NCR of Houston, TX

Finding reference number: #2021-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 114-EE062-NP-WAH and 2002) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Pending Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $48,750 Statement of condition #2021-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended June 30, 2021. Criteria: Pursuant to Section (4) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $48,750 at June 30, 2021. Cause: The Corporation experienced a cash flow shortage at year-end due to not receiving the May 2021 or June 2021 HAP subsidy and did not make the May or June 2021 deposits. Recommendation: Management should make an additional deposit in future years until all required deposits have been made. Completion date: N/A Management's response: Agree. Management intends to fully fund the delinquent deposits during the year ended June 30, 2022.

Name of auditee: National Church Residences of Houston, TX HUD auditee identification number: 114-EE062 Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2020 CAP prepared by Name: Jill Kolb Position: Vice President of Housing Accounting Telephone number: 614-451-2151 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Statement of condition #2021-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended June 30, 2021. Recommendation: Management should make an additional deposit in future years until all required deposits have been made. Action(s) Taken or Planned on the Finding: Management intends to fully fund the delinquent deposits during the year ended June 30, 2022.

2020-001

Finding reference number: #2020-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA No. 14.157 (Mortgage loan identification number 114-EE062-NP-WAH and 2002) Auditor non-compliance code: N-Reserve for Replacements Deposits Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $24,375 Statement of condition #2020-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended June 30, 2020. Criteria: Pursuant to Section (4) of the HUD Regulatory Agreement, the Corporation is required to make monthly deposits to the reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement and the reserve for replacements account is underfunded by $24,375 at June 30, 2020. Cause: The Corporation experienced a cash flow shortage at year-end and did not make its June 2020 deposit. Recommendation: Management should make an additional deposit in future years until all required deposits have been made. Completion date: N/A Management's response: Agree. Management made additional deposits in the amount of $24,375 on July 10, 2020.

Name of auditee: National Church Residences of Houston, TX HUD auditee identification number: 114-EE062 Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2020 CAP prepared by Name: Julia Fratianne Position: Vice President of Accounting Telephone number: 614-451-2151 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Statement of condition #2020-001 (CFDA 14.157): The required monthly deposits to the reserve for replacements account were not made during the year ended June 30, 2020. Recommendation: Management should make an additional deposit in future years until all required deposits have been made. Action(s) Taken or Planned on the Finding: Management made additional deposits in the amount of $24,375 on July 10, 2020.

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