LJR Corporation

2025-001: Supportive Housing for Persons with Disabilities – AL #14.181 – Eligibility Criteria or Specific Requirement (including statutory, regulatory, or other citation) Per HUD’s occupancy requirements (HUD Handbook 4350.3), the project owners are required to determine whether applicants are eligible to occupy the subsidized property and receive housing assistance. Eligibility is determined by federal statute and HUD regulation. Based on the eligibility requirements, project owners must maintain eligibility documentation in the tenant file. Condition During fiscal year ended June 30, 2025, several instances were noted where the Corporation failed to retain the following required eligibility documentation: verification of social security number, income limits, disability status and birth certificate. Cause This noncompliance was the result of an administrative oversight, in which, the property management personnel did not consistently follow the Corporation’s policies and procedures. Effect or Potential Effect Failure to obtain a required eligibility documentation can result in federal assistance to non-qualified individuals. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that the Corporation comply with established policies and procedures to ensure that the proper eligibility documentation is maintained in the tenant files. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

2025-002: Supportive Housing for Persons with Disabilities – AL #14.181 – Eligibility Criteria or Specific Requirement (including statutory, regulatory, or other citation) Per Uniform Guidance (2 CFR 200.303), non-federal entities are required to establish and maintain effective internal controls over federal awards. HUD program guidelines also require documentation and supervisory review of tenant eligibility, rent determinations, and related compliance activities. Condition During our audit, we noted that tenant files, which included eligibility determinations, income verifications, and rent calculations, were not consistently reviewed or approved by management. Cause This was the result of an administrative oversight, in which, the property management personnel did not consistently follow the Corporation’s policies and procedures. Effect or Potential Effect The absence of management review increases the risk of noncompliance with federal regulations, incorrect eligibility determinations, and inaccurate rent calculations, which could result in questioned costs or adverse impact on program participants. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that the Corporation comply with established policies and procedures that require the review and approval of all tenant files by a designated supervisor. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

2025-003: Supportive Housing for Persons with Disabilities – AL #14.181 – Cash Management Criteria or Specific Requirement (including statutory, regulatory, or other citation) Uniform Guidance (2 CFR 200.303) requires organizations to establish effective internal controls over federal awards. Proper review and approval are key controls to prevent errors and misstatements. Condition Monthly HUD-52670 forms were submitted to HUD for housing assistance payment requests without evidence of review or approval by management. Cause The Corporation didn’t have adequate controls in place to ensure that monthly HUD-52670 forms were reviewed and approved by management. Effect or Potential Effect There is a risk of potential noncompliance with HUD and federal cash management requirements. Questioned Costs - None Identification as a Repeat Finding, if applicable – No Recommendation We recommend that management implement a process for review and approval of all HUD-52670 forms before submission to HUD. Views of Responsible Officials See attached response for view of responsible officials and planned corrective actions.

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