ST. PETER'S SUPPORTIVE HOUSING, INC.

Finding # 2021-001 Federal Grantor: U.S. Department of Housing and Urban Development CFDA# / Program : 14.181 - Supportive Housing for Persons with Disabilities Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make twelve (12) monthly deposits to the reserve for replacements of $2,305. Sample size information: Tests were performed on the 12 required monthly deposits. Criteria: The Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement signed by the Project on February 1st, 2010 requires the Project to make twelve (12) monthly deposits to the reserve for replacements of $2,305. Statement of Condition: None of the 12 monthly deposits were made to the reserve for replacements. The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Cause: A deficiency in controls over compliance with the compliance requirements in the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Effect or Potential Effect: The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Auditor Non-Compliance Code: N - Reserve for Replacements deposits Questioned Costs: No questioned costs associated with this finding. Reporting Views of Responsible Officials: St. Peter's Place has a critical cash flow problem which has been prevalent for multiple years. Unfortunately, the rents are not enough to cover the operating expenses and the required Replacement Reserves Deposits. Context: The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Recommendations: We recommend that Management review their controls over compliance with the compliance requirements in the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Management is working with HUD to increase rents to improve cash flow and replacement reserve for replacements. Response Indicator Agree Completion Date 12/31/2022 Response Management initiated communication with HUD in an effort to rectify the cash problems in June of 2021. This included active follow-up to request assistance with analysis regarding deficits, which were unanswered until January of 2022. Management added a PRAC consultant to our team in February of 2022. On March 3, 2022, management requested HUD for a rent subsidy increase to cover the negative cash flow and reiterated that request on March 22, 2022. Management is waiting for a response from HUD.

Finding # 2020-001 Federal Grantor: U.S. Department of Housing and Urban Development CFDA# / Program : 14.181 - Supportive Housing for Persons with Disabilities Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make twelve (12) monthly deposits to the reserve for replacements of $2,305. Sample size information: Tests were performed on the 12 required monthly deposits. Criteria: The Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement signed by the Project on February 1st, 2010 requires the Project to make twelve (12) monthly deposits to the reserve for replacements of $2,305. Statement of Condition: The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Cause: A deficiency in controls over compliance with the compliance requirements in the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Effect or Potential Effect: The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Auditor Non-Compliance Code: N - Reserve for Replacements deposits Questioned Costs: No questioned costs associated with this finding. Reporting Views of Responsible Officials: St. Peter's Place has a critical cash flow problem which has been prevalent for multiple years. Unfortunately, the rents are not enough to cover the operating expenses and the required Replacement Reserves Deposits. Context: The Project is not in compliance with the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Recommendations: We recommend that Management review their controls over compliance with the compliance requirements in the Housing for Persons with Disabilities Section 811 of the Housing Act of 1959 Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: St. Peter's Place has a critical cash flow problem which has been prevalent for multiple years. Unfortunately, the rents are not enough to cover the operating expenses and the required Replacement Reserves Deposits. Management is currently in communication with HUD in an effort to rectify the cash problems. Management is seeking a rent increase and approval to use Residual Receipts Reserve and Minimum Capital Investment Reserve funds. Response Indicator: Agree Completion Date: 12/31/2021 Response: Management is currently in communication with HUD in an effort to rectify the cash problems. Management is seeking a rent increase and approval to use Residual Receipts Reserve and Minimum Capital Investment Reserve funds.

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