Bethel Manor II IncNon-Profit

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.155 The Project is required to make a deposit into the residual receipts account within 90 days after year end in the amount of any surplus cash. Recommendation: We recommend management ensure they have the controls and processes in place to make the residual receipts deposit timely. Action taken in response to finding: Management has made all required deposits to the residual receipts account as of May 2025 and the cash account was whole before the sale that took place on November 30, 2025. Name of the contact person responsible for corrective action: Thomas Krolak Planned completion date for corrective action plan: May 31, 2025

Section 232 HUD-Insured Mortgage– Assistance Listing No. 14.155 The security deposit liability needs to be funded by a security deposit asset equal to or greater than the liability. Recommendation: We recommend management ensure they have controls and processes in place to ensure the security deposit liability account is properly funded at all times. Action taken in response to finding: The property sold on November 30, 2025, and the security deposit cash was transferred to the new owners at that point. The $342 shortage in cash was considered in the sale but was not transferred from operating to the security deposit cash before the sale took place. Name of the contact person responsible for corrective action: Thomas Krolak Planned completion date for corrective action plan: November 30, 2025

U.S, Department of Housing and Urban Development Bethel Manor II respectfully submits the following corrective action plan for the year ended December 31, 2019. Audit period: January 1, 2019 ? December 31, 2019 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS?FINANCIAL STATEMENT AUDIT MATERIAL WEAKNESS 2019-001 Significant Audit Adjustment Recommendation: For any future fixed asset additions and salary expenses, it is recommended that these additions and expenses are reviewed to ensure they are being recoded to the correct property in accordance with U.S. GAAP. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will adopt procedues to ensure fixed asset additons and salary and benefit expenses are property recorded in the financial statements. A monthly review of financial information by The Organization will ensure items will be property accounted for in accordance with U.S. GAAP. Name(s) of the contact person(s) responsible for corrective action: Patti Carey Planned completion date for corrective action plan: January 1, 2020 FINDINGS?FEDERAL AWARD PROGRAMS AUDITS U.S, Department of Housing and Urban Development 2019-002 Section 223(f) HUD Insured Mortgage ? CFDA No. 14.155 Recommendation: For any future fixed asset additions, it is recommended that these additions are reviewed to ensure they are being recoded to the correct property in accordance with U.S. GAAP. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will adopt procedues to ensure fixed asset additons and salary and benefit expenses are properly recorded at the correct entity. A monthly review of financial information by The Organization will ensure items will be recorded to the correct entity. Name(s) of the contact person(s) responsible for corrective action: Patti Carey Planned completion date for corrective action plan: January 1, 2020 If the U.S, Department of Housing and Urban Development has questions regarding this plan, please call Patti Carey at (320) 763-1122.