BISHOP (CSI) NON-PROFIT HOUSING CORPORATION

Finding reference number: #2025-001 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 (Project identification number 044-11134, 2008) Auditor non-compliance code: N – Reserve for replacement deposits Finding resolution status: Completed Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $99,135 Statement of condition #2025-001 (Assistance Listing No. 14.155): Effective May 1, 2025, the required monthly deposit to the reserve for replacements increased from $12,539 to $63,106 based on the capital needs assessment and replacement reserve analysis. The Corporation did not increase the monthly deposits and as of June 30, 2025, the reserve for replacements account is underfunded by $99,135. Criteria: Pursuant to the Regulatory Agreement, the Corporation shall establish and maintain a reserve for replacements in a separate account and make monthly deposits in amounts as approved in writing by HUD. Effect or potential effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. At June 30, 2025, the Property's reserve for replacements account is underfunded by $99,135. Cause: The increase in deposits was not billed by the loan servicer until July 2025. Recommendation: Management should transfer $99,135 from the operating account to bring the reserve for replacements account current. Completion date: July 1, 2025 Management's response: Management concurs with the finding and recommendation. On July 1, 2025, management transferred $99,135 to the reserve for replacements account.

Name of auditee: Bishop (CSI) Non-Profit Housing Corporation HUD auditee identification number: 044-11134 Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2025 CAP prepared by Name: Anne Sackrison Position: Chief Executive Officer Telephone number: 586-753-9052 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Finding #2025-001: Effective May 1, 2025, the required monthly deposit to the reserve for replacements increased from $12,539 to $63,106 based on the capital needs assessment and replacement reserve analysis. The Corporation did not increase the monthly deposits and as of June 30, 2025, the reserve for replacements account is underfunded by $99,135. Comments on the Finding and Each Recommendation: Management should transfer $99,135 from the operating account in order to bring the reserve for replacements account current. Action(s) taken or planned on the finding: Agreed. On July 1, 2025, management transferred $99,135 to the reserve for replacements account.

Finding reference number: 2020-001 CFDA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA 14.155 (Project identification number 044-11134; 2014) Auditor non-compliance code: I - Failure to maintain property/open physical inspection Finding resolution status: In process Universe population size: The universe population is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition 2020-001 for noncompliance information. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Statement of Condition 2020-001 (CFDA 14.155): The Property received a score of 56c on a physical inspection of the Property performed on February 28, 2019 by a representative of HUD. Management responded to this inspection on August 20, 2019. By reference, the REAC inspection is included as a statement of condition. The Corporation notified the auditor of this inspection and response during the June 30, 2020 audit. Criteria: Pursuant to the HUD Regulatory Agreement, the Property is to be maintained in good repair and condition and considered decent, safe, and sanitary. Management is to conduct routine unit and general property inspections and deficiencies should be corrected. Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement. If deficiencies are of a life threatening nature and not corrected in a timely manner, the units could be considered not to be in a decent, safe, and sanitary condition. Cause: The Property manager was not using the Uniform Physical Condition Standards Comprehensive Listing Checklist to ensure the Corporation was in compliance with HUD requirements when completing self-inspections. Recommendation: Management should ensure all necessary repairs have been made and request a reinspection from HUD. Management should continue to conduct routine unit and general property inspections and deficiencies should be corrected in a timely manner. Completion date: June 30, 2021 Management's response: Management has responded to HUD in regards to this inspection report and has addressed all health and safety issues. Management will continue to correct all remaining deficiencies noted and will implement a process of self-inspection of units and common areas. Management informed HUD that the property was ready for a reinspection on August 20, 2019. Multiple inquiries were made to HUD without reinspection and COVID-19 in 2020 has caused further delays. As of June 30, 2020, the property has not had a reinspection.

CFDA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA 14.155 (Project identification number 044-11134; 2014) Statement of Condition 2020-001 (CFDA 14.155): The Property received a score of 56c on a physical inspection of the Property performed on February 28, 2019 by a representative of HUD. Management responded to this inspection on August 20, 2019. By reference, the REAC inspection is included as a statement of condition. The Corporation notified the auditor of this inspection and response during the June 30, 2020 audit. Recommendation: Management should ensure all necessary repairs have been made and request a reinspection from HUD. Management should continue to conduct routine unit and general property inspections and deficiencies should be corrected in a timely manner. Action(s) Taken or Planned on the Finding: Agree. Management has responded to HUD in regards to this inspection report and has addressed all health and safety issues. Management will continue to correct all remaining deficiencies noted and will implement a process of self-inspection of units and common areas. Management informed HUD that the property was ready for a reinspection on August 20, 2019. Multiple inquiries were made to HUD without reinspection and COVID-19 in 2020 has caused further delays. As of June 30, 2020, the property has not had a reinspection.

Finding reference number: #2019-001 CFDA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA No. 14.155 (Project identification number 044-11134, 2008) Auditor non-compliance code: A - Unauthorized withdrawal from replacement reserve Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $36,064.54 Statement of condition #2019-001 (CFDA No. 14.155): During the year ended June 30, 2019, a reserve for replacements withdrawal that included invoices from a previously authorized withdrawal was processed in error. The reserve for replacements account was not reimbursed for the duplicate withdrawal. Criteria: Pursuant to the Regulatory Agreement, expenditures can only be withdrawn from the replacement reserves once. Effect or potential effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. At June 30, 2019, the Property's replacement reserve is underfunded by $36,064.54. Cause: A reserve for replacements withdrawal that included invoices from a previously authorized withdrawal was processed in error. The error was not identified and the withdrawal was not returned by June 30, 2019. Recommendation: Management should transfer from the operating account and/or receive approval from HUD to offset the withdrawal with other invoices for $36,064.54 in order to bring the reserve for replacements current. Completion date: June 30, 2020 Management's response: Agreed. Management plans to make a deposit to the reserve for replacements and/or receive approval from HUD to offset the withdrawal with other invoices to bring the reserve for replacements current by June 30, 2020.

CFDA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA No. 14.155 (Project identification number 044-11134, 2008)Finding #2019-001: During the year ended June 30, 2019, a reserve for replacements withdrawal that included invoices from a previously authorized withdrawal was processed in error. The reserve for replacements account was not reimbursed for the duplicate withdrawal. Comments on the Finding and Each Recommendation: Management should transfer from the operating account and/or receive approval from HUD to offset the withdrawal with other invoices for $36,064.54 in order to bring the reserve for replacements current. Action(s) taken or planned on the finding: Agreed. Management plans to make a deposit to the reserve for replacements and/or receive approval from HUD to offset the withdrawal with other invoices to bring the reserve for replacements current by June 30, 2020.