WESLEY TOWER, INC.Non-Profit

Statement of Condition: Management is responsible submitting the audit package to the Federal Audit Clearinghouse within 9 months of the fiscal year end. Criteria: The audit package was submitted after the 9 month deadline. Effect: The Federal Audit Clearinghouse received the information late. It should be noted that the audit information was timely submitted to HUD in the REAC system. Cause: During the period the process for submitting the audit package to the Federal Audit Clearinghouse changed, which caused some confusion. Also, there was some miscommunication between the auditor and the auditee. Recommendation: In the future the audit package should be timely filed with the Federal Audit Clearinghouse. Non-compliance code: Z – Other.

FINDING NUMBER 2023-001: CASH BALANCES IN FINANCIAL INSTITUTIONS IN EXCESS OF FEDERAL INSURANCE LIMITS Finding Resolution Status: - In Process Information on Universe Population Size: - Not applicable Sample Size Information: - Not applicable Noncompliance Information: - Cash balances in project operating bank accounts are in financial institutions in excess of federal insurance limits Statement of Condition: - HUD requires that the Company maintain cash balances in financial institutions that are covered by insurance issued by the Federal Deposit Insurance Corporation (FDIC). The Company may maintain cash balances in financial institution in excess of the FDIC insurance limit if the Company verifies the bank’s debt rating meets certain requirements. Criteria: - As of March 31, 2023 the operating cash balances in excess of the amount allowed by HUD is $236,589. Effect: - The Company has cash balances in excess of the amounts allowed by HUD. The $236,589 amount in excess of the FDIC limit is less than the surplus cash at the end of the year. Cause: - The Company accumulated excess cash in the operating account. Recommendation: - The Company should monitor the investments held by these financial institutions to ensure that HUD’s requirements are met. Non-compliance code: - Z – Other. Amount of Questioned Costs: - None

Information on Universe Population Size: Statement of Condition: 9 Sample Size Information: 3 Statement of Condition: HUD requires the Company to run EIV (Enterprise Income Verification) reports on new tenant move-ins within 90 days of the move-in date. We noted 2 instances that the EIV reports were not run within the 90 day period. The Company?s system of internal control over compliance did not timely detect the error. Criteria: The Company runs EIV reports within 90 days of a tenant moving in. Effect: The EIV report was not run within the timeframe required by HUD. Cause: The onsite manager, of many years, retired and the assistant manager terminated their employment about the same time. Because of this there were staffing changes and temporary help until more permanent onsite management employees could be hired. This change in employees resulted in delays in running the EIV reports. Recommendation: The Company run the EIV reports with in 90 days of a tenant moving into the building.