Audit 1658

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Frederick United Methodist Housing Development Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The amount reported for the mortgage was the beginning of year balance. The balance at the end of the year was $1,911,607. De Minimis Rate Used: N Rate Explanation: Frederick United Methodist Housing Development Corporation has 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 includes the federal award activity of Frederick United Methodist Housing Development Corporation, HUD Project No. 051-11386, and is presented on the accrual basis of accounting. The information in this 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) and/or OMB Circular A-122, Cost Principals for Non-Profit Organizations, as applicable. Because the Schedule presents only a selected portion of the operations of Frederick United Methodist Housing Development Corporation, it is not intended to and does not present the financial position, change in net assets, or cash flows of Frederick United Methodist Housing Development Corporation.

Title: Subrecipient Payments Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Frederick United Methodist Housing Development Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The amount reported for the mortgage was the beginning of year balance. The balance at the end of the year was $1,911,607. De Minimis Rate Used: N Rate Explanation: Frederick United Methodist Housing Development Corporation has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. None of the expenditures reported on the Schedule were passed through to subrecipients.