Audit 3008

Title: Loans Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of United Community Centers, Inc. (Organization). The information in this Schedule is presented in accordance with the audit 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). Because the Schedule only presents a selected portion of the operations of the Organization, it is not intended and does not present the financial position, changes in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such 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: N Rate Explanation: The Organization has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. During 2016, the Organization received one interest free loan form the city of Fort Worth through grants provided by the United States Department of Housing and Urban Development. (The interest rate is set by the United States Department of Housing and Urban Development.) The interest rate may be increased to 6% if the property is sold before the expiration of the affordability period or if other compliance requirements are not adhered to. The City of Fort Worth loan is forgivable beginning in 2027 through the end of the affordability period in June 2036 at 10% per year, provided that all program requirements are met and the Organization is not otherwise in default of the loan terms or the grant contract. Management believes that violating the conditions of the loan agreement is unlikely; therefore, the loan was recorded as grant revenue for the year ended March 31, 2016, and is not reflected on the statement of financial position as a liability. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the Schedule. The balance of loans outstanding at March 31, 2023 is $766,500.