KIMBLE DOVER STREET APARTMENTS INC

Schedule reference number 2023-001. Title and AL Number of Federal Program: Supportive Housing for the Elderly, AL 14.157 Type of finding: Financial statement Resolution status: In process Population size: N/A Sample size: N/A Repeat finding: No. Criteria: All significant general ledger accounts were not reconciled for the year ended December 31, 2023. Condition: During the audit, several adjusting journal entries were recorded to reconcile certain accounts to underlying support. Cause: The Project had a change in the management company in December 2023 and during the transition, some accounts were not reconciled. Effect: Several audit adjusting journal entries were recorded. Noncompliance code: S. Internal control deficiency Questioned cost: None Reporting views of officials: Management agrees with the finding. Context: This was noted while performing certain procedures on various general ledger accounts during the audit. Recommendation: The new management company should ensure that all significant accounts are reconciled on a monthly basis. Auditors' summary of auditee's comments: They are in agreement. Completion date: 12/31/24 Response: The new management company agrees with the comments and will ensure that in the future, all transactions are properly recorded and all accounts are reconciled on a monthly basis.

Schedule reference number 2023-002. Title and AL Number of Federal Program: Supportive Housing for the Elderly, AL 14.157 Type of finding: Compliance Resolution status: In Progress Population size: N/A Sample size: N/A Repeat finding: No Criteria: The Project did not have the proper insurance coverage as required by the capital advance agreement. Condition: The fidelity bond insurance coverage for the property was not in effect the entire year and excluded the apartment manager, board chair, board vice-chair, eight board members, board treasurer and CFO. Cause: The Project obtained fidelity bond insurance coverage effective February 27, 2023, however, the policy explicitly excluded certain officials and employees required by the capital advance agreement. Effect: The Property did not have adequate fidelity bond insurance coverage required by their regulatory agreement and had a lapse in other required insurance coverage. Noncompliance code: Z. Other Questioned cost: None Reporting views of officials: Management agrees with the finding. Context: This was noted during the audit. Recommendation: The proper coverage for fidelity bond insurance as required by the capital advance agreement should be put in place for the Project immediately. Auditors' summary of auditee's comments: The new management company understands the requirements and are in the process of obtaining all required coverage. Completion date: 12/31/24 Response: Management is in the process of obtaining all required insurance coverage. Corrective Action: In progress

Finding 2023-003 Title and AL Number of Federal Program: Supportive Housing for the Elderly, AL 14.157 Type of finding: Compliance Resolution status: In Progress Population size: N/A Sample size: N/A Repeat finding: No Criteria: All of the required deposits to the replacement reserve were not made during the year. Condition: The required deposits to the replacement reserve for the year were short by $1,321. Cause: Prior management company oversight. Effect: There was a shortfall in the monthly deposits to the replacement reserve as required by HUD. Noncompliance code: N. Reserve for Replacement Deposits Questioned cost: None Reporting views of officials: Management agrees with the finding. Context: This was noted while performing audit procedures on the replacement reserve. Recommendation: All deposits required to be made to the replacement reserve should be made on a timely basis. Auditors' summary of auditee's comments: They are in agreement and the new management company will make a deposit for the shortfall. Completion date: 12/31/24 Response: The new management company plans to make all deposits in a timely manner. Corrective Action: In progress