Audit 292723

Title: FEDERAL EXPENDITURES – SBA MICROLOAN PROGRAM Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Regional Business Assistance Corporation (Organization) 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The amounts presented in this schedule differ from amounts presented in, or used in the preparation of, the basic financial statements. For Community Advantage 7(a) Pilot Program and 504 Loan Program loans, the amounts reflected as federal expenditures represent loan receivable balances outstanding as of October 1, 2022 and loans funded during the fiscal year. The Organization also has loans from the U.S. Small Business Administration (SBA) for the purpose of relending as Microloans to eligible business, as well as a grant for training and technical assistance for Microloan borrowers. For the SBA Microloan Program, the amounts reflected as federal expenditures represent loan balances payable to the SBA as of October 1, 2022, loans received during the fiscal year, and grant expenditures incurred during the fiscal year. In the accompanying financial statements, the Organization reports Community Advantage 7(a) Pilot Program and Microloan receivable balances outstanding, net of an allowance for loan losses, as of September 30, 2023. The financial statements do not include outstanding balances of the Organization’s 504 loan portfolio, as the Organization only brokers and services these loans, and is not the lender. SUBRECIPIENTS The Organization did not pass through any federal awards to subrecipients during the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance and applied for their own rate. The Organization was approved for a 46.2% indirect cost rate for the fiscal year ended September 30, 2023, which is only applicable to the Microloan program. Due to the nature of the 504 Loan and Community Advantage 7(a) Pilot Programs, there are no indirect costs charged to those programs. The Organization has received loans from the SBA under the SBA Microloan Program. Federal expenditures reported for the SBA Microloan Program include the outstanding balance of SBA Microloans advanced to the Organization as of October 1, 2022, loans advanced to the Organization during the year, and expenditures of federal grants received under the program. The outstanding loan payable balance under the SBA Microloan Program as of September 30, 2023 was $1,109,745.

Title: FEDERAL EXPENDITURES – SBA 504 LOANS Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Regional Business Assistance Corporation (Organization) 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The amounts presented in this schedule differ from amounts presented in, or used in the preparation of, the basic financial statements. For Community Advantage 7(a) Pilot Program and 504 Loan Program loans, the amounts reflected as federal expenditures represent loan receivable balances outstanding as of October 1, 2022 and loans funded during the fiscal year. The Organization also has loans from the U.S. Small Business Administration (SBA) for the purpose of relending as Microloans to eligible business, as well as a grant for training and technical assistance for Microloan borrowers. For the SBA Microloan Program, the amounts reflected as federal expenditures represent loan balances payable to the SBA as of October 1, 2022, loans received during the fiscal year, and grant expenditures incurred during the fiscal year. In the accompanying financial statements, the Organization reports Community Advantage 7(a) Pilot Program and Microloan receivable balances outstanding, net of an allowance for loan losses, as of September 30, 2023. The financial statements do not include outstanding balances of the Organization’s 504 loan portfolio, as the Organization only brokers and services these loans, and is not the lender. SUBRECIPIENTS The Organization did not pass through any federal awards to subrecipients during the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance and applied for their own rate. The Organization was approved for a 46.2% indirect cost rate for the fiscal year ended September 30, 2023, which is only applicable to the Microloan program. Due to the nature of the 504 Loan and Community Advantage 7(a) Pilot Programs, there are no indirect costs charged to those programs. Federal expenditures reported for the SBA Certified Development Company Loan (504 Loans) Program include loans advanced to borrowers during the year, as well as the outstanding balance as of October 1, 2022, of all loans issued in prior years that the Organization continues to service. These loans are only brokered and serviced by the Organization, but the Organization is not the lender, and these loans are not reflected in the Organization’s financial statements. The outstanding loan balance as of September 30, 2023 is $529,992,672.

Title: FEDERAL EXPENDITURES – SBA COMMUNITY ADVANTAGE 7(A) PILOT PROGRAM Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Regional Business Assistance Corporation (Organization) 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The amounts presented in this schedule differ from amounts presented in, or used in the preparation of, the basic financial statements. For Community Advantage 7(a) Pilot Program and 504 Loan Program loans, the amounts reflected as federal expenditures represent loan receivable balances outstanding as of October 1, 2022 and loans funded during the fiscal year. The Organization also has loans from the U.S. Small Business Administration (SBA) for the purpose of relending as Microloans to eligible business, as well as a grant for training and technical assistance for Microloan borrowers. For the SBA Microloan Program, the amounts reflected as federal expenditures represent loan balances payable to the SBA as of October 1, 2022, loans received during the fiscal year, and grant expenditures incurred during the fiscal year. In the accompanying financial statements, the Organization reports Community Advantage 7(a) Pilot Program and Microloan receivable balances outstanding, net of an allowance for loan losses, as of September 30, 2023. The financial statements do not include outstanding balances of the Organization’s 504 loan portfolio, as the Organization only brokers and services these loans, and is not the lender. SUBRECIPIENTS The Organization did not pass through any federal awards to subrecipients during the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance and applied for their own rate. The Organization was approved for a 46.2% indirect cost rate for the fiscal year ended September 30, 2023, which is only applicable to the Microloan program. Due to the nature of the 504 Loan and Community Advantage 7(a) Pilot Programs, there are no indirect costs charged to those programs. Federal expenditures reported for the SBA Community Advantage 7(a) Pilot Program include loans advanced to borrowers during the year, as well as the outstanding balance as of October 1, 2022, of all loans issued in prior years that the Organization continues to service. The outstanding loan balance, including interest receivable, as of September 30, 2023 is $5,926,663.