Notes to SEFA
Title: Mortgage Payable
Accounting Policies: Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity of LTC,
Inc. (d.b.a. Gillbeke Apartments), HUD Project No. 073-11891, and is presented on the accrual basis of
accounting. 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). Therefore, some amounts presented in
this schedule may differ from amounts presented in, or used in the preparation of, the basic financial
statements.
RECOGNITION OF RENTAL REVENUE
Residents in this facility are billed a monthly rental charge. These charges are recognized as income
when earned. Revenue is recorded for each month a housing unit is available for occupancy. Amounts
attributable to employee housing units and vacancies are charged to the appropriate accounts in
accordance with HUD provisions.
The Corporation also receives housing assistance payments from HUD which are also recognized as
income when earned. Rental income from the HAP Contract totaled $138,929 (76% of net rental
revenue) for the year ended June 30, 2023.
De Minimis Rate Used: N
Rate Explanation: The Corporation does not utilize the 10% de minimis cost rate because the guidance under Part 200.414 Indirect Costs does not apply.
The mortgage note is in the amount of $1,200,000. The mortgage loan is evidenced by a mortgage loan
agreement. The monthly installments for principal and interest are $4,938 with a maturity date of June 1,
2052. Interest is being charged at 3.47%. The balance of the mortgage at June 30, 2023 was
$1,080,824.