Title: NOTE 1 – 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. For performance-based awards, expenditures reported represent amounts earned.
De Minimis Rate Used: Y
Rate Explanation: HEDCO has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of HEDCO, Inc. (“HEDCO”) under programs of the federal government for the year ended May 31, 2024. 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 this Schedule presents only a selected portion of the operations of HEDCO, it is not intended to and does not present the financial position, changes in net assets, or cash flows of HEDCO.
Basis of Accounting
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. For performance-based awards, expenditures reported represent amounts earned.
HEDCO has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 2 – SMALL BUSINESS ADMINISTRATION MICROLOAN 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. For performance-based awards, expenditures reported represent amounts earned.
De Minimis Rate Used: Y
Rate Explanation: HEDCO has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
HEDCO participates in the Small Business Administration’s ("SBA") Microloan Program for small businesses. HEDCO borrows funds from the SBA for the purpose of making loans to eligible businesses within the State of Connecticut. The loans are limited to a maximum amount of $50,000 per loan and require the borrower to repay HEDCO on a monthly basis at interest rates set at the time of closing. As of May 31, 2024, HEDCO owed the SBA under separate borrowings as follows:
SBA Loan Number 6342285002- Issue Date: 11/22/2013, Interest Rate: 0.00%, Original Amount: $500,000, Balance - Beginning of Year - $17,307, Loan proceeds - 0, Loan repayments - (17,307), Balance - End of Year - $0. SBA Loan Number 2838787008- Issue Date: 10/3/2018, Interest Rate: 1.50%, Original Amount: $450,000,Balance - Beginning of Year - $290,649, Loan proceeds - 0, Loan repayments - (52,470), Balance - End of Year - $238,179. SBA Loan Number 4547479109 - Issue Date: 3/6/2023, Interest Rate: 2.875%, Original Amount: $500,000, Balance - Beginning of Year - $300,000, Loan proceeds - 200,000, Loan repayments - (12,038), Balance - End of Year - $487,962. Total Balance - Beginning of Year - $607,956, Total loan proceeds - 200,000, Total loan repayments - (81,815), Total Balance - End of Year - $726,141.