PALATINE MANOR HOUSING DEVELOPMENT FUND CORPORATIONNon-Profit

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2025-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One of the Project’s bank balances exceeds the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. CRITERIA HUD requires the Project’s bank balances to not exceed the $250,000 FDIC limit due to the risk of loss in the event the bank was to fail. EFFECT OF CONDITION The Project’s accounts with the Bank of Greene County totaled over the FDIC limit at December 31, 2025. CONTEXT Bank balances were reviewed to ensure the Project is properly managing bank account limits and exposure. Balances at one bank were over the $250,000 limit. CAUSE OF CONDITION The Project’s bank accounts at one bank exceeded the FDIC limit at December 31, 2025. RECOMMENDATION The auditor recommends ensuring all bank account balances at each bank remain below the FDIC limit. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring bank accounts more frequently throughout the year and has been restructuring the bank accounts to ensure bank balances do not exceed the FDIC limit.

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2024-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One of the Project’s bank balances exceeds the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. CRITERIA HUD requires the Project’s bank balances to not exceed the $250,000 FDIC limit due to the risk of loss in the event the bank was to fail. EFFECT OF CONDITION The Project’s accounts with the Bank of Greene County totaled over the FDIC limit at December 31, 2024. CONTEXT Bank balances were reviewed to ensure the Project is properly managing bank account limits and exposure. Balances at one bank were over the $250,000 limit. CAUSE OF CONDITION The Project’s bank accounts at one bank exceeded the FDIC limit at December 31, 2024. RECOMMENDATION The auditor recommends ensuring all bank account balances at each bank remain below the FDIC limit. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring bank accounts more frequently throughout the year to ensure bank balances do not exceed the FDIC limit.

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2023-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION Two tenant files, out of six files reviewed, were for tenants who moved in during the year and management did not properly generate the Enterprise Income Verification (EIV) report timely. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to review the EIV report within 90 days after transmission of the move in certification to the Tenant Rental Assistance Certification System (TRACS). EFFECT OF CONDITION The EIV report for the tenants that moved in was not generated until after the 90-day period specified by HUD. CONTEXT During audit fieldwork, six files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, two tenants were new move ins. The two tenant’s files did not contain the EIV verified in the required 90-day timeframe. CAUSE OF CONDITION The procedures to ensure compliance over HUD tenant compliance, including EIV verification, were not followed timely. RECOMMENDATION The auditor recommends ensuring all current and new staff are trained on tenants’ 90-day EIV reports and ensuring they are generated within the required time period to verify tenant information promptly and help reduce errors in subsidy payments. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be monitoring use of the EIV system for move ins and recertifications.

Department of Housing and Urban Development Finding, 2021-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance Program - Accumulated Balance), Assistance Listing 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, was a new move-in and management did not properly generate the Enterprise Income Verification (EIV) report timely. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to review the EIV report within 90 days after transmission of the move-in certification to the Tenant Rental Assistance Certification System (TRACS). EFFECT OF CONDITION Income not being verified to determine the amount of housing assistance tenants are eligible to receive, if any, could result in improper use of HUD funds. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six tenant files examined, one tenant was a new move-in. The tenant?s file did not contain the EIV verified in the required 90-day timeframe. CAUSE OF CONDITION The procedures to ensure compliance over HUD tenant compliance, including EIV verification, were not followed timely. RECOMMENDATION The auditor recommends implementing greater oversight over HUD tenant compliance and proper employee training on these compliance requirements to ensure EIV verification promptly and help reduce errors in subsidy payments. MANAGEMENT?S RESPONSE The Project will be monitoring use of the EIV system for move-ins and recertifications and review the HUD tenant compliance requirements with their employees.