Evergreen Terrace, Inc.

Finding reference number: #2024-001 Assistance Listing title and number (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing 14.157, 1997 Auditor non-compliance code: Z - Other Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition 2024-001 for noncompliance. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Statement of condition # 2024-001: For the year ended June 30, 2023, the Corporation did not submit audited financial statements to the Federal Audit Clearinghouse within nine months after the fiscal period end date on March 31, 2024. The audited financial statements were submitted to the Federal Audit Clearinghouse on April 12, 2024. Criteria: Pursuant to 2 CFR 200.512(a), the Corporation is required to electronically submit audited financial statements to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period. Effect: The Corporation is not in compliance with the federal reporting requirements. Cause: Management oversight. Recommendation: The Corporation should submit audited financial statements to the Federal Audit Clearinghouse within the time frames required. Completion date: April 12, 2024 Management Response: Management concurs with the finding and agrees with the auditor's recommendation. The audited financial statements have been submitted to the Federal Audit Clearinghouse. No further action required.

Finding reference number: #2024-002 Assistance Listing title and number (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing 14.157, 1997 Auditor non-compliance code: M – Security Deposits Finding resolution status: Unresolved Universe population size: 12 months Sample size information: 1 month Noncompliance information: See statement of condition 2024-002 for noncompliance. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $1,487 Statement of condition # 2024-002: The Partnership did not maintain a cash account for residents' security deposits in an amount equal to or greater than the outstanding balance of the residents' security deposit liability. At June 30, 2024, the residents' security deposit cash account was underfunded by $1,487. Criteria: Pursuant to the Regulatory Agreement, residents' security deposits should be funded in a separate account in an amount which shall at all times equal or exceed the aggregate of all outstanding obligations. Effect: Failure to fund residents' security deposits could result in the inability of the Company to return security deposits to residents upon termination of the residents' leases. Cause: Management did not adequately monitor the balance of the residents' security deposits cash account throughout the year. Recommendation: Management should ensure the residents' security deposits cash account is adequately funded and transfer funds from the Property's operating cash account to adequately fund the residents' security deposits cash accounts. Completion date: N/A Management Response: Management concurs with the finding and recommendation. Management will ensure the residents' security deposits cash account is properly funded.