Olive Plaza

Assistance Listing (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects-Assistance Listing 14.155 (126- 11123 and 2015) Auditor non-compliance code: H-Unauthorized distribution of project assets 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: $35,448 Statement of condition 2021-001: During the years ended December 31, 2021 and 2020, the Corporation paid $14,195 and $21,253, respectively, of costs in connection with the Community Development Block Grant. These costs were paid from Project funds and require HUD approval. Criteria: The Regulatory Agreement requires the Corporation to receive HUD approval for all reasonable and necessary Project expenditures. Effect: The Project is not in compliance with HUD regulations and the project operating fund is underfunded by $35,448. Cause: Management paid the CDBG funds monthly continuing the historical procedures of the prior management agent, while Management awaited a response from the prior management agent regarding the abatement of the residual receipts required deposits in order to fund the disbursements. Management did not receive a response. Recommendation: The Board of Directors should repay the funds unless HUD allows the payments as Project costs. As an alternative, Management should request that HUD allows the 2020 payments and the 2021 payments be covered by the 2021 surplus cash.Management's response: Agree. Management has contacted the City of Eugene regarding future repayment of the CDBG loan. Additionally, if HUD does not approve utilizing 2021 surplus cash to cover the 2020 and 2021 pre-payments of the CDBG loan, Management will request that HUD approve a loan from Management to repay the funds and then seek reimbursement of this loan as part of the planned refinancing of Olive Plaza.

Comments on the Finding and Each Recommendation: During the years ended December 31, 2021 and 2020, the Corporation paid $14,195 and $21,253, respectively, of costs in connection with the Community Development Block Grant. These costs were paid from Project funds and require HUD approval. Action(s) taken or planned on the finding Management concurs with the finding and the auditor's recommendation. Management is seeking HUD approval to recognize these costs as paid from the 2021 surplus cash balance. If this approval is not granted, Management will seek approval from HUD of a loan into project for the $35,448.

2020-002

CDFA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects CFDA No. 14.155 (126- 11123 and 2015) Auditor non-compliance code: B-Failure to make required residual receipt deposit 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: $32,868 Statement of condition #2020-001: The Corporation did not make the required residual receipt deposit computed at December 31, 2019, in the amount of $32,868 within 90 days of the fiscal year end. Criteria: HUD regulations require the deposit due residual receipts be deposited with the mortgagee within 90 days after the fiscal period ends. Effect: The residual receipt account was underfunded and the account is not under the control of the mortgagee. Cause: Prior management was inquiring to HUD about abatement of the residual receipt deposit requirement in order to pay the Community Development Block Grant. Recommendation: Management should make the deposit required in a timely manner and then closely monitor the cash position of the organization. Management's response: Agree. Management concurs and deposited $32,868 into the residual receipts account on October 19, 2020. The new management agent will closely monitor the cash position of the organization.

Comments on the Finding and Each Recommendation: The Corporation did not make the required residual receipt deposit computed at December 31, 2019, in the amount of $32,868 within 90 days of the fiscal year end. Action(s) taken or planned on the finding Management concurs and deposited $32,868 into the residual receipts account on October 19, 2020.

CDFA title and number (Federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects CFDA No. 14.155 (126- 11123 and 2015) Auditor non-compliance code: H-Unauthorized distribution of project assets 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: $21,253 Statement of condition #2020-002: During the year ended December 31, 2020, the Corporation paid $21,253 of costs in connection with the Community Development Block Grant. These costs were paid from Project funds and require HUD approval. Criteria: The Regulatory Agreement requires the Corporation to receive HUD approval for all reasonable and necessary Project expenditures. Effect: The Project is not in compliance with HUD regulations and the project operating fund is underfunded by $21,253. Cause: Prior management paid the CDBG funds monthly and was inquiring to HUD about abatement of the residual receipts required deposits in order to fund the disbursements, however, did not receive approval. Recommendation: The Board of Directors should repay the funds unless HUD allows the payments as Project costs, and management should request HUD permission for the costs to be allowed as Project costs before making additional payments. Management's response: Agree. A new management agent has since been engaged by the property who will more closely monitor disbursements of project funds. Management is also seeking HUD approval to pay these funds in the future.

Comments on the Finding and Each Recommendation: During the year ended December 31, 2020, the Corporation paid $21,253 of costs in connection with the Community Development Block Grant. These costs were paid from Project funds and require HUD approval. Action(s) taken or planned on the finding Management concurs with the finding and the auditor's recommendation. A new management agent has since been engaged by the property who will more closely monitor disbursements of project funds. Management is also seeking HUD approval to pay these funds in the future.

GSA_MIGRATION

GSA_MIGRATION