EVANGELINE BOOTH FRIENDSHIP HOUSE RESIDENCE INC., A TEXAS CORPORATIONNon-Profit

Finding 2025-001 - Special Tests and Provisions U.S. Department of Housing and Urban Development Federal Program Name: Section 202 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended September 30, 2024, the project paid management fees totaling $466 in excess of the amount approved by HUD in 2024, and this excess was not reimbursed during the year ended September 30, 2025. Cause Lack of management oversight caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $466 Context The project overpaid $466 in management fees, exceeding the HUD-approved amount during the year ended September 30, 2024. This overpayment is classified as an accounts receivable - entity under HUD regulations and is attributed to insufficient management oversight. Management did not repay this overpayment during the year ended September 30, 2025. Identification as a Repeat Finding: Yes. See 2024-001 Recommendation The management company should reimburse the project for overpaid management fee in the amount of $466 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the management agreement. Auditor Noncompliance Code J - Unauthorized management fees Finding Resolution Status In Process Reporting Views of Responsible Officials Management will repay the property and update our procedures to correctly calculate management fees.

Finding No. 2025-002 - ReportingU.S. Department of Housing and Urban Development Federal Program Name: Section 202 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Criteria The FAC requires that the annual financial statements be submitted the earlier of 30 days after the report date or nine months after the fiscal year end. Condition The Single Audit was not submitted to the Federal Audit Clearinghouse (FAC) within nine months after the fiscal year end of the Company for the year ended September 30, 2024. CauseManagement does not have controls in place to timely file its financial statements with the FAC. Effect or Potential Effect Management is not in compliance with the requirement to timely submit the Single Audit to the FAC. Questioned Costs None Context Management does not have a process in place to ensure that all audits are submitted to the FAC timely. Identification as a Repeat Finding: No Recommendation Management should implement procedures to ensure that the financial statements are submitted to the FAC in accordance with the FAC filing requirements. Auditor Noncompliance Code Z - Other Finding Resolution Status Resolved Views of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it.

Finding No. 2025-003 - Special Tests and ProvisionsU.S. Department of Housing and Urban Development Federal Program Name: Section 202 Supportive Housing for the Elderly Assistance Listing Number: 14.157 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 2 tenants that moved out of the project during the year, we noted 1 instance where management failed to refund the tenant security deposit and/or provide the tenant with an itemized list of charges deducted from the deposit within thirty days after the move-out date. Cause Management did not have procedures in place regarding timely refunding of tenant security deposits which require refunds or notice to occur within the 30-day requirement established by HUD. Effect or Potential Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges. Questioned Costs $123 Context: Management did not have monitoring procedures in place to ensure timely refunding of tenant security deposits to the tenant or to their estate. Identification as a Repeat Finding: No Recommendation Management should change its policies and procedures related to refunding of tenant security deposits to comply with the thirty-day timeline required by HUD regulations. Auditor Noncompliance Code: M - Security Deposits Finding Resolution Status: In process Views of Responsible Officials Management will review the processes and procedures with site personnel to strengthen controls over the refunding of tenant security deposits.

Department of Housing and Urban Development Finding 2024-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Criteria Management fee payments are limited to amounts determined in accordance with the terms of the management agreement. Condition During the year ended December 31, 2024, the project paid management fees of $466 in excess of the amount approved by HUD. Cause Lack of management oversight caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $466 Context The project overpaid $466 in management fees, exceeding the HUD-approved amount. This overpayment is classified as an unauthorized distribution under HUD regulations and is attributed to insufficient management oversight. Identification as a Repeat Finding Not a Repeat finding Recommendation The management company should reimburse the project for overpaid management fee in the amount of $466 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the management agreement. Auditor Noncompliance Code: J - Unauthorized management fees Finding Resolution Status: In Process Reporting Views of Responsible Officials Management will repay the property and update our procedures to correctly calculate management fees.

Department of Housing and Urban Development Finding 2024-002 Section 202 Supportive Housing for the Elderly, AL 14.157 Criteria The terms of capital advance and PRAC agreement with HUD prohibit loans from project assets without HUD approval. Condition During the year ended December 31, 2024, management inadvertently deposited $5,073 from project operations into another entity's bank account. Cause An administrative oversight in the payments of replacement reserve deposits caused the amount to be deposited into an incorrect bank account. Effect or Potential Effect The project funds deposited to another entity's cash account are considered to be questioned costs. Questioned Costs $5,227 Context The issue is linked to lack of adequate management oversight in making the replacement reserve deposits and the need for corrective action. Identification as a Repeat Finding Not a Repeat finding Recommendations 2024-2-a The project's operating cash account should be reimbursed for this amount. 2024-2-b The management company should implement procedures to ensure that cash is not inadvertently sent to another company's bank account. Auditor Noncompliance Code: G - Unauthorized loans from project assets Finding Resolution Status: In Process Reporting Views of Responsible Officials North TX A/C will repay the amount to the property

Department of Housing and Urban Development Finding 2022-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition During the year ended September 30, 2022, the Project paid expenses in the amount of $6,500 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of September 30, 2022 is $6,500. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $6,500 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Recommendation Management should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G. Unauthorized Loans (REAC); N. Special Tests and Provisions (UG) Finding Resolution Status: In process. As of January 10, 2023, the check request for the reimbursement to Evangeline Booth Friendship House has been approved. Reimbursement is anticipated in the near future. Reporting Views of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it. The $6,500 will be repaid to the property.

Department of Housing and Urban Development Finding 2021-001 Section 202 Supportive Housing for the Elderly, CFDA 14.157 Statement of Condition The Single Audit was not submitted to the Federal Audit Clearinghouse (FAC) within nine months after the fiscal year end of the Company for the year ended September 30, 2020. Criteria The FAC requires that the annual financial statements be submitted the earlier of 30 days after the report date or nine months after the fiscal year end. Effect Management is not in compliance with the requirement to timely submit the Single Audit to the FAC. Cause Management does not have controls in place to timely file its financial statements with the FAC. Recommendation Management should implement procedures to ensure that the financial statements are submitted to the FAC in accordance with the FAC filing requirements. Auditor Noncompliance Code: L - Reporting (FAC), Z - Other (REAC) Finding Resolution Status: Resolved Reporting Views of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it.

FINDINGS - FEDERAL AWARDS AUDIT Department of Housing and Urban Development Finding 2020-001 Section 202 Capital Advance, CFDA 14.157 Statement of Condition During the year ended September 30, 2020, management did not make the required excess residual receipts reserve payment to HUD upon the expiration of the annual PRAC in the amount of $10,290, as required by HUD. The excess residual receipts payment to HUD was made on February 15, 2021. Criteria Excess residual receipts reserve payments should be made upon the expiration of the PRAC, unless an exception is granted by HUD. Cause Controls are not in place to ensure that excess residual receipts reserve payments to HUD are made timely. Effect or Potential Effect The Project is not in compliance with the requirements of the regulatory agreement. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve payments to HUD are made timely. Auditor Compliance Code: Z - Other Finding Resolution Status: Resolved Reporting View of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it.

Department of Housing and Urban Development Finding 2019-001 Section 202 Capital Advance, CFDA 14.157 Statement of Condition During the year ended September 30, 2019, the project did not make the required monthly deposits to the replacement reserve in the amount of $20,292, resulting in a shortage of $1,691. The project is required to make monthly deposits to the reserve in the amount of $1,691 per month. Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve unless a waiver was obtained from HUD. Cause Management does not have controls in place to ensure twelve monthly payments are made to the reserve. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the regulatory agreement. Recommendation Management should make the additional deposit. Management should request a waiver from HUD to suspend deposits, as the account balance exceeds the HUD minimum requirement of $1,000 per unit, or $120,000. Auditor Noncompliance Code: N ? Special Tests and Provisions (FAC); N ? Reserve for replacement deposits (REAC) Finding Resolution Status: In process Reporting Views of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION