Audit 351464

Title: Note A. BASIS OF PRESENTATION Accounting Policies: Basis of Accounting: Expenditures reported on this 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. The amounts reported on the face of the SEFA are the beginning of the audit period balance of outstanding loans from previous year for which the federal government imposes continuing compliance requirements. De Minimis Rate Used: N Rate Explanation: All direct costs of providing the various activities have been applied to the award. Functional Allocation of Expenses: Functional expenses are allocated to program related and administrative functions. Most expenses are allocated directly to the program or support services benefited. Certain expenses are allocated on a percentage basis The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of The Arc of Hilo and Affiliates 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 The Arc of Hilo and Affiliates, it is not intended to and does not present the consolidated statements of financial position, changes in net assets, or cash flows of The Arc of Hilo and Affiliates.

Title: Note B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Basis of Accounting: Expenditures reported on this 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. The amounts reported on the face of the SEFA are the beginning of the audit period balance of outstanding loans from previous year for which the federal government imposes continuing compliance requirements. De Minimis Rate Used: N Rate Explanation: All direct costs of providing the various activities have been applied to the award. Functional Allocation of Expenses: Functional expenses are allocated to program related and administrative functions. Most expenses are allocated directly to the program or support services benefited. Certain expenses are allocated on a percentage basis Basis of Accounting: Expenditures reported on this 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. Indirect Cost Rate: The Organization has elected not to use the 10% de minimis rate.

Title: Note C. SECTION 202 DIRECT LOAN PROGRAM FOR HOUSING FOR THE ELDERLY OR DISABLED Accounting Policies: Basis of Accounting: Expenditures reported on this 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. The amounts reported on the face of the SEFA are the beginning of the audit period balance of outstanding loans from previous year for which the federal government imposes continuing compliance requirements. De Minimis Rate Used: N Rate Explanation: All direct costs of providing the various activities have been applied to the award. Functional Allocation of Expenses: Functional expenses are allocated to program related and administrative functions. Most expenses are allocated directly to the program or support services benefited. Certain expenses are allocated on a percentage basis See the Notes to the SEFA for chart/table

Title: Note D. SUBRECIPIENT PASS THROUGH AWARDS Accounting Policies: Basis of Accounting: Expenditures reported on this 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. The amounts reported on the face of the SEFA are the beginning of the audit period balance of outstanding loans from previous year for which the federal government imposes continuing compliance requirements. De Minimis Rate Used: N Rate Explanation: All direct costs of providing the various activities have been applied to the award. Functional Allocation of Expenses: Functional expenses are allocated to program related and administrative functions. Most expenses are allocated directly to the program or support services benefited. Certain expenses are allocated on a percentage basis No Federal awards have been passed through to subrecipients.