Beaumont Senior Citizens Housing, Inc.

Section III - Federal Award Finding

Finding #2025-001: Section 8 Housing Assistance Payments Program, Assistance Listing: 14.195 and Mortgage Insurance Section 223(f) Insured Loan Assistance Lising: 14.155

Type of Finding: Significant Deficiency

Condition: The audited financial statements for the period ended June 30, 2024 were not entered into the FASSUB or Federal Audit Clearinghouse (FAC) system timely.

Criteria: The HUD regulatory agreement requires the audited financial statements to be prepared in accordance with GAAP and filed into the FASSUB system within 90 days of year end.

Effect: The Corporation is in violation of the compliance requirement of its major federal program.

Questioned Cost: $0

Cause: Financials were not ready\available for audit.

Recommendation: We recommend the audited financial statements be submitted into the FASSUB system within 90 days of year end.

Auditor’s Comment: Cleared: The June 30, 2024 financial data was submitted and accepted into the FASSUB system on November 8, 2024 and into the FAC system on June 24, 2025.

Section II – Financial Statement and Section III - Federal Award Finding

Finding #2025-002: Section 8 Housing Assistance Payments Program, Assistance Listing: 14.195 and Mortgage Insurance Section 223(f) Insured Loan Assistance Listing: 14.155

Type of Finding: Material Weakness

Condition: On November 15, 2023, the Corporation’s tax-exempt status was revoked due to failure to file federal tax return Form 990 for three consecutive years.

Criteria: The nonprofit corporation financed the Project with the U.S. Department of Housing and Urban Development (HUD) pursuant to a mortgage note regulated by HUD.

Effect: The Corporation is in violation of the compliance requirement of its major federal programs.

Questioned Cost: $0

Cause: Federal tax return Form 990’s were not filed for three consecutive years.

Recommendation: We recommend the Corporation file all necessary forms to reinstate the Corporations’ tax-exempt status.

Management’s View: Management is in agreement with the finding. The corrective action plan is included in the audit report.

Auditor’s Comment: The Corporation in the process of apply for reinstatement of tax-exempt status and submitting all past due Form 990’s.

Section III - Federal Award Finding Finding #2024-001: Section 8 Housing Assistance Payments Program, Assistance Listing: 14.195 and Mortgage Insurance Section 223(f) Insured Loan Assistance Lising: 14.155 Type of Finding: Significant Deficiency Condition: The audited financial statements for the periods ended June 30, 2021, 2022 and 2023 were not entered into the FASSUB or Federal Audit Clearinghouse (FAC) system timely. Criteria: The HUD regulatory agreement requires the audited financial statements to be prepared in accordance with GAAP and filed into the FASSUB system within 90 days of year end. Effect: The Corporation is in violation of the compliance requirement of its major federal program. Questioned Cost: $0 Cause: Financials were not ready\available for audit. Recommendation: We recommend the audited financial statements be submitted into the FASSUB system within 90 days of year end. Auditor’s Comment: The 2021 and 2022 financial statements will not be submitted. The June 30, 2023 and 2024 financial data was received and submitted into the FASSUB system.

Section II – Financial Statement and Section III - Federal Award Finding Finding #2024-002: Section 8 Housing Assistance Payments Program, Assistance Listing: 14.195 and Mortgage Insurance Section 223(f) Insured Loan Assistance Listing: 14.155 Type of Finding: Material Weakness Condition: On November 15, 2023, the Corporation’s tax-exempt status was revoked due to failure to file federal tax return Form 990 for three consecutive years. Criteria: The nonprofit corporation financed the Project with the U.S. Department of Housing and Urban Development (HUD) pursuant to a mortgage note regulated by HUD. Effect: The Corporation is in violation of the compliance requirement of its major federal programs. Questioned Cost: $0 Cause: Federal tax return Form 990’s were not filed for three consecutive years. Recommendation: We recommend the Corporation file all necessary forms to reinstate the Corporations’ tax-exempt status. Management’s View: Management is in agreement with the finding. The corrective action plan is included in the audit report. Auditor’s Comment: The Form 990’s for fiscal year 2021, 2022 and 2023 have been filed. The Corporation intends to apply for reinstatement of tax-exempt status.

Finding #2023-001: Section 8 Housing Assistance Payments Program, CFDA: 14.195 and Mortgage Insurance Section 223(f) Insured Loan CFDA: 14.155 Condition: The audited financial statements for the periods ended June 30, 2021, 2022 and 2023 were not entered into the FASSUB system timely. Criteria: The HUD regulatory agreement requires the audited financial statements to be prepared in accordance with GAAP and filed into the FASSUB system within 90 days of year end. Effect: The Corporation is in violation of the compliance requirement of its major federal program. Questioned Cost: $0 Cause: Financials were not ready\available for audit. Recommendation: We recommend the audited financial statements be submitted into the FASSUB system within 90 days of year end. Auditor’s Comment: The June 30, 2023 financial data was received and submitted into the FASSUB system.

Finding #2023-002: Section 8 Housing Assistance Payments Program, CFDA: 14.195 and Mortgage Insurance Section 223(f) Insured Loan CFDA: 14.195 Condition: The June mortgage payment was not made in a timely matter. Criteria: The HUD regulatory agreement requires the Corporation to promptly make all payments due under the mortgage agreement. Effect: The Corporation is in violation of the compliance requirement of its major federal program. Questioned Cost: $32,376 Cause: Insufficient cash flow Recommendation: We recommend the Corporation monitor cash flow and implement procedures for assuring payment of the mortgage by the due dates. Auditor’s Comment: CLEARED: The mortgage payment due on June 1, 2023 was made on July 1, 2023.

Finding #2023-003: Section 8 Housing Assistance Payments Program, CFDA: 14.195 Condition: The Corporation did not maintain current documents in the vendor files, including invoices and cancelled checks. Criteria: The Corporation is required to maintain documentation in the vendor files including approved bills, invoices, or other supporting documents. Questioned Costs: $98,784 Effect: The Corporation is in violation of regulatory requirements governing disbursements. Cause: Management’s policies with respect to proper documentation of vendor files and cash disbursements were not consistently followed. Recommendation: Management should review its policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.