Audit 324850

Title: Note 3 – Contingency Accounting Policies: Note 1 – Summary of Significant Accounting Policies The accompanying schedule of expenditures of federal awards includes the federal grant activities of The Pepin Academies, Inc. (“Pepin”). 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 Pepin, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Pepin. 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. De Minimis Rate Used: N Rate Explanation: Note 2 – Indirect Costs Pepin has elected not to use the 10% de minimis cost rate allowed by the Uniform Guidance. Expenditures incurred by Pepin are subject to audit and possible disallowance by federal agencies. Management believes that, if audited, an adjustment for disallowed expenses would be immaterial.