ASI CAPITOLA, INC.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: The Project's replacement reserve cash balance was underfunded at December 31, 2025. Criteria: The Project made two replacement reserve withdrawals for the same invoice during 2024. Effect: The replacement reserve cash balance was $835 less than it should be at December 31, 2025. Context: Activity in the replacement reserve account for the year ended December 31, 2025 was tested. No sample was tested. Questioned costs - $835; Cause: The Project mistakenly made two replacement reserve withdrawals for the same invoice during 2024. The finding was not corrected during 2025. Recommendation: The Project should repay the amount improperly withdrawn from the replacement reserve account. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $835 into the replacement reserve account as soon as possible. Questioned Costs - Department of Housing and Urban Development - $835; Non-compliance code - A

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2024-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: In 1 of 25 cash disbursements tested, the Project paid the expense of another project under common management. Criteria: The Project should not pay the expenses of another project. Effect: The amount of the expense incorrectly paid was $308 out of a total sample of disbursements of $25,870. Context: A sample of disbursements was selected for testing of compliance. The test found one disbursement that was not in compliance. The non compliance had a financial effect outlined below. The details and results of the sample are as follows: Population - 272, $509,908; Sample - 25, $25,870; Not in Compliance - 1, $308; Questioned Costs - $308; Cause: The Project mistakenly paid the invoice of another project under common management. Recommendation: The Project should carefully review invoices before payment to make sure it only pays the proper amount. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. The accounts payable staff will be reminded to be careful when entering invoices for payment. Total-Department of Housing and Urban Development - $308; Non compliance code - R

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2024-002: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: One of the tenant files tested contained a mathematical error in computing household income in the process of computing the tenant share of monthly rent. Criteria: Household income should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files was selected for testing household income in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non compliance did not have a financial effect. The details and results of the sample are as follows: Population - 25, Dollars - N/A; Sample - 3, Dollars - N/A, Not in Compliance - 1, $390; Questioned Costs - $390; Cause: There was an error in interpreting some information provided by the tenant during the certification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Total-Department of Housing and Urban Development - $390; Non compliance code - R

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2024-003: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: The Project's replacement reserve cash balance was underfunded at December 31, 2024. Criteria: The Project made two replacement reserve withdrawals for the same invoice. Effect: The replacement reserve cash balance was $835 less than it should be at December 31, 2024. Context: Activity in the replacement reserve account for the year ended December 31, 2024 was tested. No sample was tested. Questioned costs - $835; Cause: The Project mistakenly made two replacement reserve withdrawals for the same invoice. Recommendation: The Project should repay the amount improperly withdrawn from the replacement reserve account. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $835 into the replacement reserve account. Questioned Costs - Department of Housing and Urban Development - $835; Non-compliance code - A

FINDING 2023-001: SECTION 811, FEDERAL ASSISTANCE LISTING NUMBER 14.181 Condition: One of the tenant files tested contained a mathematical error in computing household income in the process of computing the tenant share of monthly rent. Criteria: Household income should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files was selected for testing household income in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non-compliance did not have a financial effect. The details and results of the sample are as follows: pOPULATION - 25, Dollars - N/A; Sample - 3, Dollars - N/A; Not in Compliance - 1, $162, Questioned Costs - $162. Cause: There was an error in interpreting some information provided by the tenant during the certification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Total-Department of Housing and Urban Development - $162, Non-compliance code - R

ASI CAPITOLA, INC. HUD PROJECT NO. 121-HD051-NP-WPD SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2019 C. Findings and Questioned Costs - Major Federal Award Programs Audit Questioned Costs DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2019-001: SECTION 811, CFDA 14.181 Condition: One of the tenant files tested did not contain a copy of the tenant's social security card. Criteria: All tenant files should include a copy of the tenant's social security card. Effect: There is no financial effect. Context: A sample of tenant files were selected for testing tenant information in the process of computing the tenant share of monthly rent. The test found one file that didn't include a copy of the tenant's social security card. The non compliance did not have a financial effect. The details and results of the sample are as follows: Number Dollars Population 24 N/A Sample 3 N/A Not in Compliance 1 N/A Questioned Costs None Cause: The management company failed to obtain support for the tenant's social security number during the certification process. Recommendation: Project personnel should be reminded that obtaining support for the tenant's personal information is an important step in tenant management. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. The social security card information was obtained in January 2020. No adjustments to HUD billing is required. Total-Department of Housing and Urban Development $- Non-compliance code - R

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