Notes to SEFA
Accounting Policies: NOTE 1 - BASIS OF PRESENTATIONThe accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Pine Hills, Inc., HUD Project No. 065-HD027-CA, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. The Organization did not use the 10% de minimis rule.NOTE 2 - CALCULATION OF FEDERAL EXPENDITURESTo protect its interest in a capital advance, HUD requires a note and a mortgage, generally for a 40 year term. The owner is not required to repay the principal or pay interest and the note is forgiven at maturity, as long as the owner provides housing for the designated class of people in accordance with applicable HUD requirements. However, the full outstanding balance on the note should be considered federal awards expended, included in determining Type A programs and reported as loans on the Schedule of Expenditures of Federal Awards or accompanying notes in accordance with the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.