Mar Vista Eldorado, Inc.

Section II-Financial Statement Findings Our audit disclosed no findings or questioned costs that are required to be reported. Section III-Federal Award Findings and Questioned Costs Finding reference number: 2023-001 Assistance Listing title and Number (Federal award identification and year): Supportive Housing for the Elderly, Assistance Listing Number 14.157 (Project identification number 122-EH528- WAH-NP and 1994) Auditor non-compliance code: B – Failure to make required residual receipts deposit Finding resolution status: Resolved 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. Noncompliance information: See Statement of Condition 2023-001 for noncompliance information. Name of Federal agency: Department of Housing and Urban Development Pass-through entity: N/A Repeat finding: Yes Questioned costs: $15,869 Statement of Condition 2023-001 (Assistance Listing Number 14.157) : The required residual receipts deposit in the amount of $15,869 per the June 30, 2022 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited into the residual receipts account within 90 days after the fiscal year end. Criteria: Pursuant to Section 5(c) of the Regulatory Agreement, within 90 days after the end of each fiscal year, any residual receipts realized from the operation of the mortgaged property shall be deposited in a separate residual receipt account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. At June 30, 2023, the residual receipts account is underfunded by $15,869. Surplus cash at June 30, 2023 has been reduced by $15,869. Cause: This was an oversight by Management. Recommendation: Management should make a deposit of $15,869 to the residual receipts account for the underfunded amount. Additionally, management should make deposits, as required by the Regulatory Agreement, on an annual basis. Completion Date: August 24, 2023 Managements Response: Management concurs with the findings and recommendations. Management made a deposit of $15,869 on August 24, 2023 to fully fund the residual receipts account for the year ended June 30, 2023.

Name of auditee: Mar Vista Eldorado, Inc. HUD auditee identification number: 122-EH528-WAH-NP Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2023 CAP prepared by Name: Dwight Hargett Position: President/CEO – Management Agent Telephone number: 812-987-8344 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Statement of Condition 2023-001 (Assistance Listing Number 14.157): The required residual receipts deposit in the amount of $15,869 per the June 30, 2022 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited into the residual receipts account within 90 days after the fiscal year end. Recommendation: Management should make a deposit of $15,869 to the residual receipts account for the underfunded amount. Additionally, management should make deposits, as required by the Regulatory Agreement, on an annual basis. Actions taken or planned on the finding: Management made a deposit of $15,869 on August 24, 2023 to fully fund the residual receipts account for the year ended June 30, 2023.

2022-001

Section II-Financial Statement Findings Our audit disclosed no findings or questioned costs that are required to be reported. Section III-Federal Award Findings and Questioned Costs Finding reference number: 2022-001 Assistance Listing title and Number (Federal award identification and year): Supportive Housing for the Elderly, Assistance Listing Number 14.157 (Project identification number 122-EH528- WAH-NP and 1994) Auditor non-compliance code: B ? Failure to make required residual receipts deposit Finding resolution status: Resolved 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. Noncompliance information: See Statement of Condition 2022-001 for noncompliance information. Name of Federal agency: Department of Housing and Urban Development Pass-through entity: N/A Repeat finding: No Questioned costs: $9,607 Statement of Condition 2022-001 (Assistance Listing Number 14.157): The required residual receipts deposit in the amount of $9,607 per the June 30, 2021 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited into the residual receipts account within 90 days after the fiscal year end. Criteria: Pursuant to Section 5(c) of the Regulatory Agreement, within 90 days after the end of each fiscal year, any residual receipts realized from the operation of the mortgaged property shall be deposited in a separate residual receipt account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. At June 30, 2022, the residual receipts account is underfunded by $9,607. Surplus cash at June 30, 2022 has been reduced by $9,607. Cause: This was an oversight by Management. Recommendation: Management should make a deposit of $9,607 to the residual receipts account for the underfunded amount. Additionally, management should make deposits, as required by the Regulatory Agreement, on an annual basis. Completion date: August 4, 2022 Management's response: Management concurs with the findings and recommendations. Management made a deposit of $9,607 on August 4, 2022 to fully fund the residual receipts account for the year ended June 30, 2022.

Name of auditee: Mar Vista Eldorado, Inc. HUD auditee identification number: 122-EH528-WAH-NP Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2022 CAP prepared by Name: Dwight Hargett Position: President/CEO - Management Agent Telephone number: 812-987-8344 Current Findings on the Summary of Auditors Results Statement of Condition 2022-001 (Assistance Listing Number 14.157): The required residual receipts deposit in the amount of $9,607 per the June 30, 2021 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited into the residual receipts account within 90 days after the fiscal year end. Recommendation: Management should make a deposit of $9,607 to the residual receipts account for the underfunded amount. Additionally, management should make deposits, as required by the Regulatory Agreement, on an annual basis. Actions taken or planned on the finding: Management made a deposit of $9,607 on August 4, 2022 to fully fund the residual receipts account for the year ended June 30, 2022.

Finding reference number: 2021-001 Assistance Listing title and Number (Federal award identification and year): Supportive Housing for the Elderly, Assistance Listing Number 14.157 (Project identification number 122- EH528-WAH-NP and 1994) Auditor non-compliance code: N - Reserve for Replacements Deposits Finding resolution status: Resolved 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. Noncompliance information: See Statement of Condition 2021-001 for noncompliance information. Name of Federal agency: Department of Housing and Urban Development Pass-through entity: N/A Repeat finding: No Questioned costs: $7,280 Statement of Condition 2021-001 (Assistance Listing Number 14.157): During the year ended June 30, 2021, management did not make the required monthly deposits, as determined by HUD, to the reserve for replacements. At June 30, 2021, the reserve for replacements is underfunded by $7,280. Criteria: Pursuant to 24 CFR Section 891.405(b), the owner shall make monthly deposits to the reserve for replacements as determined by HUD. Effect: At June 30, 2021, the reserve for replacements is underfunded by $7,280. Surplus cash at June 30, 2021 has been reduced by $7,280. Cause: Management was in the process of moving the operating bank account to a new bank and did not make the required deposit to the reserve for replacements to ensure the operating account had sufficient funds. Recommendation: Management should make a deposit of $7,280 to the reserve for replacements for the underfunded amount. Additionally, management should make deposits to the reserve for replacements on a monthly basis in an amount as determined by HUD. Completion date: July 30, 2021 Management's response: Management concurs with the findings and recommendations. Management made a deposit of $7,280 on July 30, 2021 to fully fund the reserve for replacements for the year ended June 30, 2021.

Statement of Condition 2021-001 (Assistance Listing Number 14.157): During the year ended June 30, 2021, management did not make the required monthly deposits, as determined by HUD, to the reserve for replacements. At June 30, 2021, the reserve for replacements is underfunded by $7,280. Recommendation: Management should make a deposit of $7,280 to the reserve for replacements for the underfunded amount. Additionally, management should make deposits to the reserve for replacements on a monthly basis in an amount as determined by HUD. Actions taken or planned on the finding: Management made a deposit of $7,280 on July 30, 2021 to fully fund the reserve for replacements for the year ended June 30, 2021.

Finding reference number: 2021-002 Assistance Listing title and Number (Federal award identification and year): Supportive Housing for the Elderly, Assistance Listing Number 14.157 (Project identification number 122- EH528-WAH-NP and 1994) Auditor non-compliance code: A - Unauthorized withdrawal from replacement reserve Finding resolution status: Resolved Universe population size: 1 invoice from 2 HUD approved 9250 withdrawals. Sample size information: 1 invoice from 2 HUD approved 9250 withdrawals. Noncompliance information: See Statement of Condition 2021-002 for noncompliance information. Name of Federal agency: Department of Housing and Urban Development Pass-through entity: N/A Repeat finding: No Questioned costs: $11,160 Statement of Condition 2021-002 (Assistance Listing Number 14.157): During the year ended June 30, 2021, HUD approved a form HUD-9250 for a reserve for replacements withdrawal of $54,660 to replace a sewer line. After performing excavation work related to the sewer line replacement, the vendor determined that the proposed sewer line replacement could not be completed due to earthquake retrofitting at the site. Management obtained bids to determine how much it would cost to make the replacement and deemed it to be cost prohibitive. Once this determination was made, the vendor restored the site to its original condition and refunded the Corporation $11,160. This amount was not remitted to the reserve for replacements. As such, $11,160 of the $54,660 withdrawn from the reserve for replacements was not used as directed by HUD. Criteria: Pursuant to 24 CFR Section 891.405(d), funds may be drawn from the reserve for replacements and used only in accordance with HUD guidelines and with the approval of, or as directed by, HUD. Effect: The reserve for replacements is underfunded by $11,160 at June 30, 2021. Surplus cash at June 30, 2021 has been reduced by $11,160. Cause: Management did not consider the need to remit the refund of $11,160 to the reserve for replacements. Recommendation: Management should remit $11,160 to the reserve for replacements. Completion date: September 23, 2021 Management's response: Management concurs with the findings and recommendations and remitted $11,160 to the reserve for replacements on September 23, 2021.

Statement of Condition 2021-002 (Assistance Listing Number 14.157): During the year ended June 30, 2021, HUD approved a form HUD-9250 for a reserve for replacements withdrawal of $54,660 to replace a sewer line. After performing excavation work related to the sewer line replacement, the vendor determined that the proposed sewer line replacement could not be completed due to earthquake retrofitting at the site. Management obtained bids to determine how much it would cost to make the replacement and deemed it to be cost prohibitive. Once this determination was made, the vendor restored the site to its original condition and refunded the Corporation $11,160. This amount was not remitted to the reserve for replacements. As such, $11,160 of the $54,660 withdrawn from the reserve for replacements was not used as directed by HUD. Recommendation: Management should remit $11,160 to the reserve for replacements. Actions taken or planned on the finding: Management remitted $11,160 to the reserve for replacements on September 23, 2021.

Finding reference number: 2021-003 Assistance Listing title and Number (Federal award identification and year): Supportive Housing for the Elderly, Assistance Listing Number 14.157 (Project identification number 122- EH528-WAH-NP and 1994) Auditor non-compliance code: R - Section 8 Program Administration Finding resolution status: Resolved 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. Noncompliance information: See Statement of Condition 2021-003 for noncompliance information. Name of Federal agency: Department of Housing and Urban Development Pass-through entity: N/A Repeat finding: No Questioned costs: $4,812 Statement of Condition 2021-003 (Assistance Listing Number 14.157): During the year ended June 30, 2021, management utilized a vacant unit as a rent free unit for the assistant property manager. The two rent free units at the property were already being occupied. The additional rent free unit utilized was not approved by HUD. Criteria: Pursuant to section 7(g) of the Regulatory Agreement, the Corporation shall not, without the written approval of HUD, permit the use of the dwelling accommodations of the project for any purpose except the use which was originally intended. Furthermore, pursuant to the PRAC contract and other program regulations, the project has only two rent free units. Effect: The unit was not available to be occupied by a qualified tenant. Cause: At the time the assistant property manager moved in management was not aware that HUD had placed a limitation on the number of rent free units at the property. Recommendation: No further action required. The assistant property manager moved out of the unit once management became aware of the limitation on the number of rent free units at the property. To prevent future occurrences, management should only utilize rent free units approved by HUD. Completion date: 3/22/2021 Management's response: Management concurs with the finding and recommendations.

Statement of Condition 2021-003 (Assistance Listing Number 14.157): During the year ended June 30, 2021, management utilized a vacant unit as a rent free unit for the assistant property manager. The two rent free units at the property were already being occupied. The additional rent free unit utilized was not approved by HUD. Recommendation: No further action required. The assistant property manager moved out of the unit once management became aware of the limitation on the number of rent free units at the property. To prevent future occurrences, management should only utilize rent free units approved by HUD. Actions taken or planned on the finding: Management has corrected the finding and will only utilize rent free units approved by HUD in future periods.