Audit 319138

Title: NOTE A – BASIS OF PRESENTATION Accounting Policies: The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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 SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs. The accompanying Schedule of Expenditures of Federal Awards (“SEFA”) includes the federal grant activity of Friendship Shelter, Inc. (the “Organization”) under programs of the federal government for the year ended December 31, 2023. The information in this SEFA is presented in accordance with the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States of America, and the audit requirements of Title 2 U.S. Code of Federal Regulation (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the SEFA presents only a selected portion of operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. Federal awards received directly from federal agencies as well as federal awards passed through local agencies are included in the SEFA.

Title: NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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 SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs. The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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.

Title: NOTE C – INDIRECT COST RATE Accounting Policies: The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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 SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs. The SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs.

Title: NOTE D - SUBRECIPIENTS Accounting Policies: The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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 SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs. There were no payments of federal funds to subrecipients for the year ended December 31, 2023.

Title: NOTE E – IN-KIND PERSONAL PROTECTIVE EQUIPMENT (PPE) Accounting Policies: The SEFA is presented using the accrual basis of accounting which is described in the notes to the Organization’s consolidated financial statements. 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 SEFA includes both direct and indirect costs expenses for all grants. The Organization elected to not use the 10% de minimis indirect cost rate as allowed per section 414 of the Uniform Guidance. The indirect costs expended are included as part of the pre-determined fixed fees outlined on the grant agreement budgets. Other costs are allocated to contracts based on relative percentage of employee working costs. The Organization received no in-kind Personal Protective Equipment (PPE) during the year ending December 31, 2023.