Audit 3139

Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the grant activity of LifeQuest and Controlled Entities (“LifeQuest”) 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. LifeQuest has elected to use the 10% de minimis cost rate. NOTE B - LOAN LifeQuest has a loan agreement with the U.S. Department of Department of Agriculture Community Facilities Loans and Grants program. In accordance with section 502(b) of the Uniform Guidance, the loan balance outstanding at the beginning of the period is included as the federal expenditures presented in the Schedule. As of June 30, 2023 and 2022, the outstanding balance of the loan was $ 41,577,000. Refer to Note H of the accompanying consolidated financial statements for additional information regarding this loan. De Minimis Rate Used: Y Rate Explanation: NOTE A - BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the grant activity of LifeQuest and Controlled Entities (“LifeQuest”) 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. LifeQuest has elected to use the 10% de minimis cost rate. NOTE B - LOAN LifeQuest has a loan agreement with the U.S. Department of Department of Agriculture Community Facilities Loans and Grants program. In accordance with section 502(b) of the Uniform Guidance, the loan balance outstanding at the beginning of the period is included as the federal expenditures presented in the Schedule. As of June 30, 2023 and 2022, the outstanding balance of the loan was $ 41,577,000. Refer to Note H of the accompanying consolidated financial statements for additional information regarding this loan.