BONHAM RHF HOUSING INC

Finding reference number: 2020-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly, CFDA 14.157 (Project identification number 112-EH109 and 1990) Auditor non-compliance code: Q - Failure to make Mortgage Payments Finding resolution status: Resolved Universe population size: The universe population is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition 2020-001 for noncompliance information. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Repeat Finding: Yes, see Finding 2019-001. Questioned costs: $486 Statement of Condition 2020-001 (CFDA 14.157): As of February 29, 2020, the Corporation is delinquent $486 on the mortgage note. Criteria: Pursuant to Section 1 of the Regulatory Agreement, the Corporation is required to make all payments due under the mortgage. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. The mortgage is in default in the amount of $486 at February 29, 2020. Cause: The mortgage payment for the month of February 2020 was not made in full. The monthly mortgage payments are deducted from the monthly HAP subsidy received, however, the HAP subsidy received for February 2020 was $486 less than the monthly mortgage payment. Recommendation: Management should pay the delinquent mortgage note payment of $486 immediately. Completion date: March 16, 2020 Management's response: Agree. Management paid down the mortgage note to $80,000 with proceeds from a new HUD mortgage note on March 16, 2020.

Statement of Condition 2020-001 (CFDA 14.157): As of February 29, 2020, the Corporation is delinquent $486 on the mortgage note. Recommendation: Management should pay the delinquent mortgage note payment of $486 immediately. Actions taken or planned on the finding: Management paid down the mortgage note to $80,000 with proceeds from a new HUD mortgage note on March 16, 2020.

2019-001

Finding reference number: 2019-001 CFDA title and number (federal award identification and year): Supportive Housing for the Elderly, CFDA No. 14.157 (112-EH109 and 1990) Auditor non-compliance code: Q - Failure to make Mortgage Payments 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: No Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $964 Statement of condition 2019-001: As of February 28, 2019, the Corporation is delinquent $964 on the mortgage. Criteria: Pursuant to Section 1 of the Regulatory Agreement, the Corporation is required to make all payments due under the mortgage. Effect or potential effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. The mortgage is in default for $964 at February 28, 2019. Cause: The mortgage payment for the month of November 2018 was not made in full. The monthly mortgage payments are deducted from the monthly HAP subsidy received, however, the HAP subsidy received for November 2018 was $964 less than the monthly mortgage payment. Recommendation: Management should pay HUD the delinquent $964 immediately. Completion Date: May 16, 2019 Reporting views of responsible officials: Management agrees with the recommendation and issued the check for the delinquent mortgage payment of $964 on May 16, 2019.

Name of auditee: Bonham RHF Housing, Inc. HUD auditee identification number: 112-EH109 Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended February 28, 2019 CAP prepared by Name: Christopher Purcell Position: Controller Telephone number: 562-257-5100 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Statement of Condition 2019-001 (CFDA 14.157): As of February 28, 2019, the Corporation is delinquent $964 on the mortgage. Recommendation: Management should pay HUD the delinquent $964 immediately. Actions taken or planned on the finding: Management agrees with the recommendation and issued the check for the delinquent mortgage payment of $964 on May 16, 2019.