Webb Park, Inc.

Finding 2024-001 – Special Tests and Provisions: Criteria In accordance with the Uniform Guidance, an amount as required by HUD will be deposited monthly in the replacement reserve account. Condition During the year ended June 30, 2024, the project only made 11 monthly deposits into the replacement reserve account. Effect The required monthly deposits were not made properly. Cause The project only made 11 monthly deposits into the replacement reserve account. Questioned Costs $1,100 Context The project did not make all 12 monthly deposits into the replacement reserve account. Repeat Finding No Recommendation Management should ensure the procedures to make the required monthly deposits into the replacement reserve account are followed. Auditor Noncompliance Code N – Reserve for Replacements Deposits; Special Tests and Provisions – Replacement Reserve. Finding Resolution Status Open. Reporting Views of Responsible Officials Management will ensure the project makes the delinquent deposit into the replacement reserve account. Management will also ensure the procedures to make the required monthly deposits into the replacement reserve account are followed.

Finding 2024-002 – Special Tests and Provisions: Criteria In accordance with chapter 2.14 of HUD Handbook 4381.5, each project must have fidelity bond or employee dishonesty coverage for at least the value of two months’ gross potential income for the project. If the bond covers more than one project, this minimum must be computed using the project with the highest gross potential income. Condition For the year ended June 30, 2024, the project’s fidelity bond coverage was underfunded in the amount of $56,000. On August 16, 2024, management agent made policy changes to increase fidelity bond/employee dishonesty coverage to meet the minimum coverage requirements prescribed by HUD. Effect For the year ended June 30, 2024, the project’s fidelity bond coverage was insufficient. Cause The project’s fidelity bond coverage was underfunded by $56,000. Questioned Costs $56,000. Context The project’s fidelity bond coverage was not in compliance with HUD rules and regulations. Repeat Finding No. Recommendation Management should ensure fidelity bond coverage for the project meets the minimum requirements prescribed by HUD. Auditor Noncompliance Code Z – Other; Special Tests and Provisions –Management Functions. Finding Resolution Status Resolved. Reporting Views of Responsible Officials. Management will ensure that fidelity bond coverage is in accordance with HUD rules and regulations.