Audit 323144

Title: NOTE B - CONTINGENCIES Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal and state grant activity of Housing First Steps Forward, Inc. and Subsidiaries (the "Organization") 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) and Chapter 10.650 Rules of the Auditor General. Because the Schedule presents only a selected portion of the 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. Expenditures are recognized following the cost principles contained in the Uniform Guidance and Chapter 10.650 Rules of the Auditor General, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected to use the 10- percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. These federal programs are subject to financial and compliance audits by grantor agencies which, if instances of material noncompliance are found, may result in disallowed expenditures and affect the Organization's continued participation in specific programs. The amounts, if any, of expenditures which may be disallowed by the grantor agencies cannot be determined at this time, although the Organization expects such amounts, if any, to be immaterial.

Title: NOTE C - CAPITAL ADVANCE, NON-AMORTIZING MORTGAGE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal and state grant activity of Housing First Steps Forward, Inc. and Subsidiaries (the "Organization") 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) and Chapter 10.650 Rules of the Auditor General. Because the Schedule presents only a selected portion of the 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. Expenditures are recognized following the cost principles contained in the Uniform Guidance and Chapter 10.650 Rules of the Auditor General, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected to use the 10- percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Capital Advance, Non-Amortizing Mortgage is administered directly by Housing First Steps Forward, Inc. and Subsidiaries, and balances and transactions relating to this program are included in Housing First Steps Forward, Inc. and Subsidiaries’ consolidated financial statements. The value of the Capital Advance, Non-Amortizing Mortgage received during the year is included in the State expenditures presented in the Schedule. The balance of the mortgage outstanding at December 31, 2023 is $1,494,000. As long as Housing First Steps Forward, Inc. and Subsidiaries remains qualified under the Florida Housing Finance Corporation, State Housing Initiatives Partnership Program (SHIP) and Local Economic Development Initiatives Program, repayment of the principal balance on the mortgage is deferred until final maturity in 2036 and 2032, respectively. At that time, the mortgage will be forgiven.