TB Housing Development Fund Co., Inc. HUD Project No. 014-EE285

Finding 2025-001: Special Tests and Provisions - Project Funds. Criteria: In accordance with 24 CFR 891.400(e), a separate interest-bearing project fund account shall be maintained in a depository or depositories which are members of the Federal Deposit Insurance Corporation or National Credit Union Share Insurance Fund and all tenant payments, charges, income and revenues arising from project operation or ownership shall be deposited to this account. Condition and context: During our testing, we noted that the project fund account used by the Company was not an interest-bearing account. Cause: Subsequent to the initial rental assistance contract, changes to HUD regulations resulted in the requirement that the project fund account be an interest-bearing account. This change was an oversight by the Company's management. Effect or potential effect: Project funds would not earn interest in accordance with HUD requirements. Questioned costs: None. Recommendation: We recommend that the Company utilize an interest-bearing account for project funds in accordance with HUD requirements. Views of responsible officials: Management concurs with the audit finding. Although the non-profit Company does not currently use an interest-bearing account for project funds, due to the ongoing operation of the program and continuous activity within the project funds account, any interest earned in such an account would be negligible. Management inquired with the bank and deemed the cost outweighs the benefit due to the fees charged for an interest bearing account exceeding the interest that would be earned.

Corrective Action Plan – Single Audit Finding Entity Name: TB Housing Development Fund Co., Inc. Audit Period: For the year Ended June 30, 2025 Finding Reference Number: 14.157 Federal Program: Supportive Housing for the Elderly (Section 202) 1. Audit Finding Summary Describe the audit finding and the specific noncompliance identified by the auditor. In accordance with 24 CFR 891.400(e), a separate interest-bearing project fund account shall be maintained in a depository or depositories which are members of the Federal Deposit Insurance Corporation or National Credit Union Share Insurance Fund and all tenant payments, charges, income and revenues arising from project operation or ownership shall be deposited to this account. 2. Root Cause Explain the underlying reasons for the finding, such as process gaps, training issues, or lack of controls. Subsequent to the initial rental assistance contract, changes to HUD regulations resulted in the requirement that the project fund account be an interest-bearing account. This change was an oversight by the Company's management. 3. Corrective Actions Action Item: Use an interest-bearing account for project funds Responsible Person: Chief Financial Officer Completion Date: TBD Status: In process 4. Monitoring Plan Describe how the implementation of corrective actions will be monitored and evaluated. Management inquired with the bank and deemed the cost outweighs the benefit due to the fees charged for an interest bearing account exceeding the interest that would be earned. 5. Contact Information Name: Aaron Hejmowski Title: Chief Financial Officer Phone: 716-884-7791 Email: ahejmowski@belmonthousingwny.org