Audit 341264

Title: NOTE C – PRIOR YEARS’ EXPENDITURES Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant and loan activities of HIP Housing Development Corporation, 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. The purpose of the Schedule is to present a summary of those activities of HIP Housing Development Corporation for the year ended June 30, 2024, which have been financed by the U.S. Government. For purposes of the Schedule, federal awards include all federal assistance entered into directly and indirectly between HIP Housing Development Corporation and the federal government. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Assistance Listing numbers (“AL No.”) are provided when available. De Minimis Rate Used: N Rate Explanation: HIP Housing Development Corporation did not elect to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule includes expenditures from prior years for which continuing compliance is required.

Title: NOTE D – U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAM Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant and loan activities of HIP Housing Development Corporation, 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. The purpose of the Schedule is to present a summary of those activities of HIP Housing Development Corporation for the year ended June 30, 2024, which have been financed by the U.S. Government. For purposes of the Schedule, federal awards include all federal assistance entered into directly and indirectly between HIP Housing Development Corporation and the federal government. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Assistance Listing numbers (“AL No.”) are provided when available. De Minimis Rate Used: N Rate Explanation: HIP Housing Development Corporation did not elect to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. HIP Housing Development Corporation has received U.S. Department of Housing and Urban Development pass-through loans. The loan balances outstanding at the end of the year are as follows: HOME Investment Partnership Program Loans City of Redwood City $ 384,797 City of San Mateo $ 2,574,150 City of Daly City $ 754,500 County of San Mateo $ 1,055,979 Community Development Block Grant Program Loans City of Redwood City $ 289,750 County of San Mateo $ 501,929 City of Daly City $ 56,406