Indian Town Home AssociationNon-Profit

Segregation of Duties See Section II – Financial Statement Findings Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Section 202 Project Rental Assistance Contract Assistance Listing #: 14.157 Questioned Costs: None Type of Finding: • Material Weakness in Internal Control over Compliance

Security Deposits Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Section 202 Project Rental Assistance Contract Assistance Listing #: 14.157 Type of Finding: • Other Matter and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: HUD requires refunds to be disbursed to the former tenant and in the appropriate amount within 30 days of move-out. If no refund is given, the tenant should received an itemized listing of any unpaid rent, damages to the unit, and any estimated cost for repair. Condition: We noted a refund was provided to a tenant 32 days after the tenant’s move-out date. Questioned Costs: None Context: We noted a refund was provided to a tenant 32 days after the tenant’s move-out date. Cause: Management oversight. Effect: The Organization is not in compliance with HUD requirements. Repeat Finding: No Recommendation: The Organization should ensure move-out notifications are provided to the accounting office in a timely manner to ensure the tenant's security deposit is processed and refunded within 30 days of the move out date. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. Management will process the related move-out supporting documentation in a timely manner that will allow for the processing of the security deposit payment within 30 days of the actual move-out date.

Lack of Supporting Documentation Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Section 202 Project Rental Assistance Contract Assistance Listing #: 14.157 Type of Finding: • Other Matter and Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: According to 2 CFR 200, all disbursements must be supported by appropriate documentation to ensure the accuracy and reliability of compliance with applicable regulations. Condition: We noted that two disbursements did not have supporting invoices. Questioned Costs: None Context: During the fiscal year there was a change in personnel and during that transition two invoices were misplaced. Cause: Management oversight. Effect: The absence of supporting documentation for disbursements increases the risk of financial misstatement and may lead to unauthorized or inappropriate transactions. Repeat Finding: No Recommendation: The Organization should strengthen their record retention policy to ensure that proper support for disbursements is maintained. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. Management will maintain invoices for all disbursements.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Section 202 Project Rental Assistance Contract Assistance Listing #: 14.157 Questioned Costs: None Type of Finding: • Material Weakness in Internal Control over Compliance Condition: There is not an ideal segregation of duties among personnel involved in the accounting function. A lack of proper segregation of duties could allow errors or irregularities to occur and go undetected. This condition is inherent in operations which, for sound economic conditions, must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Criteria or Specific Requirement: A proper segregation of duties is an important component of a system of strong internal controls and should be implemented, if possible. Cause: For sound economic reasons, the Organization and the management company must function with a small number of office personnel, and correction of this condition would require the employment of additional office personnel. Consequently, corrective action may not be practical. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Repeat Finding: No Recommendation: When this condition exists, management’s and the board’s close supervision and review of accounting information are the best means of preventing or detecting errors and irregularities. Views of Responsible Officials and Planned Corrective Actions: We agree and will continue to monitor monthly financial results and accounting information as correction is not practical.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Supportive Housing for the Elderly (Section 202) Mortgage Financing Section 202 Project Rental Assistance Contract Assistance Listing #: 14.157 Type of Finding: • Other Matter and Significant Deficiency in Internal Control over Compliance Condition: The Organization had surplus cash at September 30, 2023 of $39,374. This surplus cash was not deposited into the residual receipts reserve account within 90 days from September 30, 2023. The deposit was made on July 31, 2024. Criteria or Specific Requirement: The HUD regulatory agreement requires any surplus cash to be deposited into the residual receipts account within 90 days of year end. Questioned Costs: None Cause: Management oversight. Effect: The Organization is not in compliance with the HUD regulatory agreement. Repeat Finding: No Recommendation: We recommend that management ensure any surplus cash is deposited within 90 days of year end. Views of Responsible Officials and Planned Corrective Actions: We agree and will ensure future surplus cash is deposited within the required timeline.