Audit 309042

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Sunset Hills Apartments, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimus cost rate The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Sunset Hills Apartments, Inc., HUD Project No. 114-35664, and is presented on the accrual basis of accounting. 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, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Sunset Hills Apartments, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Sunset Hills Apartments, Inc.

Title: NOTE 3 - MORTGAGE NOTE PAYABLE Accounting Policies: NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Sunset Hills Apartments, Inc. has elected not to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimus cost rate The outstanding balance of the loan and loan guarantee programs at December 31, 2023 with continuing compliance requirements which are reported as federal expenditures on the accompanying schedule of expenditures of federal awards was as follows: CFDA Balance at Number 12/31/2023 14.135 $ 423,746 14.164 779,479 14.197 81,291 $ 1,284,516