Notes to SEFA
Title: Loan/loan guarantee outstanding balances
Accounting Policies: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Onslow County Hospital Authority, under programs of the federal government for the year ended September 30, 2022. 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 Onslow County Hospital Authority, it is not intended to and does not present the net position, changes in net position, or cash flows of Onslow County Hospital Authority. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Any 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 financial statements reflect revenue recognized from COVID-19 Provider Relief Funds of approximately $1,228,000 and $3,168,000 for the years ended September 30, 2022 and September 30, 2021, respectively. The SEFA includes COVID-19 Provider Relief Funds of $1,531,762 that were received in Period 2 in accordance with the requirements of the compliance supplement for assistance listing number 93.498. All of $1,531,762 was recognized in the financial statements for the year ended September 30, 2020.
De Minimis Rate Used: Y
Rate Explanation: The auditee used the de minimis cost rate.
MORTGAGE INSURANCE_HOSPITALS (14.128) - Balances outstanding at the end of the audit period were 29,235,391. In 2006, the Authority issued bonds with a face value of $58,100,000 that were insured by the Department of Housing and Urban Development (HUD). In March 2016, the Authority obtained approval from HUD to proceed with a transaction to defease the 2006 HUD Revenue Bond. Accordingly, in May 2016, the Authority defeased the HUD bond and entered into a new mortgage loan that continued to be insured by HUD. As of September 30, 2022, the outstanding balance of the mortgage loan was $29,235,391. 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 September 30, 2022, the expenditures included in the Schedule consist of the highest outstanding loan balance during the fiscal year.