Providence Place V, Inc. 053-EE097

Statement of Condition: During the year ended September 30, 2021, the Organization overpaid management fees and payroll reimbursements to St. Joseph of the Pines, Inc. totaling $7,388. On August 26, 2019, the Organization paid expenses of $7,388 on behalf of another entity related through a common board. On November 11, 2019, the related entity reimbursed the Organization. However, the deposit was made to the St. Joseph of the Pines, Inc. corporate bank account instead of the operating account of the Organization. In order to correct the deposit made in error, the related party reimbursements to St. Joseph of the Pines, Inc. were to be reduced by $7,388. Instead of reducing the amount due for management fees and payroll reimbursements by $7,388, the Organization paid the full amount which therefore caused an overpayment of related party reimbursements during the current year. Criteria: HUD Handbook 4370.2 REV-1, Chapter 2, Section 2-6 E, specifies that project funds should only be used to make mortgage payments, make required deposits to the Reserve for Replacements, pay reasonable expenses necessary for the operations and maintenance of the project, pay distribution of surplus cash permitted, and repay owner advances authorized by HUD. Effect: Noncompliance with HUD regulations. Cause: Management oversight. Context: A test was performed to review for reasonableness of related party reimbursements. Recommendation: We recommend that the Organization funds and business accounts of the Organization are only used for expenses of the Organization. We recommend any amounts being deposited on behalf of the Organization are reviewed to verify that the funds have been deposited in the proper account. Additionally, we recommend that St. Joseph of the Pines reimburses the Organization for the overpayment in the amount of $7,388. Questioned Costs: $7,388. Views of Responsible Officials and Corrective Action Plan: Management acknowledges the funds meant for the Organization were improperly deposited into the bank account of St. Joseph of the Pines, Inc. and therefore, the Organization overpaid management fees and payroll reimbursements during the current year. Subsequent to year end on November 2, 2021, St. Joseph of the Pines, Inc. reimbursed the Organization for the overpayment in the amount of $7,388. This amount is included on the balance sheet in accounts receivable - operations.

Statement of Condition: During the year ended September 30, 2019, the Organization paid expenses of $7,388 on behalf of another entity, related through a common board, in error. The expenses were reimbursed to the Organization subsequent to year end. Criteria: HUD Handbook 4370.2 REV-1, Chapter 2, Section 2-6, E, specifies that project funds should only be used to make mortgage payments, make required deposits to the Reserve for Replacements, pay reasonable expenses necessary for the operations and maintenance of the project, pay distribution of surplus cash permitted, and repay owner advances authorized by HUD. Effect: Noncompliance with HUD guidelines and payment of non-project expenses. Cause: Management oversight Context: Management detected the error through its routine monitoring processes. Additionally, a new process was put in place by management to ensure proper payment of project expenses in the future. The expenses were reimbursed to the Organization subsequent to year end. Questioned Costs: $7,388 Recommendation: We recommend the management ensure that vendors provide the correct name on invoices to monitor the disbursements of the Organization. Views of Responsible Officials and Corrective Action Plan: Management detected the error through its routine monitoring processes. Additionally, a new process was put in place by management to ensure proper payment of project expenses in the future. The expenses were reimbursed to the Organization subsequent to year end.