Contact Person: William Bane Management's Response: Management acknowledges that there were not sufficient controls in place to ensure written consent from HUD prior to incurring new debt or lease arrangements. Management does feel that subsequent emails and phone conversations did take place where communication of new debt or lease arrangements were discussed. However, Management cannot produce hard copy documentation due to not having access to the email files of management that was in place at that time. Current Management has now established effective controls to ensure that written consent is obtained prior to incurring new debt or lease arrangements. Going forward, Accounting will verify prior to submitting any payments that the addendum with the HUD language has been received . These will be scanned and saved to one central location so that they are easy to obtain. In addition, once Accounting Management is aware of any new debt being discussed, we will ensure there is a copy of the approval from HUD kept in Accounting so it can be easily obtained. Completion Date: September 28, 2023