Village of Lawrence, Inc. dba Branchwood Village Senior Living CooperativeNon-Profit

Filing of Single Audit Reporting Package Federal Program – HUD insured mortgage under Section 213 of the National Housing Act Assistance Listing Number – 14.126 Significant Deficiency Category of Finding - Other Criteria - Pursuant to 2 CFR section 200.512(a), the reporting package shall be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition - The Cooperative did not submit the Single Audit Reporting Package for the year ended March 31, 2023 and 2022 within nine months after the end of the audit period (December 31, 2023 and 2022). Cause - The Single Audit Reporting website was updated in 2022 and 2023 and a new unique entity identification number was required to be created. The Cooperative did not file for a unique entity identification number in an appropriate time to submit the report. Effect - Failure to submit the required Single Audit Reporting Package timely automatically results in the Cooperative not qualifying for low-risk auditee status for the subsequent year’s single audit. Recommendation - We recommend the Cooperative develop, document, and implement policies and procedures for timely submission of the Single Audit Reporting Package. Auditee’s comment - The Board of Directors will designate an individual to document financial statement preparation processes to ensure timely submission of the Single Audit Reporting Package. Status - Unresolved

Filing of Single Audit Reporting Package Federal Program – HUD insured mortgage under Section 213 of the National Housing Act Assistance Listing Number – 14.126 Significant Deficiency Category of Finding - Other Criteria - Pursuant to 2 CFR section 200.512(a), the reporting package shall be submitted within the earlier of 30 days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition - The Cooperative did not submit the Single Audit Reporting Package for the year ended March 31, 2022 within nine months after the end of the audit period (December 31, 2022). Cause - The Single Audit Reporting website was updated in 2022 and a new unique entity identification number was required to be created. The Cooperative did not file for a unique entity identification number in an appropriate time to submit the report. Effect - Failure to submit the required Single Audit Reporting Package timely automatically results in the Cooperative not qualifying for low-risk auditee status for the subsequent year’s single audit. Recommendation - We recommend the Cooperative develop, document, and implement policies and procedures for timely submission of the Single Audit Reporting Package. Auditee’s comment - The Board of Directors will designate an individual to document financial statement preparation processes to ensure timely submission of the Single Audit Reporting Package. Status - Unresolved

Significant deficiency – segregation of duties Criteria - Good internal control requires a segregation of duties and responsibilities such that no one employee has access to both physical assets and the related accounting records, or to all phases of a transaction. Condition - The Cooperative has one employee that performs day to day management and accounting functions. Cause - The size of the Cooperative’s accounting and administrative staff precludes certain internal controls that would be preferred if the office staff were large enough to provide optimum segregation of duties. Effect - The lack of segregation of duties may result in undetected errors in financial statements and increases the possibility of misappropriation of Cooperative assets. Repeat Finding - This finding was reported in the prior period as finding 2021-001. Recommendation - The Board of Directors should remain involved in the financial affairs of the Cooperative on a regular ongoing basis to provide oversight and independent review functions and mitigate the weakness created by the lack of segregation. Auditee’s comment - The Board of Directors is and will remain involved in the financial affairs of the Cooperative. Status - Outstanding

2021-001 ? Significant deficiency ? segregation of duties Criteria - Good internal control requires a segregation of duties and responsibilities such that no one employee has access to both physical assets and the related accounting records, or to all phases of a transaction. Condition - The Cooperative has one employee that performs day to day management and accounting functions. Cause - The size of the Cooperative?s accounting and administrative staff precludes certain internal controls that would be preferred if the office staff were large enough to provide optimum segregation of duties. Effect - The lack of segregation of duties may result in undetected errors in financial statements and increases the possibility of misappropriation of Cooperative assets. Repeat Finding - This finding was reported in the prior period as finding 2020-001. Recommendation - The Board of Directors should remain involved in the financial affairs of the Cooperative on a regular ongoing basis to provide oversight and independent review functions and mitigate the weakness created by the lack of segregation. Auditee?s comment - The Board of Directors is and will remain involved in the financial affairs of the Cooperative. Status - Outstanding Auditor?s non-compliance code - S - Internal Control Deficiencies

2021-002 ? Filing of Single Audit Report Federal Program ? HUD insured mortgage under Section 213 of the National Housing Act CFDA# ? 14.126 Significant Deficiency Category of Finding - Other Criteria - Pursuant to 2 CFR section 200.512(a), the reporting package shall be submitted within the earlier of 30 days after receipt of the auditor?s report(s), or nine months after the end of the audit period. Condition - The Cooperative did not submit the Single Audit Reporting Package for the period ended March 31, 2020 within nine months after the end of the audit period (December 31, 2020). Cause - The Cooperative submitted a Single Audit Report prior to the required deadline, but it was rejected due to the omission of the Corrective Action Plan, a component of the report required by the OMB Uniform Guidance. The Corrective Action Plan was submitted in January 2021, and final approval of the Single Audit was received, but it was after the December 31, 2020 deadline. Effect - Failure to submit the required Single Audit Reporting Package timely automatically results in the Cooperative not qualifying for low-risk auditee status for the subsequent year?s single audit. Recommendation - We recommend the Cooperative develop, document, and implement policies and procedures for timely submission of the Single Audit Reporting Package. Auditee?s comment - The Board of Directors will designate an individual to document financial statement preparation processes to ensure timely submission of the Single Audit Reporting Package. Status - Resolved Auditor?s non-compliance code - Z -Other Responsible party for correction action - Craig Brinkman, CFO of REE Development (Management Agent)

SECTION II ? FINDINGS ? FINANCIAL STATEMENTS AUDIT 2020-001 ? Significant deficiency ? segregation of duties Criteria - Good internal control requires a segregation of duties and responsibilities such that no one employee has access to both physical assets and the related accounting records, or to all phases of a transaction. Condition - The Cooperative has one employee that performs day to day management and accounting functions. Cause - The size of the Cooperative?s accounting and administrative staff precludes certain internal controls that would be preferred if the office staff were large enough to provide optimum segregation of duties. Effect - The lack of segregation of duties may result in undetected errors in financial statements and increases the possibility of misappropriation of Cooperative assets. Recommendation - The Board of Directors should remain involved in the financial affairs of the Cooperative on a regular ongoing basis to provide oversight and independent review functions and mitigate the weakness created by the lack of segregation. Auditee?s comment - The Board of Directors is and will remain involved in the financial affairs of the Cooperative. Status - Outstanding Auditor?s non-compliance code - S - Internal Control Deficiencies SECTION III ? FINDINGS AND QUESTIONED COSTS ?MAJOR FEDERAL AWARD PROGRAM AUDIT No matters were reported.