Audit 299354

Title: 4. Section 223(f) HUD Insured Loan Accounting Policies: 1. General The accompanying schedule of expenditures of federal awards (the Schedule) presents the activity of all federal award programs of Diakon Lutherwood Senior Housing, LLC (the Company). The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Company, it is not intended to and does not present the financial position, changes in net deficit, or cash flows of the Company. 2. Basis of Accounting The accompanying Schedule is presented using the accrual basis of accounting, which is described in Note 1 to the financial statements. 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: Y Rate Explanation: The auditee used the de minimis cost rate. 4. Section 223(f) HUD Insured Loan Diakon Lutherwood Senior Housing, LLC has an outstanding mortgage payable balance due to Wells Fargo Bank, National Association. The loan is insured by HUD under Section 207 pursuant to Section 223(f) of the National Housing Act (AL No. 14.155). The federal government imposes continuing compliance requirements for the balance of the loan. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule per the Uniform Guidance. The balance of the loan as of December 31, 2023 amounted to $5,234,838.