Cornelia HouseNon-Profit

Condition: The Project has receivables, totaling $26,714, from related parties at year end. Criteria: The Project may only distribute funds to affiliates up to the amount required for management fees, as reimbursement for payroll, benefits, and operating expenses, or from allowable distributions of surplus cash taken only after the semiannual or annual surplus cash calculations. Amounts in excess are unauthorized distributions. Cause: Management oversight. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should request the affiliates repay the amounts due and ensure payments to affiliates are only for management fees, as reimbursement for payroll, benefits, and operating expenses, or from allowable distributions of surplus cash taken only after the semiannual or annual surplus cash calculations. View of Responsible Officials: Management is aware of the related party receivable and reconciles these balances to be reimbursed timely. The Project will request repayment from the affiliates and will continue to monitor related party activity to ensure the Project does not pay reimbursements or advances to affiliates in excess of allowed expenditures or allowable distributions of surplus cash.

Condition: During 2024, the Project transferred $79,620 from operating cash to cash-entity in excess of allowable surplus cash calculations. Criteria: The Project may only distribute funds up to the amounts calculated based on semiannual and annual surplus cash calculations. Cause: Management oversight. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should refund operating cash for the distributions in excess of allowable surplus cash calculations. View of Responsible Officials: Management agrees with recommendation and will refund operating cash.

U.S. Department of Housing and Urban Development Finding 2022.002, CFDA #14.135 Section 221(d)(4) ? Insured Mortgage Condition: At June 30, 2022, there was $145,939 of related party receivables included in the surplus cash calculation comprised of $116,973 related to the Small Business Administration Paycheck Protection Program described below and $28,966 for other matters. As of December 31, 2022, the related party receivable totaling $116,973 related to the Small Business Administration Paycheck Protection Program. Criteria: The Project may only distribute funds to affiliates up to the amount required for management fees, as reimbursement for payroll, benefits, and operating expenses, or from allowable distributions of surplus cash taken only after the semiannual or annual surplus cash calculations. Amounts in excess are unauthorized distributions. Cause: The Project?s has a related party receivable at December 31, 2022, for amounts earned by the Project as part of the Small Business Administration Paycheck Protection Program. These funds, earned by the Project, were received by an affiliated entity in 2021 and have not yet been remitted to the Project. Effect: An affiliate of the Project has not remitted amounts earned by the Project as part of the Small Business Administration Paycheck Protection Program in a timely manner. Recommendation: The Project should request the affiliate to remit the amounts earned by the Project as part of the Small Business Administration Paycheck Protection Program. View of Responsible Officials: The Project will request payment from the affiliate and will continue to monitor related party activity to ensure the Project does not pay reimbursements or advances to affiliates in excess of allowed expenditures or allowable distributions of surplus cash.

U.S. Department of Housing and Urban Development Finding 2021.003, CFDA #14.135 Section 221(d)(4) ? Insured Mortgage Condition: The Project has receivables, totaling $43,037, from related parties at year-end. Criteria: The Project may only distribute funds to affiliates up to the amount required for management fees, as reimbursement for payroll, benefits, and operating expenses, or from allowable distributions of surplus cash taken only after the semiannual or annual surplus cash calculations. Amounts in excess are unauthorized distributions. Cause: As a result of the adjustments disclosed in finding 2021.002, there was a related party receivable at December 31, 2021. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should request the affiliates repay the amounts due and ensure payments to affiliates are only for management fees, as reimbursement for payroll, benefits, and operating expenses or from allowable disbursements of surplus cash taken only after the semiannual or annual surplus cash calculations. View of Responsible Officials: Management monitored the related party receivables during the year and, prior to the audit adjustment, there was no related party receivable at December 31, 2021. Management is aware of, and agrees with, the adjusting journal entry which resulted in a related party receivable at December 31, 2021. The Project will request repayment from the affiliates and will continue to monitor related party activity to ensure the Project does not pay reimbursements or advances to affiliates in excess of allowed expenditures or allowable distributions of surplus cash.

U.S. Department of Housing and Urban Development Finding 2020.002, CFDA #14.135 Section 221(d)(4) ? Insured Mortgage Condition: The Project distributed advances to affiliates during the year and, as a result, have receivables totaling $15,452 from related parties at year-end. Criteria: The Project may only distribute funds to affiliates up to the amount required for management fees, as reimbursement for payroll, benefits, and operating expenses, or from allowable distributions of surplus cash taken only after the semiannual or annual surplus cash calculations. Amounts in excess are unauthorized distributions. Cause: Management oversight. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should request the affiliates repay the amounts due and monitor funds to assure payments to affiliates are only for management fees, as reimbursement for payroll, benefits, and operating expenses or from allowable disbursements of surplus cash taken only after the semiannual or annual surplus cash calculations. View of Responsible Management is aware of the related party receivables and consistently reconciles these Officials: balances to be reimbursed timely. The Project will request repayment from the affiliates and will continue to monitor related party activity to assure the Project does not pay reimbursements or advances to affiliates in excess of allowed expenditures or allowable distributions of surplus cash.

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