Management has carefully reviewed the contract governing its CDBG loan and attendant accounting requirements, including compliance with the US GAAP and single audit obligations. Given the issues that were identified and corrected during the course of the single audit, the Foundation is in the process of replacing its third-party accountant with a team that has significant experience with the US GAAP and the requirements that arise upon an award of Federal grant funds. The Foundation’s duties under the current contract will be unequivocally communicated to its new accountant of record. Moving forward, Management understands that a single audit may be required when federal funds are awarded. Accordingly, the Foundation will promptly engage the counsel of the grantors and an auditing team to determine whether such obligations exist immediately upon executing any agreement by which federal grant money is conferred. Management will further engage an auditor’s advice and counsel during the first quarter of each fiscal year to ensure compliance with accounting principles and auditing standards.