Audit 295161

Title: General Information Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America. 4. INDIRECT COST RATE The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines. 5. NON-CASH EXPENDITURES The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule.

Title: Basis of Accounting Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America. 4. INDIRECT COST RATE The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines. 5. NON-CASH EXPENDITURES The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project.

Title: Relationship to Basic Financial Statements Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America. 4. INDIRECT COST RATE The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines. 5. NON-CASH EXPENDITURES The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America.

Title: Indirect Cost Rate Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America. 4. INDIRECT COST RATE The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines. 5. NON-CASH EXPENDITURES The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines.

Title: Non-cash Expenditures Accounting Policies: 1. GENERAL INFORMATION The accompanying schedule of expenditures of federal awards presents the activities in all the federal financial assistance programs of Alternatives Homes 2004, Inc. (the “Project”). All financial assistance received directly from federal agencies, as well as financial assistance passed through other governmental agencies or not-for-profit organizations, is included on the schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting. The amounts reported in this schedule as expenditures may differ from certain financial reports submitted to federal funding agencies due to those reports being submitted on either a cash or modified accrual basis of accounting. Because the schedule presents only a selected portion of the operations of the Project, it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of the Project. 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Expenditures of federal awards are generally reported on the statement of activities and changes in net assets (deficit) as program services. In certain programs, the expenditures reported in the basic financial statements may differ from the expenditures reported in the schedule of expenditures of federal awards due to program expenditures exceeding grant or contract budget limitations, matching or in-kind contributions, or capitalization policies required under accounting principles generally accepted in the United States of America. 4. INDIRECT COST RATE The Project does not have a federal approved indirect cost rate, nor has it elected to use the 10% indirect cost rate allowed under federal guidelines. 5. NON-CASH EXPENDITURES The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Project was financed by a capital advance from HUD in the amount of $829,600. The advance is secured by an enforcement mortgage on the property. The mortgage, which matures in September 2046, bears no interest, and repayment is not required so long as the housing remains available to eligible low-income persons with disabilities. There was no change in the mortgage payable from June 30, 2022 to June 30, 2023.