Audit 7221

Title: Note A Accounting Policies: Note B - Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Smokey Hollow Housing Development Fund Company, Inc. has elected not to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Note A - Basis Of Presentation - The accompanying schedule of expenditures of federal awards includes the federal award activity of Smokey Hollow Housing Development Fund Company, Inc. (St. Mary's Apartments), Project No. 014-EE030/NY06-S921-008, 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, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of St. Mary's Apartments, it is not intended to and does not present the financial position, changes in net aseets, or cash flows of St. Mary's Apartments.

Title: Note B Accounting Policies: Note B - Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Smokey Hollow Housing Development Fund Company, Inc. has elected not to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Note B - Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Smokey Hollow Housing Development Fund Company, Inc. has elected not to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance.

Title: Note C Accounting Policies: Note B - Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Smokey Hollow Housing Development Fund Company, Inc. has elected not to use the 10- percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Note C - U.S Department of Housing and Urban Development Loan Program - Smokey Hollow Housing Development Fund Company, Inc. has received a U.S. Department of Housing and Urban Development insured loan under Section 202 of the National Housing Act on September 29, 1993. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Smokey Hollow Housing Development Fund Company, Inc. received no additional loans during the year.