Audit 5060

Accounting Policies: NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal award activity of El Bethel Arms, Inc., FHA Contract No. CA39M000178, and is presented on the accrual basis of accounting. 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 El Bethel Arms, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of El Bethel Arms, Inc. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: El Bethel Arms, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.