In accordance with the Uniform Guidance, § 200.502 Basis for determining Federal awards expended, since the Federal government is at risk for loans until the debt is repaid, the amount to be presented as expenditure of federal awards for loans awarded, included those awarded and expended in prior years that have continuing compliance requirements, is: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Accordingly, the Organization has reported loans awarded in accordance with the aforementioned criteria. U.S. Department of Agriculture (AL 10.767) For the Intermediary Relending Program (IRP), the expenditure is based on the outstanding balance of the loan due to the federal government at year-end, adjusted for administrative allowances. 10.767 Loan balance outstanding at December 31, 2024 Value of new loans issued during 2025 with current year advances Principal paid during 2025 Loan balance outstanding at December 31, 2025 Administrative expenses reimbursed/(paid) $ 2,838,669 - (118,251) 2,720,418 (134,434) $ 2,585,984 U.S. Small Business Administration (AL 59.062) For the SBA Intermediary Loan Program (ILP), the expenditure is calculated based on the value of the RLF assets and current year administrative costs. Loan balance outstanding at December 31, 2025 to the SBA was $407,989. 59.062 Unpaid principal of RLF loans issued to subrecipients RLF cash and investment balance Administrative expenses reimbursed/(paid) $ 271,988 153,154 60,000 $ 485,142
BASIS FOR DETERMINING EXPENDITURES OF FEDERAL AWARDS FOR THE ECONOMIC ADJUSTMENT ASSISTANCE PROGRAM, FEDERAL ASSISTANCE LISTING NUMBER 11.307 The Office of Management and Budget (OMB) Compliance Supplement formula to determine the amount to be presented on the schedule of expenditures of federal awards for revolving loan fund (RLF) grants under federal assistance listing number 11.307. The formula to determine expenditures to be reported in the Schedule is as follows: (1) The balance of RLF loans outstanding at the end of the recipient’s fiscal year, plus; (2) The cash and investment balance in the RLF at the end of the fiscal year, plus; (3) Administrative expenses paid out of the RLF during the year, plus; (4) The unpaid principal of all loans written off during the year, and then multiply this sum by; (5) The federal share of the RLF based on the federal grant rate as specified in the grant award. According, SEDF has reported expenditures of federal awards for its Economic Adjustment Assistance funded RLF program as follows: 05-57-04742 Balance of RLF loans outstanding at December 31, 2025 Cash balance in the RLF at December 31, 2025 Administrative expenses paid out of the RLF income during the year Unpaid principal of all RLF loans written off during the year Total RLF loan pool The Federal share of the RLF loan pool $ 3,443,684 1,522,639 148,220 223,434 $ 5,337,977 56.09% $ 2,994,201 05-79-05957 $ 666,432 420,868 39,797 - $ 1,127,097 80.00% $ 901,677 05-79-06032 $ 2,647,638 1,147,133 129,592 - $ 3,924,363 100% $ 3,924,363
Events occurring after December 31, 2025, were evaluated by management on March 26, 2026, the date the financial statements were available to be issued, to ensure that any subsequent events that met the criteria for recognition and/or disclosure in these financial statements have been included. The following subsequent was identified for disclosure: On May 5, 2025, by resolution of the SEDF Board of Directors, SEDF requested that EDA release its federal interest in EDA Revolving Fund Award #05-57-04742. SEDF received and executed an agreement from EDA dated February 3, 2026, granting the requested release of the federal interest in the revolving loan fund award. Per the release agreement, SEDF agreed to continue to utilize the grant funds for one or more activities that continue to carry out the economic development purposes of the Public Works and Economic Development Act. SEDF intends to continue to utilize the funds in its revolving loan fund as part of this agreement.