North General Aids Housing Development Fund CorporationNon-Profit

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Any withdrawal from the replacement reserve requires HUD approval evidenced by a signed HUD-9250. Condition During the year ended June 30, 2025, the project withdrew $330,000 from the replacement reserve without having obtained the appropriate approvals. Cause Procedures in place were not followed. Effect or Potential Effect The withdrawal of $330,000 is an unauthorized withdrawal from the replacement reserve. Questioned Costs $330,000 Context Isolated instance with was not part of a statistical sample. Identification as a Repeat Finding Yes – 2024-001 Recommendation Management should ensure that there is a mechanism and procedures in place to ensure proper approval evidenced by a signed HUD-9250 before withdrawing funds from the replacement reserve. Management should obtain retroactive approval for the withdrawal. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account Finding resolution status: Resolved. View of responsible officials and planned corrective actions Management refunded the money during the fiscal year ending in June 30, 2025 and has implemented protocols to avoid withdraws without prior HUD approval.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Property inspection score should be 59 or higher and any life threatening or severe conditions should be addressed within 24 hours of issuance with corrections certified in the HUD form. Condition During the year ended June 30, 2025, the property was inspected on November 13, 2024, and failed the inspection with the total inspection score of 6. During inspection there were 71 defects found with severity levels of either life-threatening or severe. An inspection was performed January 6, 2026, which had a final inspection score of 90. Cause Procedures were not being followed to maintain the building in a proper physical condition. Effect or Potential Effect Life threatening and severe defects were not prevented and not addressed timely in accordance with HUD requirements. Questioned Costs None Context Isolated instance with was not part of a statistical sample. Identification as a Repeat Finding No. Recommendation Management should follow their internal controls and procedures to ensure that the property is held in good condition and that defects found are addressed timely. Auditor Noncompliance Code: I. failure to maintain property/open physical inspection. Finding resolution status: Resolved View of responsible officials and planned corrective actions We recently had our REAC site visit from HUD in January and the overall score was much improved; we received an overall (90 final calculated score). We are awaiting the final correspondence from HUD. Essentially this was done through ongoing site supervision of client apartments and overall building maintenance.

Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Condition In connection with the procedures applied to a sample of 1 tenant that moved out of the Project during the year, we noted 1 instance where management failed to refund the tenant security deposit within thirty days after the move-out. Cause Procedures in place were not followed. Effect or Potential Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits. Questioned Costs None Context A sample of 1 tenant file from a population of 4 was selected. We identified exceptions in the file tested. The sample in not a statistically valid sample. Identification as a Repeat Finding No. Recommendation Refund the security deposit. Ensure proper procedures are in place to ensure security deposits are refunded timely. Auditor Noncompliance Code: M. Security deposits Finding resolution status: In process. View of responsible officials and planned corrective actions Management will ensure that we will follow all HUD occupancy requirements to a timely refund and or documentation of security forfeit. We understand that even though the security was refunded to the tenant it needs to be within 30 days and we have taken measures in our office that this will be done.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Any withdrawal from the replacement reserve requires HUD approval evidenced by a signed HUD-9250. Condition During the year ended June 30, 2024, the project withdrew $100,000 from the replacement reserve without having obtained the appropriate approvals. Cause Procedures in place were not followed. Effect The withdrawal of $100,000 is an unauthorized withdrawal from the replacement reserve. Questioned Costs None Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure proper approval evidenced by a signed HUD-9250 before withdrawing funds from the replacement reserve. Management should obtain retroactive approval for the withdrawal. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account Finding resolution status: Resolved/In process. View of responsible officials and planned corrective actions Management will review and revise the protocols to avoid withdraws without prior HUD approval.

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Expenses charged to the project should be for reasonable expenses necessary for the operation and maintenance of the project, unless prior authorization from HUD has been received. Condition During the year ended June 30, 2024, the project paid for expenses in the amount of $1,838 that were not related to the project. Cause Procedures were not being followed to ensure that charges to the project were limited to project operating costs. Effect The recording of $550 for a legal invoice and $1,288 for audit allocation of fees was not for reasonable expenses of the property and therefore considered to be questioned costs. Questioned Costs $1,838 Context Instances which were not part of a statistical sample. Identification as a Repeat Finding No. Recommendation Management should follow their internal controls and procedures to ensure only expenses of the project are recorded in the books and records. Auditor Noncompliance Code: G. Unauthorized loans from project assets Finding resolution status: Resolved View of responsible officials and planned corrective actions As of March 26, 2025, these amounts have been credited back to the company through the central disbursement accounting system. Management will implement reviews on a quarterly basis will be performed to ensure that only expenses related to the Corporation are included in expenses and will review indirect allocations to ensure only appropriate expenses approved in the HUD budget will be included in expenses.

Statement of Condition During the year ended June 30, 2023, the project did not make all the required monthly deposits to the replacement reserve, in the amount of $62,500. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Questioned Costs None Cause Delays in funding from HUD of the subsidy voucher which is directly used to fund the replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure timely funding of the replacement reserve. Auditor Noncompliance Code: N – Special tests and provisions Finding resolution status: Resolved. View of responsible officials and planned corrective actions Management has refunded the money, management should put a system in place to avoid such withdrawals in the future. We have informed the HUD about the finding of April 23 Voucher not submitted on time, and going forward HUD will make sure all the HUD vouchers are submitted timely and monthly reserve’s transfers are done on time.

Department of Housing and Urban Development Finding No. 2022-001; Section 811, CFDA 14.181 Statement of Condition During the year ended June 30, 2022, management withdrew $120,406 from the replacement reserve without HUD approval. Criteria Any withdrawal from the replacement reserve required HUD approval. Questioned Costs None Effect The withdrawal of $120,406 is an unauthorized withdrawal from the replacement reserve. Cause Money was inappropriately transferred from replacement reserve account. Recommendation Management has refunded the money, management should put a system in place to avoid such withdrawals in the future. Auditor Noncompliance Code: H - unauthorized distribution of project assets Finding resolution status: Cleared. View of responsible officials and planned corrective actions Management has refunded the money and have implemented protocols to avoid withdraws without prior HUD approval.

Finding No. 2022-002; Section 811, CFDA 14.181 Statement of Condition In connection with the procedures applied to a sample of 4 lease files we noted the following deficiencies: ? 3 instances where the file did not contain the appropriate Enterprise Income Verification system documentation. ? 2 instances where the tenant recertification was signed off but not dated by the tenant. ? 4 instances where the tenant recertification was not signed off by management. ? 1 instance where the file did not contain the tenant application, proof of citizenship or background check. ? 1 instance where the HUD-50059 contained a security deposit of $240 however there was no security deposit in the security deposit payable listing. Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Questioned Costs None Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD or tenant being charged incorrect amount of rent. Cause Management's policies with respect to eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed, and tenants income may be over/under reported. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant security deposits are correctly recorded, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 Program Administration Finding Resolution Status: In process. Views of Responsible Officials and Planned Corrective Actions The Harlem United management team has established a new policy to ensure compliance of tenant lease files. Specifically, when intake staff receive a referral from the NYC HIV/AIDS Services Administration (HASA), an interview will take place to determine if the individual fits the program criteria (including documentation of their income, medical status, psychosocial assessment and/or psychiatric evaluation and proof of citizenship). If the individual fits the criteria and accepts an efficiency unit at North General / Foundation House East, the person?s documentation will be forwarded to our consultant, P & L Management, to verify the income and complete all leasing documentation for HUD approval (background checks and security deposits are not required of this program). Upon completion of the HUD documentation process, the intake staff will check to verify that all documentation have been signed and dated by the appropriate persons which includes P & L Management and North staff, and the tenant. Annually, the income information of all tenants at North General will be sent to P & L Management for verification; if the tenant?s income status continues to meet the HUD guidelines, the updated documentation will be forwarded back to the staff at North General. If the tenant?s income status does not meet the HUD criteria, the individual?s income information will be forwarded to NYC HASA for alternate housing placement. In addition, the Managing Director of North General will perform quarterly mock audits to ensure that tenant lease files are in compliance.

Department of Housing and Urban Development Finding No. 2022-003; Section 811, CFDA 14.181 Statement of Condition Management failed to maintain the property in good repair and received a score of 20c in its December 8, 2021 REAC Physical inspection. Criteria In accordance with the regulatory agreement, management is required to maintain the property in good repair. Questioned Costs None Effect The Project was unable to obtain a passing score on its REAC inspection. Cause The procedures to ensure compliance with HUD regulations regarding physical condition of the property were not followed. Recommendation Management should correct all findings noted in the REAC Physical Inspection Report in the time frames requested in the physical inspection. Auditor Noncompliance Code: I - Failure to maintain property/open physical inspection. Finding Resolution Status: Cleared. Views of Responsible Officials and Planned Corrective Actions The December 2021 REAC inspection found multiple deficiencies at North General / Foundation House East. Seven Health and Safety violations were identified and resolved within 72 hours. In addition, all smaller repairs were made within two weeks following the inspection. Several major capital repairs were also cited in the REAC inspection, particularly the roof, the facade, windows and trash compactor. These repairs are extensive and required additional funding. In the months following the REAC inspection, Harlem United senior management prioritized identifying new funding specifically for major capital projects in supportive housing buildings. Additional funding was granted by HUD and became available to North General / Foundation House East in spring 2022, and soon after bids were obtained from vendors. Repairs to the roof, facade, windows and compactor are scheduled to begin in July 2023. In addition, facility staff work with program staff to identify and address minor repairs in tenants? units and in common areas on an ongoing basis

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