MISSION HOUSING DEVELOPMENT PROPERTY IV, INC.Non-Profit

Finding # 2024-001 Federal Grantor: AL# / Program : Type of Finding: Finding Resolution Information on Universe Population Size: Sample size: Criteria: Statement of Condition: Cause: Effect or Potential Effect: Auditor Non-Compliance Code: Questioned Costs: $ - Reporting Views of Responsible Officials: Context: Recommendation: Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Response Indicator: Completion Date: Response: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cash flow improves. Reserve for replacement is underfunded by $26,376. Project is not in compliance with HUD compliance requirements. N - Replacement Reserve Deposits N/A 6/30/2025 Mission Housing and Property Management are actively working on the Budget Based Rent Increase (BBRI) and project to submit before the due date of February 2025 for next FY. This will increase cash flow and allow the project to make the required monthly reserve deposits, as well as the past due reserve deposit amount. Previously, the project was unable to obtain a waiver of deposits due to not submitting the BBRI. When the BBRI is obtained, we have the option to submit a waiver for replacement deposits if needed. Project did not make payments due to cash flow issues. In Process Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. U.S. Department of Housing and Urban Development 14.157- Supportive Housing for the Elderly under Section 202 Federal Award Finding Agrees Project is required to make monthly deposits to the reserve for replacements of $2,198. Tests were performed on the twelve required monthly deposits. Mission Housing and Property Management are actively working on the Budget Based Rent Increase (BBRI) and project to submit before the due date of February 2025 for next FY. This will increase cash flow and allow the project to make the required monthly reserve deposits, as well as the past due reserve deposit amount. Previously, the project was unable to obtain a waiver of deposits due to not submitting the BBRI. When the BBRI is obtained, we have the option to submit a waiver for replacement deposits if needed. Mission Housing and Property Management are actively rent increase to increase cash flow and allow the project to make the required monthly reserve deposits and have the option to submit a waiver for replacement deposits if needed.

Finding # 2023-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157- Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make monthly deposits to the reserve for replacements of $2,198. Sample size: Tests were performed on the twelve required monthly deposits. Criteria: Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. Statement of Condition: Reserve for replacement is underfunded by $26,376.00 Cause: Project did not make payments due to cash flow issues. Effect or Potential Effect: Project is not in compliance with HUD compliance requirements. Auditor Non-Compliance Code: N - Replacement Reserve Deposits Questioned Costs: $- Reporting Views of Responsible Officials: Replacement reserve deposit waiver requested but denied. Context: N/A Recommendation: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cashflow improves. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Replacement reserve deposit waiver requested but denied. Response Indicator: Agrees Completion Date: 6/30/2023 Response: Replacement reserve deposit waiver requested but denied. Finding # 2023-001 Federal Grantor: U.S. Department of Housing and Urban Development AL# / Program : 14.157- Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make monthly deposits to the reserve for replacements of $2,198. Sample size: Tests were performed on the twelve required monthly deposits. Criteria: Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. Statement of Condition: Reserve for replacement is underfunded by $26,376.00 Cause: Project did not make payments due to cash flow issues. Effect or Potential Effect: Project is not in compliance with HUD compliance requirements. Auditor Non-Compliance Code: N - Replacement Reserve Deposits Questioned Costs: $- Reporting Views of Responsible Officials: Replacement reserve deposit waiver requested but denied. Context: N/A Recommendation: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cashflow improves. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Replacement reserve deposit waiver requested but denied. Response Indicator: Agrees Completion Date: 6/30/2023 Response: Replacement reserve deposit waiver requested but denied.

Finding # 2021-001 Federal Grantor: U.S. Department of Housing and Urban Development CFDA# / Program : 14.157- Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make monthly deposits to the reserve for replacements of $2,198. Sample size: Tests were performed on the twelve required monthly deposits. Criteria: Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. Statement of Condition: Reserve for replacement is underfunded by $4,396. Cause: Project only made ten months of deposits due to cash flow issues. Effect or Potential Effect: Project is not in compliance with HUD compliance requirements. Auditor Non-Compliance Code: N - Replacement Reserve Deposits Questioned Costs: $- Reporting Views of Responsible Officials: The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily. Context: N/A Recommendation: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cashflow improves. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily. Response Indicator: Agree Completion Date: 6/30/2022 Response: We are working on requesting HUD to waive the funding requirements temporarily.

Finding # 2021-001 Federal Grantor: CFDA# / Program : Type of Finding: Finding Resolution Status: Information on Universe Population Size: Sample size: Criteria: Statement of Condition: Cause: Effect or Potential Effect: Auditor Non-Compliance Code: Questioned Costs: $ - Reporting Views of Responsible Officials: Context: Recommendation: Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Response Indicator: Completion Date: Response: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cashflow improves. Reserve for replacement is underfunded by $4,396. Project is not in compliance with HUD compliance requirements. N - Replacement Reserve Deposits N/A 6/30/2022 We are working on requesting HUD to waive the funding requirements temporarily. In Process Project only made ten months of deposits due to cash flow issues. Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. U.S. Department of Housing and Urban Development 14.157- Supportive Housing for the Elderly Federal Award Finding Agree Project is required to make monthly deposits to the reserve for replacements of $2,198. Tests were performed on the twelve required monthly deposits. The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily. The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily.

Finding # 2021-002 Federal Grantor: CFDA# / Program : Type of Finding: Finding Resolution Status: Information on Universe Population Size: Sample size information: Criteria: Statement of Condition: Cause: Effect or Potential Effect: Auditor Non-Compliance Code: Questioned Costs: $ - Reporting Views of Responsible Officials: Context: Recommendation: Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Response Indicator: Completion Date: Response: 6/30/2022 We are working on requesting HUD to waive the loan payback and also will be working on applying with HUD for contract rent increase. The project does not have sufficient cash to pay back the loan obtained from RR in 2019. We are working on requesting HUD to waive the loan payback and also will be working on applying with HUD for contract rent increase. N/A We recommend the Project request HUD approval to waive the repayment of the reserve loan. The project does not have sufficient cash to pay back the loan obtained from RR in 2019. We are working on requesting HUD to waive the loan payback and also will be working on applying with HUD for contract rent increase. Agree Project is required to repay reserve loans for subsidy once subsidy is received as required by HUD. Prior year reserve loan for $38,008 was not repaid when subsidies were received. Project did not repay prior year reserve loan for $38,008 when subsidies were received due to cashflow issues. Project is not in compliance with HUD compliance requirements. N - Replacement Reserve Deposits 14.157- Supportive Housing for the Elderly Federal Award Finding In Process N/A N/A U.S. Department of Housing and Urban Development

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