Audit 51773

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of LornaDoone Associates, LLC, HUD Project No. 105-94009, and is presented on the accrual basis of accounting.The information in this schedule is presented in accordance with the requirements of OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented inthis schedule may differ from amounts presented in, or used in the preparation of, the basic financialstatements. Management has elected to use the 10% de Minimis indirect cost rate for certain costs De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate.Note 2 - Loans OutstandingLorna Doone Associates, LLC had the following loan balances outstanding at December 31, 2022Section 223 (a)(7) Insured Loan with the Department of Housing and Urban Development in the amount of$962,080. (See Note 3 Mortgage Payable) This loan balance outstanding is included in the federalexpenditures presented in the schedule. Per Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards paragraph200.502 (Uniform Guidance), for loan guarantee programs the amount of federal awards expended is basedon the beginning of the period balance of loans from previous years for which the Federal governmentimposes continuing compliance requirements. So, the amount of the federal awards expended for the loanguarantee program listed in this schedule will differ from the balance reflected on the balance sheet by theamount of principal paid during the reporting period. Note 2 - Loans OutstandingLorna Doone Associates, LLC had the following loan balances outstanding at December 31, 2022Section 223 (a)(7) Insured Loan with the Department of Housing and Urban Development in the amount of$962,080. (See Note 3 Mortgage Payable) This loan balance outstanding is included in the federalexpenditures presented in the schedule. Per Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards paragraph200.502 (Uniform Guidance), for loan guarantee programs the amount of federal awards expended is basedon the beginning of the period balance of loans from previous years for which the Federal governmentimposes continuing compliance requirements. So, the amount of the federal awards expended for the loanguarantee program listed in this schedule will differ from the balance reflected on the balance sheet by theamount of principal paid during the reporting period.