Audit 366100

Title: 1. Purpose of the Schedule Accounting Policies: The expenditures in the Schedule are recognized as incurred based on the accrual basis of accounting and the cost accounting principles contained in the Uniform Guidance. Under those cost principles, certain types of expenditures are not allowable or are limited to the amount of reimbursement. De Minimis Rate Used: N Rate Explanation: Davis Behavioral Health did not elect to use the 10% de-minimis indirect cost rate. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is a supplementary schedule to Davis Behavioral Health, Inc.'s consolidated and combined financial statements and is presented for purposes of additional analysis. Because the Schedule presents only a selected portion of the activities of Davis Behavioral Health, Inc., it is not intended to and does not present the financial position, changes in net assets or the current support revenue and expenditures and other changes of Davis Behavioral Health, Inc.

Title: 2. Significant Accounting Policies Accounting Policies: The expenditures in the Schedule are recognized as incurred based on the accrual basis of accounting and the cost accounting principles contained in the Uniform Guidance. Under those cost principles, certain types of expenditures are not allowable or are limited to the amount of reimbursement. De Minimis Rate Used: N Rate Explanation: Davis Behavioral Health did not elect to use the 10% de-minimis indirect cost rate. 2. Significant Accounting Policies Basis of Presentation The accompanying Schedule includes the federal award activity of Davis Behavioral Health, Inc. under programs of the federal government for the year ended June 30, 2024. The 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). Basis of Accounting The expenditures in the Schedule are recognized as incurred based on the accrual basis of accounting and the cost accounting principles contained in the Uniform Guidance. Under those cost principles, certain types of expenditures are not allowable or are limited to the amount of reimbursement. Type A and Type B programs The Uniform Guidance establishes the levels of expenditures or expenses to be used in defining Type A and Type B federal awards programs. Type A programs, for Davis Behavioral Health, Inc., are those programs which exceed $750,000 in federal expenditures, distributions, or issuances for the fiscal year ended June 30, 2024. Reporting Entity The reporting entity is fully described in Note 1 of Davis Behavioral Health, Inc. 's consolidated and combined financial statements. The Schedule includes all federal financial awards received directly from federal agencies as well as federal financial awards passed through from other governmental agencies for the year ended June 30, 2024. Matching Costs The Schedule does not include matching expenditures. Direct and Indirect Flow-Through Federal Assistance The majority of the Davis Behavioral Health, Inc. 's federal awards are passed through a separate entity prior to receipt by Davis Behavioral Health, Inc. (i.e., Davis Behavioral Health, Inc. is the sub-recipient) and identified accordingly on the Schedule. However, there is a portion of federal awards that are received directly from the granting federal agencies. Indirect Costs Davis Behavioral Health did not elect to use the 10% de-minimis indirect cost rate.