing limitations, and reliance on outdated guidance when determining inspection deadlines. BHA has taken and will continue to take corrective action to strengthen internal controls over HQS inspection scheduling, monitoring, and completion. Corrective actions include resolving the primary Yardi scheduling issue, completing additional system refinements and testing, updating procedures for determining biennial inspection due dates, training staff on current HQS inspection requirements and BHA policy, hiring an additional Housing Inspector I, using an additional contract inspector, and using temporary administrative support to assist with inspection scheduling and communication. During fiscal year 2026, BHA will use manual monitoring and quality-control supervisory review to track upcoming, completed, and overdue inspections while the backlog is being cleared. BHA will review inspection reports regularly to monitor progress and ensure inspections are scheduled and completed at least biennially in accordance with federal requirements and BHA policy. Anticipated date to complete the corrective action: BHA expects to complete the inspection backlog and have inspections current by September 30, 2026. BHA expects to return to normal inspection operations effective October 1, 2026.

Finding 2025-004: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 10, 2025 Recommendation: It was recommended the related party reimburse Cheney Care Community. It was also recommended management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure disbursements are not made outside of HUD’s allowable regulations going forward. Action Taken: The related party reimbursed Cheney Care Community. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure HUD requirements are followed going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

Finding 2025-003: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: November 20, 2025 Recommendation: It was recommended the related parties reimburse Cheney Care Community for the expenditures paid on their behalf. In addition, it was recommended management review the disbursements made during the periods of turnover to confirm there were no other unallowable payments made. It was also recommended management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure the controls are consistently performed going forward. Action Taken: The related parties reimbursed Cheney Care Community for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.

Finding 2025-002: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: December 31, 2026 Recommendation: It was recommended Cheney Care Community implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement. Action Taken: On February 8, 2025, the audit was submitted to HUD through REAC. The Executive Director/Administrator and Accountant will review the process and procedures in place for the audit, and implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement going forward.

Finding 2025-001: Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 Anticipated Completion Date: September 30, 2026 Recommendation: It was recommended management of Cheney Care Community review their internal controls over the financial reporting and close processes to determine whether additional controls over the preparation of the final trial balances and related schedules can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Action Taken: Cheney Care Community will review their internal controls over the financial reporting and close processes to determine whether additional controls need to be implemented going forward.

Compliance Requirement: Special Tests and Provisions – HQS Quality Control Inspections Management’s Response Management acknowledges the deficiency identified during the audit and has implemented corrective measures to strengthen internal controls over compliance. The Housing Authority is committed to enhancing its quality control procedures, improving supervisory oversight, and ensuring compliance with HUD requirements. The following actions have been implemented or are in the process of being implemented: • Implement Enhanced Quality Control • Conduct monthly QC reviews of a sample of income determinations. • Document findings and corrective actions in a QC log. • Provide coaching or retraining for staff when errors are identified. • Ongoing Monitoring & Accountability • Supervisors will review income calculations for accuracy before final approval. • QC results will be discussed in monthly performance meetings. • Trends or recurring issues will be addressed through updated procedures or additional training. Responsible Officials: HCV Program Administrator and Executive Director Anticipated Completion Date: September 30, 2026

Finding 2025-005: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: December 31, 2026 Recommendation: It was recommended Sessions Village 202 implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement. Action Taken: On February 8, 2025, the audit was submitted to HUD through REAC. The Executive Director/Administrator and Accountant at the management agent will review the process and procedures in place for the audit, and implement internal controls to ensure that the audited financial statements are filed in accordance with the regulatory agreement going forward.

Finding 2025-003: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: May 28, 2026 Recommendation: It was recommended Sessions Village 202 deposit the underfunded amount into the account. In addition, it was recommended management of Sessions Village 202 review their internal controls over the insurance escrow deposit process with the necessary individuals involved in the process to ensure the implementation of general ledger account coding on cash disbursements is consistently performed going forward. In addition, it was recommended management review their monitoring controls to ensure a secondary review is conducted at least quarterly to ensure the appropriate deposits were made. Action Taken: In May 2026, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward.

Finding 2025-002: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: November 13, 2025 Recommendation: It was recommended Sessions Village 202 deposit the underfunded amount into the account. In addition, it was recommended management of Sessions Village 202 review their internal controls over the reserve for replacements deposit process with the necessary individuals involved in the process to ensure the implementation of general ledger account coding on cash disbursements is consistently performed going forward. In addition, it was recommended management review their monitoring controls to ensure a secondary review is conducted at least quarterly to ensure the appropriate deposits were made. Action Taken: In November 13, 2025, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward.

Finding 2025-001: Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 Anticipated Completion Date: September 30, 2026 Recommendation: It was recommended Sessions Village 202 obtain the missing signed documents if the tenant still resides at the project. In addition, it was recommended Sessions Village 202 review all tenant files to ensure all other records are complete. Also, it was recommended staff involved in the tenant move-in process review the requirements and revise their current process and procedures as needed to ensure the appropriate forms are completed correctly and kept in the tenant files going forward. Additional controls could include completing a checklist of required signed forms obtained during the move-in process, or having a second individual check the file for completeness. Action Taken: In December 2025, the Property Manager obtained the missing signed documents for the tenants listed above. For one instance, the tenant had already moved out and no updated documentation could be obtained. The Property Manager will review the process and procedures in place, and implement controls to ensure the appropriate forms are completed correctly and kept in the tenant files going forward.

Corrective Action Plan – Single Audit Finding Entity Name: W.S. Housing Development Company, Inc. Audit Period: For the year Ended September 30, 2025 Finding Reference Number: 14.157 Federal Program: Supportive Housing for the Elderly (Section 202) 1. Audit Finding Summary Describe the audit finding and the specific noncompliance identified by the auditor. In accordance with 24 CFR 891.400(e), a separate interest-bearing project fund account shall be maintained in a depository or depositories which are members of the Federal Deposit Insurance Corporation or National Credit Union Share Insurance Fund and all tenant payments, charges, income and revenues arising from project operation or ownership shall be deposited to this account. 2. Root Cause Explain the underlying reasons for the finding, such as process gaps, training issues, or lack of controls. Subsequent to the initial rental assistance contract, changes to HUD regulations resulted in the requirement that the project fund account be an interest-bearing account. This change was an oversight by the Company's management. 3. Corrective Actions Action Item: Use an interest-bearing account for project funds Responsible Person: Chief Financial Officer Completion Date: TBD Status: In process 4. Monitoring Plan Describe how the implementation of corrective actions will be monitored and evaluated. Management inquired with the bank and deemed the cost outweighs the benefit due to the fees charged for an interest bearing account exceeding the interest that would be earned. 5. Contact Information Name: Aaron Hejmowski Title: Chief Financial Officer Phone: 716-884-7791 Email: ahejmowski@belmonthousingwny.org

Finding 2025-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Federal Catalog Numbers: 14.871 Noncompliance – N. Special Tests and Provisions – HQS Enforcement Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the Housing Quality Standards (HQS) and the Authority must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussions with management, the Authority did not properly abate (2) housing assistance payments. Context: Of a sample size of twenty-five (25) failed inspections, the Authority did not properly abate two (2) out of twenty-five (25) housing assistance payments. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: $18,690 Finding 2025-002 (continued): Cause: There is a material weakness in internal controls over compliance for the special tests and provisions type of compliance related to HQS enforcement. Controls were not operating effectively to ensure housing assistance payments were properly abated. Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on HQS enforcement that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Programs and has implemented a process to prevent the same issues from occurring. The Authority will also continue to train staff on HQS enforcement and enhance it's internal control procedures that will ensure compliance with federal regulations. Tracy Thomas is considered the responsible person and the corrective action will be completed by September 30, 2026.

Finding 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Assistance Listing Numbers: 14.871 Non Compliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: No Significant deficiency in Internal Control over Compliance for Eligibility Finding 2025-001 (continued) Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 814 units. Of a sample size of twenty-one (21) tenant files, one (1) tenants' HUD-50058 form contained an income miscalculation during the tenant's annual reexamination process. Our sample size is statistically valid. Known Questioned Costs: $13,000 Cause: There is a significant deficiency in internal controls for the Section 8 Housing Choice Vouchers Program over the compliance for the eligibility type of compliance related to the maintenance of tenant files. Controls were not operating effectively to ensure tenant income calculations reported on the HUD-50056 form were properly reviewed for accuracy and compliance with HUD requirements. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility requirements of the program. Errors in tenant income calculations and recertification documentation could result in participants being determined eligible based on inaccurate information, which may lead to noncompliance with HUD eligibility requirements and improper housing assistance payments. Recommendation: We recommend that the Authority strengthen and consistently apply internal control procedures over tenant eligibility determinations and HUD-50058 recertification reviews to help ensure compliance with HUD requirements and the Uniform Guidance. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Program and will train staff on the proper maintenance of tenant files and implement internal control procedures that will ensure compliance with federal regulations. Tracy Thomas is considered the responsible person and the corrective action will be completed by September 30, 2026.

Oversight Agency for Audit, Senior Citizens Housing Development Corporation of Ville Platte respectfully submits the following corrective action plan for the year ended September 30, 2025. Name and address of independent public accounting firm: Bellows Associates, P.A., 5401 N University Drive, Suite 201, Coral Springs, Florida 33067 Audit period: October 1, 2024 through September 30, 2025 The finding from the September 30, 2025 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. SECTION III – FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT FINDING No. 2025-001:Section 202 Supportive Housing for the Elderly, ALN 14.157 Recommendation: The Project should implement procedures for compliance with all HUD regulations and ensure that all supporting documents are appropriately retained. Action Taken: Management has implemented procedures to ensure compliance with HUD requirements related to utility allowances and document retention. The Project will perform and document an annual utility allowance review and analysis in accordance with HUD regulations. Supporting documentation used in the analysis, including utility rate information and calculation worksheets, will be maintained in the Project's compliance files and retained in accordance with HUD record-retention requirements. Management has also established procedures to ensure that all compliance-related documentation is properly organized, reviewed, and retained to support future audits and monitoring reviews. Responsibility for maintaining the utility allowance analysis and related supporting documentation has been assigned to designated management personnel, and periodic reviews will be performed to verify that required records are complete and accessible. These corrective actions are expected to be fully implemented by September 30, 2026. If the Oversight Agency for Audit has questions regarding this plan, please call Irene Phillips at 954-835-9200. Sincerely yours, Irene Phillips CFO

Oversight Agency for Audit, Pine Grove Housing Development Corporation respectfully submits the following corrective action plan for the year ended September 30, 2025. Name and address of independent public accounting firm: Bellows Associates, P.A., 5401 N University Drive, Suite 201, Coral Springs, Florida 33067 Audit period: October 1, 2024 through September 30, 2025 The finding from the September 30, 2025 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. SECTION III – FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAMS AUDIT FINDING NO. 2025-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Recommendation: Management should enhance their procedures to ensure that all payroll disbursements are for work performed at the Project. Action Taken: Payroll procedures have been enhanced to ensure all employee changes are done timely. If the audit Oversight Agency has questions regarding this plan, please call Irene Phillips at 954-835-9200. Sincerely yours, Irene Phillips CFO