Audit 11573

Title: Basis of presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles contained in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited to direct reimbursement. De Minimis Rate Used: N Rate Explanation: Family Scholar House, Inc. and Subsidiaries have elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Family Scholar House, Inc. and Subsidiaries, under programs of the federal government for the period from July 1, 2022 to December 31, 2022. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Family Scholar House, Inc. and Subsidiaries, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Family Scholar House, Inc. and Subsidiaries.

Title: Loan Program Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles contained in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited to direct reimbursement. De Minimis Rate Used: N Rate Explanation: Family Scholar House, Inc. and Subsidiaries have elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Family Scholar House, Inc. and Subsidiaries have received direct loans under the federal program as listed below. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at December 31, 2022 consist of: