The Shire, Inc.Non-Profit

Statement of Condition: Project funds were used to pay a related party. The related party, in turn, paid the operating expenses of the Project. Cause: For ease of administration, common vendors were paid by the related party. Effect: The payments made to the related party could be disallowed. Auditor Non-Compliance Code: H-Unauthorized distribution of project assets. Questioned Costs: $82,096. Reporting View of Responsible Officials: The Organization agrees with the finding. The auditor's recommendations, as well as the local HUD field office's recommendations, are in the process of being implemented. Context: Review of the detail in the account provided evidence that project funds were paid to the related party. Personnel were forthcoming with this practice and are in the process of correcting this finding. Recommendation: In conjunction with the Organization's local HUD field office, it was determined that the related party should invoice the Organization for project expenses on a monthly basis. In turn, the Organization should pay the invoice amount on a monthly basis.

Statement of Condition: Tenant files after October 2022 were missing Form 50059. Cause: The Organization lost access to the federal form writing software and there was a delay getting it corrected due to a change in staffing. Effect: Potential miscalculation of tenant eligibility. Auditor Non-Compliance Code: Z. Questioned Costs: $0. Reporting View of Responsible Officials: The Organization agrees with the finding. The auditor's recommendations are in the process of being implemented. Context: Review of the tenant files provided evidence that the Form 50059 reports were not being printed and stored in tenant files. Recommendation: Training of staff should be performed to bring the staff up to date with the implementation of all the tenant file compliance requirements.

S3800-010 Finding Reference Number: 2022-001 S3800-011 Title and CFDA Number of Federal Program: Supportive Housing for Persons with Disabilities - 14.181 S3800-015 Type of Finding: Federal Award Finding S3800-016 Finding Resolution Status: In Process S3800-020 Criteria: Project funds must be used for the operation of the Project.S3800-030 Statement of Condition Project funds were used to pay a related party. The related party, in turn, paid the operating expenses of the Project. S3800-032 Cause: For ease of administration, common vendors were paid by the related party. S3800-033 Effect: The payments made to the related party could be disallowed. S3800-035 Auditor Non-Compliance Code: H - Unauthorized distribution of project assets S3800-040 Questioned Costs: $23,806 S3800-045 Reporting View of Responsible Officials: The Organization agrees with the finding. The auditor's recommendations, as well as the local HUD field office's recommendations, are in the process of being implemented. S3800-050 Context: Review of the detail in the account provided evidence that project funds were paid to the related party. Personnel were forthcoming with this practice and are in the process of correcting this finding. S3800-080 Recommendation: In conjunction with the Organization's local HUD field office, it was determined that the related party should invoice the Organization for project expenses on a monthly basis. In turn, the Organization should pay the invoice amount on a monthly basis. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: The auditors have worked with the auditee in conjunction with their local HUD field office to determine a course of action. All parties were in agreement with the recommendation. S3800-130 Response Indicator: Agree S3800-140 Completion Date: September 30, 2022 S3800-150 Response: The auditee is committed to correcting the finding.

S3800-010 Finding Reference Number: 2022-002 S3800-011 Title and CFDA Number of Federal Program: Supportive Housing for Persons with Disabilities - 14.181 S3800-015 Type of Finding: Federal Award Finding S3800-016 Finding Resolution Status: In Process S3800-020 Criteria: Reports viewed from EIV system must be printed and included in the tenant files in order to demonstrate EIV system compliance. S3800-030 Statement of Condition: Reports demonstrating the proper use of EIV system were not printed and retained in the tenant files. S3800-032 Cause: The Organization was not storing EIV reports into the tenant files. S3800-033 Effect: Potential miscalculation of tenant rent responsibility. S3800-035 Auditor Non-Compliance Code: Z S3800-040 Questioned Costs: $0 S3800-045 Reporting View of Responsible Officials: The Organization agrees with the finding. The auditor's recommendations are in the process of being implemented. S3800-050 Context: Review of the tenant files provided evidence that the EIV reports were not being printed in stored in the tenant file. S3800-080 Recommendation: Training of staff should be performed to bring the staff up to date with the implementation of all the EIV system compliance requirements. S3800-090 Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: The Organization did not retain EIV information because in their opinion they had more current and detailed information on their clients' financial status than EIV provided; however, the Organization will retain the EIV information in the tenant file as required. S3800-130 Response Indicator: Agree S3800-140 Completion Date: September, 30 2022 S3800-150 Response: The Organization will retain the EIV information in the tenant file as required.

FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT: Reports viewed from EIV system must be printed and included in the tenant files in order to demonstrate EIV system compliance. Reports demonstrating the proper use of EIV system were not printed and retained in the tenant files. The Organization was not storing EIV reports into the tenant files. Potential miscalculation of tenant rent responsibility.

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