HISPANIC HOUSING SERVICES, INC. DBA VILLA AT SACRED HEART

Section 202 Supportive Housing for the Elderly Loan Program, CFDA 14.157 Finding #2019-001 Criteria: Total deposits made in fiscal 2019 to the replacement reserve were less than the required deposits for the current year. Statement of Condition: The replacement reserve account was not fully funded. Cause: Cash flow problems and management oversight prevented the Project from properly funding the replacement reserve. Effect: The Company was not in compliance with the terms of the Regulatory Agreement. Required replacement reserve deposits of $3,399 have not been made for fiscal 2019. Auditors' Non-Compliance Code Replacement reserve deposits Amount of Questioned Costs $ -0- Reporting Views of Responsible Officials: Cash flow problems and management oversight created the replacement reserve deposit delinquencies. Context: This was not a sampling audit procedure. Recommendation: The management agent should make the required deposits to the replacement reserve or obtain a waiver of such deposits from HUD. Auditors' Summary of Auditee's Comments on the Findings and Recommendations Auditee agreed with auditors' finding. Response Indicator Agreed Completion Date September 19, 2019 Response Management made the required deposits on July 3, 2019. Contact Person: Isadore Rivas

HISPANIC HOUSING SERVICES, INC. D/B/A VILLA AT SACRED HEART INDIANAPOLIS, INDIANA CORRECTIVE ACTION PLAN September 19, 2019 U.S. Department of Housing and Urban Development Multifamily Midwest Region Chicago Regional Center 77 W. Jackson Blvd. Chicago, IL 60604 Hispanic Housing Services, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2019. Name and address of independent public accounting firm: Merrill & Thoman, LLP, 9449 Priority Way West Drive, Suite 130, Indianapolis, IN 46240 Audit period: Year ended June 30, 2019 The finding from the June 30, 2019 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. Findings-Financial Statement Finding: None Findings-Federal Award Finding: U.S. Department of Housing and Urban Development Finding 2019-001: Section 202, CFDA 14.157 Recommendation: Make the delinquent deposit to the reserve for replacements account as required. Action taken: Management made the required deposit on July 3, 2019 and will ensure compliance in the future. If the U.S. Department of Housing and Urban Development has questions regarding this plan, please call Isadore Rivas at (317) 881-7481. Sincerely yours, Isadore Rivas, President