Notes to SEFA
Title: Loan Balances Subject to Continuing Compliance Requirements
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 the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
De Minimis Rate Used: N
Rate Explanation: St. Dominic’s Apartments, Inc. has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Total expenditures in the accompanying schedule of expenditures of federal awards for the Supportive Housing for the Elderly (Section 202) Program (ALN 14.157) includes the total amount of new loans made during fiscal year 2024, as well as the unpaid principal balance from loans originated in previous years for which the Federal government imposed “continuing compliance requirements”. The program requires a note and mortgage for a 40-year term for which the owner is not required to repay the principal or pay interest, and the note is forgiven at maturity, as long as the owner provides housing for the designated class of people in accordance with applicable HUD requirements.
As of June 30, 2024, the Section 202 program had loan balances subject to continuing compliance requirements of $2,426,500. Uniform Guidance (2 CFR 200.502) requires this amount be included in the “basis for determining Federal awards expended” on the current year schedule of expenditures of federal awards as the Federal government is at risk for the loans until the debt is repaid. The beginning balance of the loans subject to continuing compliance requirements was also $2,426,500 on July 1, 2023.