ACCESSIBLE RESIDENCES, INC.

Finding No. 2025‐001: Special Tests and Provisions ‐ Material Weakness in internal controls over compliance and compliance finding Criteria: The Capital Advance Regulatory Agreement for the United States Housing and Urban Development (HUD) funded loan program requires that disbursements from the replacement reserve fund be made only after receiving consent in writing from HUD. Condition: The Agency did not get prior written approval from HUD when transferring funds out of the replacement reserve account. Cause: Funds were erroneously transferred to the management company to pay accrued management fees. Effect: The Agency is not in compliance with the Capital Advance Regulatory Agreement that governs the loan program. Questioned costs: $15,000 Recommendation: We recommend that management communicate with their oversight agency the required steps to remedy the noncompliance. We also recommend that going forward management obtains written prior approval from HUD before disbursing funds from the replacement reserve account. Management’s Response: See corrective action plan.

Finding 2025‐002: Special Tests – Significant deficiency in internal controls over compliance and compliance finding. Supporting Housing for Persons with Disabilities (Section 811) ALN 14.181 Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to ensure compliance for utility allocations. Condition: During special tests testing for federal grants, 5 out of 25 utility reimbursements selected for testing had overallocated expenses. Cause: The Agency did not have a standard procedure in place to review the utility reimbursement allocations. Effect: Tenants’ monthly utilities were overcharged for the month. Questioned costs: None. Recommendation: Management should design and implement controls to ensure utility reimbursement allocations are accurate. Management’s response: See corrective action plan.