Notes to SEFA
Title: Loan/loan guarantee outstanding balances
Accounting Policies: 1.BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Westhab, Inc. and Affiliates (the Company) under programs of the federal government for the year ended December 31, 2022. 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). Because the Schedule presents only a selected portion of the operations of Westhab, Inc. and Affiliates, it is not intended and does not present the financial position, changes in net assets, or cash flows of Westhab, Inc. and Affiliates. The Companys contract with the federal agencies does not have a provision for an indirect cost rate.2.SUMMARY OF SIGNIFICANT ESTIMATESExpenditures 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 allowed or are limited as to reimbursement.3.SUB-RECIPIENTSThe Company provided no federal awards to sub-recipients for the year ended December 31, 2022.4.INDIRECT COSTSThe Company has not previously received a negotiated indirect cost rate. However, the Company has elected to use the 10% de minimus indirect cost rate allowable under the Uniform Guidance.5.NON-CASH EXPENDITURESCertain affiliates of the Company were in part financed by capital advances from HUD. These advances were in turn loaned from the Company to these affiliates and total $18,364,770 as of December 31, 2022. These advances are secured by enforcement mortgages on the properties owned by the affiliates. The mortgages carry a term of 40 years, bear no interest and repayment is not required so long as the housing remains available for its intended purpose. Since the mortgages are not repayable so long as the Company complies with HUD regulations, the proceeds from the mortgages have been recorded as net assets with donor restrictions and are being released from restriction ratably over the term of the mortgages.
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
SUPPORTIVE HOUSING FOR THE ELDERLY (14.157) - Certain affiliates of the Company were in part financed by capital advances from HUD. These advances were in turn loaned from the Company to these affiliates and total $18,364,770 as of December 31, 2022. These advances are secured by enforcement mortgages on the properties owned by the affiliates. The mortgages carry a term of 40 years, bear no interest and repayment is not required so long as the housing remains available for its intended purpose. Since the mortgages are not repayable so long as the Company complies with HUD regulations, the proceeds from the mortgages have been recorded as net assets with donor restrictions and are being released from restriction ratably over the term of the mortgages.