Title: Loan/loan guarantee outstanding balances
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Better Homes of Seaford, Inc. and Affiliates, 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 (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 the entity, it is not intended to and does not present the entitys financial position, changes in net assets, or cash flows.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.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Corporation has entered into the following loan agreements: USDA - RD: Long-term debt instruments were provided by RD pursuant to its Rural Housing Program under Section 515 of the National Housing Act of 1949 for Charleston Place Apartments and Yorktowne Woods Apartments. The long-term debt instruments are secured by an interest in real and personal property and an assignment of income to be derived from the Projects.Under the loan agreements, the amount of interest charged is reduced to 1% so there is a lower payment made on a monthly basis.DSHA - HOME: Long-term debt instruments were provided by DSHA pursuant to the HOME program for Charleston Place Apartments, Williamsburg Manor Apartments, and Yorktowne Woods Apartments. The long-term debt instruments are secured by an interest in real and personal property and an assignment of income to be derived from the Projects. No repayments on the long-term debt instruments are required unless there is available cash flow, as defined in the DSHA Regulatory Agreements. HUD: The long-term debt instrument was provided by HUD per Section 202 for Virginia Crest Apartments. The debt is secured by an interest in real and personal property and an assignment of income to be derived from the Project. No repayments on the debt are required unless there is noncompliance with the provisions of the loan agreement. RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 1455758. SUPPORTIVE HOUSING FOR THE ELDERLY - CAPITAL ADVANCE (14.157) - Balances outstanding at the end of the audit period were 1990100. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 1951217.
Title: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Better Homes of Seaford, Inc. and Affiliates, 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 (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 the entity, it is not intended to and does not present the entitys financial position, changes in net assets, or cash flows.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.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.CASH AND CASH EQUIVALENTS: Management considers all highly liquid investments with a maturity of three months or less, at the date of acquisition, to be cash and cash equivalents.CREDIT RISK: Cash and cash equivalents are maintained at financial institutions and, at times, balances exceeded the federally insured limits.RESTRICTED DEPOSITS AND FUNDED RESERVES: Restricted deposits consist of the following: escrow funds which are held by DSHA and financial institutions as approved by HUD, DSHA or RD and tenant security deposits which are held in separate bank accounts in the name of the Projects. The Regulatory Agreements (the Agreements) require monthly payments, as specified by HUD, DSHA or RD on an annual basis, for insurance premiums and real estate taxes where payments are made by the Projects, or DSHA on the Projects behalf, and are expensed by management based on the respective effective periods, and into a restricted reserve for replacement account where withdrawals can be made for repair and/or replacement of and capital improvements to the apartment complex, subject to HUD, DSHA or RD approval. The State of Delaware Landlord-Tenant Code requires management to receive security deposits from the tenants upon execution of the lease agreement and repay them to the tenant upon vacating the premises, depending on whether the tenant had any obligations to the Projects at that time. INVESTMENTS: Investments represent certificates of deposit held for long-term investment. Financial instruments which potentially subject the Corporation to a concentration of credit risk consist principally of investments held by credit-worthy financial institutions. By policy, these investments are kept within limits designed to prevent risk caused by concentration. PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost and are depreciated on the straight-line method over the estimated useful life of the assets, which are 25 to 50 years for the buildings and improvements and 5 to 20 years for the furniture and equipment. Additions and betterments are capitalized, while repairs and maintenance that do not improve or extend the useful life of the respective assets are expensed currently. In accordance with Accounting Standards Codification (ASC), No. 360, Accounting for the Impairment or Disposal of Long-Lived Assets, management reviews property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recovered. If the fair value is less than the carrying amount of the asset, an impairment loss is recognized for the difference. No impairment losses have been recognized during the years presented.ADVERTISING: Advertising costs are expensed when incurred.SUBSEQUENT EVENTS: Events and transactions subsequent to year end have been evaluated for potential recognition in the financial statements or disclosure in the notes to the financial statements. All events and transactions have been evaluated through June 2, 2023, the date the report was available for issuance.As a result of the spread of COVID-19 (Coronavirus) and its variants, economic uncertainties have arisen which are likely to negatively impact revenue and support. Other financial impact could occur through such potential impact is unknown at this time.