Notes to SEFA
Title: Capital Advance
Accounting Policies: 1.BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Fernclif Housing Development Fund Company, Inc., HUD Project No. 014-HD001 (the Company) under programs of the federal government for the year ended December 31, 2022 and has been prepared in accordance with accounting principles generally accepted in the United States. 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 the Company, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Company.2.BASIS OF ACCOUNTINGExpenditures 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 expenditure are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Company has received a Section 811 capital advance from HUDs Supportive Housing for Persons with Disabilities program (Assistance Listing No. 14.181). Under the terms of the capital advance agreement, the Company must continue to operate for the specified purpose for 40 years in order to earn the advance. The outstanding balance of the capital advance was $1,372,103 at December 31, 2022.