ARCHULETA HOUSING CORPORATIONNon-Profit

a. Comments on the Finding and Each Recommendation Management concurs with Finding 2022-001 and agrees with the recommendation in the finding. However, the Organization would like to note that it has documentation dating back to 2015, which shows the submission of a deferral package to HUD, and correspondence afterward from HUD stating that due to the government shutdown the package was on hold. Following the hold and the installation of a new Executive Director in May of 2019, the Organization has documentation of correspondence with HUD directly asking for an update on the submitted deferral package, and HUD recognizing that the delays caused the deferral package to be lost in the system and that the old package was deemed incomplete and a new package would need to be submitted. As of November 25, 2020 a Resolution Specialist from HUD was assigned to AHC and since then management has worked closely with her to gather resources and prepare a package for deferral. b. Action(s) Taken or Planned on the Finding Management is currently preparing a deferral package to be submitted to HUD by the upcoming fiscal year end for the deferral and repayment of the Flexible Subsidy Loans. A Capital Needs Assessment was completed on the property July 12, 2021 which provided guidance to the Board of Directors to prepare for future capital needs and the repayment of the loan. In addition, management worked with and met with members of CHFA & DOLA regularly throughout this fiscal year to analyze the CNA and gather information about potential strategies to address capital needs and the repayment of the loan. Management also wrote and received grants for its capital campaign from donors, CHFA, the Colorado Health Foundation and the Community Foundation serving Southwest Colorado. In March of 2022, the board heard a recommendation from RCAC for a large-scale LIHTC rehab project and considered its cost and value. Ultimately, the board decided to term out the HUD loan and continue making upgrades on the units when they turn over, and utilize funds acquired through its capital campaign to make large-scale renovations. Additionally, a successful REAC inspection was completed with a score of 66c on July 14, 2022. Lastly, the HAP Contract for AHC expired September 30, 2022 which caused a delay in the ability to complete the Flex Loan Deferral package, as the Pro Forma depends on the contract rents.

2021-001

a. Comments on the Finding and Each Recommendation Management concurs with Finding 2022-002 and agrees with the recommendation in the finding. However, the Organization would like to note that it has documentation dating back to 2015, which shows the submission of a deferral package to HUD, and correspondence afterward from HUD stating that due to the government shutdown the package was on hold. Following the hold and the installation of a new Executive Director in May of 2019, the Organization has documentation of correspondence with HUD directly asking for an update on the submitted deferral package, and HUD recognizing that the delays caused the deferral package to be lost in the system and that the old package was deemed incomplete and a new package would need to be submitted. As of November 25, 2020 a Resolution Specialist from HUD was assigned to AHC and since then management has worked closely with her to gather resources and prepare a package for deferral. b. Action(s) Taken or Planned on the Finding Management is currently preparing a deferral package to be submitted to HUD by the upcoming fiscal year end for the deferral and repayment of the Flexible Subsidy Loans. A Capital Needs Assessment was completed on the property July 12, 2021 which provided guidance to the Board of Directors to prepare for future capital needs and the repayment of the loan. In addition, management worked with and met with members of CHFA & DOLA regularly throughout this fiscal year to analyze the CNA and gather information about potential strategies to address capital needs and the repayment of the loan. Management also wrote and received grants for its capital campaign from donors, CHFA, the Colorado Health Foundation and the Community Foundation serving Southwest Colorado. In March of 2022, the board heard a recommendation from RCAC for a large-scale LIHTC rehab project and considered its cost and value. Ultimately, the board decided to term out the HUD loan and continue making upgrades on the units when they turn over, and utilize funds acquired through its capital campaign to make large-scale renovations. Additionally, a successful REAC inspection was completed with a score of 66c on July 14, 2022. Lastly, the HAP Contract for AHC expired September 30, 2022 which caused a delay in the ability to complete the Flex Loan Deferral package, as the Pro Forma depends on the contract rents.

2021-002

Management?s Response: a. Comments on the Finding and Each Recommendation Management concurs with Finding 2021-001 and agrees with the recommendation in the finding. However, the Organization would like to note that it has documentation dating back to 2015, which shows the submission of a deferral package to HUD, and correspondence afterward from HUD stating that due to the government shutdown the package was on hold. Following the hold and the installation of a new Executive Director in May of 2019, the Organization has documentation of correspondence with HUD directly asking for an update on the submitted deferral package, and HUD recognizing that the delays caused the deferral package to be lost in the system and that the old package was deemed incomplete. In the interim, management repeatedly asked HUD for information about what needed to be done, and how to begin making payments without having a formal agreement in place. Finally, HUD provided a link to Pay.gov and management began making monthly payments on the Flexible Subsidy Loan in December of 2019 in the amount of $4,791.67, in the hopes of spurring the finalization of the note and receiving information about how to proceed with the deferral package. b. Action(s) Taken or Planned on the Finding Management is currently preparing a proposal to be submitted to HUD by 6/30/2022 for the deferral and repayment of the Flexible Subsidy loans. Management set up and attended the High Priority Colorado Preservation meeting with Eileen Hearty and Craig Nelson from HUD and members of our team from RCAC, CHFA & DOLA on June 2, 2021. HUD applauded AHC for getting a CNA done to prepare for the submission of the deferral. In addition, HUD was pleased that AHC had such a strong team assisting them with preparing the deferral package. HUD noted that this meeting was being recorded by HUD Denver, to show progress towards reaching a deferral agreement in the future. Mr. Nelson from HUD provided a follow up email to the group with Notice H 2011-05 which goes over the deferral package requirements and process. This is being used to prepare the Flexible Subsidy loan deferral package.

2020-005

Management?s Response: a. Comments on the Finding and Each Recommendation Management concurs with Finding 2021-002 and agrees with the recommendation in the finding. b. Action(s) Taken or Planned on the Finding Management has chosen to go with a new auditing firm that has a much better understanding of HUD guidelines and will submit the results of this year?s audit filed with the Federal Audit Clearinghouse (FAC). The previous audit firm was unaware of this guideline, thus did not inform management of the need for them to file the previous year?s audits with the Federal Audit Clearinghouse (FAC).