Audit 322300

Title: NOTE A - Basis of presentation 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. South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal award activity of South Carthage Manor, Inc., HUD Project No. 086-EE056, and is presented on the accrual basis of accounting. The information in this 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). Because the Schedule presents only a selected portion of the operations of South Carthage Manor, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of South Carthage Manor, Inc.

Title: NOTE B - Summary of significant accounting policies 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. South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate 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 the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Title: NOTE C - U.S. Department of Housing and Urban Development Loan Program 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. South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: South Carthage Manor, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. South Carthage Manor, Inc. has received a U.S. Department of Housing and Urban Development capital advance under Section 202 of the National Housing Act. The balance is included in the federal expenditures presented in the Schedule. South Carthage Manor, Inc. received no additional funds during the year.