Audit 353934

Title: NOTE 01 - SCOPE OF PRESENTION Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Project that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. The expenditures included in the accompanying schedule were reported on a accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. The Schedule was prepared from only the accounts of the grant programs and, therefore, does not present the financial position or results of operations of the Project. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis cost rate allowed in the Uniform Guidance, Section 414. The accompanying schedule presents the expenditures incurred (and related awards received) by the Project that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule.

Title: NOTE 02 - BASIS OF ACCOUNTING Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Project that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. The expenditures included in the accompanying schedule were reported on a accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. The Schedule was prepared from only the accounts of the grant programs and, therefore, does not present the financial position or results of operations of the Project. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis cost rate allowed in the Uniform Guidance, Section 414. The expenditures included in the accompanying schedule were reported on a accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program The Schedule was prepared from only the accounts of the grant programs and, therefore, does not present the financial position or results of operations of the Project.

Title: NOTE 03 - INDIRECT COST RATE Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Project that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. The expenditures included in the accompanying schedule were reported on a accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. The Schedule was prepared from only the accounts of the grant programs and, therefore, does not present the financial position or results of operations of the Project. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis cost rate allowed in the Uniform Guidance, Section 414. The Project has elected not to use the 10% de minimis cost rate allowed in the Uniform Guidance, Section 414.

Title: NOTE 04 - ENDING LOAN BALANCE Accounting Policies: The accompanying schedule presents the expenditures incurred (and related awards received) by the Project that are reimbursable under federal programs of federal agencies providing financial assistance and state awards. For the purposes of this schedule, only the portion of program expenditures reimbursable with such federal or state funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal or state reimbursement authorized or the portion of the program expenditures that were funded with local or other nonfederal funds are excluded from the accompanying schedule. The expenditures included in the accompanying schedule were reported on a accrual basis of accounting. Expenditures are recognized in the accounting period in which the related liability is incurred. Expenditures reported included any property or equipment acquisitions incurred under the federal program. The Schedule was prepared from only the accounts of the grant programs and, therefore, does not present the financial position or results of operations of the Project. De Minimis Rate Used: N Rate Explanation: The Project has elected not to use the 10% de minimis cost rate allowed in the Uniform Guidance, Section 414. None - amount from HUD was a capital advance and reported as net assets without donor restrictions.