TOMBALL PINES, INC.

Findings reference number: 2025-001 - Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities (Section 811), AL 14.181 - Type of finding: Compliance - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: No. - Criteria: Per the HUD management fee schedule for owners and agents, the basic rate for management fees is $50 per unit per month (pupm). The Project qualifies for add-on fees of $8 pupm for having 16 to 30 units in property and $3 pupm for being a Sec 811 property with the total cap of management fees at $61 pupm. - Condition: Management fees for the year ended December 31, 2025 were paid in excess of the monthly pupm cap. - Cause: Management oversight. - Effect: Management miscalculated the management fees for the year ended December 31, 2025, and hence, fees were paid in excess of the cap by $4,183. A receivable was recorded for the overpaid management fees. - Noncompliance code: J. Unauthorized management fees. - Questioned costs: $4,183. - Reporting views of officials: Auditee agrees with the finding. - Contract Number: 114-HD006-NP-CMI - Context: This was noted while performing audit procedures on management fees during the audit. - Recommendation: Management should ensure that management fees are paid in accordance with HUD limits. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/26. - Response: Management plans to repay the overcharged fees as soon as possible.

Schedule reference number 2024-001. Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities (Section 811), AL 14.181 -Type of finding: Financial statement -Resolution status: In process -Population size: N/A -Sample size: N/A -Repeat finding: No. -Criteria: All expenses for the year ended December 31, 2024 should be recorded to the books. -Condition: Management failed to accrue legal fees pertaining to the year ended December 31, 2024 for which the invoice was dated in November 2024 but not received or paid until January 2025. -Cause: Management oversight. -Effect: The Project's expenses and payables for the year ended December 31, 2024 were understated. -Noncompliance code: S. Internal control deficiency -Questioned cost: $12,491. -Reporting views of officials: Management agrees with the finding. -Context: This was noted while performing certain procedures to search for unrecorded liabilities during the audit. -Recommendation: Management should review invoices received and payments done in the subsequent period and accrue the expenses relating to the prior period. -Auditors' summary of auditee's comments: They are in agreement. -Completion date: 12/31/25 -Response: Governance agrees with the comments and will ensure that all transactions are properly recorded.

Findings reference number: 2023-001 Title and AL Number of Federal Program: Supportive Housing for Persons with Disabilities (Section 811) CFDA 14.181 Type of finding: Federal Award Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No Criteria: Surplus cash should be deposited to the residual receipts accounts within 60 days after year end. Condition: The review of surplus cash indicates a deposit should have been made by March 1, 2024. Cause: Management did not calculate surplus cash until a later period. Effect: Once the deposit is made, there will be some lost interest income but it should be minimal. Noncompliance code: B. Residual Receipt Questioned costs: N/A. Reporting views of officials: Auditee agrees with the finding. Context: This was noted while performing audit procedures on surplus cash. Recommendation: Management should fund the surplus amount as soon as possible. Auditee's comments: Auditee agrees with the finding and will fund the surplus cash to the residual receipts account as soon as possible. Auditors' summary of auditee's comments: They are in agreement. Completion date: 12/31/2024 Response: Management plans to fund the residual receipt account as soon as possible.