Audit 53835

Title: U.S. Department of Housing and Urban Development Loan Program Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includesthe federal award activity of The Hempfield Apartments South, Inc., HUD ProjectNo. 033-EE137 under programs of the federal government for the year endedJune 30, 2022. The information in this Schedule is presented in accordance withthe requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for FederalAwards (Uniform Guidance). Because the Schedule presents only a select portionof the operations of The Hempfield Apartments South, Inc., it is not intended toand does not present the financial position, changes in net assets (deficit), orcash flows of The Hempfield Apartments South, Inc. De Minimis Rate Used: N Rate Explanation: Expenditures reported on the Schedule are reported on the accrual basis ofaccounting. Such expenditures are recognized following the cost principlescontained in Uniform Guidance wherein certain types of expenditures are notallowable or are limited as to reimbursement. The Hempfield Apartments South,Inc., has elected not to use the 10 percent de minimis indirect cost rate allowedunder the Uniform Guidance. HUD has made a Section 202 Capital Advance to The Hempfield Apartments South,Inc., for the purpose of funding the major portion of the cost of the apartmentbuilding. The total amount of the advance was $ 3,913,300. No interest orrepayment of the advance is required as long as the Organization operates theapartment building for very low-income elderly persons for not less than 40 yearsfrom September 1, 2010. Until October 1, 2051, the Section 202 Capital Advancewill continue to be reported on the Schedule as a major program for the fullamount of the advance.