Audit 4574

Title: CAPITAL ADVANCE Accounting Policies: 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Ulster Accessible Apartments and Housing Development Fund Corporation, HUD Project No. 012-EH646 (the Project) under programs of the federal government for the year ended December 31, 2022, and has been prepared in accordance with accounting principles generally accepted in the United States of America. 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 Project, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Project. 2. BASIS OF ACCOUNTING 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 expenditure are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: UTILIZED HUD CHART OF ACCOUNTS The Project has received $984,570 of funding under a capital advance program from HUD for Section 811 supportive housing for disabled persons. The Capital Advance Program Mortgage Note under Section 811 bears no interest and need not be repaid so long as the housing remains available to very low-income disabled persons through May 2032. If the Project does not comply with the requirements of the Capital Advance Program Mortgage Note, the entire principal sum of $984,570, shall become due with interest at a rate of 7.75%.