PENN MANOR APARTMENTS 601 S Penn Ave. Independence, KS 67301. Corrective Action Plan August 17, 2023 Penn Manor Apartments HUD Project No. 102-11030 Audit performed by Pettit & Company, LLC 3725 E. Southport Rd., Suite A Indianapolis, IN 46227 Period covered by the audit Year ended December 31, 2022 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Finding 2022-001 Allowable Costs Statement of condition: The Organization repaid $7,200 on a related party loan without surplus cash or HUD approval. Comments on the Finding and Each Recommendation: This was a finding from prior year, and once it was brought to our attention, all payments ceased. As reported in our prior year finding, the owner's SEK Lutheran's, Inc, a non-profit organization, had no cash flow and ne?_ded the funds loaned to Penn Mam to be repaid as soon as possible. Corrective Action Planned or Taken: The action taken was to immediately cease the payments, and wait until there are residual funds available to repay the loan or HUD approval is granted. Finding 2022-002 Cash Management Statement of condition: The Project is not current on its mortgage at December 31, 2022. Comments on the Finding and Each Recommendation: The mortgage was not current in December. The managing Agent had taken a temporary leave due to a personal family issue. The agent believed the mortgage and other bill were being addressed, however, due to high vacancies and the strains from covid, there was a strain on the project's cash flow. Corrective Action Planned or Taken: We have caught up on the mortgage and continuing to stay current. We contacted our HUD Representative and have worked out a financial plan to get matters resolved and back on track. We are filing monthly reports with HUD and have also seen a decrease in our vacancies which is further helping with the finances.