LW Fraser Independent Living Project, Inc.

U.S. Department of Housing and Urban Development Federal Financial Assistance Listing 14.181 Section 811 Eligibility Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Criteria: Pursuant to the terms of the agreement and HUD requirements, annual tenant certifications are to be completed and verified to determine the calculation of rental assistance to be received by the tenant. Certifications should be accurately completed, reviewed, and approved to support compliance reporting. Condition: One tenant file selected for testing had an incorrect component of the calculation, resulting in an incorrect calculation of tenant assistance. Cause: The exception appears to be due to oversight in the calculation and secondary review to ensure accurate information and calculations were included to determine tenant assistance amounts. Effect: Due to the incorrect calculations, the rental assistance amounts paid were incorrect, which could result in noncompliance with HUD requirements. Questioned Costs: None reported. Repeat Finding from Prior Year(s): No Recommendation: We recommend management strengthen tenant file and calculation review procedures to ensure all required eligibility documentation is retained in the file in accordance with HUD requirements. Views of Responsible Officials: Management agrees with the finding.

FINDINGS AND QUESTIONED COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2024-01: Late Monthly Deposit to Replacement Reserve Statement of Condition: The Project is required by HUD to make monthly deposits to the replacement reserve in an amount prescribed by HUD. Payments for a portion of the year were lower than the required deposits. The Project corrected the shortfall during 2024 and began making the required deposits. Criteria: The Project is required by HUD to make monthly deposits to the replacement reserve in an amount prescribed by HUD. Effect: The Project was not in compliance with HUD requirements regarding monthly deposits to the replacement reserve. Cause: The Project made monthly deposits to the replacement reserve using the previous HUD communicated amount and did not update the deposit with the new amount. Questioned Costs: None Recommendation: We recommend the Project strengthen procedures to ensure updates to the monthly replacement reserve deposits are made in the correct amount. Views of Responsible Officials: Management concurs with the finding and recommendations. Auditor’s Summary of Auditee’s Comments: The Project didn’t timely update its monthly replacement reserve deposit, but had corrected it during the year. Management concurs with the finding and recommendations. Management’s Response: Management concurs with the finding and recommendations. Management has implemented additional procedures to ensure the monthly deposit to the replacement reserve is timely updated.

Type of Finding: Significant Deficiency Criteria: The Project is responsible for ensuring proper cut-off of accounts payable to help ensure the financial statements are prepared in accordance with U.S. GAAP. Condition: Two invoices were noted as being improperly excluded from the accounts payable listing. Cause: The Project posted invoices received after year-end to January 2024 rather than reflecting them within 2023. Questioned Costs: None Effect: Procedures were not in place to ensure costs incurred prior to year-end were properly reflected within accounts payable. Recommendation: We recommend the Project strengthen procedures to ensure proper cut-off is achieved for accounts payable. Views of Responsible Officials: Management concurs with the finding and recommendations. Auditor’s Summary of Auditee’s Comments: The Project posted invoices after year-end to January 2024 rather than reflecting them within 2023. Management concurs with the finding and recommendations. Management’s Response: Management concurs with the finding and recommendations. Management will implement an additional review step to evaluate the timing of when such costs are incurred in order to ensure accounts payable includes all applicable invoices.