Caspian Housing Corporation - Spring Valley Apartments

Finding 2024-001: Considered a material weakness in internal controls over major program compliance. Major Program ALN: 14.155 Major Program Name: Mortgage Insurance for the Purchase of Refinancing of Multifamily Housing Projects Criteria: According to 2 CFR Part 200 (Uniform Guidance), specifically 2 CFR §200.303, non-federal entities are required to establish and maintain effective internal control over federal awards. This includes written policies and procedures to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our review of Caspian Housing Corporation’s administration of its major federal program, we noted that the entity lacks formal, written policies and procedures governing key compliance areas. The absence of such written policies and procedures increases the risk of noncompliance with HUD program requirements and may result in inefficiencies, errors, or potential misuse of federal funds. Cause: Caspian Housing Corporation has not developed or implemented written policies and procedures in accordance with federal requirements. Effect: Without documented policies and procedures, Caspian Housing Corporation is at risk of noncompliance with federal requirements, which could lead to financial penalties, questioned costs, or potential loss of federal funding. Recommendation: We recommend that Caspian Housing Corporation develop and implement comprehensive written policies and procedures that align with Uniform Guidance requirements. Management Response: Management is in agreement with the recommendations and will work to implement the required policies and procedures in accordance with Uniform Guidance requirements during 2025. Auditor Non-compliance Code: S - internal control deficiencies

Caspian Housing Corporation respectfully submits the following corrective action plan for the year ended December 31, 2024. Auditor: Maner Costerisan, PC, 2425 E. Grand River Ave., Suite 1, Lansing, MI 48912 Audit period: Year ended December 31, 2024 The findings from December 31, 2024 schedule of finding and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Finding Number 2024-001 - Material Weakness in Interal Control Over Major Program Complaince Recommendation: Develop and implement comprehensive written policies and procedures that align with Uniform Guidance requirements. Action Taken: We are in agreement with the recommendations and will work to implement the required policies and procedures in accordance with Uniform Guidance during 2025.