Title: BASIS OF PRESENTATION
Accounting Policies: The following significant accounting policies have been followed in the preparation of the financial statements.
Basis of Accounting
The Company maintains its records and prepares its financial statements using the accrual
basis of accounting in accordance with accounting principles generally accepted in the
United States of America.
Revenue Recognition
Rental revenue is shown at its maximum gross potential. Vacancy loss is shown as a
reduction in rental revenue.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months
or less to be cash equivalents. At June 30, 2024 and 2023, the Company’s deposits were
fully insured. Not included as cash are funds restricted as to their use, regardless of liquidity,
such as tenant security deposits, replacement reserve and operating reserve accounts.
Funded Reserves
In accordance with the Regulatory Agreement for the Mental Health Services Act Housing
Program, the Company maintains an operating reserve and a replacement reserve from
which funds cannot be disbursed without approval from the California Housing Finance
Agency.
Receivables
Management has elected to record bad debts using the direct write- off method. Accounting
principles generally accepted in the United States of America require that the allowance
method be used to reflect bad debts. However, the effect of the use of the direct write-off
method is not materially different from the result that would have been obtained had the
allowance method been followed.
Property and Equipment
Purchased property and equipment are recorded at cost. Depreciation is computed on the
straight-line method based upon estimated useful lives as follows:
Buildings and Improvements 7 to 30 Years
Furniture and Fixtures 7 Years
Substantially all property and equipment serve as underlying assets for operating leases in
which the Company is the lessor. Maintenance and minor repairs are charged against income, major renewals and betterments are capitalized and depreciated. It is the
Company’s policy to capitalize all property and equipment purchases greater than $1,000
with an estimated useful life of greater than one year.
Advertising Costs
It is the policy of the Company to expense advertising costs as they are incurred. For the
year ending June 30, 2024, there was no advertising expense.
Functional Allocation of Expenses
The financial statements report certain categories of expenses that are attributable to more
than one program or supporting function of the Company. Therefore, these expenses
require allocation on a reasonable basis that is consistently applied. The expenses that are
allocated include the following: salaries and benefits, which are allocated on the basis of
time spent on programs; training and payroll processing fees, based on headcount in the
program; maintenance and landscaping, based on square footage of property; Housing
Management, based on number of client beds as a percent of the total number of beds in
agency; rental & building costs, based on square footage of occupied space by respective
program; Quality Assurance for Medi-Cal billable programs, based on budgeted cost of
programs.
Estimates
The preparation of the financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make estimates
and assumptions that affect certain reported amounts and disclosures. Actual results could
differ from those estimates.
Income Taxes
No provision or benefit for income taxes has been included in these financial statements
since for income tax purposes the Company is a disregarded entity and the operations are
reported by the sole member. The Company is liable each year for an $800 California
franchise tax in addition to a limited liability company fee based on total income.
Management has considered its tax positions and believes that all of the positions taken in
its state tax return are more likely than not to be sustained upon examination. The
Company’s returns are subject to examination by state taxing authorities generally for four
years after they are filed.
Fair Value Measurements
The Company’s financial instruments, including cash and cash equivalents, accounts
receivable and accounts payable are carried at cost, which approximates their fair value
because of the short-term maturity of these instruments. The fair value of the Company’s
debt approximates book value as of June 30, 2024 and 2023.
Residential Leases
Revenue from lease payments is recognized under the accrual method. Lease payments
are included in income as rents become due. Lease payments received in advance are
deferred until earned. At the commencement of an operating lease, no revenue is
recognized; subsequently, lease payments received by the Company are recognized on the
straight-line basis.
Leasing operations consist principally of operating leases of residential real estate expiring
in various months through 2024, in which the Company is the lessor. All leases provide for
renewal options. Lease contracts do not include variable lease payments.
Subsequent Events
Subsequent events have been evaluated through September 30, 2024, which is the date the
financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: Sunflower Housing, LLC has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The accompanying schedule of expenditures of federal awards (the Schedule) includes the
federal award activity of Sunflower Housing, LLC under programs of the federal government
for the year ended June 30, 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 the Schedule presents only a selected portion of the
operations of Sunflower Housing, LLC, it is not intended to and does not present the
financial position, results of its operations, or cash flows of Sunflower Housing, LLC.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: The following significant accounting policies have been followed in the preparation of the financial statements.
Basis of Accounting
The Company maintains its records and prepares its financial statements using the accrual
basis of accounting in accordance with accounting principles generally accepted in the
United States of America.
Revenue Recognition
Rental revenue is shown at its maximum gross potential. Vacancy loss is shown as a
reduction in rental revenue.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months
or less to be cash equivalents. At June 30, 2024 and 2023, the Company’s deposits were
fully insured. Not included as cash are funds restricted as to their use, regardless of liquidity,
such as tenant security deposits, replacement reserve and operating reserve accounts.
Funded Reserves
In accordance with the Regulatory Agreement for the Mental Health Services Act Housing
Program, the Company maintains an operating reserve and a replacement reserve from
which funds cannot be disbursed without approval from the California Housing Finance
Agency.
Receivables
Management has elected to record bad debts using the direct write- off method. Accounting
principles generally accepted in the United States of America require that the allowance
method be used to reflect bad debts. However, the effect of the use of the direct write-off
method is not materially different from the result that would have been obtained had the
allowance method been followed.
Property and Equipment
Purchased property and equipment are recorded at cost. Depreciation is computed on the
straight-line method based upon estimated useful lives as follows:
Buildings and Improvements 7 to 30 Years
Furniture and Fixtures 7 Years
Substantially all property and equipment serve as underlying assets for operating leases in
which the Company is the lessor. Maintenance and minor repairs are charged against income, major renewals and betterments are capitalized and depreciated. It is the
Company’s policy to capitalize all property and equipment purchases greater than $1,000
with an estimated useful life of greater than one year.
Advertising Costs
It is the policy of the Company to expense advertising costs as they are incurred. For the
year ending June 30, 2024, there was no advertising expense.
Functional Allocation of Expenses
The financial statements report certain categories of expenses that are attributable to more
than one program or supporting function of the Company. Therefore, these expenses
require allocation on a reasonable basis that is consistently applied. The expenses that are
allocated include the following: salaries and benefits, which are allocated on the basis of
time spent on programs; training and payroll processing fees, based on headcount in the
program; maintenance and landscaping, based on square footage of property; Housing
Management, based on number of client beds as a percent of the total number of beds in
agency; rental & building costs, based on square footage of occupied space by respective
program; Quality Assurance for Medi-Cal billable programs, based on budgeted cost of
programs.
Estimates
The preparation of the financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make estimates
and assumptions that affect certain reported amounts and disclosures. Actual results could
differ from those estimates.
Income Taxes
No provision or benefit for income taxes has been included in these financial statements
since for income tax purposes the Company is a disregarded entity and the operations are
reported by the sole member. The Company is liable each year for an $800 California
franchise tax in addition to a limited liability company fee based on total income.
Management has considered its tax positions and believes that all of the positions taken in
its state tax return are more likely than not to be sustained upon examination. The
Company’s returns are subject to examination by state taxing authorities generally for four
years after they are filed.
Fair Value Measurements
The Company’s financial instruments, including cash and cash equivalents, accounts
receivable and accounts payable are carried at cost, which approximates their fair value
because of the short-term maturity of these instruments. The fair value of the Company’s
debt approximates book value as of June 30, 2024 and 2023.
Residential Leases
Revenue from lease payments is recognized under the accrual method. Lease payments
are included in income as rents become due. Lease payments received in advance are
deferred until earned. At the commencement of an operating lease, no revenue is
recognized; subsequently, lease payments received by the Company are recognized on the
straight-line basis.
Leasing operations consist principally of operating leases of residential real estate expiring
in various months through 2024, in which the Company is the lessor. All leases provide for
renewal options. Lease contracts do not include variable lease payments.
Subsequent Events
Subsequent events have been evaluated through September 30, 2024, which is the date the
financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: Sunflower Housing, LLC has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Expenditures reported on the Schedule are reported on the accrual basis of accounting.
Such expenditures are recognized following, as applicable, either the cost principles in OMB
Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained
in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein
certain types of expenditures are not allowable or are limited as to reimbursement. Negative
amounts shown on the Schedule represent adjustments or credits made in the normal
course of business to amounts reported as expenditures in prior years. Sunflower Housing,
LLC has elected not to use the 10 percent de minimis indirect cost rate as allowed under the
Uniform Guidance.
Title: LOAN OUTSTANDING
Accounting Policies: The following significant accounting policies have been followed in the preparation of the financial statements.
Basis of Accounting
The Company maintains its records and prepares its financial statements using the accrual
basis of accounting in accordance with accounting principles generally accepted in the
United States of America.
Revenue Recognition
Rental revenue is shown at its maximum gross potential. Vacancy loss is shown as a
reduction in rental revenue.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months
or less to be cash equivalents. At June 30, 2024 and 2023, the Company’s deposits were
fully insured. Not included as cash are funds restricted as to their use, regardless of liquidity,
such as tenant security deposits, replacement reserve and operating reserve accounts.
Funded Reserves
In accordance with the Regulatory Agreement for the Mental Health Services Act Housing
Program, the Company maintains an operating reserve and a replacement reserve from
which funds cannot be disbursed without approval from the California Housing Finance
Agency.
Receivables
Management has elected to record bad debts using the direct write- off method. Accounting
principles generally accepted in the United States of America require that the allowance
method be used to reflect bad debts. However, the effect of the use of the direct write-off
method is not materially different from the result that would have been obtained had the
allowance method been followed.
Property and Equipment
Purchased property and equipment are recorded at cost. Depreciation is computed on the
straight-line method based upon estimated useful lives as follows:
Buildings and Improvements 7 to 30 Years
Furniture and Fixtures 7 Years
Substantially all property and equipment serve as underlying assets for operating leases in
which the Company is the lessor. Maintenance and minor repairs are charged against income, major renewals and betterments are capitalized and depreciated. It is the
Company’s policy to capitalize all property and equipment purchases greater than $1,000
with an estimated useful life of greater than one year.
Advertising Costs
It is the policy of the Company to expense advertising costs as they are incurred. For the
year ending June 30, 2024, there was no advertising expense.
Functional Allocation of Expenses
The financial statements report certain categories of expenses that are attributable to more
than one program or supporting function of the Company. Therefore, these expenses
require allocation on a reasonable basis that is consistently applied. The expenses that are
allocated include the following: salaries and benefits, which are allocated on the basis of
time spent on programs; training and payroll processing fees, based on headcount in the
program; maintenance and landscaping, based on square footage of property; Housing
Management, based on number of client beds as a percent of the total number of beds in
agency; rental & building costs, based on square footage of occupied space by respective
program; Quality Assurance for Medi-Cal billable programs, based on budgeted cost of
programs.
Estimates
The preparation of the financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make estimates
and assumptions that affect certain reported amounts and disclosures. Actual results could
differ from those estimates.
Income Taxes
No provision or benefit for income taxes has been included in these financial statements
since for income tax purposes the Company is a disregarded entity and the operations are
reported by the sole member. The Company is liable each year for an $800 California
franchise tax in addition to a limited liability company fee based on total income.
Management has considered its tax positions and believes that all of the positions taken in
its state tax return are more likely than not to be sustained upon examination. The
Company’s returns are subject to examination by state taxing authorities generally for four
years after they are filed.
Fair Value Measurements
The Company’s financial instruments, including cash and cash equivalents, accounts
receivable and accounts payable are carried at cost, which approximates their fair value
because of the short-term maturity of these instruments. The fair value of the Company’s
debt approximates book value as of June 30, 2024 and 2023.
Residential Leases
Revenue from lease payments is recognized under the accrual method. Lease payments
are included in income as rents become due. Lease payments received in advance are
deferred until earned. At the commencement of an operating lease, no revenue is
recognized; subsequently, lease payments received by the Company are recognized on the
straight-line basis.
Leasing operations consist principally of operating leases of residential real estate expiring
in various months through 2024, in which the Company is the lessor. All leases provide for
renewal options. Lease contracts do not include variable lease payments.
Subsequent Events
Subsequent events have been evaluated through September 30, 2024, which is the date the
financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: Sunflower Housing, LLC has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Sunflower Housing, LLC had the following loan balance outstanding at June 30, 2024. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the schedule of expenditures of federal awards. The balance of the loan outstanding at June 30, 2024, consists of:
City of Salinas Community Development Block Grant 14.218$500,000
County of Monterey Community Development Block
Grant 14.218 $530,000
Total $ 1,030,000