Audit 355982

Title: Note C — U.S. Department of Housing and Urban Development Loan Programs: Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Hearth Homes of Waterbury, Inc. 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, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The schedule presents only a selected portion of the operations of Hearth Homes of Waterbury, Inc. It is not intended to, and does not present, the financial position or changes in net assets of Hearth Homes of Waterbury, Inc. De Minimis Rate Used: N Rate Explanation: 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. Hearth Homes of Waterbury, Inc. has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Hearth Homes of Waterbury, Inc. has received a U.S. Department of Housing and Urban Development Section 202 Capital Advance loan and a HOME Investment Partnership Program loan. The loan balances outstanding at the beginning of the year are included in the federal expenditures presented in the schedule. Hearth Homes of Waterbury, Inc. received no additional loans during the year. The balance of the loans outstanding at June 30, 2022, consists of: Program Name ALN Section 202 Capital Advance 14.157 $ 7,033,500 HOME Investment Partnership Program 14.239 $ 4,587,100