Community For Affordable Senior Housing, IncNon-Profit

Federal Program – U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 – Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding – Eligibility Criteria - The Compliance Supplement requires owners and management agents of properties with Section 202 project rental assistance contracts to complete annual income recertifications for all tenants. These recertifications must be conducted timely, with notices sent at least 120 days prior to the effective date and all required documentation collected to ensure accurate rent calculations and continued eligibility. Condition - During the audit, a review of tenant files revealed that income recertifications were either not completed or not completed in a timely manner. Specifically: 3 out of 5 tenant files reviewed lacked completed income recertifications within the required timeframe. 1 out of 5 tenant files we reviewed did not contain evidence that tenants were notified of their obligation to provide updated income and family composition information. Context - Of the total population of 49 units, 5 were tested. Questioned costs are not applicable to this finding. Based on our sample and inquiry of employees we understand this finding to be prevalent at the Organization throughout the year. Cause - The identified deficiencies appear to be due to inadequate oversight and ineffective tracking of the recertification process by property management. Factors contributing to the issue include not utilizing a tracking system to track recertification deadlines and timely distribution of recertification notices; insufficient staff training on federal compliance requirements; and staff turnover resulting in inconsistent adherence to required procedures. Effect (Potential Effect) - Failure to perform annual recertifications on a timely basis increases the risk that ineligible tenants may continue to receive assistance or that assistance amounts may not be properly calculated based on current income and family composition. This could result in questioned costs and potential repayment of HUD assistance related to periods in which recertifications were late. Identification of repeat finding - Yes Recommendation - To ensure compliance with HUD recertification requirements, management should utilize available tracking systems to monitor and enforce recertification deadlines; provide staff training on HUD Handbook 4350.3 recertification procedures and requirements; establish a quality control process to verify recertifications are completed on time and properly documented in tenant files; and conduct periodic internal audits to identify and correct any deficiencies in the recertification process. Views of responsible officials and planned corrective actions - The Organization agrees with the finding and has continued to implement strategies to address the finding. To address this finding, ownership has moved its portfolio, with the exception of one project, to third party property managers as of January 1, 2026. These agents have a track record of completing certifications on time and in accordance with applicable regulations. Ownership periodically reviews the agents’ procedures to ensure that they complete tenant files on time and have routine internal audits of tenant files to ensure compliance with HUD regulations.

Federal Program – U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 – Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding – Eligibility Criteria - The Compliance Supplement requires that tenant files contain all necessary documentation to verify eligibility, rent calculations, and compliance with federal regulations. Required documents include, but are not limited to, original applications, verified bank accounts, resident screenings, Enterprise Income Verification (EIV) reports, unit inspections, and move-out documentation. Maintaining complete tenant files is essential for ensuring compliance with federal requirements and preventing improper subsidy payments. Condition - During the audit, a review of tenant files revealed that required documentation was either missing or incomplete. Specifically: In 1 out of 5 tenant files reviewed, we were not provided evidence that all required documents were included in the tenant file. Missing documentation included original application, Social Security Number verification, security deposit documentation, and inspection forms. Context - Of the total population of 49 units, 5 units were tested. Questioned costs are not applicable to this finding. Based on our sample and inquiry of employees, we understand this finding to be prevalent at the Organization throughout the year. Cause - The identified deficiencies appear to be due to inadequate file management and oversight. Contributing factors may include insufficient staff training on federal documentation requirements, staff turnover resulting in inconsistencies in maintaining tenant records, and not conducting routine internal file audits to ensure compliance. Effect (Potential Effect) - Missing documentation in tenant files reduces the project’s ability to demonstrate that tenant income, assets, and eligibility were properly determined in accordance with HUD requirements. This increases the risk of ineligible tenants receiving assistance or incorrect assistance amounts and may result in questioned costs or other compliance actions by HUD. Identification of repeat finding - No Recommendation - To ensure compliance with federal requirements for tenant documentation, property management should conduct periodic internal file audits to identify and correct missing or incomplete documentation; provide staff training on proper file management and federal compliance requirements; establish a document tracking system to prevent missing files and ensure timely updates; and assign responsibility to designated staff for reviewing and maintaining complete tenant records. Views of responsible officials and planned corrective actions - The Organization agrees with the finding. To address this finding, ownership has moved its portfolio, with the exception of one project, to third party property managers as of January 1, 2026. These agents have a track record of completing, documenting, and retaining certifications in accordance with applicable regulations. Ownership periodically reviews the agents’ procedures to ensure that they document and maintain tenant files in accordance with HUD and have routine internal audits of tenant files to ensure compliance with HUD regulations.

2024-001 – Annual Income Recertifications Federal Program – U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 – Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding – Eligibility Criteria - The Compliance Supplement requires owners and management agents of properties with Section 202 project rental assistance contracts to complete annual income recertifications for all tenants. These recertifications must be conducted timely, with notices sent at least 120 days prior to the effective date and all required documentation collected to ensure accurate rent calculations and continued eligibility. Condition - During the audit, a review of tenant files revealed that income recertifications were either not completed or not completed in a timely manner. Specifically: • 3 out of 5 tenant files reviewed lacked completed income recertifications within the required timeframe. • 1 out of 5 tenant files we reviewed did not contain evidence that tenants were notified of their obligation to provide updated income and family composition information. Context - Of the total population of 49 units, 5 were tested. Questioned costs are not applicable to this finding. Based on our sample, inquiry of employees and a master list of late annual recertifications provided by management, we understand this finding to be prevalent at the Organization throughout the year. Cause - The identified deficiencies appear to be due to inadequate oversight and ineffective tracking of the recertification process by property management. Factors contributing to the issue include not utilizing a tracking system to track recertification deadlines and timely distribution of recertification notices; insufficient staff training on federal compliance requirements; and staff turnover resulting in inconsistent adherence to required procedures. Effect (Potential Effect) - Failure to complete or timely conduct income recertifications can lead to several compliance and financial risks, including: incorrect rent calculations, resulting in overpayment or underpayment of housing assistance subsidies; loss of subsidy for tenants who fail to complete recertification, potentially leading to eviction risks; increased administrative burden to resolve delayed recertifications and financial discrepancies; and risk of noncompliance findings in HUD’s Management and Occupancy Reviews (MORs), potentially leading to corrective actions or penalties. Identification of repeat finding - No Recommendation - To ensure compliance with HUD recertification requirements, management should utilize available tracking systems to monitor and enforce recertification deadlines; provide staff training on HUD Handbook 4350.3 recertification procedures and requirements; establish a quality control process to verify recertifications are completed on time and properly documented in tenant files; and conduct periodic internal audits to identify and correct any deficiencies in the recertification process. Views of responsible officials and planned corrective actions - The Organization agrees with the finding and has continued to implement strategies to address the finding. To address this finding, management has assembled and deployed a team of external consultants and temporary workers to assist site staff in completing tenant recertifications and hired a team of additional roving property management/compliance teams to cover open property management positions and to support site staff in completing tenant recertifications. Currently, management plans to transition 50% of its real estate portfolio to new property management in 2025.

Federal Program ? U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 ? Supportive Housing for the Elderly (Section 202) Noncompliance Category of Finding ? Special Tests and Provisions Criteria ? Pursuant to the Corporation?s Regulatory Agreement with the Department of Housing and Urban Development (HUD), all surplus cash must be deposited into the residual receipts reserve within 90 days following the end of the year. Condition ? The Corporation did not deposit 2020 surplus cash of $10,223 to the residual receipts reserve in 2021. Cause ? Procedures in place to ensure that surplus cash is deposited to the residual receipts reserve were not followed. Effect ? The Corporation did not comply with the HUD Regulatory Agreement. Recommendation ? We recommend the Corporation review procedures regarding surplus cash with the responsible employee to ensure surplus cash is deposited to residual receipts on time. Views of Responsible Officials and Corrective Action ? The Corporation agrees with the finding. Management has reminded the employee responsible of the procedures in place to ensure surplus cash is deposited to residual receipts within 90 days of the end of the year. As of December 31, 2021, the deposit has not been made.