Audit 337012

Title: NOTE 2 - MORTGAGE NOTE PAYABLE Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of DIMA III, Inc., 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 (CFR) 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 the Project, it is not intended to and does not present the Project’s financial position, changes in net assets, or cash flows. 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: Management did not elect to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. HUD awarded DIMA III, Inc. a mortgage of $784,900 under Section 811 of the National Affordable Housing Act for acquisition and rehabilitation of the Project. A mortgage modification agreement was entered into on March 15, 1994, which modified the maximum mortgage commitment to $939,200. The mortgage is deemed a contingent liability since no interest or principal payments are payable or due. The mortgage note does not become due unless HUD operating and filing requirements, as defined under Section 811 of the National Affordable Housing Act, are not met, in which case the entire mortgage balance becomes due, including interest accrued at 6.625% per annum. DIMA III, Inc. must continue to operate the project under HUD guidelines until March 15, 2034, before the note will be forgiven.

Title: NOTE 3 - OTHER AWARDS Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of DIMA III, Inc., 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 (CFR) 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 the Project, it is not intended to and does not present the Project’s financial position, changes in net assets, or cash flows. 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: Management did not elect to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Subsidy revenues for low-income, elderly, or disabled tenants are provided under housing assistance payment contracts. These contracts require tenants to contribute a portion of the contract rent. The difference between the calculated tenant rent and the contract rent is paid by the awarding agency. During 2024, DIMA III, Inc. received HUD Section 8 assistance of $21,594.