LIGHTHOUSE LIVING CENTERS NO. 2, INC.

Finding #2025-002 – Material Weakness and Other Noncompliance. Applicable federal programs: U. S. Department of Housing and Urban Development, Supportive Housing for the Elderly, Assistance Listing #: 14.157, Contract Number: TX24-T841006, Contract Year: 07/01/24 – 06/30/25. Section 8 Housing Choice Vouchers, Assistance Listing #: 14.871, Contract Number: TX24-T841006, Contract Year: 07/01/24 – 06/30/25. Criteria: In accordance with Title 2 U. S. Code of Federal Regulations Part 200 §200.510 Financial Statements, the auditor must prepare financial statements that reflect its financial position, results of operations or changes in net assets and cash flows for the fiscal year audited. Condition and context: Same as finding #2025-001. Cause and effect: Same as finding #2025-001. Recommendation: Same as finding #2025-001. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2025-003 – Significant Deficiency and Other Noncompliance. Criteria: The Supportive Housing for the Elderly and Persons with Disabilities, §891.405 and §891.605 requires Living Centers No. 2 to make a monthly deposit to the replacement reserves account in an amount determined by the U. S. Department of Housing and Urban Development (HUD). Condition and context: The required monthly replacement reserves deposit amount increased from $842 to $885 during the year, but Living Centers No. 2 failed to increase the monthly deposit. Cause and effect: Failure to make the required monthly deposit resulted in an understatement of the replacement reserves account. Recommendation: Reemphasize current policies and procedures to ensure that the required monthly deposit is made in accordance with HUD requirements. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.