Audit 28923

Title: Loan/loan guarantee outstanding balances Accounting Policies: Basis of PresentationThe accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activityof Dawning Family Services, Inc. (the Organization) under programs of the federal government for the yearended September 30, 2022. The information in this schedule is presented in accordance with the auditrequirements 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 selectedportion of the operations of the Organization, it is not intended to and does not present the financial position,changes in net assets, or cash flows of the Organization.Pursuant to the Uniform Guidance, the Organization, as a sub-recipient of federal awards, has provided thename of the pass-through entity and the identifying description and number assigned by the pass-through entitywhen available from the pass-through entity. The Organization has provided the total federal awards expendedfor each individual federal program and the Assistance Listing Number (ALN) or other identifying informationwhen the ALN information is not available. The Uniform Guidance does not require the Organization toprovide this information, nor a breakdown of amounts awarded ALN if that information is not available fromthe awarding agency.Summary of Significant Accounting PoliciesExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures arerecognized following the cost principles contained in the Uniform Guidance, wherein certain types ofexpenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - Balances outstanding at the end of the audit period were 1979773. The Organization entered into a Community Development Block Grant funding agreement passed throughHillsborough County, Florida not to exceed $2,000,000 for the construction of an emergency shelter forhomeless and at risk families and various improvements to existing offices on the Organizations property.Pursuant to the funding agreement, a deferred payment mortgage (the mortgage) in the amount of $2,000,000was executed between the Organization and Hillsborough County, Florida. The funding agreement includesprovisions for the continued use of the improvements in a public facility benefiting homeless individuals andfamilies to the later of March 31, 2041 or 20 years from the completion of the project. The project wascompleted in June 2021. The Organization spent, and recognized as revenue, approximately $1,533,000 and$447,000 in fiscal years ending September 30, 2020 and 2021, respectively. There were no new costs incurredon this loan in fiscal year 2022. The land use restrictions of the funding agreement and the mortgage provide for the optional right ofHillsborough County, Florida to collect on the mortgage in the event the Organization does not follow theterms of the agreement. Interest is not accrued during the deferment period of the mortgage. The balance ofthe mortgage is $1,979,773 at September 30, 2022. The Organization plans to follow the terms of the agreement.