September 23, 2022 To the Department of Housing & Urban Development Re: Corrective Action Plan New Life Homes 6 respectfully submits the following corrective action plan for the year ended June 30, 2022. Name and address of independent public accounting firm: Palmer & Company 701 Osuna NE, Ste 100 Albuquerque, NM 87113 Audit period: June 30, 2022 The findings from the June 30, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS - FEDERAL AWARD PROGRAMS AUDITS FINDING 2022-001 - Special Tests and Provisions - Reserve for Replacement Criteria: Total cash of $3,552 was required to be deposited into the Reserve for Replacement account by June 30, 2022 Statement of Condition: As of June 30, 2022, the Reserve for Replacement only had $1,480 deposited during the year. Cause: Management did not meet the annual funding requirement for the Reserve for Replacement account. Effect or Potential Effect: The project was not in compliance with the Capital Advance and current HUD regulations, the project?s Reserve for Replacement was under-funded for the current year by $2,072. Auditor Non-Compliance Code: B Questioned Cost: $2,072 Reporting Views of Responsible Officials: Management agrees with the Reserve for Replacement calculations and is aware of the current deposit required to the Reserve for Replacement. 1816 E. Mojave Street ? Farmington, NM 87401 ? 505-325-6515 Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Management has not transferred the full obligation of $2,072 to the Reserve for Replacement account as of September 23, 2022 due to insufficient funds. This finding is therefore, unresolved. Action Plan: Management did transfer $1,776 into the Reserve for Replacement account on 9/20/2022. The rest of the funds will be transferred as soon as cash flow allows.