Title: Loan/loan guarantee outstanding balances
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Millsboro Housing for Progress, Inc. and Affiliates, under programs of the federal government for the year ended December 31, 2022.The information in this 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). Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the Entity's financial position, changes in net assets, or cash flows.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.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
USDA - RD: Long-term debt instruments were provided by RD pursuant to its Rural Housing Program under Section 521 of the National Housing Act of 1949 for Millsboro Village I Apartments, Millsboro Village II Apartments, and Old Landing I Apartments. The long-term debt instruments are secured by a mortgage against the real estate, an interest in personal property, and an assignment of income to be derived from the Projects.DSHA - HOME: A long-term debt instrument was provided by DSHA pursuant to the HOME program for Millsboro Village I Apartments. The long-term debt instrument is secured by a mortgage against the real estate, an interest in personal property, and an assignment of income to be derived from the Project.RURAL RENTAL HOUSING LOANS (10.415) - Balances outstanding at the end of the audit period were 1128316. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 26577.
Title: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal expenditure activity of Millsboro Housing for Progress, Inc. and Affiliates, under programs of the federal government for the year ended December 31, 2022.The information in this 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). Because the Schedule presents only a selected portion of the operations of the Entity, it is not intended to and does not present the Entity's financial position, changes in net assets, or cash flows.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.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.CASH AND CASH EQUIVALENTS: Management considers all highly liquid investments with a maturity of three months or less, at the date of acquisition, to be cash and cash equivalents.CREDIT RISK: Cash and cash equivalents are maintained at financial institutions and, at times, balances exceeded the federally insured limits.RESTRICTED DEPOSITS AND FUNDED RESERVES: Restricted deposits consist of the following: escrow funds which are held by DSHA and tenant security deposits which are held in a separate bank account in the name of Millsboro Village I Apartments and Old Landing II Apartments. The Regulatory Agreement (the Agreement) requires monthly payments, as specified by DSHA on an annual basis, for insurance premiums and real estate taxes where payments are made by management, or an authority on the Projects behalf, and are expensed by management based on the respective effective periods, and into a restricted reserve for replacement account where withdrawals can be made for repair and/or replacement of, and capital improvements to, the apartment complexes, subject to DSHA approval. The State of Delaware Landlord-Tenant Code requires management to receive security deposits from the tenants upon execution of the lease agreement and repay them to the tenant upon vacating the premises, depending on whether the tenant had any obligations to the Project at that time.INVESTMENTS: Investments represent certificates of deposit held for long-term investment. Financial instruments which potentially subject the Corporation to a concentration of credit risk consist principally of investments held by credit-worthy financial institutions. By policy, these investments are kept within limits designed to prevent risk caused by concentration.PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost and are depreciated on the straight-line method over the estimated useful lives of the assets, which are 25 to 50 years for the building and improvements and 5 to 20 years for the furniture, fixtures, and equipment. Additions and betterments are capitalized, while repairs and maintenance that do not improve or extend the useful life of the respective assets are expensed currently.In accordance with Accounting Standards Codification (ASC), No. 360, Accounting for the Impairment or Disposal of Long-Lived Assets, management reviews the properties for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recovered. If the fair value is less than the carrying amount of the asset, an impairment loss is recognized for the difference. No impairment losses have been recognized during the years presented.ADVERTISING: Advertising costs are expensed when incurred.SUBSEQUENT EVENTS: Events and transactions subsequent to year end have been evaluated for potential recognition in the financial statements or disclosure in the notes to the financial statements. All events and transactions have been evaluated through June 9, 2023, the date the report was available for issuance.As a result of the spread of COVID-19 (Coronavirus) and its variants, economic uncertainties have arisen which are likely to negatively impact rental income. Other financial impact could occur, though such potential impact is unknown at this time.