Notes to SEFA
The accompanying schedule of expenditures of federal awards includes the federal grant activity of Northwood Health Systems Inc. and Subsidiaries and is presented on the accrual basis of accounting. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Northwood Health Systems, Inc. and Subsidiaries did not use the 10% de minimis cost rate contained in the Unform Guidance for Federal Awards.
Northwood Health Systems, Inc. and Subsidiaries received capital advances under the U.S. Department of Housing and Urban Development (HUD) Section 811 Supportive Housing for Persons with Disabilities Program (Assistance Listing 14.181). The capital advances are non-interest-bearing, forgivable loans provided to finance the development of housing for very low-income persons with disabilities. The capital advance is not required to be repaid as long as the housing project continues to operate in compliance with HUD requirements for the full term of the regulatory agreement (typically 40 years). The outstanding balance of the capital advances of Larkin, Inc. and Ash Grove, Inc. as of June 30, 2025 were $659,000 and $310,000, respectively.
Northwood Health Systems, Inc. and Subsidiaries participates in the U.S. Department of Housing and Urban Development (HUD) Section 202 Supportive Housing for the Elderly Program (Assistance Listing 14.157). The program provides direct loans to nonprofit organization to finance the construction or rehabilitation of housing for very low-income elderly persons. The loan is secured by a mortgage on the property and is being repaid in accordance with the loan agreement. The outstanding principal balance of the HUD Section 202 direct loan as of June 30, 2025 was $338,241. Although the Organization is making payments on the loan, the outstanding principal balance continues to be considered federal financial assistance in accordance with 2 CFR 200.502(b).