Notes to SEFA
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Westhab, Inc. (the "Organization") under programs of the federal government for the year ended December 31, 2025. The information in this 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"). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Organization. The Organization's contract with the federal agencies does not have a provision for an indirect cost rate.
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. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
The Company provided no federal awards to sub-recipients for the year ended December 31, 2025.
Westhab, Inc. has not previously received a negotiated indirect cost rate. However, Westhab, Inc. has elected to use the 10% de minimis indirect cost rate allowable under the Uniform Guidance.
Certain affiliates of Westhab, Inc. were in part financed by capital advances from HUD. These advances were in turn loaned from Westhab, Inc. to these affiliates and total $18,364,770 as of December 31, 2025. These advances are secured by enforcement mortgages on the properties owned by the affiliates. The mortgages carry a term of 40 years, bear no interest and repayment is not required so long as the housing remains available for its intended purpose. Since the mortgages are not repayable so long as Westhab, Inc. complies with HUD regulations, the proceeds from the mortgages have been recorded as net assets with donor restrictions and will be released from restriction upon expiration of the 40-year terms.