Notes to SEFA
Title: Section 811 Capital Advance
Accounting Policies: BASIS OF PRESENTATION - The accompanying schedule of expenditures of federal awards includes the federal grant activity of Tomball Pines Apartments, FHA Project No. 114-HD006-NP-CMI, 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 (CFR) 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 Tomball Pines Apartments, it is not intended to and does not present the financial position, changes in net assets or cash flows of Tomball Pines Apartments. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Expenditures reported in 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 reimbursements.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
SECTION 811 CAPITAL ADVANCE - The Project received a loan under HUD's Section 811 Capital Advance Program in a prior year. The loan balance at the beginning of the year, amounting to $1,216,500, is included in the schedule of expenditures of federal awards. The Project has received no additional funds during the year. The loan balance is reported as a long-term note payable in the statement of financial position.