Audit 308883

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: Cost Principles for Non-profit Organizations De Minimis Rate Used: N Rate Explanation: Independent Communities, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance The accompanying schedule of expenditures of federal awards includes the federal grant activity of Independent Communities, Inc., HUD Project No. 061-HD063/GA06Q981002, under programs of the federal government for the year ended June 30, 2023. 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). Because the schedule presents only a selected portion of the operations of Independent Communities, Inc., it is not intended to and does not present the financial position, changes in net assets (deficit), or cash flows of Independent Communities, Inc.

Title: NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Cost Principles for Non-profit Organizations De Minimis Rate Used: N Rate Explanation: Independent Communities, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Independent Communities, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance.

Title: NOTE 3 - CAPITAL ADVANCE PROGRAM Accounting Policies: Cost Principles for Non-profit Organizations De Minimis Rate Used: N Rate Explanation: Independent Communities, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance Independent Communities, Inc. received a capital advance under the U.S. Department of Housing and Urban Development’s Section 811 Supportive Housing for Persons with Disabilities program. The capital advance is treated as a loan program for reporting federal expenditures. The capital advance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule of Expenditures of Federal Awards. Independent Communities, Inc. received no additional advances and made no payments during the year ended June 30, 2023. The balance of the capital advance outstanding at June 30, 2023 was $1,262,000.