Audit 348175

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: The schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of East Village Apartments, Inc., HUD Project No. 048-HD005 (the “Corporation”) and 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). The amount reported on the Schedule for Section 811 represents the capital advance amount received from the U.S. Department of Housing and Urban Development (HUD) and was originally recorded as a grant on the financial statements of the Corporation when earned. The amount reported on the Schedule for the Section 811 PRAC represents the rent subsidy payments remitted by HUD to the Corporation for the year. PRAC payments are used to make up the difference between the HUD approved rent due to the Corporation and the tenants’ required contributions toward rent based on program guidelines. The PRAC amount presented on the Schedule is reported on the accrual basis. The Corporation has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Corporation. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of East Village Apartments, Inc., HUD Project No. 048-HD005 (the “Corporation”) and 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). The amount reported on the Schedule for Section 811 represents the capital advance amount received from the U.S. Department of Housing and Urban Development (HUD) and was originally recorded as a grant on the financial statements of the Corporation when earned. The amount reported on the Schedule for the Section 811 PRAC represents the rent subsidy payments remitted by HUD to the Corporation for the year. PRAC payments are used to make up the difference between the HUD approved rent due to the Corporation and the tenants’ required contributions toward rent based on program guidelines. The PRAC amount presented on the Schedule is reported on the accrual basis. The Corporation has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Corporation.