Audit 359336

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Suchexpenditures 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 Agency’s summary of significant accounting policies is presented in Note 1 in the Agency’s basic financial statements. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The entity has elected not to use the 10% de minimis indirect cost rate as permitted under 2 CFR 200.414(f). Instead, it applies an indirect cost rate, as established in its current federal awards. This rate more accurately reflects the organization’s actual indirect costs and ensures equitable allocation across all federal programs. The accompanying schedule of expenditure of federal awards (the Schedule) includes the federal award activity of Grand Lake Mental Health Center, Inc. (the Agency) under programs of the federal governments for the year ended June 30, 2024. The information 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 Agency, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Agency.

Title: NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Suchexpenditures 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 Agency’s summary of significant accounting policies is presented in Note 1 in the Agency’s basic financial statements. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The entity has elected not to use the 10% de minimis indirect cost rate as permitted under 2 CFR 200.414(f). Instead, it applies an indirect cost rate, as established in its current federal awards. This rate more accurately reflects the organization’s actual indirect costs and ensures equitable allocation across all federal programs. Expenditures reported in 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. The Agency’s summary of significant accounting policies is presented in Note 1 in the Agency’s basic financial statements. No federal financial assistance has been provided to a subrecipient.

Title: NOTE 3 – INDIRECT COST RATE Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Suchexpenditures 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 Agency’s summary of significant accounting policies is presented in Note 1 in the Agency’s basic financial statements. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The entity has elected not to use the 10% de minimis indirect cost rate as permitted under 2 CFR 200.414(f). Instead, it applies an indirect cost rate, as established in its current federal awards. This rate more accurately reflects the organization’s actual indirect costs and ensures equitable allocation across all federal programs. The Agency has not elected to use the 10% de minimis cost rate.