NHHI/ASI BLOOMINGTON, INC.Non-Profit

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: The Project's replacement reserve cash balance was underfunded at September 30, 2025. Criteria: The Project underpaid six required monthly deposits into the replacement reserve account and withdrew the full amount for an invoice that had already been partially paid by a tenant. Effect: The replacement reserve cash balance was $738 less than it should be at September 30, 2025. Context: Activity in the replacement reserve account for the year ended September 30, 2025 was tested. No sample was tested. Questioned costs - $738; Cause: HUD adjusted the Project’s monthly replacement reserve deposit requirement during the year, but the Project failed to update its deposits accordingly, resulting in an underfunded account. Additionally, the Project withdrew the full amount for a HUD approved invoice, even though a portion had already been paid by a tenant. Recommendation: The Project should deposit $738 into the replacement reserve account. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $738 into the replacement reserve account. Questioned Costs - Department of Housing and Urban Development - $738; Non-compliance code - N

FINDING 2024-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: One of the tenant files tested contained a mathematical error in computing the tenant's medical expense deduction in the process of computing the tenant share of monthly rent. Criteria: The medical expense deduction should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files was selected for testing the medical expense deduction in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non-compliance did not have a financial effect. The details and results of the sample are as follows: Population - 21, Dollars - N/A; Sample - 3, Dollars - N/A, Not in Compliance - 1, $32; Questioned Costs - $32; Cause: There was an error in interpreting some information provided by the tenant during the recertification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Total-Department of Housing and Urban Development - $32; Non-compliance code: R

FINDING 2024-002: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: One of the tenant files tested contained a mathematical error in computing household income in the process of computing the tenant share of monthly rent. Criteria: Household income should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files were selected for testing household income in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non-compliance did not have a financial effect. The details and results of the sample are as follows: Population - 21, Dollars - N/A; Sample - 3, Dollars - N/A; Not in Compliance - 1, $60; Questioned Costs - $60; Cause: There was an error in interpreting some information provided by the tenant during the recertification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Total-Department of Housing and Urban Development - $60; Non-compliance code: R