In March 2013, Hoke Healthcare obtained permanent financing for Health Pavilion Hoke from the United States Department of Agriculture (USDA) in the form of a $38,448,000, fixed rate, 40-year direct loan (the phase 1 Direct loan). The USDA also provided permanent financing for Phase 2 through its Community Facilities Direct Loan and Guaranteed Loan Program through a fixed-rate, 40-year, $30,000,000 direct loan (the Phase 2 Direct Loan) and a fixed-rate, 30-year, $27,311,000 guaranteed loan (the Guaranteed Loan). As of December 31, 2025, the outstanding balance of the total loan was $76,598,595. In 2011, Harnett Health obtained a construction loan of $63,000,000 from a financial institution. In March 2013, Harnett Health entered into an additional series of obligations for eight notes payable to the USDA. The proceeds of the USDA notes were used to pay off the construction loan noted above. As of December 31, 2025, the outstanding balance of the total loan was $51,294,967. In accordance with 2 CFR 200.502, since the federal government is at risk for loans until the debt is repaid, the value of federal awards expended under loan programs in a given period is calculated as the value of new loans made or received during the fiscal year, plus the balance of loans from previous years for which the federal government imposes continuing compliance requirements, plus any interest subsidy, cash, or administrative cost allowance. As of December 31, 2025, the expenditures included in the Schedule consist of the highest outstanding loan balance during the fiscal year.
The accompanying schedule of expenditures of federal and state awards (the Schedule) includes the federal and state award activity of Cumberland County Hospital System, Inc. dba: Cape Fear Valley Health System (the Health System), 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 2 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 Health System, it is not intended to and does not present the net position, changes in net position, or cash flows of the Health System.