Finding 1164892 (2024-001)

Management concurs with the findings and auditors’ recommendations to enhance internal controls to ensure compliance with the RD requirements. Furthermore, we would like to note that the questioned costs was paid from project cash for the ultimate benefit of improving the property for the tenants. The substantial rehabilitation tax credit transaction planned by the owner is anticipated to start within the next fiscal year will significantly enhance the living standards and experience for the tenants. The funds used for purposes directly related to the operations of the project will be repaid with the planned closing of the Low-Income Housing tax credit transaction during fiscal year 2025 unless an approval is granted by RD for payment of the questioned costs that will ultimately benefit the tenants of Rotary Commons. Furthermore, internal controls over funds used for purposes unrelated to the Corporation are being strengthened to prevent future noncompliance.