Audit 8631

Title: Loan/loan guarantee outstanding balances Accounting Policies: This summary of significant accounting policies of Encino Terrace, Inc. is presented to assist in understanding Encino Terrace, Inc.'s Schedule of Expenditures of Federal Awards. The Schedule and notes are representations of Encino Terrace, Inc.'s management, which is responsible for their integrity and objectivity. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Encino Terrace, Inc. has received a U.S. Department of Housing and Urban Development direct loan under Section 202 of the National Housing Act and a flexible subsidy loan. The loan balances outstanding at the beginning of the year (less accrued interest) are included in the federal expenditures presented in the Schedule. The Organization received no additional loans during the year. The outstanding balance of the mortgage note payable was paid off in December 2022. At March 31, 2023, the flexible subsidy loan had an outstanding balance of $1,062,000. The loan was paid off on May 24, 2023.

Title: Sub-recipients Accounting Policies: This summary of significant accounting policies of Encino Terrace, Inc. is presented to assist in understanding Encino Terrace, Inc.'s Schedule of Expenditures of Federal Awards. The Schedule and notes are representations of Encino Terrace, Inc.'s management, which is responsible for their integrity and objectivity. The Schedule of Expenditures of Federal Awards is prepared using the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. There were no sub-recipients of the Federal Awards received by Encino Terrace, Inc. for the year ended March 31, 2023.