REDI CORPORATION AND AFFILIATESNon-Profit

Finding reference number: #2025-001 Assistance Listing title and number (Federal award identification number and year): Project Based Rental Assistance, Assistance Listing No. 14.195 and Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects No. 14.155 Identification number Property Year of award Questioned costs CO99T881006 REDI V 2017 $2,452 C099T841008 REDI VI 2017 $988 C099T841007 / 101-11323 1221 Pearl 2022 $426 Auditor non-compliance code: N – Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $3,866 Repeat Finding: No Statement of condition #2025-001 (Assistance Listing No. 14.195): The Corporation did not make $3,866 of the total required reserve for replacements deposits during the year ended March 31, 2025. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2024, the reserve for replacements account is underfunded by $3,866. Cause: Management did not make the required monthly reserve for replacements deposits. Recommendation: Management should make all required deposits to the reserve for replacements funds. Management should transfer $3,866 from the operating accounts to the reserve for replacements funds. Completion date: December 31, 2025 Management response: Agreed. Management concurs with the finding and the auditor's recommendation. The Corporation made additional deposits totaling $3,866 to the reserve for replacements funds.

Finding reference number: #2025-002 Assistance Listing title and number (Federal award identification number and year): Project Based Rental Assistance, Assistance Listing No. 14.195 and Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects No. 14.155 Identification number Property Year of award Questioned costs CO99T881007 / 101-11323 1221 Pearl 2017 $1,174 Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $1,174 Repeat Finding: No Statement of condition #2025-002 (Assistance Listing No. 14.195): For the year ended March 31, 2025, 1221 Pearl paid management fees to the Agent in excess of the fees earned resulting in prepaid management fees of $1,174 at March 31, 2025. The HUD approved management certification provides for the payment of management fees subsequent to collections. Effect or potential effect: 1221 Pearl is not in compliance with the terms of the HUD approved management certification and 1221 Pearl's cash position has been reduced by $1,174. Cause: 1221 Pearl inadvertently paid fees in excess of the amount earned. Recommendation: The Agent should repay the prepaid management fee balance. Completion date: December 31, 2025 Management response: Agreed. 1221 Pearl concurs with the finding and agrees with the auditor's recommendation. The Agent transferred $1,174 to 1221 Pearl to refund the overpayment.

Finding reference number: #2024-001 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155, Project Based Rental Assistance, Assistance Listing No. 14.195 Identification number See SEFA Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of condition #2024-001: The Form SF-SAC Single Audit Data Collection Form for the year ended March 31, 2024 was not submitted to the federal audit clearinghouse in the required timeframe. Criteria: Pursuant to the Uniform Guidance, the Corporation is required to submit Form SF-SAC Single Audit Data Collection Form within the earlier of 30 days after the receipt of the auditor's report or nine months after the end of the audit period. Effect or potential effect: The Corporation is not in compliance with Uniform Guidance. Cause: Due to administrative delays, the Corporation was not able to complete the audit within the required timeframe. Recommendation: The Corporation should submit the Form SF-SAC Single Audit Data Collection Form for the year ended March 31, 2024 as soon as practical. Completion date: December 31, 2025 Management response: Agreed. The Agent concurs with the finding and recommendation.

Finding reference number: #2024-002 Assistance Listing title and number (Federal award identification number and year): Project Based Rental Assistance, Assistance Listing No. 14.195 Auditor non-compliance code: N – Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $16,431 Repeat Finding: Yes Statement of condition #2024-002 (Assistance Listing No. 14.195): During the year ended March 31, 2024, the Corporation did not make the required deposit to the residual receipts account within 90 days after the end of the fiscal year, resulting in the account being underfunded at year end. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2023, REDI IV had surplus cash of $16,431. During the year ended March 31, 2024, the Corporation did not deposit surplus cash into the residual receipts account for REDI IV. At March 31, 2024, the residual receipts account for REDI IV is underfunded by $16,431. Cause: The Corporation did not make the required surplus cash deposit to the residual receipts account for REDI IV within 90 days after the end of the fiscal year. Recommendation: The Agent should transfer $16,431 from the REDI IV operating account to the residual receipts account. The Agent should make all required deposits to the residual receipts account within 90 days after the end of the fiscal year. Completion date: September 11, 2024 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure future deposits to the residual receipt account are made within 90 days after the end of the fiscal year.

Finding reference number: #2024-003 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 Auditor non-compliance code: P – Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size population: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of condition #2024-003 (Assistance Listing No. 14.155): The Partnership did not furnish HUD with a complete annual financial report within ninety (90) days following the end of the fiscal year ending March 31, 2024. Criteria: Pursuant to the Regulatory Agreement, within ninety (90) days, or such period established in writing by HUD, following the end of each fiscal year, the Partnership shall engage an independent, licensed Certified Public Accountant to audit the Partnership's annual financial report and to produce and furnish HUD an audit report in accordance with the requirements established by HUD. Effect: The Partnership was not in compliance with the Regulatory Agreement. Cause: The Partnership was late to provide the CPA firm (Dauby, O'Connor, & Zaleski, LLC) with open items required to complete the audited financial statements. Recommendation: The annual financial statements should be issued in a timely manner pursuant to the time frame set forth by HUD. Completion Date: August 5, 2024 Management Response: Management concurs with the finding and recommendation. The audited financial statements have been submitted to HUD. No further action is required.

Finding reference number: #2023-001 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T851006 REDI IV 2017 $3,490 CO99T841007 REDI III 2017 $7,350 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $10,840 Repeat Finding: Yes Statement of condition #2023-001 (Assistance Listing No. 14.195): At March 31, 2023, the Corporation's reserve for replacement accounts were underfunded. Criteria: The HAP Contracts require monthly deposits into separate reserve for replacement accounts. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2023, the reserve for replacements accounts are underfunded $10,840. Cause: The Corporation did not make the required monthly deposits to the various reserve for replacements accounts. Recommendation: The Agent should transfer $10,840 from the respective operating accounts to the reserve for replacements accounts. The Agent should make all required deposits to the reserve for replacements accounts. Completion date: October 19, 2023 (REDI IV), January 11, 2024 (REDI III) Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation made the $3,490 required transfer for REDI IV and the $7,350 deposit to REDI III.

Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T851006 REDI IV 2017 $51,630 CO99T841007 REDI III 2017 $19,654 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $71,284 Repeat Finding: No Statement of condition #2023-002 (Assistance Listing No. 14.195): During the year ended March 31, 2023, the Corporation did not make the required deposit to the residual receipts account within 90 days after the end of the fiscal year, resulting in the account being underfunded at year end. Finding reference number: #2023-002 (continued) Criteria: The HAP Contracts require that surplus cash, as defined, to be deposited into either a residual receipts account or reserve for replacement account within 90 days after the end of the fiscal year. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2022, REDI III had surplus cash of $51,630. During the year ended March 31, 2023, the Corporation did not deposit surplus cash into the residual receipts account for REDI III. At March 31, 2023, the residual receipts account for REDI III is underfunded by $51,630. At March 31, 2022, REDI IV had surplus cash of $19,654. During the year ended, March 31, 2023, the Corporation did not deposit surplus cash to the residual receipts account for REDI IV. At March 31, 2023, the residual receipts account for REDI IV is underfunded by $19,654. Cause: The Corporation did not make the required surplus cash deposit to the residual receipts account for REDI III and REDI IV within 90 days after the end of the fiscal year. Recommendation: The Agent should transfer $51,630 from the REDI III operating account to the residual receipts account and $19,654 from the REDI IV operating account to the residual receipts account. The Agent should make all required deposits to the residual receipts account within 90 days after the end of the fiscal year. Completion date: October 19, 2023 (REDI III), December 13, 2023 (REDI IV) Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure future deposits to the residual receipts account are made within 90 days after the end of the fiscal year.

Finding reference number: #2023-003 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award CO99T851006 REDI IV 2017 Auditor non-compliance code: A - Activities Allowed or Unallowed Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Finding reference number: #2023-003 (continued) Pass-through entity: N/A Questioned costs: $28,300 Repeat Finding: Yes Statement of condition #2023-003 (Assistance Listing No. 14.195): For the year ended March 31, 2023, the Corporation paid $28,300 on behalf of a related entity without HUD approval. Criteria: The HAP Contracts do not permit the Corporation from making any distributions or payments to related entities from operating cash without the written approval of HUD. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts and the Corporation's cash position at March 31, 2023 has been reduced by $28,300. Cause: The Corporation did not obtain HUD approval prior to making payments on behalf of the related entity. Recommendation: The related entity should repay $28,300 to the Corporation. The Agent should consider obtaining written approval from HUD prior to making any future distributions or payments to related entities. Completion date: December 13, 2023 Management response: Agreed. The Agent concurs with the finding and agrees with the auditor's recommendation. The related entity will repay $28,300 to the Corporation.

Finding reference number: #2023-004 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 Identification numbers Property Year of award 101-11323 1221 Pearl 2022 Auditor non-compliance code: A – Activities Allowed or Unallowed Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Finding reference number: #2023-004 (continued) Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $28,619 Repeat Finding: No Statement of Condition #2023-004: During the year ended March 31, 2023, the Partnership made distributions of $28,619 in excess of surplus cash. Criteria: Pursuant to the Regulatory Agreement, the Partnership shall not make, or receive and retain, any distribution of assets or any income of any kind of the project except surplus cash. Effect: The payment of the distribution without surplus cash could result in the Partnership not having enough funds to cover operations. Cause: Management distributed an amount greater than the total of the surplus cash amount. Recommendation: Management should limit the payment of distributions to surplus cash. Completion Date: March 31, 2023 Management Response: Agreed. Management will limit future distributions to surplus cash. Surplus cash is positive at March 31, 2023, no further action is needed.

Finding reference number: #2023-005 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 Identification numbers Property Year of award 101-11323 1221 Pearl 2022 Auditor non-compliance code: N – Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Finding reference number: #2023-005 (continued) Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of Condition #2023-005: At March 31, 2023 the Partnership's residual receipts accounts were not invested in interest bearing accounts. Criteria: The Regulatory Agreement requires that the residual receipts be invested in an interest bearing account. Effect: The Partnership is not in compliance with the terms of the Regulatory Agreement. Cause: The Partnership did not open an interest bearing account when it opened the residual receipts cash account. Recommendation: The Agent should transfer the residual receipts account to an interest bearing account. Completion Date: December 12, 2023 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Partnership will transfer the residual receipts account to an interest bearing account.

Finding reference number: #2023-006 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155, Section 8 Housing Assistance Payments Program, Assistance Listing No. 14.195 Identification numbers See SEFA Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Finding reference number: #2023-006 (continued) Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2023-006: The Corporation's accounting books and records as submitted for audit included certain accounts which were not presented in accordance with accounting standards generally accepted in the United States of America ("GAAP"). As a result management was required to provide audit adjustments to present the March 31, 2023 financial statements in accordance with GAAP. Criteria: Pursuant to HUD and OMB requirements, the books and records of the Corporation are required to be kept in accordance with the requirements of HUD and OMB, which includes adequate design and monitoring of controls to safeguard the Corporation's assets, including: maintenance of books and records, completeness and accuracy of books and records, and an auditable paper trail. Effect: The Corporation was not in compliance with certain HUD regulations. Audit adjustments provided by management were required to present the March 31, 2023 financial statements in accordance with GAAP. Cause: During the development of Rhonda's Place, one loan and one grant were received which were not accounted for in accordance with GAAP. Recommendation: The Agent should maintain a comprehensive set of accounting books and records in accordance with GAAP. Completion Date: March 31, 2023 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure that the Agent will maintain a comprehensive set of accounting books and records in accordance with GAAP.

Finding reference number: #2023-007 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155, Section 8 Housing Assistance Payments Program, Assistance Listing No. 14.195 Identification numbers See SEFA Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2023-007: The Form SF-SAC Single Audit Data Collection Form for the years ended March 31, 2023 and 2022 were not submitted to the federal audit clearinghouse in the required timeframe. Criteria: Pursuant to the Uniform Guidance, the Corporation is required to submit Form SF-SAC Single Audit Data Collection Form within the earlier of 30 days after the receipt of the auditor's report or nine months after the end of the audit period. Effect: The Corporation was not in compliance with Uniform Guidance. Cause: Due to the refinancing and development activity, year-end accounting was delayed. Recommendation: The Corporation should submit the Form SF-SAC Single Audit Data Collection Form for the years ended March 31, 2023 and 2022 as soon as practical. Completion Date: April 30, 2024 Management Response: Management concurs with the finding and recommendation. The audited financial statements have been submitted to the federal clearinghouse. No further action is required.

Finding reference number: #2023-008 Assistance Listing title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 Identification numbers Property Year of award 101-11323 1221 Pearl 2022 Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2023-008: The Partnership did not furnish HUD with a complete annual financial report within ninety (90) days following the end of the fiscal year ending March 31, 2023. Criteria: Pursuant to the Regulatory Agreement, within ninety (90) days, or such period established in writing by HUD, following the end of each fiscal year, the Partnership shall engage an independent, licensed Certified Public Accountant to audit the Partnership's annual financial report and to produce and furnish HUD an audit report in accordance with the requirements established by HUD. Effect: The Partnership was not in compliance with the Regulatory Agreement. Cause: Due to the refinancing transaction, the financial information took longer than expected to prepare. Recommendation: The annual financial statements should be issued in a timely manner pursuant to the time frame set forth by HUD. Completion Date: April 30, 2024 Management Response: Management concurs with the finding and recommendation. The audited financial statements have been submitted to HUD. No further action is required.

Finding reference number: #2022-001 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award CO99T851006 REDI IV 2017 CO99T881007 REDI V 2015 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of condition #2022-001 (Assistance Listing No. 14.195): At March 31, 2022, the Corporation's residual receipts accounts were not invested in interest bearing accounts. Criteria: The HAP Contracts require that surplus cash, as defined, be deposited into interest bearing residual receipts account or reserve for replacement account. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. Cause: The Corporation did not make deposits of surplus cash into interest bearing accounts for REDI IV and REDI V. Recommendation: The Agent should transfer the residual receipts accounts to interest bearing accounts. Completion date: June 27, 2022 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation transferred the residual receipts accounts to interest bearing accounts on June 27, 2022.

Finding reference number: #2022-002 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 337 CO99T851006 REDI IV 2017 1,563 CO99T881007 REDI V 2015 1,871 CO99T881008 REDI VI 2016 1,009 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $4,780 Repeat Finding: Yes Statement of condition #2022-002 (Assistance Listing No. 14.195): At March 31, 2022, the Corporation's reserve for replacement accounts were underfunded. Criteria: The HAP Contracts require monthly deposits into separate reserve for replacement accounts. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2022, the reserve for replacements accounts are underfunded by $4,780. Cause: The Corporation did not make the required monthly deposits to the various reserve for replacements accounts. Recommendation: The Agent should transfer $4,780 from the respective operating accounts to the reserve for replacements accounts. The Agent should make all required deposits to the reserve for replacements accounts. Completion date: December 20, 2022 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will make the required monthly deposits into separate reserve for replacement accounts.

Finding reference number: #2022-003 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 2,957 CO99T851006 REDI IV 2017 1,527 Auditor non-compliance code: P - Other Finding resolution status: Cleared Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $4,484 Repeat Finding: Yes Statement of condition #2022-003 (Assistance Listing No. 14.195): For the year ended March 31, 2022, the Corporation paid management fees to the Agent in excess of the fees earned resulting in prepaid management fees of $4,484 at March 31, 2022. Criteria: The HUD approved management certification provides for the payment of management fees subsequent to collections. Effect or potential effect: The Corporation is not in compliance with the various HUD approved management certifications and the Corporation's cash position at March 31, 2022 has been reduced by $4,484. Cause: The Corporation inadvertently paid fees in excess of amount earned. Recommendation: The Agent should repay the prepaid management fee balance. Completion date: December 21, 2022 Management response: Agreed. The Corporation concurs with the finding and agrees with the auditor's recommendation. The Agent repaid the prepaid management fees on December 21, 2022.

Finding reference number: #2022-004 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 81,460 CO99T851006 REDI IV 2017 2,777 CO99T881007 REDI V 2015 2,317 CO99T881008 REDI VI 2016 2,022 Auditor non-compliance code: A - Activities Allowed or Unallowed Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $88,576 Repeat Finding: Yes Statement of condition #2022-004 (Assistance Listing No. 14.195): For the year ended March 31, 2022, the Corporation paid $88,576 to various related entities without HUD approval. Criteria: The HAP Contracts do not permit the Corporation from making any distributions or payments to related entities from operating cash without the written approval of HUD. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts and the Corporation's cash position at March 31, 2022 has been reduced by $88,576. Cause: The Corporation did not obtain HUD approval prior to making payments to the related entities. Recommendation: The related entities should repay $88,576 to the Corporation. The Agent should consider obtaining written approval from HUD approval prior to making any future distributions or payments to related entities. Completion date: March 31, 2023 Management response: Agreed. The Agent concurs with the finding and agrees with the auditor's recommendation. The related entity will repay $88,576 to the Corporation.

Finding reference number: #2022-005 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award CO99T781014 REDI I 2017 CO99T841007 REDI III 2017 CO99T851006 REDI IV 2017 CO99T881007 REDI V 2015 CO99T881008 REDI VI 2016 Auditor non-compliance code: N ? Special Tests and Provisions Finding resolution status: Completed Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2022-005: During the year ended March 31, 2022, the waitlist maintained was not in compliance with HUD guidelines. The waitlist was combined with other contracts. In addition, the waiting list was missing information which is required to be maintained in accordance with HUD Handbook 4350.3, including but not limited to, move-in dates and rejected applicants. Criteria: In accordance with the HAP Contract and HUD Handbook 4350.3, the Corporation must select applicants in a systematic and chronological fashion from a waiting list. Effect: The Corporation is not in compliance with the terms of the HAP Contract or HUD Handbook 4350.3. Due to inadequate record keeping procedures, the Corporation may have removed eligible applicants from the waitlist without being offered a unit in the contract. Cause: The Corporation was not properly maintaining the waiting list in accordance with HUD Handbook 4350.3. Recommendation: The Corporation should revise their waitlist to be contract specific and ensure that all applicants are properly documented on the waiting list and are contacted and selected in chronological order. Completion Date: April 19, 2022 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will be separating the waiting list by contract and will follow all HUD regulations for waiting list requirements.

Finding reference number: #2022-006 Assistance Listing title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, Assistance Listing No. 14.195 Identification numbers Property Year of award Questioned costs CO99T881008 REDI VI 2016 15,026 Auditor non-compliance code: N - Special Tests and Provisions. Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $15,026 Repeat Finding: No Statement of condition #2022-006 (Assistance Listing No. 14.195): During the year ended March 31, 2022, $15,000 was withdrawn from the reserve for replacement account without HUD approval. Additionally, the Corporation was charged a $26 early withdrawal penalty in connection to the withdrawal which was withdrawn without HUD approval. Criteria: The regulations at 24 CFR Part 880.601 and 24 CFR Part 880.602 authorizes the Secretary of HUD to effectively monitor withdrawals from the reserve for replacements fund. Disbursements must be pre-approved by HUD prior to being withdrawn from the reserve for replacements fund. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2022, the reserve for replacements accounts are underfunded by $15,026. Cause: The Agent inadvertently withdrew from the reserve for replacements. Recommendation: The Agent should only withdraw funds from the reserve for replacements fund after receiving approval from HUD. The Agent should reimburse the reserve for replacements fund or not withdrawal future HUD approved withdrawals. Completion date: March 31, 2023 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will reimburse the reserve for replacements account or not withdrawal future HUD approved withdrawals.

Finding reference number: #2021-001 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 (Identification number CO99T851006, 2017) Auditor non-compliance code: N-Special Tests and Provisions Finding resolution status: Completed Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of Condition #2021-001: During the year ended March 31, 2021, the Corporation's did not make the required deposit to the residual receipts account within 90 days after the end of the fiscal year. Criteria: The HAP Contract requires that surplus cash, as defined, be deposited into either a residual receipts account or reserve for replacement account within 90 days after the end of the fiscal year. Effect: The Corporation is not in compliance with the terms of the HAP Contract. Cause: The Corporation did not make the required surplus cash deposit to the residual receipts account for REDI IV within 90 days after the end of the fiscal year. Recommendation: The Agent should make all required deposits to the residual receipts account within 90 days after the end of the fiscal year. Completion Date: October 30, 2020 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure future deposits to the residual receipt account are made within 90 days after the end of the fiscal year.

CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 84,876 CO99T881007 REDI V 2015 9,859 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $94,735 Repeat Finding: Yes Statement of condition #2021-002 (CFDA No. 14.195): At March 31, 2021, the Corporation's residual receipts accounts were underfunded. Criteria: The HAP Contracts require that surplus cash, as defined, be deposited into either a residual receipts account or reserve for replacement account. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2020, REDI III had surplus cash of $84,876. During the year ended March 31, 2021, the Corporation did not deposit surplus cash to the residual receipts account for REDI III. At March 31, 2021, the residual receipts account for REDI III is underfunded by $84,876. At March 31, 2020, REDI V had surplus cash of $52,865. During the year ended March 31, 2021, the Corporation only deposited $43,006 of surplus cash to the residual receipts account for REDI V. At March 31, 2021, the residual receipts account for REDI V is underfunded by $9,859. Cause: The Corporation did not make the required surplus cash deposit to the residual receipts account for REDI III and REDI V. Recommendation: The Agent should transfer $84,876 from the REDI III operating account to the residual receipts account and $9,859 from the REDI V operating account to the residual receipts account. The Agent should make all required deposits to the residual receipts account. Completion date: March 31, 2022 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will make the required deposits to the residual receipts account.

Finding reference number: #2021-003 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award CO99T851006 REDI IV 2017 CO99T881007 REDI V 2015 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of condition #2021-003 (CFDA No. 14.195): At March 31, 2021, the Corporation's residual receipts accounts were not invested in interest bearing accounts. Criteria: The HAP Contracts require that surplus cash, as defined, be deposited into interest bearing residual receipts account or reserve for replacement account. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. Cause: The Corporation did not make deposits of surplus cash into interest bearing accounts for REDI IV and REDI V. Recommendation: The Agent should transfer the residual receipts accounts to an interest bearing account. Completion date: March 31, 2022 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will transfer the residual receipts accounts to an interest bearing account.

Finding reference number: #2021-004 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 2,361 CO99T851006 REDI IV 2017 3,542 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $5,903 Repeat Finding: No Statement of condition #2021-004 (CFDA No. 14.195): At March 31, 2021, the Corporation's reserve for replacement accounts were underfunded. Criteria: The HAP Contracts require monthly deposits into separate reserve for replacement accounts. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts. At March 31, 2021, the reserve for replacements accounts are underfunded by $5,903. Cause: The Corporation did not make the required monthly deposits to the various reserve for replacements accounts. Recommendation: The Agent should transfer $2,361 from the REDI III operating account to the reserve for replacements account and $3,542 from the REDI IV operating account to the residual receipts account. The Agent should make all required deposits to the residual receipts account. Completion date: March 31, 2022 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will make the required monthly deposits into separate reserve for replacement accounts.

Finding reference number: #2021-005 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 8,574 CO99T851006 REDI IV 2017 5,623 CO99T881007 REDI V 2015 4,848 CO99T781014 REDI I 2017 1,376 Auditor non-compliance code: P - Other Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $20,421 Repeat Finding: No Statement of condition #2021-005 (CFDA No. 14.195): For the year ended March 31, 2021, the Corporation paid management fees to the Agent in excess of the fees earned resulting in prepaid management fees of $20,421 at March 31, 2021. Criteria: The HUD approved management certification provides for the payment of management fees subsequent to collections. Effect or potential effect: The Corporation is not in compliance with the various HUD approved management certifications and the Corporation's cash position at March 31, 2021 has been reduced by $20,421. Cause: The Corporation inadvertently paid fees in excess of amount earned. Recommendation: The Agent should repay the prepaid management fee balance. Completion date: March 31, 2022 Management response: Agreed. The Corporation concurs with the finding and agrees with the auditor's recommendation. The Agent will repay the prepaid management fees.

Finding reference number: #2021-006 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award Questioned costs CO99T841007 REDI III 2017 2,319 CO99T851006 REDI IV 2017 2,777 CO99T881007 REDI V 2015 2,317 CO99T881008 REDI VI 2016 2,022 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $9,435 Repeat Finding: No Statement of condition #2021-006 (CFDA No. 14.195): For the year ended March 31, 2021, the Corporation paid $9,435 to various related entities without HUD approval. Criteria: The HAP Contracts do not permit the Corporation from making any distributions or payments to related entities from operating cash without the written approval of HUD. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contracts and the Corporation's cash position at March 31, 2021 has been reduced by $9,435. Cause: The Corporation did not obtain HUD approval prior to making payments to the related entities. Recommendation: The related entities should repay $9,435 to the Corporation. The Agent should consider obtaining written approval from HUD approval prior to making any future distributions or payments to related entities. Completion date: March 31, 2022 Management response: Agreed. The Agent concurs with the finding and agrees with the auditor's recommendation. The related entity will repay $9,435 to the Corporation.

Finding reference number: #2021-007 CFDA title and number (Federal award identification number and year): Home Investments Partnership Program, CFDA No. 14.239 (Identification number 104-03-01, 104-03-02, 404-03-03;1998) Auditor non-compliance code: E-Eligibility Finding resolution status: Completed Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: Yes Statement of Condition #2021-007: For the period April 1, 2020 through December 31, 2020, the resident files for REDI Grant were not retained by the Corporation. Therefore, resident files selected for testing under Uniform Guidance could not be located. Criteria: In accordance with the HOME Loan agreement, the Corporation must retain resident provided documentation, third party verification, and related supporting documentation in the resident file to demonstrate that REDI Grant complies with the requirements of the Home Investment Partnerships Program. Effect: The Corporation is not in compliance with the terms of the HOME Loan agreement. Cause: The Corporation leased REDI Grant to the Mental Health Center of Denver who discarded the resident files upon move out of the resident. Effective January 1, 2021, the Corporation required the Mental Health Center of Denver to retain all resident files. Recommendation: The Corporation should continue to ensure that all resident files are maintained at the site for each resident of REDI Grant in accordance with the HOME Loan agreement. Completion Date: January 1, 2021 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will continue to ensure that resident files are retained in accordance with the HOME Loan agreement.

Finding reference number: #2020-001 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 Identification numbers Property Year of award CO99T841007 REDI III 2017 CO99T851006 REDI IV 2017 CO99T881007 REDI V 2015 CO99T881008 REDI VI 2016 CO99T781014 REDI I 2017 Auditor non-compliance code: P - Other Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2020-001: The Corporation's accounting books and records as submitted for audit included certain accounts which were not presented in accordance with accounting standards generally accepted in the United States of America ("GAAP"). As a result management was required to provide audit adjustments to present the March 31, 2020 financial statements in accordance with GAAP. Criteria: Pursuant to HUD regulations, the books and records of the Corporation are required to be kept in accordance with the requirements of HUD, which includes adequate design and monitoring of controls to safeguard the Corporation's assets. Chapter 2 of the Financial Operations and Accounting Procedures of Insured Multi-Family Projects Handbook (Handbook 4370.2 Rev.1) provides the accounting and financial operations requirements of a HUD-insured multi-family property including: maintenance of books and records, completeness and accuracy of books and records, and an auditable paper trail. Effect: The Corporation was not in compliance with certain HUD regulations. Audit adjustments provided by management were required to present the March 31, 2020 financial statements in accordance with GAAP. Cause: The Agent had significant turnover of key personnel in the accounting department during the year ended March 31, 2020. As a result, the Agent hired a reputable third party accounting firm to maintain the accounting books and records. The internal control system designed by management to produce accounting books and records in accordance with GAAP was not able to be implemented by the third party accounting firm prior to submission of the accounting books and records for audit. Recommendation: The New Agent should maintain a comprehensive set of accounting books and records in accordance with GAAP. Completion Date: March 31, 2021 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. Effective June 1, 2020 the Corporation entered into a new third party management agreement with the New Agent. The Corporation will ensure the New Agent will maintain a comprehensive set of accounting books and records in accordance with GAAP.

Finding reference number: #2020-002 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 (Identification number CO99T841007, 2017) Auditor non-compliance code: N-Special Tests and Provisions Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2020-002: During the year ended December 31, 2020, the Corporation's did not make the required deposit to the residual receipts account within 90 days after the end of the fiscal year for REDI III. The deposit was made on March 12, 2020 which is 257 days after the end of the fiscal year. Criteria: The HAP Contract requires that surplus cash, as defined, be deposited into either a residual receipts account or reserve for replacement account within 90 days after the end of the fiscal year. Effect: The Corporation is not in compliance with the terms of the HAP Contract. Cause: The Agent did not make the required surplus cash deposit to the residual receipts account for REDI III within 90 days after the end of the fiscal year. Recommendation: The Agent should make all required deposits to the residual receipts account within 90 days after the end of the fiscal year. Completion Date: March 12, 2020 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure future deposits to the residual receipt account are made within 90 days after the end of the fiscal year.

Finding reference number: #2020-003 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 (Identification number CO99T881007, 2015) Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $43,006 Repeat Finding: Yes Statement of condition #2020-003 (CFDA No. 14.195): At March 31, 2020 and 2019, the Corporation's residual receipts account for REDI V was underfunded. Criteria: The HAP Contracts require that surplus cash, as defined, be deposited into either a residual receipts account or reserve for replacement account. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contract. At March 31, 2018, REDI V had surplus cash of $43,006. During the years ended March 31, 2020 and 2019, The Agent did not deposit surplus cash to the residual receipts account for REDI V. At March 31, 2020 and 2019, the residual receipts account for REDI V is underfunded by $43,006. Cause: The Agent did not make the required surplus cash deposit to the residual receipts account for REDI V. Recommendation: The Agent should transfer $43,006 from the operating account to the residual receipts account. The Agent should make all required deposits to the residual receipts account. Completion date: May 11, 2020 Management response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation made the required deposit of $43,006 to the residual receipts account on May 11, 2020.

Finding reference number: #2020-004 CFDA title and number (Federal award identification number and year): Home Investments Partnership Program, CFDA No. 14.239 (Identification number 104-03-01, 104-03-02, 404-03-03; 1998) Auditor non-compliance code: E-Eligibility Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Repeat Finding: No Statement of Condition #2020-004: During the year ended March 31, 2020, the resident files for REDI Grant were not retained by the Corporation. Therefore, resident files selected for testing under Uniform Guidance could not be located. Criteria: In accordance with the HOME Loan agreement, the Corporation must retain resident provided documentation, third party verification, and related supporting documentation in the resident file to demonstrate that REDI Grant complies with the requirements of the Home Investment Partnerships Program. Effect: The Corporation is not in compliance with the terms of the HOME Loan agreement. Cause: The Corporation leased REDI Grant to the Mental Health Center of Denver who discarded the resident files upon move out of the resident. Recommendation: The Corporation should ensure that all resident files are maintained at the site for each resident of REDI Grant in accordance with the HOME Loan agreement. Completion Date: March 31, 2021 Management Response: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation will ensure that resident files are retained in accordance with the HOME Loan agreement

Finding reference number: #2019-001 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.195 See Schedule of Findings and Questioned Costs for chart/table Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $8,314 Repeat Finding: No Statement of condition #2019-001 (CFDA No. 14.195): At March 31, 2019, the Corporation's reserve for replacement accounts are underfunded. Criteria: The HAP Contracts require monthly deposits into separate reserve for replacement accounts. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contract. At March 31, 2019, the reserve for replacements account is underfunded by $8,314. Cause: Management did not make the required monthly deposits to the various reserve for replacement accounts. Recommendation: Management should transfer a total of $8,314 from the various operating accounts to the various reserve for replacements accounts. Management should make all required deposits to the various reserve for replacements accounts. Completion date: March 31, 2020 Reporting response: Agreed. Management concurs with the finding and the auditor's recommendation. The Corporation will make the required deposits of $8,314 to the various reserve for replacements accounts.

inding reference number: #2019-002 CFDA title and number (Federal award identification number and year): Section 8 Housing payments, CFDA No. 14.195 (Identification number CO99T841007, 2017) Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $32,440 Repeat Finding: No Statement of condition #2019-002 (CFDA No. 14.195): At March 31, 2019, the Corporation's reserve for replacement account for REDI III was underfunded. Management withdrew $32,440 from the reserve for replacement account for REDI III without HUD approval. Criteria: The HAP Contract requires all disbursements from the reserve for replacement accounts to be approved in writing by HUD. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contract. At March 31, 2019, the reserve for replacements account for REDI III is underfunded by $32,440. Cause: Management made a withdrawal from the reserve for replacement account without HUD approval. Recommendation: Management should transfer $32,440 from the operating account to the reserve for replacement account until HUD approves the withdrawal or request retroactive approval from HUD. Management should obtain HUD approval for all reserve for replacement withdrawals. Completion date: March 31, 2020 Reporting response: Agreed. Management concurs with the finding and the auditor's recommendation. The Corporation requested and received retroactive approval from HUD for the $32,440 on June 14, 2019.

Finding reference number: #2019-003 CFDA title and number (Federal award identification number and year): Section 8 Housing Assistance Payments, CFDA No. 14.155 (Identification number CO99T881007, 2015) Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $43,006 Repeat Finding: No Statement of condition #2019-003 (CFDA No. 14.195): At March 31, 2019, the Corporation's residual receipts account for REDI V was underfunded. Criteria: The HAP Contracts require that surplus cash, as defined, be deposited into either a residual receipts account or reserve for replacement account. Effect or potential effect: The Corporation is not in compliance with the terms of the HAP Contract. At March 31, 2018, REDI V had surplus cash of $43,006. During the year ended March 31, 2019, management did not deposit surplus cash to the residual receipts account for REDI V. At March 31, 2019, the residual receipts account for REDI V is underfunded by $43,006. Cause: Management did not make the required surplus cash deposit to the residual receipts account for REDI V. Recommendation: Management should transfer $43,006 from the operating account to the residual receipts account. Management should make all required deposits to the residual receipts account. Completion date: March 31, 2020 Reporting response: Agreed. Management concurs with the finding and the auditor's recommendation. The Corporation will make the required deposit of $43,006 to the residual receipts account.

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