GREATER TUCSON LIONS SENIOR CITIZEN FOUNDATION INC.Non-Profit

Criteria: Under the regulatory agreement with HUD, the Project is required to ensure that funds are only used for the purpose of necessary expenditures of the property and operating the project. Condition: During our testing of disbursements, it was noted there was no evidence of review or approval for 53 of 60 disbursements. Additionally, two out of the 60 disbursements, totaling $169, did not have a supporting invoice and we were unable to determine if the expenditures were appropriate and necessary expenditures for the Project. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 transactions out of 314 total transactions were selected for disbursement testing, which accounted for $59,887 of $340,478 of project disbursements for the year ended June 30, 2022. Cause: Management oversight and a lack of segregation of duties. Effect: The Project was not in compliance with HUD requirements as it relates to controls over the use of project funds. Repeat Finding from Prior Year(s): Yes, prior year finding 2021-003. Recommendation: We recommend the Project follow its internal control process and document review of invoices before they are paid to ensure they are in fact expenses related to the Project. Views of Responsible Officials: Management agrees with the finding.

Criteria: Under the regulatory agreement with HUD, the Project is required to maintain certain cash accounts in compliance with HUD requirements, in addition to using funds that are only for the purpose of necessary expenditures of the property and operating the project. Condition: During our testing we identified the following matters: ? During our testing of disbursements, it was noted that there were expenditures that were prepaid to the management company (a related party) without HUD approval. The amount of prepaid employee costs was $4,271. ? During testing of the replacement reserve account, we noted incorrect deposit amounts were funded to the account for 1 of 12 months. This error resulted in the replacement reserve account to be underfunded by $42 as of June 30, 2021. ? During our testing of disbursements, it was noted there was no evidence of review or approval for 4 of 60 disbursements.Questioned Costs: None reported Context/Sampling: A nonstatistical sample of 60 transactions out of 313 total transactions were selected for disbursement testing, which accounted for $155,133 of $327,210 of project disbursements for the year ended June 30, 2021. Cause: The procedures used by the Project to track project funds, including restricted funds, and a lack of segregation of duties did not alert them to the situation. Effect: The Project was not in compliance with HUD requirements as it relates to the restricted funds and use of project funds. Repeat Finding from Prior Year(s): Yes, prior year finding 2020-003 Recommendation: We recommend that the Project comply with the HUD requirements and deposit $42 to the replacement reserve account. Additionally, we recommend the Project follow its internal control process and document review of invoices before they are paid to ensure they are in fact expenses related to the Project. Views of Responsible Officials: Management agrees with the finding.

Criteria: Under the regulatory agreement with HUD, the Project is required to maintain certain cash accounts in compliance with HUD requirements, in addition to using funds that are only for the purpose of necessary expenditures of the property and operating the project. Condition: During our testing we identified the following matters: ? During testing of the reserve for replacement account, we noted incorrect deposit amounts were being funded to the account for 11 of 12 months. This error resulted in the reserve for replacement account to be underfunded by $465 as of June 30, 2020. ? During our testing of disbursements, it was noted there was no evidence of review or approval for 57 of 60 disbursements.Questioned Costs: $465 Context/Sampling: A nonstatistical sample of 60 transactions out of 315 total transactions were selected for disbursement testing, which accounted for $53,038 of $264,544 of project disbursements for the year ended June 30, 2020. Cause: The procedures used by the Project to track project funds, including restricted funds, and a lack of segregation of duties did not alert them to the situation. Effect: The Project was not in compliance with HUD requirements as it relates to the restricted funds and use of project funds. Repeat Finding from Prior Year(s): Yes, prior year finding 2019-003 Recommendation: We recommend that the Project comply with the HUD requirements and deposit $465 to the reserve for replacement account. Additionally, we recommend the Project follow its internal control process and document review of invoices before they are paid to ensure they are in fact expenses related to the Project. Views of Responsible Officials: Management agrees with the finding.

Criteria: Under the regulatory agreement with HUD, the Project is required to maintain certain cash accounts in compliance with HUD requirements, in addition to using funds that are only for the purpose of necessary expenditures of the property and operating the project. Condition: During our testing we identified the following matters of noncompliance: ? During testing of the residual receipts account, we noted funds were withdrawn from the account that were not approved by HUD. The unauthorized disbursements from the residual receipts account was $18,499. As of June 30, 2019, the disbursements have been fully refunded by the Project to the residual receipts account. ? During our testing of disbursements, it was noted that there were approximately 12 months of expenditures that were prepaid to the management company (a related party) without HUD approval. The amount of prepaid employee costs was $42,128. ? During our testing of disbursements, it was noted there was no evidence of review or approval for any disbursements. Additionally, there was insufficient support for one out of forty disbursements tested. ? During testing, it was noted project funds in the amount of $9,129 were used to pay for expenses for a separate, related organization. As of June 30, 2019, the related organization refunded the funds in full to the Project. Questioned Costs: None Context/Sampling: A nonstatistical sample of 40 transactions out of 349 total transactions were selected for disbursement testing, which accounted for $28,985 of $301,108 of project disbursements for the year ended June 30, 2019. Cause: The procedures used by the Project to track project funds, including restricted funds, did not alert them to the situation. Effect: The Project was not in compliance with HUD requirements as it relates to the restricted funds and use of project funds. Repeat Finding from Prior Year(s): Yes, prior year finding 2018-001 Recommendation: We recommend that the Project comply with the HUD requirements and discontinue the unauthorized withdrawals from the residual receipts account and prepayments of amounts to the management company. Any amounts that were prepaid to the management company as of June 30, 2019 should be refunded to the Project. The amounts per these contracts can be amended and by paying in advance can lead to payments in excess of contracts and considered to be unauthorized distributions. As it relates to the reimbursement employee costs, it is not appropriate to prepay expenditures of this nature until the expenditures are incurred as the estimated amounts could significantly differ from actual expenditures incurred. Additionally, we recommend the Project follow its internal control process and document review of invoices before they are paid to ensure they are in fact expenses related to the Project. Views of Responsible Officials: Management agrees with the finding.

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