THE HARRY AND JEANETTE WEINBERG VILLAGE III, INCNon-Profit

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. Condition In connection with our lease file review we noted the following deficiencies: - 2 out of 2 new tenants tested did not follow EIV guidelines; - 6 out of 14 existing tenants tested did not follow EIV guidelines; - 1 out of 14 existing tenants had issues where the files were not maintained in accordance with guidelines. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for 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. Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure 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. Finding Resolution Status: Resolved Views of Responsible Officials FG Companies has a procedure in place that requires all tenant files to be reviewed by the compliance team that is in line with the community’s tenant selection plan that outlines the tenant eligibility requirements. All annual certifications are submitted and reviewed by compliance in accordance with the requirements of the HUD Handbook4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. FG Companies has also implemented a bi-weekly file audit system that will continue to be completed by the Regional Manager. This system is to ensure all files are current with certifications and all required state and local forms are completed and filed accordingly.

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. Condition In connection with our lease file review we noted the following deficiencies: - Five out of 10 existing tenants tested did not follow EIV guidelines; - Two out of 10 existing tenants had issues where the files were not maintained in accordance with guidelines; - One out of one former tenant had an issue where the file was not maintained in accordance with guidelines; and - One out of one new tenant tested did not follow EIV guidelines. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential 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. Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure 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. Views of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirements. 1. Move in EIV's - All move in files will be sent to our in house compliance department and Franklin Group has an EIV specialist who follows and tracks all moves for accuracy for all move files and the EIV specialist also sends out the 90-day reminders for all move in. 2. Existing Tenant EIV - It is the policy that all existing tenant EIV and 120-day reports are run per the 4350 guidelines. The Community Manager for Renaissance Gardens has been provided the HUD Trainings and has noted on her daily task reminder from One Site to pull all reports as required. The RM is required during monthly visits to spot check at least five existing tenants. 3. Gross Rent Change and Medical Reporting - The policy states that all Gross Rent Changes are to be completed as approved by the new rent schedule - The Community Manager is required to scheduled appointments with all residents to sign the effective gross rent change and file in tenants files, it is also required that residents 50059s are signed and in the file, the Community Manager has taken the latest HUD training with our in house HUD Compliance Manager - The Regional Manager ("RM") will also spot check files to be certain that all Gross Rent Changes are in its 6-part file folders. Medical reporting records were discussed in our HUD Compliance Training and all expenses must be in the 6-part file folder. Again, the RM will continue to spot check files during the monthly required inspections. All HUD Communities were required to participate in the HUD Training as a reminder tool. 4. Security Deposit - Franklin Companies has a policy that all security deposit refunds must be submitted within the three-day move out period. This situation was due to the changeover in Management.

Criteria 1. Management is responsible for the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. 2. Management is responsible for timely submission of audited financial statements to Federal Audit Clearinghouse ("FAC"). Condition 1. The accounting records required numerous material adjustments to be proposed and recorded in order for the financial statements to be fairly presented in accordance with generally accepted accounting principles in the United States of America. 2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial statements was not completed within specified time frame. Cause Management did not have sufficient controls over financial reporting. Effect or Potential Effect Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial statements such that they are not in accordance with accounting principles generally accepted in the United States of America. Condition 2 results in auditee being designated as not a lowrisk auditee, which may have an effect on future federal grants and program eligibility. Recommendation 1. Management should undertake a review of internal controls over financial reporting and ensure that financial data is properly recorded in the books and records of the project to prevent misstatements from occurring in the future. 2. Management should implement procedures to ensure that required filing is completed timely. Auditor Noncompliance Code S. Internal control deficiencies Views of Responsible Officials 1. Management agrees with the finding and recommendation and has implemented reviews of the financial statements by senior management prior to closing books to ensure accuracy of information. 2. Management agrees with the finding and recommendation and will ensure required filing is completed timely. Finding Resolution Status: Resolve

Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Condition As of June 30, 2024, management has not fully funded the tenant security deposits cash account. The tenant security deposits cash account was underfunded by $3,391. Cause The tenant security deposits liability exceeds the tenant security deposits cash account by $3,391 as of June 30, 2024. Effect or Potential Effect Management commingled tenant security deposits with its operating cash and did not have sufficient cash balance in the tenant security deposits cash account to cover the tenant security deposits liability as of June 30, 2024. Questioned Costs $3,391 Identification as a Repeat Finding This finding is not a repeat finding. Recommendations Management should transfer $3,391 from the operating account in order to fully fund the tenant security deposits account. Auditor Noncompliance Code: M. Security Deposits View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for security funding. Funds have been transferred and will be maintained based on HUD requirements in a separate account from operating funds. Finding Resolution Status: Resolved

Criteria Residual receipts funds should be made within 90 days of year-end. Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $10,012 within 90 days of year-end, as required by HUD. Cause Controls were not in place to ensure that residual receipts funds were timely deposited. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement and of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $10,012 Identification as a Repeat Finding This is not a repeat finding. Recommendations Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Views of Responsible Officials Management agrees with the finding and due to the property being short on funds, management will work with HUD on funding. Finding Resolution Status: In process

Criteria Management fee payments are limited to amounts determined in accordance with the terms of the HUD approved management agreement. Condition During the year ended June 30, 2024, the project paid management fees of $10,442 in excess of the amount approved by HUD. Cause There were two different management agreements and management did not follow the HUD approved management agreement when paying management fees from operations. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $10,442 Identification as a Repeat Finding This is not a repeat finding. Recommendation The management company should reimburse the project for overpaid management fee in the amount of $10,442 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the HUD approved management agreement. Auditor Noncompliance Code: J. Unauthorized management fees. Views of Responsible Officials Management agrees with the finding and is working with ownership on reimbursements to the property. Management will collect in accordance with HUD going forward. Finding Resolution Status: Unresolved

Criteria Management's internal control processes should include timely clearing out of reconciliating items on the reconciliation of the project's operating cash account. These reconciliations should be reviewed by a supervisory person who understands both the general ledger and project operations and can assist in researching and clearing out reconciling items. Condition There were material old items carried on the bank reconciliation that were not properly recorded, resulting in adjustments that ultimately lead to a bank overdraft at June 30, 2024. Cause Management carried reconciling items on the bank reconciliation longer than their policy. Effect or Potential Effect The cash balance reported on the project's books is not an accurate account of the actual cash balance which resulted in a bank overdraft. Additionally, there is a potential for fraudulent activity to not be timely identified and rectified due to the lack of enforcement of controls. Questioned Costs N/A Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should ensure there is enough oversight by qualified accounting personnel who have the ability to research and resolve reconciling items. Additionally, management should create a review process where they can enforce their existing policies. Auditor Noncompliance Code: S. Internal control deficiencies Views of Responsible Officials Management agrees with the finding and has implemented a new policy that financials are not to be delivered to ownership until the property has completed all outstanding items. Finding Resolution Status: Resolved

Finding No. 2023-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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. Condition In connection with our lease file review we noted the following deficiencies:  One out of ten existing tenants tested had EIVs that were performed outside of the 120- day EIV window.  One out of one new tenants tested had an initial EIV certification that was performed outside of the 90-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential 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. Questioned Costs There are no questioned costs. Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure 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: Section 202 Supportive Housing for the Elderly program administration. Finding Resolution Status: Resolved. Views of Responsible Officials The Franklin Johnston group has strict EIV policies and procedures in place. Although HUD requires quarterly reports, we require monthly reports for our Master Binder. Site teams are only permitted to pull the “By Head of Household Report” at the time of the recertification appointment. They do not pull 120 ,90 , 60 or 30 days in advance. The report is pulled at the time the recertification packet is completed. The site teams pull this report 90 days after a MI is submitted to TRACS. We pull this report 90 days that a resident receives a utility check as well. There are other EIV reports as it relates to specific tasks. All site teams members have been trained as it relates to this policy. In addition to this training all site teams are required to attend monthly EIV training.

Finding No. 2022-001; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 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. Condition In connection with our lease file review we noted the following deficiencies: Six out of ten existing tenants tested had EIVs that were performed outside of the 120-day EIV window. Cause Management's policies with respect to the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential 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. Questioned Costs There are no questioned costs. Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure 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: Section 202 Supportive Housing for the Elderly program administration Finding Resolution Status: Resolved. Views of Responsible Officials Management hired additional oversight staff at the corporate level and changed the procedure for reviewing and approving annual certifications as well as monitoring EIV reporting. Management implemented new EIV procedures to ensure timely EIV reporting. All HUD staff has been trained on the new procedures.

A. Summary of Auditor's Results 1. The auditor's report expresses an unmodified opinion on whether the financial statements of The Harry and Jeanette Weinberg Village III, Inc. were prepared in accordance with generally accepted accounting principles. 2. No significant deficiencies related to the audit of the financial statements were reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. No material weaknesses were reported. 3. No instances of noncompliance material to the financial statements of The Harry and Jeanette Weinberg Village III, Inc., which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. A significant deficiency in internal control over the major federal awards program was disclosed during the audit and reported in the Independent Auditor's Report on Compliance for the Major Program and on Internal Control over Compliance Required by the Uniform Guidance. No material weaknesses were reported. 5. The auditor's report on compliance for the major federal award program for The Harry and Jeanette Weinberg Village III, Inc. expresses a qualified opinion on the major federal program. 6. There is one audit finding required to be reported in accordance with 2 CFR Section 200.516(a) in the Schedule. 7. The program tested as a major program was: U.S. Department of Housing and Urban Development Supportive Housing for the Elderly CFDA No.14.157 8. The threshold for distinguishing between Type A and B programs was $750,000. 9. The Harry and Jeanette Weinberg Village III, Inc. was not determined to be a low-risk auditee. B. Findings - Financial Statements Audit None C. Findings and Questioned Costs - Major Federal Award Program Audit Department of Housing and Urban Development Finding No. 2021-001; Section 202 Supportive Housing for the Elderly, CFDA 14.157 Statement of Condition In connection with our lease file review we noted the following deficiencies: 2 out of 11 tenants tested did not have documentation in their lease file that their income was verified using EIV. 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 N/A Effect The procedures for determining tenant 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. Cause Management?s policies with respect to the determination of tenant 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. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that 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 administration. Finding Resolution Status: Resolved. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and the auditor?s recommendation has been implemented.