Los Jardines, Inc.

FINDING 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Section 223 (f) HUD Insured Mortgage CFDA Number: 14.155 Award Period: January 1, 2021 through December 1, 2021 Type of Finding: ? Other Matters ? Noncompliance (Cash Management) ? Significant Deficiency in Internal Control over Compliance Criteria: The Project is required to make the surplus cash deposit within 90 days after year-end. Condition: Management did not make the required deposit timely. Cause: The late surplus cash deposit was an oversight. Effect: The deposit was not made on time. Recommendation: The auditor recommends that management set up a control to ensure that surplus cash deposits are made timely. Views of responsible officials: There is no disagreement with the audit finding.

U.S. Department of Housing and Urban Development 2021-001 Section 202 Capital Advance ? Assistance Listing No. 14.157 Recommendation: We recommend that management set up a control to ensure the year-end surplus cash deposit is made timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will set up additional controls to ensure residual receipts deposits are made timely within 90 days after year end. Through management?s current review procedures, the residual receipts deposit error was identified and corrected prior to year-end. Human Good Pennsylvania has a dedicated accountant that is assigned to the HUD Project to make sure residual receipts deposit are made within 90 days at year end closes. The Assistant Controller will review and monitor the residual receipts deposit and setup a calendar schedule at year to ensure it is made accurately and timely. The Assistant Controller will keep a log of sites that require a residual receipts deposits to confirm the residual receipts deposit is made within 90 days upon close of Year end audit. For example, the Assistant Controller will review the residual receipts payment log with the accountant on or about the 25th of the 3rd month to confirm if residual receipts payment is going to get deposit and was made. Name(s) of the contact person(s) responsible for corrective action: Derrick Lawson- Assistant Controller, Affordable Housing Human Good East 610-260-1119 Planned completion date for corrective action plan: March 28, 2021

FINDING 2021-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Section 223 (f) HUD Insured Mortgage CFDA Number: 14.155 Award Period: January 1, 2021 through December 1, 2021 Type of Finding: ? Other Matters ? Noncompliance (Cash Management) ? Significant Deficiency in Internal Control over Compliance Criteria: The Project is required to make a monthly deposit to the Replacement Reserve. Condition: Management did not make the required deposit timely. Cause: The late required Replacement Reserve monthly cash deposit was an oversight. Effect: The deposit was not made on time. Recommendation: The auditor recommends that management set up a control to ensure that Replacement Reserve monthly cash deposits are made timely. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Section 202 Capital Advance ? Assistance Listing No. 14.157 Recommendation: We recommend that management set up a control to ensure the required monthly Replacement Reserve deposits are completed in the month of receipt of the Housing Assistance Payments (HAP). Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management plans to complete the required monthly replacement reserve deposit in a timely manner after receipt of the HAP and set reminders for the required deposit date. Name(s) of the contact person(s) responsible for corrective action: Derrick Lawson- Assistant Controller, Affordable Housing Human Good East 610-260-1119 Planned completion date for corrective action plan: March 28, 2022