Council for Jewish Elderly

Federal Agency: U.S. Department of Housing and Urban Development (HUD), ALN 14.195 Award Year: 2025 Compliance Requirement: HUD HAP Contract Rent Adjustments and Utility Allowances Criteria: HUD program requirements require timely implementation of approved contract rent adjustments and accurate application of utility allowances matching HUD schedules. Condition/Context: During testing, updated utility allowances were not applied following a HUD-approved contract rent adjustment. Management turnover during August through September 2024 contributed to the lapse. Additional Control Conclusion: Although the adjustment was signed and approved by the proper individual, it was not implemented. Therefore, the control did not operate effectively, resulting in both a compliance issue and a control deficiency. Cause: Controls failed to ensure timely implementation of HUD-approved rent and utility updates during staffing transition. Effect or Potential Effect: Inaccurate HAP submissions and risk of future repayment obligations. Questioned Costs: None identified. Repeat Finding: No. Recommendations: Enhance review controls, cross-check HUD approvals, and assign update responsibilities clearly. Views of Responsible Officials: Management concurs and will implement revised procedures as outlined in the Corrective Action Plan.

Finding 2023-001: Distributions in excess of surplus cash available Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: Illinois Housing Development Authority – Program Name: Section 8 Project-Based Cluster, Section 8 Housing Assistance Payment Program Assistance Listing Number: 14.195 Award Numbers: IL06T861037 Category of Finding: Unauthorized distribution of project assets Criteria: The Regulatory Agreement for Multifamily Projects requires the computation of surplus cash prior to the distribution of funds to members and repayment of related-party debt. Any surplus cash in the project funds account should be deposited in a federal insured account and withdrawals may be made only for project purposes and with the approval of HUD. Condition/Context: There were distributions in excess of surplus cash available to be distributed during the year ended June 30, 2023, in the amount of $27,294. The population consists of distribution in the amount of $49,610. Cause: The Company made the distributions without considering surplus cash calculation. Effect: This may result in funds being distributed in excess of allowed amounts. Questioned Costs: $27,294 Repeat Finding: Yes Recommendation: We recommend management to complete and review the calculation of surplus cash to ensure it is accurate and ensure surplus cash is available prior to distributions. Views of responsible officials: Management agrees with the aforementioned finding. See corrective action plan.

Section III - Federal Award Findings and Questioned Costs Finding 2022-001: Distributions in excess of surplus cash available Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: Illinois Housing Development Authority Program Name: Section 8 Project - Based Cluster Assistance Listing Number: 14.195 Award Numbers: IL062156201 Category of Finding: Unauthorized distribution of project assets Criteria: The Regulatory Agreement for Multifamily Projects requires the computation of surplus cash prior to the distribution of funds to members and repayment of related-party debt. Any surplus cash in the project funds account should be deposited in a federal insured account and withdrawals may be made only for project purposes and with the approval of HUD. Condition/Context: There were distributions in excess of surplus cash available to be distributed during the year ended June 30, 2022, in the amount of $11,142. The population consists of distribution in the amount of $29,374. Cause: The Company made the distributions without considering surplus cash calculation. Effect: This may result in funds being distributed in excess of allowed amounts. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management to complete and review the calculation of surplus cash to ensure it is accurate and ensure surplus cash is available prior to distributions. Management?s response: Management agrees with the aforementioned finding.