Audit 5636

Title: NOTE 1: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 2 to the Organization’s financial statements. 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. 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 Schedule presents both Type A and Type B federal assistance programs administered by the Organization. The Uniform Guidance establishes the formula for determining the level of expenditures of disbursements to be used in defining Type A and Type B federal financial assistance programs. For the Organization, Type A programs are those which exceed $750,000 in disbursements, expenditures, or distributions. The determination of major and nonmajor programs is based on the risk-based approach outlined in Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization elected not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of United Inner City Services, Inc. dba EarlystART (the “Organization”) under programs of the federal government for the year ended December 31, 2022. 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 the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization

Title: NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 2 to the Organization’s financial statements. 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. 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 Schedule presents both Type A and Type B federal assistance programs administered by the Organization. The Uniform Guidance establishes the formula for determining the level of expenditures of disbursements to be used in defining Type A and Type B federal financial assistance programs. For the Organization, Type A programs are those which exceed $750,000 in disbursements, expenditures, or distributions. The determination of major and nonmajor programs is based on the risk-based approach outlined in Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization elected not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 2 to the Organization’s financial statements. 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. 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 Schedule presents both Type A and Type B federal assistance programs administered by the Organization. The Uniform Guidance establishes the formula for determining the level of expenditures of disbursements to be used in defining Type A and Type B federal financial assistance programs. For the Organization, Type A programs are those which exceed $750,000 in disbursements, expenditures, or distributions. The determination of major and nonmajor programs is based on the risk-based approach outlined in Uniform Guidance.

Title: NOTE 3: SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 2 to the Organization’s financial statements. 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. 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 Schedule presents both Type A and Type B federal assistance programs administered by the Organization. The Uniform Guidance establishes the formula for determining the level of expenditures of disbursements to be used in defining Type A and Type B federal financial assistance programs. For the Organization, Type A programs are those which exceed $750,000 in disbursements, expenditures, or distributions. The determination of major and nonmajor programs is based on the risk-based approach outlined in Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization elected not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization did not provide funds to subrecipients in the current fiscal year.

Title: NOTE 4: INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 2 to the Organization’s financial statements. 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. 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 Schedule presents both Type A and Type B federal assistance programs administered by the Organization. The Uniform Guidance establishes the formula for determining the level of expenditures of disbursements to be used in defining Type A and Type B federal financial assistance programs. For the Organization, Type A programs are those which exceed $750,000 in disbursements, expenditures, or distributions. The determination of major and nonmajor programs is based on the risk-based approach outlined in Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization elected not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization elected not use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.