Audit 55914

Title: Capital Advance Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal award activity of Brownstone Gardens III, Inc., HUD Project No. 023-EE026 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 Brownstone Gardens III, Inc. it is not intended to and does not present the financial position, change in net assets, or cash flows of Brownstone Gardens III, Inc. 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 expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Brownstone Gardens III, Inc. has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The balance of the Section 202 Capital Advances is included in net assets without donor restrictions.