Exhibit 21 - CPLC Financial Statements 2022 — Marshall v. Prestamos CDFI, LLC (Dkt. 86-22, E.D. Pa. No. 5:21-cv-04337)

Summary

Exhibit 21, filed October 27, 2023 as Document 86-22 in Case 5:21-cv-04337-JMG, is the consolidated financial statements of Chicanos Por La Causa, Inc. and its subsidiaries and affiliates for the year ended June 30, 2022, with an independent auditors' report by CliftonLarsonAllen LLP dated January 19, 2023. The statement of financial position reports total assets of $2,594,678,177, including net notes receivable of $1,862,306,247, against total liabilities of $2,245,399,508 and total net assets of $349,278,669.

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Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 1 of 75
EXHIBIT 21
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 2 of 75
CHICANOS POR LA CAUSA, INC. AND
SUBSIDIARIES AND AFFILIATES

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 2022
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 3 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2022

INDEPENDENT AUDITORS’ REPORT
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF ACTIVITIES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES
CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 4 of 75
CliftonLarsonAllen LLP
\ A CLAconnect.com
INDEPENDENT AUDITORS’ REPORT

Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates
Phoenix, Arizona

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of Chicanos Por La Causa, Inc.
and Subsidiaries and Affiliates, which comprise the consolidated statement of financial position as of
June 30, 2022, and the related consolidated statements of activities, functional revenues and
expenses, and cash flows for the year then ended, and the related notes to the consolidated financial
statements.

We did not audit the financial statements of Casa del Pueblo II dba: Casa del Pueblo II Apartments;
Casa Mia Senior Apartments, Inc. dba: Casa Mia Apartments; Causa Community Development, Inc.
dba: Guadalupe Barrio Nuevo; Gran Victoria Housing, LLC; Casa de Primavera Apartments, LLC dba:
Casa de Primavera; Pueblo Senior Housing, Inc. dba: Casa del Pueblo; Santa Cruz Apartments, Inc.
dba: Santa Cruz Apartments; Mountain Pointe Apartments, LP; dba Mountain Pointe Apartments, Bella
Vista Properties | Limited Partnership; Ladera Village Limited Partnership and Villa Las Vegas Limited
Partnership, wholly-owned subsidiaries, which statements reflect total assets of $37,418,567 as of
June 30, 2022, and total revenues of $11,850,599 for the year then ended. Those statements were
audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts included for Casa del Pueblo {I dba: Casa del Pueblo II Apartments; Casa Mia
Senior Apartments, Inc. dba: Casa Mia Apartments; Causa Community Development, Inc. dba:
Guadalupe Barrio Nuevo; Gran Victoria Housing, LLC; Casa de Primavera Apartments, LLC dba: Casa
de Primavera; Pueblo Senior Housing, Inc. dba: Casa del Pueblo; Santa Cruz Apartments, Inc. dba:
Santa Cruz Apartments; Mountain Pointe Apartments, LP; dba Mountain Pointe Apartments, Bella Vista
Properties | Limited Partnership; Ladera Village Limited Partnership and Villa Las Vegas Limited
Partnership, is based solely on the reports of the other auditors. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.

The financial statements of Gran Victoria Housing, LLC, Santa Cruz Apartments, Inc. dba: Santa Cruz
Apartments; Bella Vista Properties | Limited Partnership; Ladera Village Limited Partnership and Villa
Las Vegas Limited Partnership were not audited in accordance with Government Auditing Standards.

In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates as of
June 30, 2022, and the changes in their net assets and their cash flows for the year then ended in
accordance with accounting principles generally accepted in the United States of America.

CLAglobal.com/disclaimer
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 5 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Our responsibilities under those
standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are required to be independent of Chicanos Por La
Causa, Inc. and Subsidiaries and Affiliates and to meet our other ethical! responsibilities in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about Chicanos Por La Causa, Inc.
and Subsidiaries and Affiliates’s ability to continue as a going concern within one year after the date
that the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will
always detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
e Exercise professional judgment and maintain professional skepticism throughout the audit.

e Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.

e Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’
internal control. Accordingly, no such opinion is expressed.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 6 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

e Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.

e Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’
ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated
January 19, 2023, on our consideration of the Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates‘ internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other maiters. The purpose of that
report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the result of that testing, and not to provide an opinion on the effectiveness of the
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates‘ internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates‘ internal
control over financial reporting and compliance.

Lief torLaraerndllon LLP

CliftonLarsonAllen LLP

Phoenix, Arizona
January 19, 2023
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 7 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
JUNE 30, 2022

ASSETS
CURRENT ASSETS

Cash and Cash Equivalents $ 193,109,158
Cash Designated for Lending 51,095,581
Cash Held for Loan Loss Reserve 55,939,242
Restricted Cash 128,755

Receivables:
Grants and Contracts, Net 16,395,018
Interest Receivable 20,737,702
Other Receivables, Net 5,441
Notes Receivable, Current 5,479,550
Prepaid Expenses 538,672
Total Current Assets 343,429,119

LONG-TERM ASSETS
Notes Receivable, Net

1,862,306,247

Real Estate Properties - Rental, Net 233,281,480
Property and Equipment, Net 45,002,217
Related Party Receivables, Net 1,354,961
Real Estate Held for Sale 19,203,509
Investments in Debt and Equity Securities 52,487,355
Investments in Affiliated Entities - Cost Method 15,531,247
Investments in Affiliated Entities - Equity Method 15,530,943
Deposits and Funded Reserves 5,056,874
Other Assets 1,494,225

Total Long-Term Assets

Total Assets

See accompanying Notes to Consolidated Financial Statements.

2,251 ,249,058

$ 2,594,678,177
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 8 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
JUNE 30, 2022

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts Payable and Accrued Expenses $ 23,225,455
Deferred Revenue, Current Portion 67,076,510
Mortgages Payable and Other Debt, Current 26,922,039
Other Liabilities 86,070,132
Total Current Liabilities 203,294,136
LONG-TERM LIABILITIES
Lines of Credit 1,837 ,478,841
Deferred Revenue, Long-Term Portion 2,255,941
Mortgages Payable and Other Debt, Net 202,370,590
Total Long-Term Liabilities 2,042,105,372
Total Liabilities 2,245,399,508
NET ASSETS
Without Donor Restrictions 343,133,288
With Donor Restrictions 6,145,381
Total Net Assets 349,278,669
Total Liabilities and Net Assets $ 2,594.678,177

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 9 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF ACTIVITIES

YEAR ENDED JUNE 30, 2022

REVENUES
Contract Revenues:
Grants and Contracts
Cost Reimbursement
Fee for Service
Total Contract Revenues
Noncontract Revenues:
Rental Income
Development Fees
Client Fees
Donations
Fundraising
Donaied Materiais and Services
Sales of Inventory
Other Revenues
Total Noncontract Revenues
Other Revenues:
Investment Income (Loss)
Loan Fees
Interest Income
Total Other Revenues
Net Assets Released from Restrictions
Total Revenues

OPERATING EXPENSES
Program Services
General and Administrative
Fundraising
Total Operating Expenses

NONOPERATING ACTIVITY
Gain (Loss) on Sale of Assets
Impairment Loss on Real Estate

Net Nonoperating Activity

CHANGES IN NET ASSETS
Net Assets - Beginning of Year

NET ASSETS - END OF YEAR

Without Donor With Donor

Restrictions Restrictions Total
$ 16,683,923 $ 4,927,288 $ 21,611,211
49,386,880 . 49 386,880
40 697 698 - 40,697,698
106,768,501 4,927,288 111,695,789
25,536,280 - 25,536,280
942.132 - 942,132
6,159,237 - 6,159,237
18,239,205 - 18,239,205
991,281 - 991,281
1,268,607 - 1,268,607
2,813,651 - 2,813,651
56,257,627 - 56,257,627
(6,859,140) - (6,859,140)
243,392,825 243,392,825
40,795,211 - 40,795,211
277,328,896 - 277,328,896
4,626 260 (4,626,260) -
444,981,284 301,028 445,282,312
154,978,560 - 154,978,560
42,309,038 - 42,309,038
2,436,129 - 2,436,129
199,723,727 - 199,723,727
(167,746) - (167,746)
(147,889) - (147,889)
(315,635) - (315,635)
244,941,922 301,028 245,242,950
98,191,366 5,844,353 104,035,719
$ 343,133,288 $ 6,145,381 $ 349,278,669

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 10 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES

YEAR ENDED JUNE 30, 2022

CPLC Health and Single Family
Community Behavioral Human Housing and
Schools Prestamos Friendship Health Services Counseling
SUPPORT AND REVENUES
Contract Revenues:
Grants and Contracts $ 4213513 $ 1,051,559 §$ - § 1,648,898 $ 4,315,031 § 793,520
Cost Reimbursement - 1,660,170 - 15,066 44,442,766 685,269
Fee for Service - 1,343,492 - 9,074,000 3,776,391 4,095,731
Total Contract Revenues 4,213,513 4,055,221 - 10,737,964 52,534,188 2,574,520
Noncontract Revenues:
Rental Income - - - 2,183 1,585 -
Development Fees - - - - - -
Client Fees . 7,560,611 - 13,515 1,803,664 9,739
Donation 142,182 851,327 - 55,661 5,478,483 18,692
Fund Raising - - - - 25,644 -
Donated Materials and Services - 12,935 - ; - 203,148 -
Sales of Inventory - - - - - (182,647)
Other Revenues 33,156 133,000 - 4,592 645 750
Total Noncontract Revenues 175,338 8,557,873 - 75,951 7,513,169 (153,466)
Other Revenues:
Intercompany Dividend Income - - - - - -
Investment Income (Loss) - 752,463 - . - -
Loan Fees - 243,392,825 - - -
Interest Income - 40,680,010 . 81 -
Total Other Revenues - 284,825,298 - 81 -
Total Support and Revenues 4,388,851 297,438,392 10,813,915 60,047,438 2,421,054

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 11 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES (CONT

YEAR ENDED JUNE 30, 2022
Economic CPLC Florence CPLC New CPLC Health
La Causa Development Nevada Crittenton Mexico, Inc. Inc. (AZRA)
SUPPORT AND REVENUES
Contract Revenues:
Grants and Contracts $ - $ 2,084,287 $ 7,004,761 $ 346,858 $ - §$ 14,064
Cost Reimbursement - 945 362 2,289,240 51,920 ~ 48,972 -
Fee for Service 6,863,919 . 201,106 979,947 3,659,034 146,660
Total Contract Revenues 6,863,919 - 9,495,107 1,378,725 3,708,006 160,724
Noncontract Revenues:
Rental Income - 29,890 800 800 . -
Development Fees 80,765 962,436 - = - -
Client Fees - - 25,120 4,449 130,000 -
Donation - - 12,575 578,495 . 5,000
Fund Raising - - - . . -
In-Kind - - - - - -
Sales of Inventory - - - - - -
Other Revenues . 9,341 (12) 72,023 - -
Total Noncontract Revenues 80,765 1,001,667 38,483 655,767 130,000 5,000
Other Revenues:
Intercompany Dividend Income - - - - - -
Investment Income (Loss) - (33,931) - (290,771) (20,629) -
Loan Fees - - - - - -
Interest Income 3 - - - 33,778 -
Total Other Revenues 3 (33,931) - (290,771) 13,149 -
Total Support and Revenues 6,944,687 967,736 9,533,590 1,743,721 3,851,155 165,724

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 12 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES (CONT

YEAR ENDED JUNE 30, 2022

See accompanying Notes to Consolidated Financial Statements.

Commercial
Properties Single
and Property Family CPLC CPLC Action CPLC Action
Management Residential California CPLC Texas Fund PAC Fund
SUPPORT AND REVENUES
Contract Revenues:
Grants and Contracts $ - &§ 490,693 $ $ 25,000 §$ - § =
Cost Reimbursement - 2,116,636 - - -
Fee for Service - 307,407 17,057,824 - -
Total Contract Revenues - 2,914,736 17,082,824 - -
Noncontract Revenues:
Rental Income 8,500,052 436,963 - - -
Development Fees - - - - -
Client Fees - - . - -
Donation - 2,216 27,350 31,000 6,030,706
Fund Raising - - - - -
In-Kind - - - - -
Sales of Inventory - (91,000) - - -
Other Revenues 105,002 3,084 - - -
Total Noncontract Revenues 8,605,054 351,263 27,350 31,000 6,030,706
Other Revenues:
Intercompany Dividend Income - - - - -
Investment Income (Loss) - 32 - - -
Loan Fees - - - - -
Interest Income 27 14,291 - - -
Total Other Revenues 27 14,323 - - .
Total Support and Revenues 8,605,081 3,280,322 17,110,174 31,000 6,030,706
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 13 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES (CONT

YEAR ENDED JUNE 30, 2022
CPLC Health and Single Family Pi
Community Behavioral Human Housing and Relati
Schools Prestamos Friendship Health Services Counseling Fund
OPERATING EXPENSES °
Salaries and Wages $ 1,696,012 $ 2,950,687 $ - $ 5,302,555 $ 26,191,011 $ 612,021 $$ 1,
Payroll Taxes 107,401 252,707 - 428,063 2,434,900 53,911
Fringe Benefits 220,621 230,035 - 609,121 4,150,862 108,911
Contractor Expense - - - - - -
Professional Fees 421,627 6,207,075 - 139,193 661,202 76,311
Management Fees - 3,708,823 - - 33,600 -
Staff Development 184,420 77,830 - 41,398 350,119 952
Property Administration - - - - - -
Travel 8,053 56,326 - 34,786 440,992 2,807
Advertising and Marketing 9,162 46,777 - 10,584 619,131 2,956
Administrative Costs 636,215 4,279,932 - 1,276,526 7,091,975 154,533
Occupancy 423,570 119,647 - 575,224 890,860 83,600
Insurance and Taxes 4,214 33,228 - 69 468 658,107 17,986
Utility Expenses 63,826 13,084 - 78,857 706,406 5,138
Repairs and Maintenance - 18,597 - 185,233 1,249,437 5,680
Office Expenses 19,269 74,023 - 46,562 611,995 3,388
Furniture and Fixtures - 29,063 - 4,494 194,169 -
Technology and Communication 112,529 202,065 - 327,182 1,272,882 22,224
Consumable Supplies 50,163 2,377 - 181,905 2,750,882 6,773
Monetary Assistance 6,453 203,559,214 3,223 15,062 2,286,955 4,081,725
Miscellaneous 45,255 172,769 - 4,908 354,142 1,893
Program Construction - - - 50,647 62,935 6,057
Donated Materials and Services - 12,935 - - 200,039 -
Depreciation 54,062 5,135 - 16,165 1,034,069 -
Capital Outlay - - - - (7,377) -
Interest Expense - 14,978,482 - - (1,147) 11
Bad Debt Expense (Recovery) (10,934) 941,993 - 8 (13,230) (35,763)
Total Operating Expenses 4,051,918 234,972,804 3,223 9,397,941 $4,224,916 2,211,114 2,
NONOPERATING ACTIVITY
Gain/Loss on Sale of Assets, Net - - - - . (9,141)
Impairment Loss on Real Estate - - - - - -
Net Nonoperating Activity - - - - - (9,141)
CHANGES IN NET ASSETS $ 336,933. $ 62465588 $ (3,223) $ 1415974 $ 5822522 § 200,799 §

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 14 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES (CONT

YEAR ENDED JUNE 30, 2022
Economic CPLC Florence CPLC New CPLC Health
La Causa Development Nevada Crittenton Mexico, Inc. Inc. (AZRA) NS
OPERATING EXPENSES
Salaries and Wages $ 1,365,442 §$ 791,264 $ 3,904,259 $ 1,277,010 § 511,032 §$ 177,175 §
Payroll Taxes 134,826 63,168 383,517 257,747 42,150 16,960
Fringe Benefits 140,607 78,727 400,472 149,619 41,973 14,687
Contractor Expense 7,123,023 - - - - -
Professional Fees 113,685 88,602 1,701,222 107,931 2,998,517 116,975
Management Fees - - - - - -
Staff Development 45,197 10,999 17,613 11,006 5,293 244
Property Administration - - - - - -
Travel 14,451 24,727 208,650 - 45,317 2,852
Advertising and Marketing 1,764 155 28,054 8,820 9,692 4,000
Administrative Costs 353,245 192,242 1,109,469 361,716 108,767 31,109
Occupancy 44,223 33,464 115,379 - 49,213 8,169
Insurance and Taxes 188,483 55,453 7,458 132,339 16,628 1,028
Utility Expenses 475 16,956 29,201 71,892 15,848 =
Repairs and Maintenance 16,265 91,741 40,448 97,277 12,151 50
Office Expenses 22,751 3,075 153,246 10,341 9,216 754
Furniture and Fixtures 1,074 - 8,518 - - -
Technology and Communication 38,619 23,521 86,439 160,319 9,300 22,801
Consumable Supplies 7,886 1,052 43,511 40,705 - 1,469
Monetary Assistance - - 665,446 7,333 - -
Miscellaneous 96,167 278 97,286 23,185 18,181 971
Program Construction 15,731 757,352 5,000 4,760 - - 2,
Donated Materials and Services - - - - - -
Depreciation 7,032 - 17,125 220,937 52,628 2,141
Capital Outlay - - 623,908 - - -
Interest Expense 89,053 75,509 - 10,396 87 -
Bad Debt Expense (Recovery) - - (11,676) (79,418) 17,109 -
Total Operating Expenses 9,819,999 2,308,285 9,634,545 2,873,915 3,963,102 401,385 2,
NONOPERATING ACTIVITY
Gain/Loss on Sale of Assets, Net (581,509) - - 108,335 1,501,305 -
Impairment Loss on Real Estate - - - - - -
Net Nonoperating Activity (581,509) - - 108,335 1,501,305 -
CHANGES IN NET ASSETS $ (3,456,821) $ (1,340,549) $ (100,955) $ (1,021,859) $ 1,389,358 $ (235,661) $ (1,

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 15 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF FUNCTIONAL REVENUES AND EXPENSES (CONT
. YEAR ENDED JUNE 30, 2022

Commercial
Properties Single
and Property Family CPLC CPLC Action CPLC Action
Management Residential California CPLC Texas Fund PAC Fund Othe
OPERATING EXPENSES
Salaries and Wages $ 665,607 §$ 564,827 § 176,423 $ 7,351,338 $ - §$ 36,513 § Q3
Payroll Taxes 103,748 53,815 28,764 891,222 - 2,985
Fringe Benefits 68,072 65,510 5,573 2,054,260 - 3,645 (
Contractor Expense - - - - - -
Professional Fees 94,557 46,545 66 2,833,635 2,405 4,428,110
Management Fees 425,641 145,561 - - - -
Staff Development 129 20,509 - 18,994 - 4,677
Property Administration 69,164 (2) - - - -
Travel 233 25,558 6,179 167,492 - 95
Advertising and Marketing 14,864 1,621 10 908,410 - 1,667,332
Administrative Costs - 188,869 (6,224) 37,371 - -
Occupancy - 6,075 - 34,578 - 1,010
Insurance and Taxes 986,064 156,668 - 1,292,111 - 71
Utility Expenses 826,432 80,092 - - - -
Repairs and Maintenance 1,253,097 97,709 - 14,088 - - 8
Office Expenses ‘ 9,014 2,781 - 10,685 - 1,327
Furniture and Fixtures - - 64 (95) - -
Technology and Communication 46,184 31,831 38 222,716 . 778 1
Consumable Supplies - 16,147 - 36,809 - 162
Monetary Assistance ~ 1,052,214 - 5,011,800 5,000 5,000
Miscellaneous 3,136 1,385 - 1,024 6,336 356
Program Construction - 14,186 - - - -
Donated Materials and Services - - - - - -
Depreciation 2,405,387 214,028 - 33,976 ~ - 61
Capital Outlay - - - (1,749) - -
Interest Expense 1,805,500 33,501 - - - -
Bad Debt Expense (Recovery) 27,587 - - 15,011 - -
Total Operating Expenses 8,804,416 2,819,430 210,893 20,933,676 13,741 6,152,061 69
NONOPERATING ACTIVITY
Gain/Loss on Sale of Assets, Net (474,220) - - (577,517) - -
Impairment Loss on Real Estate - (147,889) - - - -
Net Nonoperating Activity (474,220) (147,889) - (577,517) - -
CHANGES IN NET ASSETS $ (673,555) $ 313.003. $ (210,893) $ (4401,019) $ 17,259 $ (121,355) $ 14,94

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 16 of 75
CONSOLIDATED STATEMENT OF CASH FLOWS

YEAR ENDED JUNE 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES
Changes in Net Assets
Adjustment to Reconcile Changes in Net Assets to Net Cash Used by
Operating Activities:
Depreciation
Realized/Unrealized Loss on Investments
Change in Allowance for Doubtful Accounts and Provision for Loan Loss
Gain on Sale of Assets, Net
Impairment Loss on Real Estate
Amortization of Loan Issuance Costs
Forgivable Loan Principal Reduction
Excess of Assets Acquired Over Liabilities Assumed of Florence Crittenton
(Increase) Decrease in Assets:
Grants and Contracts, Net
Interest Receivable
Other Receivables, Net
Prepaid Expenses
Related Party Receivables, Net
(Increase) Decrease in Liabilities:
Accounts Payable and Accrued Expenses
Deferred Revenue
Other Liabilities
Net Cash Used by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Real Estate and Property and Equipment
Purchases of Investments
Proceeds from Sales of Investments
Purchases of Real Estate Held for Sale
Proceeds from Sales of Real Estate
Change in Deposits and Funded Reserves
Payments Received from Notes Receivable
issuances of Notes Receivable
Cash Balance From the Acquistion of Florence Crittenton
Change in Other Assets

Net Cash Provided by Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Mortgages and Other Debt Borrowings
Payments on Mortgages and Other Debt
Debt Issuance Costs
Proceeds from Lines of Credit

Net Cash Used by Financing Activities

NET DECREASE IN CASH AND CASH EQUIVALENTS
Cash, Cash Equivalents and Restricted Cash - Beginning of Year

CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF YEAR

See accompanying Notes to Consolidated Financial Statements.

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

245,242,950

8,700,004
8,358,012
1,448,837

(338,694)
147,889
109,636
(51,702)

(14,417,197)

31,739,306
(12,010,265)

4,182,671
(208,053)

3,704,356
(242,193,996)
(169,300,308)

(137,885,739)

(33,908,350)
(87,742,606)
7,165,253
(5,189,945)
3,496,917
(874,849)
5,000,150,840
(163,926,815)
968,796
(222,858)

4,719,916,383

1,759,141
(18,603,299)
(462,000)
(5,320,042,144)

(5,337 ,348,302)

(755,317,658)

1,055,590,394

300,272,736
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 17 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2022

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash Paid for Interest $ 19,623,781
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Non Cash Proceeds from Sale of Property $ 1,600,000
Purchase of Property Through Debt Issuance $ 101,410,000
Cash, Cash Equivalents and Restricted Cash Consist of the Following:
Cash and Cash Equivalents $ 193,109,158
Cash Designated for Lending 51,095,581
Cash Held for Loan Programs . 55,939,242
Restricted Cash 128,755
Total Cash, Cash Equivaienis and Restricted Cash $ 300,272,736

See accompanying Notes to Consolidated Financial Statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 18 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Chicanos Por La Causa, Inc. (CPLC or the Organization) is an Arizona statewide community
development corporation (CDC) with operations in California, Nevada, New Mexico and
Texas, committed to building stronger, healthier communities as a lead advocate, coalition
builder, and direct service provider. CPLC promotes positive change and self-sufficiency to
enhance the quality of life for the benefit of those they serve. The objective of CPLC and its
subsidiaries and affiliates (collectively referred to as CPLC or Organization) is the
accumulation of a sufficient capital asset base to continually advance the mandate for self-
sufficiency, as stated in Title VIl of the Community Services Act of 1974 (Title Vil). CPLC
receives substantially all of its revenue from government contracts and rental income from
its real estate properties.

Principles of Consolidation

On October 1, 2021 the board of directors of Florence Crittenton amended its bylaws and
CPLC became its sole member completing the acquisition of Florence Crittenton.

The accompanying consolidated financial statements include the financial statements of
CPLC and its subsidiaries, Futuro Investments Corp. (FIC); Tiempo, Inc. (Tiempo); La
Causa Realty, LLC (LCR); Futuro Camion Services, LLC; Liberty-Irvington, LLC; Friendship
Community Mental Health Center (FCMHC); Prestamos CDFI, LLC (PC); La Causa
Construction (LCC); Casa Loma Affordable Apartments, LLC (CL); Glenrosa Affordable
Apartments, LLC (GA or La Buena Vida); Hazelwood Affordable Apartments, LLC (HA or
Starlight); Bella Vista Management, LLC and Bella Vista Properties | Limited Partnership;
Villa Las Vegas Limited Partnership; Ladera Village Limited Partnership; Mountain Pointe
Apartments LIHTC, LLC; Mountain Pointe Apartments, LP; CPLC Donation Partners, LLC
(DP); CPLC Housing Partners, LLC; Casa de Primavera Apartments, LLC (COP); Gran
Victoria Housing, LLC (GV); CPLC Estancia, LLC; CPLC Housing & Health, LLC; Central
and Grant Plaza, LLC; CPLC Fountain Villas, LLC; Chicanos Por La Causa Land Bank,
LLC; CPLC Holding and Asset Management Company, LLC; CPLC Land Bank Manager,
LLC; Futuro Equity Fund, LLC; CPLC NM Community Stabilization Partners, LLC (CS);
CPLC Pickle House, LLC; 59™ Avenue and Roosevelt, LLC; Nuevas Vistas on Main, LLC
(Mesa Royal); CPLC 1551 W. Van Buren, LLC; Vista Village on Van Buren, LLC (Travel
Inn); La Causa Development Nevada, LLC; La Causa Realty Nevada, LLC; CPLC Main and
Country, LLC; Main and Country Club, LLC; CPLC Prestamos, Mesa Royale East Motel,
LLC; CPLC Southwest Charter Schools, LLC; CPLC Broadway Revitalization, LLC; CPLC
Mesa 5 Place LLC; CPLC Nevada Property Holdings, LLC; CPLC 1401 S. Central, LLC;
CPLC Freemont Apartments, LLC; CPLC Property Holdings, LLC; CPLC Resource
Navigation, LLC; CPLC 1202 Central, LLC; Mesa Royale West, LLC; 2728 CPLC
Apartments, LLC; CPLC Texas Affordable Housing, LLC; CPLC Oak Park, LLC; CPLC
Hummingbird, LLC; CPLC Cactus Wren, LLC; CPLC Magnolia, LLC; CPLC PM
Redevelopment, LLC; and CPLC 1380 US HWY 395, LLC.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 19 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Principles of Consolidation (Continued)

Also included in the accompanying consolidated financial statements are the assets,
liabilities, and net assets of thirteen affiliates which are under common control, and in which
CPLC possess an economic interest. These include CPLC Community Schools (CCS);
Santa Cruz Apartments, Inc. (SC); Causa Community Development, Inc. (CCD}; Pueblo
Senior Housing, Inc. (PSH); Casa Del Pueblo Il, Inc. (PSH II); Casa Mia Senior Apartments,
Inc. (CM); CPLC New Mexico, Inc.; CPLC Nevada, Inc. (CPLC Nevada); CPLC Action Fund;
CPLC Health, Inc.; CPLC Texas Inc. Chicanos Por La Causa California Inc.; CPLC Action
Fund PAC; and Florence Crittenton. SC owns the Santa Cruz apartment complex; CCD
owns the Guadalupe Barrio Nuevo apartment complex; and PSH owns the Casa Del Pueblo
apartment complex. All significant inter-organization transactions and accounts have been
eliminated in consolidation.

The consolidated financial statements of Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates have been prepared on the accrual basis of accounting. The significant accounting
policies followed are described below to enhance the usefulness of the consolidated
financial statements to the reader.

Basis of Presentation

The accompanying consolidated financial statements are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States
of America (U.S. GAAP) applicable to nonprofit organizations. The Organization’s
consolidated financial statements are prepared to focus on the Organization as a whole and
to present balances and transactions according to the existence or absence of donor-
imposed restrictions.

Net Assets

Net assets, revenues, gains, and losses are classified based on the existence or absence of
donor- or grantor-imposed restrictions. Accordingly, net assets and changes therein are
classified and reported as follows:

Net Assets Without Donor Restrictions — Net assets available for use in general
operations and not subject to donor (or certain grantor) restrictions. The governing board
has designated, from net assets without donor restrictions, net assets for an operating
reserve and board-designated endowment.

Net Assets With Donor Restrictions — Net assets subject to donor- (or certain grantor-)
imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as
those that will be met by the passage of time or other events specified by the donor.
Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that
resources be maintained in perpetuity. Donor-imposed restrictions are released when a
restriction expires, that is, when the stipulated time has elapsed, when the stipulated
purpose for which the resource was restricted has been fulfilled, or both.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 20 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net Assets (Continued)

We report contributions restricted by donors as increases in net assets without donor
restrictions if the restrictions expire (that is, when a stipulated time restriction ends, or
purpose restriction is accomplished) in the reporting period in which the revenue is
recognized. All other donor-restricted contributions are reported as increases in net
assets with donor restrictions. When a restriction expires, net assets with donor
restrictions are reclassified to net assets without donor restrictions and reported in the
consolidated statement of activities as net assets released from restrictions.

Cash and Cash Equivalents

The Organization considers all cash and highly liquid financial instruments with original
maturities of three months or less to be cash and cash equivalents. Deposits at each
institution are insured in limited amounts by the Federal Deposit Insurance Corporation
(FDIC). Restricted cash consists of funds held for the Classroom Site Fund, for use solely at
school sites. These funds are available for teacher compensation increases, employment
related expenses and maintenance and operations purposes including classroom size
reduction.

Cash Designated for Lending and Cash Held for Loan Loss Reserves

CPLC receives loans and grant funds from various sources to be used for loans to new or
existing small businesses or as cash reserves for loan losses. These loans are included in
mortgages payable and lines of credit in the accompanying consolidated statement of
financial position. The funds are maintained in separate bank accounts. As of June 30,
2022, CPLC had $51,095,581 in these accounts as cash designated for lending that are to
be used to fund additional loans and $55,939,242 as cash held for loan loss reserves.

Grants and Contracts Receivable

Grants and contracts receivable consist primarily of amounts due from state and federal
agencies for the provision of services; accordingly, credit risk is limited. Receivables are
stated at the amount management expects to collect. Management provides for probable
uncollectible amounts through a decrease to earnings and an increase to the allowance for
uncollectible accounts based on its assessment of the current status of individual
receivables. The allowance for uncollectible receivables was $678,171 as of June 30, 2022.

CPLC recognizes contributions when cash, securities or other assets; an unconditional
promise to give; or a notification of a beneficial interest is received. Conditional promises to
give that is, those with a measurable performance or other barrier and a right of return are
not recognized until the conditions on which they depend have been met. Federal and state
contracts and grants are conditioned upon certain performance requirements and the
incurrence of allowable qualifying expenses. Consequently, as of June 30, 2022, conditional
contributions approximating $20,203,547, of which no amounts had been received in
advance, have not been recognized in the accompanying consolidated financial statements.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 21 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Notes Receivable

Notes receivable consists of loans made to small businesses. They are reported at their
outstanding unpaid principal balance adjusted for the notes allowance for notes receivable
credit losses.

Interest income is accrued on the unpaid principal balance. The accrual of interest on loans
is discontinued at the time the loan is 90 days delinquent unless the credit is well secured
and in process of collection. Past due status is based on contractual terms of the loan.
Loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or
interest is considered doubtful. All interest accrued but not collected for loans that are
placed on nonaccrual or charged-off is reversed against interest income. The interest on
these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for
return to accrual. Loans are returned to accruai status when aii the principai and interest
amounts contractually due are brought current and future payments are reasonably assured.

The Organization has determined that the accounting for nonrefundable fees and costs
associated with originating or acquiring loans, except for those associated with PPP loans,
does not have a material effect on its consolidated financial statements. As such, these fees
and costs have been recognized during the period they are collected and incurred,
respectively. Starting in May 2020, the Organization began participating in the Paycheck
Protection Program. Loan origination fees associated with PPP loans are deferred and
amortized through the earlier of SBA forgiveness obtained or through the term of the loan.

Allowance for Notes Receivable Credit Losses

The allowance for notes receivable credit losses is established as losses are estimated to
have occurred through a provision for loan losses charged to earnings. Loan losses are
charged against the allowance when management believes the uncollectibility of a loan
balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for notes receivable credit losses is evaluated on a regular basis by
management and is based upon management's periodic review of the collectability of the
loans in light of historical experience, the nature and volume of the loan portfolio, adverse
situations that may affect the borrower's ability to repay, estimated value of any underlying
collateral and prevailing economic conditions. This evaluation is inherently subjective as it
requires estimates that are susceptible to significant revision as more information becomes
available.

The allowance consists of allocated and general components. The allocated component
relates to loans that are classified as impaired. For those loans that are classified as
impaired, an allowance is established when the discounted cash flows (or collateral value or
observable market price) of the impaired loan is lower than the carrying value of that loan.
The general component covers nonimpaired loans and is based on historical loss rates for
each portfolio segment, adjusted for the effects of qualitative or environmental factors that
are likely to cause estimated credit losses as of the evaluation date to differ from the
portfolio segment’s historical loss experience.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 22 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Allowance for Notes Receivable Credit Losses (Continued)

Qualitative factors include consideration of the following: changes in lending policies and
procedures; changes in economic conditions; changes in the nature and volume of the
portfolio; changes in the experience, ability and depth of lending management and other
relevant staff; changes in the volume and. severity of past due, nonaccrual and other
adversely graded loans; changes in the loan review system; changes in the value of the
underlying collateral for collateral-dependent loans; and concentrations of credit and the
effect of other external factors such as competition and legal and regulatory requirements.

Investments in Limited Liability Companies

The Organization is the sole member of seven limited liability companies (LLCs): Casa De
Encanto Operating Company, LLC; Casa De Flores Operating Company, LLC; Guadalupe
Huerta Operating Company, LLC; Rosa Linda Operating Company, LLC; Mountain Pointe
Apartments LIHTC Phase II, LLC and Highland Manager, LLC and 25" and Bell, LLC. These
LLCs have virtually no assets or liabilities as of June 30, 2022. These LLCs manage the
general partnership interest for Casa De Encanto Senior Apartments LIHTC, LP; Casa De
Flores Senior Apartments LIHTC, LP; Guadalupe Huerta Senior Apartments LIHTC, LP;
Rosa Linda Senior Apartments LIHTC, LP; Mountain Pointe Apartments Phase II, LP and
Highland at Vista, LLC, 25 and Bell LIHTC, LLC, and Dayton GMC LIHTC, LLC. The LLCs
have 0.01% general partner interest in each of the Partnerships, and have minimal assets,
liabilities, revenue, and expenses.

In October 2017, the Organization invested $412,871 into Courtyard at Encanto, LLC, which
is the owner of a 160-unit multifamily apartments. The investment represented 15%
ownership of the LLC.

Investments in Affiliated Entities

The equity method of accounting is used when the Organization has 20% to 50% interest in
other entities. Under the equity method, original investments are recorded at cost and
adjusted for the Organization’s share of undistributed earnings. or losses of these entities.
Nonmarketable investments in which the Organization has less than a 20% interest and in
which it does not have the ability to exercise significant influence over the investee are
initially recorded at cost, and periodically reviewed for impairment:

Investments in Debt and Equity Securities

The Organization records investment purchases at cost, or if donated, at fair value on the
date of donation. Thereafter, investments are reported at their fair values in the consolidated
statement of financial position. Net investment return/(loss) is reported in the consolidated
statement of activities and consists of interest and dividend income, realized and unrealized
capital gains and losses, less investment management and custodial fees.

Real Estate Held for Sale

Real estate held for sale is stated at lower of cost or market and includes foreclosed
properties, land under development, developed lots, direct and indirect costs of housing
construction and interest, and overhead costs incurred during the development period. Cost
is determined by the specific identification method.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 23 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Real Estate Properties and Property and Equipment

The Organization records real estate properties and property and equipment additions over
$5,000 at cost, or if donated, at fair value on the date of donation. Depreciation and
amortization are computed using the straight-line method over the estimated useful lives of
the assets ranging from five to forty years, or in the case of capitalized leased assets or
leasehold improvements, the lesser of the useful lives of the assets or the lease terms.
When assets are sold or otherwise disposed of, the cost and related depreciation or
amortization are removed from the accounts, and any resulting gain or loss is included in the
consolidated statement of activities. Costs of maintenance and repairs that do not improve
or extend the useful lives of the respective assets are expensed currently.

The Organization reviews the carrying values of real estate property and property and
equipment for impairment whenever events or circumstances indicate that the carrying value
of an asset may not be recoverable from the estimated future cash flows expected to result
from its use and eventual disposition. When considered impaired, an impairment loss is
recognized to the extent carrying value exceeds the fair value of the asset. During the year
ended June 30, 2022, the Organization recognized an impairment loss of $147,889.

Deposits and Funded Reserves

Deposits and funded reserves are assets whose use is limited and are held by trustees
under third-party debt agreements. Deposits consist of escrow and security deposits, and
reserves are required for property replacements and repairs.

Debt Issuance Costs

Debt issuance costs are amortized over the period the related obligation is outstanding
using the straight-line method, which approximates the effective interest method. Debt
issuance costs are included within long-term debt on the consolidated statement of financial
position. Amortization of debt issuance costs is included in interest expense.

Deferred Revenue

Each month, the Organization receives block payment funding for behavioral health services
from the Regional Behavioral Health Authority (RBHA) in Maricopa County. These funds are
considered earned if total service claims generated equal or exceed the block payments. If
service claims are insufficient, the RBHA has the contractual right to recoup the fund or
characterize the deficiency as deferred revenue with an authorization to use the funding in
the next fiscal year. For the year ended June 30, 2022, the Organization has a service claim
deficiency balance of $1,671,653.

During FY2022, Prestamos CDFIi received a $4.7 million Small Business Resilience
Program contract. As a part of the program, Prestamos received funds from Maricopa
County to buy down interest rates for qualified small business loans. As of June 30, 2022,
$609,840 interest buy down feed were received, $43,035 was recognized as revenue and
$566,805 was recorded as deferred revenue.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 24 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Deferred Revenue

Prestamos CDFI, LLC participated in Paycheck Protection Program (PPP) lending, which is
based on the Coronavirus Aid Relief and Economic Security Act (the CARES Act) in the last
quarter of fiscal year 2020, and the third quarter of fiscal year 2021. For each approved PPP
loan, the Small Business Administration (SBA) provided a percentage of the loan principal
balance as a loan processing fee to the Organization. The fee is amortized through the term
of each PPP loan. As of June 30, 2022, the Organization received $314,584,446 from SBA,
$243,392,825 was recognized as loan fee revenue and $37,046,079 was recorded as
deferred revenue. As of June 30, 2021, the Organization received $314,260,827 from SBA,
$5,086,196 was recognized as loan fee revenue and $309,174,631 was recorded as
deferred revenue.

Fee for Service — Patient Services

Patient service revenue is reported at the amount that reflects the consideration to which the
Organization expects to be entitled in exchange for providing patient care. These amounts
are due from patients, third-party payors (including health insurers and government payors),
and others and includes variable consideration for retroactive revenue adjustments due to
settlement of audits, reviews, and investigations. Generally, the Organization bills the
patients and third-party after the services are performed. Revenue is recognized as the
performance obligations are satisfied.

Performance obligations are determined based on the nature of the services provided by the
Organization. Revenue for performance obligations satisfied over time is recognized based
on actual charges incurred in relation to total expected (or actual) charges. The Organization
believes that this method provides a faithful depiction of the transfer of services over the
term of the performance obligation based on the inputs needed to satisfy the obligation.

Generally, performance obligations satisfied over time relate to patients receiving services in
our behavioral health and medical/therapy programs, which includes a majority of the
Organization’s charges for services revenue.

The Organization determines the transaction price based on standard charges for services
provided, reduced by contractual adjustments provided to third-party payors or the
established rates of the government entities. The Organization determines its estimates of
contractual adjustments and discounts based on contractual agreements, and historical
experience. The Organization determines its estimate of implicit price concessions based on
its historical collection experience with patients.

Agreements with third-party payors provide for payments that may differ from established
rates. A summary of the payment arrangements with major third-party payors follows:

Medicaid: Reimbursements for Medicaid services are generally paid at prospectively
determined rates, per occasion of service, or per covered member.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 25 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fee for Service — Patient Services (Continued)

Other: Payment agreements with certain commercial insurance carriers, health
maintenance organizations, and preferred provider organizations provide for payment
using prospectively determined rates and discounts from established charges.

Laws and regulations concerning government programs, including Medicaid, are complex
and subject to varying interpretation. As a result of investigations by governmental agencies,
various health care companies have received requests for information and notices regarding
alleged noncompliance with those laws and regulations, which, in some instances, have
resulted in companies entering into significant settlement agreements. Compliance with
such laws and regulations may also be subject to future government review and
interpretation as well as significant regulatory action, including fines, penalties, and potential
exclusion from the related programs. There can be no assurance that regulatory authorities
will not challenge the Organization’s compliance with these laws and regulations, and it is
not possible to determine the impact (if any) such claims or penalties would have upon the
Organization. In addition, the contracts the Organization has with commercial payors also
provide for retroactive audit and review of claims.

Settlements with third-party payors for retroactive revenue adjustments due to audits,
reviews or investigations are considered variable consideration and are included in the
determination of the estimated transaction price for providing patient services. These
settlements are estimated based on the terms of the payment agreement with the payor,
correspondence from the payor and the Organization’s historical settlement activity,
including an assessment to ensure that it is probable that a significant reversal in the
amount of cumulative revenue recognized will not occur when the uncertainty associated
with the retroactive adjustment is subsequently resolved.

Estimated settlements are adjusted in future periods as adjustments become known (that is,
new information becomes available), or as years are settled or are no longer subject to such
audits, reviews, and investigations.

Generally patients who are covered by third-party payors are responsible for related
deductibles and coinsurance, which vary in amount. The Organization estimates the
transaction price for patients with deductibles and coinsurance based on _ historical
experience and current market conditions. The initial estimate of the transaction price is
determined by reducing the standard charge by any contractual adjustments, discounts, and
implicit price concessions. Subsequent changes to the estimate of the transaction price are
generally recorded as adjustments to patient service revenue in the period of the change.
Additional revenue recognized due to changes in its estimates of implicit price concessions,
discounts, and contractual adjustments were not considered material for the year ended
June 30, 2022. Subsequent changes that are determined to be the result of an adverse
change in the patient’s ability to pay are recorded as bad debt expense.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 26 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fee for Service — Patient Services (Continued)

The Organization has determined that the nature, amount, timing and uncertainty of revenue
and cash flows are affected by the following factors:

e Payors (for example, Medicaid, managed care or other insurance, patient) have
different reimbursement/payment methodologies

e Length of the patient’s service of care

e Method of reimbursement (fee for service or capitation)

e Organization’s line of business that provided the service

Management Fee Revenue

Management fee revenue consists primarily of New Market Tax Credit Community
Development Entity (CDE) Sponsor Fees and CDE Asset Management Fees earned from
the Sub-CDEs. In July 2020, Prestamos CDFI, LLC was awarded an additional $55,000,000
New Market Tax Credit allocation from the United States Department of Treasury. CDE
Sponsor Fees are recognized when an investor makes a qualified equity investment in a
Sub-CDE or is otherwise earned in accordance with the terms of the individual CDE Fee
Agreement. CDE Asset Management Fees are recognized as services are performed and
collectibility is reasonably assured. The Organization recognized $3,775,636 in CDE Asset
Management Fees for the year ended June 30, 2022.

Rental Income Revenue Recognition

Rental income revenue consists primarily of rental receipts from tenants and Section 8
housing subsidy payments and/or mortgage guarantees under CPLC’s contracts with the
U.S. Department of Housing and Urban Development (HUD). Revenue is recognized
monthly in accordance with the lease agreement or contract. As of June 30, 2022, amounts
due from tenants and/or HUD are included within grants and contracts receivables.

These receivables are evaluated by management on an annual basis accordingly, an
allowance for doubtful accounts was setup. As of June 30, 2022, the allowance for doubtful
accounts balance was $73,628.

Donated Materials and Services

Volunteers contribute significant amounts of time to our program services, administration,
and fundraising and development activities; however, the consolidated financial statements
do not reflect the value of these contributed services because they do not meet recognition
criteria prescribed by U.S. GAAP. Contributed goods are recorded at fair value at the date of
donation. The Organization received $216,083 in supplies to support its health and human
services program. The Organization records donated professional services at the respective
fair values of the services received. The Organization received airtime and production costs
valued at $1,052,524 for the year ended June 30, 2022. The revenues and expenses for
these contributions are recorded in management and general in the consolidated statement
of functional revenue and expenses. The Organization estimates the fair value of donated
materials and services on the basis of estimates of the purchasing of similar assets and
services in the Organization’s market.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 27 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertising and Marketing Costs

Advertising and marketing costs are charged to operations when incurred. Advertising and
marketing costs charged to operations were $5,004,561 for the year ended June 30, 2022.

Benefits

The Organization has a partially self-insured health benefit program covering medical and
prescription claims. The plan includes a stop-loss provision that ensures claims exceeding
$175,000. The Plan offers health benefits to regular, full-time employees working 30 or more
hours per week and their beneficiaries and covered dependents once a 90-day waiting
period is met. The cost of health care services is recognized as a deduction in the period in
which it is provided to participants. Liabilities for health claims incurred but not reported are
estimated based on historical claims and industry trends.

Functional Allocation of Expenses

The costs of program and supporting services activities have been summarized on a
functional basis in the consolidated statement of activities. The consolidating statement of
functional revenues and expenses presents the natural classification detail of revenues and
expenses by function. Accordingly, certain costs have been allocated among the programs
and supporting services benefited. The allocation methods used are subject to a degree of
estimation by management. Directly identifiable expenses are charged to program and
supporting services. Salary and related expenses related to more than one function are
charged to program and supporting services on the basis of direct time and effort reporting.
Management and general expenses include those expenses that are not directly identifiable
to any other specific function but provide for the overall support and direction of the
Organization.

Use of Estimates in the Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements in conformity with U.S. GAAP requires
management to make a number of estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

CPLC, SC, CCD, PSH, PSH II, CPLC SW, CM, CPLC New Mexico, CCS, CPLC Nevada,
CPLC Health Inc. CPLC Texas Inc. and CPLC Action Fund, CPLC California, Inc. and CPLC
Action Fund PAC are organized as nonprofit corporations and have been recognized by the
Internal Revenue Service (IRS) as exempt from federal income taxes under Section 501(a)
of the Internal Revenue Code (IRC) as organizations described in Section 501(c)(3) and
Section 501(c)(4) and have been determined not to be private foundations. Accordingly,
contributions to them qualify for the charitable contribution deduction under Section
170(b)(1)(A). Each entity is annually required to file a Return of Organization Exempt from
Income Tax with the IRS.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 28 of 75
NOTE 1

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

income Taxes (Continued)

GV, CPLC Nevada, PC, SM, CL, GA, HA, COP, DP, Chicanos por la Causa Land Bank,
LLC; CPLC Holding and Asset Management Company, LLC; CPLC Land Bank Manager,
LLC; CPLC Housing & Health, LLC; CPLC Villas, LLC, San Marina Apartments, LLC; 59™
Avenue and Roosevelt, LLC; Nuevas Vistas on Main, LLC (Mesa Royal); CPLC 1551 W.
Van Buren, LLC; Vista Village on Van Buren, LLC; CPLC Southwest Charter Schools, LLC,
CPLC Broadway Revitalization, LLC and CPLC Mesa 5" Place, LLC, CPLC 1401 S. Central
LLC, CPLC Property Holdings LLC, CPLC 1202 Central LLC and Mesa Royale West, LLC
are organized as Limited Liability companies whose sole member is CPLC. CPLC Estancia
and CPLC Fountain Villas are organized as a Limited Liability whose sole member is CPLC
Housing & Health, LLC. Futuro Equity Fund is organized as an LLC whose sole member is
PC. For income tax purposes, they are disregarded entities and are treated as departments
of CPLC. Bella Vista Properties | LP is organized as a limited partnership whose sole
partner is CS. For income tax purposes, it is a disregarded entity and treated as a
department of CS. Villa Las Vegas, NM; Bella Vista Management, LLC; Ladera Village, LLC,
and CS are organized as Limited Liability Companies whose sole member is CPLC New
Mexico, Inc. CPLC Nevada Property Holdings LLC, CPLC Freemont Apartments, LLC and
2728 CPLC Apartments, LLC, are organized as Limited Liability companies whose sole
member is CPLC Nevada, Inc. CPLC Resource Navigation, LLC, CPLC Texas Affordable
Housing LLC, CPLC Oak Park, LLC, CPLC Hummingbird, LLC and CPLC Magnolia, LLC
are organized as Limited Liability companies whose sole member is CPLC Texas, Inc.
Accordingly, the disregarded LLCs are exempt from income taxes under the applicable
sections of the IRC and the Arizona Revised Statutes. In addition, the entities are generally
subject to income tax on net income that is derived from business activities that are
unrelated to their exempt purposes. CPLC and affiliates have determined it does not have
any taxable unrelated business income and they have not filed Exempt Organization
Business Income Tax Returns.

FIC, a for-profit company, files a consolidated income tax return with its subsidiaries,
Tiempo, Futuro Camion Servicios, LLC; LCC; LCD; LCD Nevada; LCR; LCR NV; Liberty-
Irvington, LLC; Central and Grant Plaza, LLC; CPLC Main and Country Club, LLC; Main and
Country Club, LLC Mesa Royale East Motel, LLC, are organized as Limited Liability
Companies whose sole member is FIC. For income tax purposes, they are disregarded
entities and are treated as departments of FIC. Friendship Community Mental Health
Center, Inc.; and CPLC Prestamos are each separately taxable corporations and are
responsible for filing their own income tax returns.

The Organizations have sustained operating losses in previous and current years from its
for-profit subsidiaries and have loss carryforwards aggregating approximately $1.7 million
dollars. Net operating losses ($1.7 million) expire in years through 2040. The loss
carryforwards generate a deferred tax asset that may be realized in future years. It is the
opinion of management that it is more likely than not that some portion or all of the deferred
tax asset will not be realized. The Organization has elected to record a valuation allowance
to reduce any deferred tax assets to zero as of June 30, 2022.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 29 of 75
NOTE 1

NOTE 2

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes (Continued)

The Organization believes that it has appropriate support for any income tax positions taken
and, as such, does not have any uncertain tax positions that are material to the consolidated
financial statements. The entities would recognize future accrued interest and penalties
related to unrecognized tax benefits and liabilities in income tax expense if such interest and
penalties are incurred.

Change in Accounting Principle

In September 2020, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU) 2020-07, Presentation and Disclosures by Not-for-Profit Entities for
Contributed Nonfinancial Assets. This standard requires that contributed nonfinancial assets
are reported on a separate line item in the statements of activities, apart from contributions
of cash and other financial assets. It also requires disclosure of disaggregated amounts of
contributed nonfinancial assets by category that depicts the type of contributed nonfinancial
assets along with additional qualitative information about the monetization of such assets,
donor restrictions and valuation techniques. The adoption of this standard did not have a
significant impact on the accompanying consolidated financial statements or disclosures.

LIQUIDITY AND AVAILABILITY

Financial assets available for general expenditure, that is, without donor or other restrictions
limiting their use, within one year of the consolidated statement of financial position date,
comprise the following:

Cash and Cash Equivalents $ 193,109,158
Receivables . 37,138,161
Investments in Debt and Equity Securities 52,487,355
Less: Net Assets With Donor Restrictions, Net of
Restricted Cash (6,016,626)
Total $ 276,718,048

In addition to cash on hand, the Organization has a $6.0 million operating line of credit with
Wells Fargo bank which is available for general operating expenditures. As of June 30,
2022, the line of credit had an outstanding balance of $-0-.

As part of the Organization’s liquidity management plan, the Organization invests cash in
excess of daily requirements in short-term investments, CDs, and money market funds.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 30 of 75
NOTE 3

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

FAIR VALUE MEASUREMENTS AND DISCLOSURES

Fair value measurement applies to reported balances that are required or permitted to be
measured at fair value under an existing accounting standard. The Organization
emphasizes that fair value is a market-based measurement, not an entity-specific
measurement. Therefore, a fair value measurement should be determined based on the
assumptions that market participants would use in pricing the asset or liability and
establishes a fair value hierarchy.

The fair value hierarchy consists of three levels of inputs that may be used to measure fair
value as follows:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
that we can access at the measurement date.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, inputs other than quoted prices that are
observable for the asset or liability, and market-corroborated inputs.

Level 3 — Valuation is based on unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the assets or liabilities. Level 3
assets and liabilities may include financial instruments whose value is determined using
pricing models, discounted cash flow methodologies, or similar techniques, as well as
instruments for which the determination of fair value requires significant management
judgment or estimation.

In some cases, the inputs used to measure the fair value of an asset or a liability might be
categorized within different levels of the fair value hierarchy. In those cases, the fair value
measurement is categorized in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement. Assessing the significance of
a particular input to entire measurement requires judgment, taking into account factors
specific to the asset or liability.

The categorization of an asset within the hierarchy is based upon the pricing transparency of

the asset and does not necessarily correspond to our assessment of the quality, risk or
liquidity profile of the asset or liability.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 31 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 3 FAIR VALUE MEASUREMENTS AND DISCLOSURES (CONTINUED)

The following table summarizes the valuation of CPLC’s assets and liabilities subject to
measurements at fair value on a recurring basis as of June 30, 2022:

Level 1 Level 2 Level 3 Total

Fixed Income Securities $ 114,712 $ - $ - $ 114,712
Government and Agency

Securities 8,459,930 - - 8,459,930

Corporate Bonds - §,325,005 - 5,325,005

Equities - Common Stock 31,006,123 - - 31,006,123

Mutual Funds 6,785,199 - - 6,785,199

Assets Held in Trust . - 778,641 778,641

Arizona Community Foundation - . 17,745 17,745

Total Investments at
Fair Value $ 46,365,964 $ 5,325,005 $ 796,386 $ 52,487,355

The following table presents the fair value hierarchy for the balances of financial assets
measured at fair value on a nonrecurring basis as of June 30, 2022:

: Level 1 Level 2 Level 3 Total
Real Estate Held for Sale $ - $ - $ 511,900 $ 511,900
Impaired Loans - - 132,285 132,285
Total Assets at
Fair Value $ - $ - $ 644.185 $ 644,185

The fair value of impaired loans is estimated based on either the loan’s obtainable market
price of the fair value of the collateral if the loan is collateral dependent or the discounted
cash flows of future payments. Each method contains significant unobservable inputs and
thus is classified as Level 3 fair value measurement.

A portion of the real estate held for sale is based on what the local markets are currently
offering for assets with similar characteristics, less costs to sell, which CPLC classifies as
Level 3 fair value measurement. The most common approach is through appraisals which
are evaluated for various factors including age of the appraisal, age of comparables
included in the appraisal, and known changes in the market and in the collateral.

Purchases, sales, transfers in and transfers out of Level 3 assets consist of the following for
the years ended June 30, 2022:

Arizona Assets
Community Held in
Foundation Trust
Purchases $ - $ -

Sales - -
Transfers In - -
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 32 of 75
NOTE 4

NOTE 5

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

RELATED PARTY ACCOUNTS RECEIVABLE

Related party receivables consist of amounts due from low-income housing real estate
projects that CPLC has invested in or nonprofit organizations which CPLC holds
membership in. These receivables primarily result from development fees earned at the
inception of these projects and funds advanced to the projects. Related party receivables
are stated at the amount management expects to collect and management provides an
allowance for uncollectible accounts. The allowance for uncollectible related party
receivables was $79,081 as of June 30, 2022.

Amounts due from related parties consist of the following:

Casa de Encanto $ 15,894
Casa de Flores 8,433
Rosa Linda/Gene Rice 687,557
Guadalupe Huerta 9,105
Mountain Pointe Phase Il 433,315
Courtyard at Encanto 8,674
Highland at Vista LIHTC LLC r 150,228
Dayton GMC LIHTC LLC 120,836
Total Related Party Accounts Receivable 1,434,042
Less: Allowance (79,081)
Related Party Accounts Receivable, Net $ 1,354,961

The above accounts receivable are unsecured and have no repayment terms.

REAL ESTATE PROPERTIES

Santa Cruz Apartments, organized by SC, has 132 units and is not a HUD property. Vue
Nineteen 01 Apartments (289 units) and Grandes Cortez Apartments (151 units), organized
under Gran Victoria LLC, are market rate properties. Casa de Primavera (COP) and Casa
Del Pueblo II (CDP II), projects of CPLC, operate apartment complexes of 162 and 38 units,
respectively, under Section 202 of The National Housing Act of 1959. Casa Del Pueblo,
organized by PSH, has 58 units and is operated under Section 811 of National Housing Act
as amended. Guadalupe Barrio Nuevo Apartments, organized by CCD, has 60 units and is
operated under Section 207 of the National Housing Act of 1959 and are HUD properties.
Casa Mia Senior Apartments has 64 units and is operated under Section 202 of the National
Affordable Housing Act, as amended.

The projects are regulated by HUD as to rent charges and operating methods and require
maintaining various deposits and reserves in restricted cash accounts. These items are
included in deposits and funded reserves in the accompanying consolidated statement of
financial position. COP, CDP Ii], CCD, PSH and Casa Mia have executed rental assistance
contracts with HUD whereby HUD provides financial assistance to enable certain private
housing to be available to individuals who are elderly, handicapped or low income.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 33 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTES REAL ESTATE PROPERTIES (CONTINUED)

During fiscal year 2015, the limited partner of one low-income tax credit apartments
transferred 99.99% ownership to CPLC New Mexico, Inc. upon completion of the 15-year
compliance period. The apartments are Bella Vista Apartments (40 units) located in Taos,
New Mexico.

During 2016, CPLC obtained low interest rate financing from United Health Care to
purchase two additional multifamily properties, CPLC Estancia Apartments and CPLC
Fountain Villas Apartments. Both apartments are located in the Phoenix Maryvale area and
are part of the CPLC community service center program to restore and stabilize the
economic environment for the local area.

During fiscal year 2017, the limited partners of two low-income tax credit apartments
transferred 99.98% ownership to CPLC and CPLC New Mexico, Inc. upon completion of the
15-year compliance period. The two apartments are Mountain Pointe Apartments (108 units
located in Nogales, Arizona) and Villa Las Vegas Apartments (60 units located in Las
Vegas, New Mexico).

During fiscal year 2020, the limited partners of Ladera Village Apartments transfer 99.99%
ownership to CPLC New Mexico, Inc. upon completion of the 15-year compliance period of
low-income tax credit. The property has 60 units and is located in Farmington, New Mexico.

During 2021, CPLC obtained low interest rate financing from United Health Care to
purchase one multifamily property, CPLC Freemont Apartments. The apartments are
located in the Las Vegas, Nevada and is a part of the CPLC community service center
program to restore and stabilize the economic environment for the local area.

During 2022. CPLC obtained low interest rate financing from United Health Care to
purchase three multifamily properties, 2728 CPLC Apartments (112 units located in Las
Vegas, Nevada), CPLC Texas Affordable Housing Apartments (171 units located in
Harlingen TX) and CPLC Oak Park Apartments (269 units located in Dallas TX).

The Organization owns different commercial buildings purchased through grants, private
mortgages or a combination of both. The buildings are leased to internal programs or to third
parties. The Organization also owns single-family rental homes that are leased to unrelated
third-party residents.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 34 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE5 REAL ESTATE PROPERTIES (CONTINUED)
Real estate properties consisted of the following as of June 30, 2022:
Cost and Donated Value:
Land $ 30,191,855
Buildings and Improvements 256,878,674
Furniture, Fixtures and Equipment 7,555,560
Construction in Progress 6,141,428
Total Cost and Donated Value 300,767,517
Less: Accumulated Depreciation (67,486,037)
Real Estate Properties, Net $ _ 233,281,480
Depreciation expense on real estate properties charged to operations was $6,251,440 for
the year ended June 30, 2022.
As of June 30, 2022, construction in progress consists of renovations of current facilities and
development of new facilities. The Organization capitalized $94,323 of interest incurred on
construction in progress during the year ended June 30, 2022.
NOTE6 PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2022:

Cost and Donated Value:

Land $ 3,109,163
Buildings and Improvements 28,430,198
Furniture, Fixtures and Equipment 7,067,064
Vehicles 6,068,217
Construction in Progress 18,108,849
Total Cost and Donated Value 62,783,491
Less: Accumulated Depreciation (17,781,274)
Property and Equipment, Net $ 45,002,217

Depreciation expense on property and equipment charged to operations was $2,448,564 for
the year ended June 30, 2022.

As of June 30, 2022, construction in progress consisted of renovations of current facilities

and development of new facilities. The Organization capitalized $133,578 of interest
incurred on construction in progress during the year ended June 30, 2022.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 35 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE7 NOTES RECEIVABLE

Prestamos CDFI, LLC (PC) notes receivable are summarized as follows as of June 30,

Micro Loans $ 4,272,136
Business Loans 44,951,879
Paycheck Protection Program (PPP) 1,819,339,589
Residential Mortgage ; 70,367
Citizenship Loans (Pilot Program) 2,537
Total Loans 1,868,636,508
Intercompany Loans (Eliminated in Consolidation) (2,557,509)
Discount on Loan Purchase (917,316)
Allowance for Loan Losses (2,567,607)
Loans, Net intercompany and Allowance $ 1,862,594 076
Current Portion of Loans $ 5,412,282

The following table presents the activity in the allowance for loan losses by portfolio
segment for PC for the year ended June 30, 2022 and the balance in the allowance for loan
losses and the recorded investment in loans by portfolio segment based on impairment
method for PC as of June 30, 2022:

Citizenship
Micro Business Residential Loan
Loans Loans Mortgage (Pilot Program) PPP Total
Allowance for Credit Losses:
Balance at Beginning of Year $ 1,373,219 $ 958,115 §$ 1,407 § - § - § 2,332,741
Charge-Offs - (133,679) - - - (133,679)
Forgiven (596,761) - - - - (596,761)
Recoveries 17,862 6,289 - - - 24,151
Provisions 466,540 474,615 - 941,155
Balance at End of Year $ 1,260,860 $ 1.305.340 $ 1407 $ - § - -$ 2,567,607
Individually Evaluated for
Impairnient $ 22,235 § 61,771 $ - § - § - §$ 84,006
Collectively Evaluated for
Impairment 1,238,625 1,243,569 1,407 - - 2,483,601
Balance at End of Year $ 1,260,860 $ 4,305340 $ 1407 $ = 3 - $ 2,567,607
Loans and Financing
Receivables:
Individually Evaluated for
Impairment $ 22,235 «= § 1,139,968 $ - $ - § - § 1,162,203
Collectively Evaluated for
Impairment 4,249,902 43,811,910 70,367 2,537 1,819,339,589 1,867,474,305
Balance at End of Year $ 4.272.137_ $ 44.951.878 —$ 70.367. _$ 2,537_ _$ 1,819.339.589 S$ 1,868.636,508

Credit Quality Indicators

PC categorizes loans into risk categories based on relevant information about the ability of
borrowers to service their debt such as: current financial information, historical payment
experience, collateral adequacy, credit documentation, public information, and current
economic trends, among other factors. PC analyzes loans individually by classifying the
loans as to credit risk. This analysis typically includes micro, business, and residential loans.
This analysis is performed on an ongoing basis as new information is obtained. PC uses the
following definitions for risk ratings:
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 36 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 7 NOTES RECEIVABLE (CONTINUED)

Credit Quality Indicators (Continued)

Pass — Loans classified as pass represent loans that are evaluated and are performing
under the stated terms. Pass rated assets are analyzed by the paying capacity, the
current net worth, and the value of the loan collateral of the obligor.

Non-Pass — Loans classified as Non-Pass possess weaknesses that require
management attention, such as being inadequately protected by the current net worth,
paying capacity of the obligor, or by the collateral pledged. Non pass loans must have a
well-defined weakness or weaknesses that jeopardize the repayment of the debt as
originally contracted. They are characterized by the distinct possibility that PC may
sustain a loss if the deficiencies are not correct. Loans in this category are allocated a
specific reserve based on the estimated discounted cash flows from the loan (or
collateral value less cost to sell for collateral dependent loans) or are charged off if
deemed uncollectible.

Credit Risk Profile by Internally Assigned Grade — Micro Loans, Business Loans, and
Residential Mortgage

A loan is considered impaired when, based on current information and events, it is probable
that Prestamos will be unable to collect all the scheduled payments of principal or interest
when due according to the contractual terms of the loan agreement. Factors considered by
management in determining impairment include payment status, collateral value, and the
probability of collecting scheduled principal and interest payments when they are due. Loans
that experience insignificant payment delays and payments shortfalls generally are not
classified as impaired. Management determines the significance of payment delays and
payments shortfalls on case by case basis, taking into consideration all of the circumstance
surrounding the loan and the borrower, including the length of the delay, the reason for the
delay, the borrower’s prior payments record, and the amount if the shortfall in relation to the
principal and interest owed.

Under certain circumstances, Prestamos will provide borrowers relief through loan
restructuring. A restructuring of debts constitutes a troubled debt restructuring (TDR) if
Prestamos for economic or legal reasons related to the borrower's financial difficulties grants
concessions to the borrower that would not otherwise consider. TDR concession can include
reduction of interest rates, extension of maturity dates, or payment reduction. Prestamos
considers all aspects of the restructuring to determine whether it has granted a concession
to the borrower. An insignificant delay in payment resulting from a restructuring is not
deemed to be a concession and would not be considered TDR.

On March 22, 2020, Interagency statement of Loan Modifications and Reporting for
Financial Institutions Working with Customers Affected by the Coronavirus (interagency
release) was issued and later revised on April 7, 2020. The Interagency Release seeks to
provide relief when structuring loan modification with the borrowers impacted by COVID-19.
In order to qualify the modification must be related to COVID-19, the loan was current at the
time the modification was implemented, and the modification period must be six months or
less. Under the interagency release, these loan modifications are not considered to be
TDRs.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 37 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 7 NOTES RECEIVABLE (CONTINUED)

Credit Risk Profile by Internally Assigned Grade — Micro Loans, Business Loans, and
Residential Mortgage (Continued)

Based on the most recent analysis performed, the risk category of loans by class of loans
for PC as of June 30, 2022 was as follows:

Pass Non Pass
Micro Loans $ 2,829,428 $ 1,442,708
Business Loans 42,291,241 2,660,638
Paycheck Protection Program (PPP) 1,819,339,589 -
Residential Mortgage 70,367 -
Citizenship Loans (Pilot Program) 2,537 :
Total $ 1,864,533,162 $ 4,103,346

The following table summarizes the aging of the past due loans by loan class within the
portfolio segments as of June 30, 2022:

Still Accruing
30 to 89 Days Over 90 Days Nonaccrual
Past Due Past Due Balance
Micro Loans $ 39,313 $ 1,805 $ 90,497
Business Loans 350,985 3,080 1,032,094
Residential Mortgage - - -
Total $ 390,298 $ 4,885 $1,122,591
The following table summarizes individually impaired loans by class of loans as of June 30,
Unpaid Average Interest
Recorded Principal Recorded Income
Investments Balance (1) Investment Recognized
Micro Loans $ 32,368 $ 32,368 $ 32,368 $ -
Business Loans 1,139,968 1,139,968 1,139,968 -
Total $1,172,336 $1,172,336 $1,172,336 $ =

(1) Represents the borrower's loan obligation, gross of any previously charge-off amounts.

Impaired loans also include loans modified in a TDR where concessions have been granted
to borrowers experiencing financial difficulties. These concessions could include a reduction
in interest rate on the loan, payment extensions, forgiveness of principal, forbearance or
other actions intended to maximize collections.

There were no TDRs during the year ended June 30, 2022.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 38 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 7 NOTES RECEIVABLE (CONTINUED)

CPLC Consolidated Portfolio
Other notes receivable consisted of the following at June 30, 2022:

25th and Bell, LLC (Related Party) $ 1,925,822
Tierra Del Sol 67,268
Victoria Foundation 767,949
BDF Property Acquisitions of NM, LLC 1,587,946
Dayton GMC LIHTC LLC 1,323,187
Other 287,498
Total Other Notes Receivable 5,959,670
Less: Allowance (767 949)
Other Notes Receivable, Net $ 5,191,721
Current Portion of Other Notes Receivable $ 67,268

There was no change in the allowance account on the above business loans during the year
ended June 30, 2022.

CPLC Consolidated Portfolio (Continued)
CPLC consolidated portfolio consists of the following:

Micro Loans $ 4,272,136
Business Loans 44,951,879
Paycheck Protection Program (PPP) 1,819,339,589
Residential Mortgage 70,367
Citizenship Loans (Pilot Program) 2,537

Total Loans 1,868,636,508
Intercompany Loans (Eliminated in Consolidation) (2,557,509)
Discount on Loan Purchase (917,316)
Allowance for Loan Losses (2,567,607)

Loans, Net Intercompany and Allowance $_1,862,594,076
Current Portion of Loans $ 5,412,282
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 39 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 8 INVESTMENTS IN DEBT AND EQUITY SECURITIES

Investments consisted of the following at June 30, 2022:

Fixed Income Securities $ 114,712
Government and Agency Securities 8,459,930
Corporate Bonds 5,325,005
Equities - Common Stock 31,006,123
Mutual Funds 6,785,199
Assets Held in Trust 778,641
Arizona Community Foundation 17,745

Total Investments _$ 52,487,355

NOTES INVESTMENTS iN AFFILIATED ENTITIES

The Organization owns interests in low-income housing real estate projects and other

limited liability companies and accounts for these interests using the equity method of
accounting.

Summarized below is financial information for equity method investments as of and for the
year ended June 30, 2022:

Assured Engineering $ 402,209
Mi Escuelita 40,328
NALCAB Network Investors, LLC 471,260
Aeneas Venture Partners 4, LLC 1,745,833
Americano 1,750,000
Verde-LPE,LLC 4,888,985
Amavida Marana, LLC 6,217,027
Other 15,301

Total $ 15,530,943
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 40 of 75
NOTE 9

NOTE 10

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

INVESTMENTS IN AFFILIATED ENTITIES (CONTINUED)

Nonmarketable investments in which the Organization has less than a 20% interest and in
which it does not have the ability to exercise significant influence over the investee are
initially recorded at cost, and periodically reviewed for impairment.

Summarized below is financial information for nonmarketable investments as of and for the
year ended June 30, 2022:

Casa de Encanto $ 222,448
Casa de Flores 60,977
Gene Rice 275,922
Guadalupe Huerta 241,190
Kraynos Capital LP-41322-Kra01 250,000
126 Park LLC - Gardiner Hotel-41222-Gar125 3,750,000
Invision Fund LLC 540,000
Taos Mountain Engergy Foods LLC 139,994
Old Wood LLC 191,224
Housing Partnership Equity Trust, LLC 61,227
Courtyard at Encanto, LLC 658,990
NALCAB Network Investors, LLC-Acceso Loan fund 829,700
LeVecke 7,000,000
Gainey 1,050,000
Other 259,575

3 15,531,247

LINES OF CREDIT

The Organization has $3,500,000 line of credit with Wells Fargo, unsecured. Borrowings
under the line bear interest equal to prime rate. Interest is payable monthly, and the line of
credit matured in December 2020. In May 2021, the Organization replaced the line of credit
with a $6,000,000 line of credit with Wells Fargo, unsecured, borrowing at prime rate (4.75%
at June 30 ,2022) and matures in May 2023. As of June 30, 2022, the outstanding balance
was $-0-.

The Organization obtained a Paycheck Protection Program Liquidity Facility (PPPLF)
advance agreement with the Federal Reserve Bank in May 2020. The PPPLF was
established by the Federal Reserve to extend credit to eligible financial institutions that
originate PPP loans, taking the loans as collateral at face value. The advance is used to
fund PPP lending based on the CARES Act.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 41 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 10 LINES OF CREDIT (CONTINUED)

NOTE 11

The advance is secured by PPP loans guaranteed by the SBA and bears interest at 0.35%.
The maturity of an advance will equate to the maturity date of the PPP loan pledged to
secure the advance. The maturity can be accelerated if the underlying PPP loan goes into
default and the Organization sells the PPP loan to the SBA to realize on the SBA guarantee
or if PPP loan is forgiven by SBA and the Organization receives reimbursement from SBA.
No advance may be made after July 31, 2021. As of June 30, 2022, the outstanding
advance balance was $1,837,478,841.

MORTGAGES PAYABLE AND OTHER DEBT
Mortgages payable and other debt consisted of the following at June 30, 2022:

Description

Casa Mia Senior Apartments, Inc., Federal Housing

and Urban Development (HUD) Capital Advance Program

Mortgage Note, collateralized by real property. So long

as Casa Mia meets the requirements outlined in the

agreement, the note bears no interest and no monthly

payments are required. The note is due April 1, 2046.

Should Casa Mia default, the entire amount of the note

could become due with interest accruing at 5.25%. $ 5,601,900

Casa Mia Senior Apartments, Inc., mortgage agreement

with the City of Phoenix, collateralized by real property.

The note bears no interest and Casa Mia receives a

5.00% principal credit annually, until fully amortized in

2026, provided it complies with the note agreement.

Should Casa Mia default, the entire amount of the note

could become due with no interest accruing. 101,418

Casa de Primavera Apartments, LLC (COP) mortgage

agreement with Greystone, collateralized by substantially

all the assets of COP, payable in monthly installments

of $17,410 including interest of 2.58% maturing in

November 2048. 3,998,598

Causa Community Development (Guadalupe Barrio Nuevo)

entered into an insured mortgage loan under Section 207

pursuant to Section 223(f) of the National Housing Act, as

amended. The mortgage is currently serviced by Bellwether

Enterprise Real Estate Capital, LLC, payable in monthly

interest and principal payments of $15,295, bearing 3.92%

interest rate and maturing in June 2053. 3,290,337
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 42 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Santa Cruz note payable to Hunt Mortgage Capital, LLC,
secured by the security instrument and other loan
documents, payable in monthly principal and interest
payments of $10,828 beginning May 2017, including interest
of 4.65%, with a balloon payment of $1,710,472 in April 2027.

Causa Community Development (CCD) second mortgage
agreement with HUD, collateralized by substantially all
assets of CCD, payable in annual installments in the amount
of 75% of surplus cash, as defined, including annually
accrued interest at 4.00%, maturing in February 2034.

Note payable to Arizona Department of Housing for the
Corazon Building, secured by certain real property,
noninterest bearing. If certain use restrictions associated
with the real property are followed, the principal balance
will be forgiven in January 2028.

Note payable to City of Phoenix Housing Department, secured
by the Corazon Building, noninterest bearing. If certain use
restrictions associated with the real property are followed,

the principal balance will be forgiven in May 2050.

Note payable to U.S. Small Business Administration

(SBA) for Prestamos from the Microloan Revolving Trust
Fund (MRTF) for SBA VIII, secured by cash held for loan
programs and select notes receivable, payable in monthly
installments of principal and interest at 0.125% commencing
in November 2013, maturing in November 2023. The loan
agreement requires Prestamos to act as a financial
intermediary by using the proceeds of the loan for lending

to existing small businesses.

Note payable to National Bank of Arizona for Prestamos,
unsecured, quarterly interest payments of 3.00%, automatically
renews annually until its maturity in December 2023.

Note payable to National Bank of Arizona for Prestamos,
unsecured, interest at 2.00% paid quarterly, automatically
renews annually until its maturity in December 2023.

Causa Community Development third mortgage agreement
with HUD, collateralized by substantially all the assets of
CCD (Guadalupe Barrio Nuevo), payable in full at the
option of HUD including annually accrued interest at
4.00%, maturing in February 2034.

1,919,523

618,925

550,000

550,000

158,097

200,000

150,000

75,761
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 43 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to Northern Trust Bank for the Corazon
Building, secured by deeds of trust of real property,
interest free and due in full on February 2024. $ 325,000

Note payable to Copperpoint Insurance, secured by loans originated

from the funds and guaranteed by CPLC. Up to $10 million can

be drawn down on loan. Interest only payments due quarterly

at interest rates of 3.00%. Note matures in August 2024. 9,996,000

Note payable to Kansas State Bank, secured by deeds of

trust of real property, payable in monthly installments of interest

only at a rate of 4.29% from July 2013 through November 2013.

Principal and interest payments began December 2013. Variable

interest rate at weekly average yield (one year) plus 3.5% with

Initial rate of 3.61% starting in June 2020. Loan matures in

November 2033. This note is for the Maryvale property. 1,581,008

Note payable to City of Phoenix Housing Department,

secured by the De Colores Building, noninterest bearing.

If certain use restrictions associated with the real property

are followed, the principal balance of the loan is being

forgiven in equal amounts annually through December 2022. 29,165

Mortgage note payable to The United Presbyterian Church.

The note has no maturity date, bears no interest and no

monthly payments are required, as long as CPLC New

Mexico maintains the requirements outlined in the note

agreement. The mortgage note would become payable in

the event of a sale of the building or the building is not

used for its intended purpose. Should CPLC New Mexico

default, the entire amount of the note could become due

with interest accruing at 8.00%. 250,000

Note payable to First Bank, secured by deeds of trust of

real property, payable in monthly installments of interest

only until February 2016, at which time monthly principal

and interest payments of $3,648 commenced with

principal due at maturity at a rate of 4.10%, maturing in

February 2025. This note is for the Hazelwood multi-family

housing property. 417,345

Bella Vista note payable to Pacific Life Insurance, secured

by certain real property and equipment, payable in monthly

installments of $5,056 including interest at 8.97% through

May 2031. 371,474
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 44 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to First Bank, secured by Casa Loma

Apartments, payable in monthly installments of principal and

interest of $5,563, at an interest rate of 4.10%, with a balloon

payment due April 2026. $ 863,364

Note payable to United Health Care, secured by all assets

and income of CPLC Fountain Villas, LLC, interest bearing at

1-3.00% during the term of this note. Interest accruing monthly

with principal and interest balance due upon maturity in

April 2023. 6,451,659

Note payable to United Health Care, secured by all assets

and income of CPLC Estancia, LLC, interest bearing at

1-3.00% during the term of this note. Interest accruing monthly

with principal and interest balance due upon maturity in

November 2022. 14,303,219

Note payable to Western Alliance Bank for Prestamos,

unsecured, interest at 3.00% paid quarterly, maturing in

September 1, 2020 and on September ‘ist of each year

thereafter maturity date shall automatically be extended for

one year unless the lender cancel such automatic

maturity extension. 2,000,000

Note payable to U.S. Small Business Administration

(SBA) for Prestamos from the Microloan Revolving Trust

Fund (MRTF) for SBA X, secured by cash held for loan

programs and select notes receivable, payable in monthly

installments of principal and interest at 0.375% commencing

in November 2016, maturing in October 2025. The loan

agreement requires Prestamos to act as a financial

intermediary by using the proceeds of the loan for lending

to existing small businesses. 479,407

Gran Victoria note payable to Berkeley Point Capital, LLC,

secured by the security instrument and other loan

documents, payable in monthly principal and interest

payments of $101,257 beginning in July 2017, including

interest of 4.63%, with a balloon payment due in June 2027. 18,049,013

Equity Equivalent (EQ2) unsecured loan to Dignity Health

to finance real estate activities associated with the

acquisition and rehabilitation of affordable multi-family

housing for CPLC’s Neighborhood Stabilization Program

and real estate operations. Interest bearing 1.0% to 2.0%

during the term of this note, with maturity in August 2024. 3,000,000
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 45 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Equity Equivalent (EQ2) unsecured loan to Wells Fargo to

operate and manage activities in support of low to

moderate-income households and financially underserved.

Quarterly interest payments accruing at 2.00% per annum.

Quarterly principal payments of $250,000 become effective

the fifth anniversary with equal payments due until maturity

in January 2024. $ 1,000,000

Equity Equivalent (EQ2) unsecured loan to BBVA Compass

to operate and manage activities in support of low to

moderate-income households and financially underserved.

Quarterly interest payments accruing at 2.25% per annum,

until maturity in April 2028. 2,500,000

Seller Carry-back loan related to the purchase of real
property in Mesa, AZ payable in annual installments of
$105,063 accruing interest at 4.00% maturing in April 2030. 718,278

Prestamos CDFI, LLC note payable to Wells Fargo, secured by

collateral assignment of loan documents, interest at 1.07% paid

quarterly commencing March 5, 2018 and maturing December

2024. 4,060,800

Prestamos CDFI, LLC note payable to Wells Fargo, secured by

collateral assignment of loan documents, interest at 1.07% paid

quarterly commencing March 5, 2018 and maturing December

2047. 1,939,200

Prestamos CDF!, LLC EQ2 unsecured loan to Wells Fargo

Community Investment Holdings, with quarterly interest

payments at 2.00% per annum until January 2028. then

additional quarterly principal payments (8) of $187,500

commence until liability is paid in full (January 2030). 1,500,000

Mountain Pointe Apartments, LP entered into an insured

loan under Section 207 pursuant to Section 223(f) of the

National Housing Act, as amended. The loan is serviced by

Bellwether Enterprise Real Estate Capital, LLC, payable in

monthly installments of $14,719 including interest of 3.92%

per annum, maturing June 1, 2053. 3,166,525

Note payable to Arizona Bank and Trust related to Nevada real
estate project, payable in monthly installments of interest at
3.75% with principal balance due February 2022. 1,249,705

Note payable to Dignity Health, unsecured, payable quarterly

at 1.00% from October 2020 until October 2022, at 2.00%
thereafter with principal balance due at maturity in October 2025. 1,000,000
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 46 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to City of Phoenix from federal HOME program

with $2 million maximum loan amount, collateralized by deed

of trust on real property, with 0% interest rate. $50,000 principal

payment will start on the 1st day of September 2020 and

continuing on the 1st day of September each year thereafter if

surplus cash is available. The entire outstanding principal

balance is due January 1, 2059. $ 1,229,644

Note payable to US Bancorp Community Development

Corporation for Prestamos, unsecured, with quarterly interest

only payments at 3.0% and principal balance due at maturity

in July 2021. The maturity date will automatically be extended

for one year as long as Prestamos performs its obligation

under the loan agreement. 1,000,000

Note payable to the New World Foundation, unsecured, 0%

interest loan, with principal payments in four equal quarterly

installments commencing September 2028. This loan is eligible

for loan forgiveness after meeting certain defined benchmarks

over the term of the loan. 3,000,000

Note payable to Foothills Bank, unsecured, interest at
3.50% payable in one lump sum of principal and accrued
interest on March 20, 2024. 250,000

Note payable to Arizona Bank and Trust Corporation, secured by

deed of trust and tangible asset of a Motel purchased in Mesa,

AZ, with monthly interest and principal payments at 4.25% until

January 2022, and the remaining balance due in February 2022. 2,968,766

Notes payable to City of Mesa from federal HOME program with

$1,443,339 maximum loan amount, collateralized by deed of trust

on real property, with 0% interest rate. The loan shall be repaid

either from the sales proceeds received from the sales of the

units to qualified income eligible homebuyers, or at the end of the

term of 20 years from each residential unit. 783,606

Note payable to Western Alliance Bank for Prestamos with

$3,000,000 maximum loan amount, unsecured, quarterly interest

only payment at 3.0% and all outstanding principal plus all

accrued unpaid interest in November 2024 with right for additional

60 months extension under certain conditions. 2,977,000
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 47 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Note payable to U.S. Small Business Administration (SBA) for
Prestamos from the Microloan Revolving Trust Fund (MRTF) for

SBA XI in the maximum amount of $1,250,000, secured by cash

held for loan programs and select notes receivable, no payment

and 0% interest rate for the first 12 months, then monthly

installment of principal and interest at 0.5% thereafter, maturing in
November 2027. The loan agreement requires Prestamos to act

as a financial intermediary by using the proceeds of the loan for

lending to existing small business. $

Notes payable to New Mexico Mortgage Finance Authority with
monthly installment of $10,943 at 6.29% and due in November
2044. It is for Laderal Village Apartments located in New Mexico.
The United State Department of Housing and Urban
Development (HUD) will endorse the loan under section 542(e) of
the Housing and Community Development Act of 1992 and the
regulations set forth at 24 CFR part 266, in effect on the date of
endorsement (90% loan guarantee).

Notes payable to New Mexico Mortgage Finance Authority in the
original amount of $500,000 with a 5.09% Interest compounded
monthly on unpaid principal and interest balances. Interest only
payment should be made in the amount of $416 per month at an
interest rate of 1% until maturity. Maturity of the loan occurs at the
sale, refinance, or transfer of the property or on September 2034.
It is for Laderal Village Apartment located in New Mexico.

Note payable to Kansas State Bank, secured by deed of trust and
tangible asset of an office building in Las Vegas, NV with monthly
interest and principal payments at 3.79% from April 2021 to
March 2026, then one year weekly average yield on US Treasury
Securities plus 4.25% from April 2026 to March 2046 (initial
4.32%) with maturity in March 2048.

Note payable to United Health Care, secured by all assets and
income of CPLC Freemont Apartments LLC, a multifamily
apartments, interest bearing at 1-2.5% during the term of this
note, monthly Interest and principal payment and a balloon
payment due upon maturity in May 2028.

Note payable to First Fidelity Bank, secured by all assets and
income of several commercial buildings, interest bearing at
3.85% with monthly principal and interest payments. A balloon
payment due upon maturity in December 2027.

1,036,140

1,578,844

500,000

1,997,236

6,667,004

11,875,084
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 48 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

Description

Bonds payable to the Industrial Development Authority of the City

of Phoenix. Interest bearing 2.97% during the term of the bond

with monthly principal and interest payments. Loan matures

October 2046. § 29,999,671

Bonds payable to the Industrial Development Authority of the City

of Phoenix. Interest bearing 3.74% during the term of the bond

with monthly principal and interest payments. Loan matures

October 2046. 11,337,651

In Oct 2020, in order to provide funds to finance the cost of
acquiring and improving a charter school real estate project, the
Industrial Development Authority of the City of Phoenix, Arizona
issued one or more series of Lease Revenue Bonds, Tax Exempt
series 2020 in an aggregate principal amount not to exceed
$4,335,000 at a 2.76% interest rate. The final funding date is
expected in 2022. The bond will mature the earlier of (1)
September 30, 2027 (2) the 60th payment date to occur following
the Final Funding Date, commencing with the Amortization Date,
and (3) the date that all of the principal of the Bonds is paid to the
bondholders. 4,335,000

Note payable to National Bank of Arizona. This note is the

unforgiven portion of the Payroll Protection Loan. This note is not

secured by property or other assets. Interest on this note is 1.0%.

Note matures February 2026. 200,655

Note payable to Optum Bank, secured by a Deed of trust and

tangible asset of a multi-family apartment building with monthly

principal and interest payments. Interest rate on this note is 1.0%

for the first year; 1.5% for the second year; 2.0% for the third

year; 2.25% for the fourth and fifth years; and 2.5% for earch

period thereafter. A balloon payment due upon maturity in

February 2029. 15,023,446

Note payable to Optum Bank, secured by a Deed of trust and

tangible asset of a multi-family apartment building with monthly

principal and interest payments. Interest rate on this note is 1.0%

for the first year; 1.5% for the second year; 2.0% for the third

year; 2.25% for the fourth and fifth years; and 2.5% for earch

period thereafter. A balloon payment due upon maturity in

November 2028. 12,366,314
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 49 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 11 MORTGAGES PAYABLE AND OTHER DEBT (CONTINUED)

NOTE 12

Description

Note payable to Optum Bank, secured by a Deed of trust and
tangible asset of a multi-family apartment building with monthly
principal and interest payments. Interest rate on this note is 1.0%
for the first year; 1.5% for the second year; 2.0% for the third
year; 2.25% for the fourth and fifth years; and 2.5% for earch
period thereafter. A balloon payment due upon maturity in May

2029. $ 28,861,608
Total Mortgages and Other Debt 230,453,390
Less: Unamortized Debt Issuance Costs (1,160,761)
Less: Current Maturities (26,922,039)
Total $ 202,370,590

Future maturities of mortgages payable and other debt are as follows:

Year Ending June 30, Amount
2023 $ 26,922,039
2024 12,863,818
2025 12,488,502
2026 18,300,904
2027 22,041,761
Thereafter 130,553,229
Forgivable Loans 7,283,137
Total Future Maturities $ 230,453,390

The Organization is required to maintain certain net asset, liquidity, and indebtedness ratios,

and must comply with other general covenants of the loan agreements.

The Organization entered into a loan agreement with the United States Department of
Agriculture (USDA) in December 2016 for $15,000,000. The loan is secured by select notes
receivable. Principal and interest at 2.38% to be paid monthly. The note matures in
December 2056. No amounts were advanced or due on the note, and the note had an

outstanding balance of $-0- at June 30, 2022.

RETIREMENT PLAN

CPLC sponsors a 401(k) plan, covering employees who meet specified age and service
requirements. Contributions to the plan are participant directed. Employer contributions are
made annually at the discretion of the board of directors. During the year ended June 30,

2022, CPLC paid contributions totaling $708,088 to the plan.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 50 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 13 OPERATING LEASES

CPLC leases various buildings and office equipment under several operating lease
agreements expiring through 2028. Minimum future rental payments under noncancelable
operating leases having remaining terms in excess of one year at June 30, 2022 are:

Year Ending June 30, Amount
2023 $ 1,111,040
2024 603,598
2025 407,673
2026 297,885
2027 270,441
Thereafter 490,349
Total $ 3,180,986

In the normal course of business, operating leases are generally renewed or replaced by
other leases. Total rental expense for operating leases with terms in excess of one month
was approximately $937,076 for the year ended June 30, 2022.

CPLC leases office space to various third parties under operating leases that expire through
2056. Future minimum lease receipts to be received under these agreements as of June 30,
2022 are as follows:

Year Ending June 30, Amount
2023 $ 1,706,206
2024 1,424,248
2025 733,091
2026 654,002
2027 584,252
Thereafter 5,005,559
Total $ 10,107,358

NOTE 14 COMMITMENTS AND CONTINGENCIES

Five of the HUD properties have a housing assistance payments contract (HAP). The HAP
contract is a rent assistance program for low-income families (or persons) as provided by
the Section 8 Program of the National Housing Act of 1959. Eligible low-income tenants pay
30% of their income as rent, while HUD pays the difference between this rental amount and
“contract rents” (as defined). CPLC can request from HUD an amount equal to 80% of
contract rent during periods that the unit is vacant if certain conditions are met, but not to
exceed 60 days. If a unit continues to be vacant after the 60-day period, CPLC may submit
a claim and receive additional housing assistance payments on a semi-annual basis if
certain conditions are met as outlined in the HAP contract.
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CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 14 COMMITMENTS AND CONTINGENCIES (CONTINUED)

The HAP contracts expire beginning in 2023 through 2024 as follows:

Casa de Primavera Apartments March 31, 2033
Casa De! Pueblo March 31, 2023
Casa Del! Pueblo I! January 31, 2023
Guadalupe Barrio Nuevo January 31, 2024
Casa Mia Senior Apartments April 30, 2023

Management intends to renew the HAP contracts as they expire. The rental income from
these contracts represents approximately 17% of total rental income from real estate for the
year ended June 30, 2022. It is uncertain whether the contracts will be extended. HUD is
contemplating several changes, which may have a significant financial impact on the

properties. Management cannot reasonably estimate the ramifications, if any,
uncertainties.

CPLC guarantees the debt of a nonconsolidated real estate venture. The debtor holds the
deed of trust on the underlying real property. Payments on the debt are due in monthly
installments and the debt matures in 2034. CPLC would be obligated to perform under this
guarantee if the real estate venture failed to pay principal and interest payments to the
lender as due. CPLC’s guarantee on the performance of the debt was approximately
$452,447 as of June 30, 2022. As of June 30, 2022, the real estate venture was current with

their debt payments.

CPLC participates in a number of federal and state-assisted grant and contract programs
which are subject to financial and compliance audits. The audits of these programs for, or
including, the year ended June 30, 2022 remain subject to review. Accordingly, CPLC’s
compliance with applicable grant or contract requirements may be established at some
future date. The amount, if any, of expenditures or fees for units of service which may be
disallowed by the granting or contracting agencies cannot be determined at this time,

although the CPLC’s management expects such amounts, if any, to be immaterial.

CPLC is guarantor of a line of credit for a nonprofit organization, Help-New Mexico. At
June 30, 2022, the borrowing limit was $1,000,000, and the outstanding balance was $-0-.

In the normal course of business, CPLC is subject to various lawsuits. It is the opinion of
management that the resolution of such lawsuits will not have a material adverse effect on
the consolidated financial statements taken as a whole. Accordingly, no provision has been
made in the accompanying consolidated financial statements for losses, if any, that might

result from the ultimate outcome of these matters.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 52 of 75
NOTE 15

NOTE 16

NOTE 17

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NET ASSETS WITH DONOR RESTRICTIONS

Net assets with donor restrictions are restricted for the following purposes or periods.

Real Estate Development $ 2,508,021
Small Business Lending 1,493,778
Supportive Housing 29,473
Prop 301 Plan 128,755
Workforce Development 274,164
Housing Counseling 336,192
Esparanza 434,723
Substance Abuse Treatment 351,581
Senior Program 161,202
Other 427,492

Total $ 6,145,381

DONATED PROFESSIONAL SERVICES AND MATERIALS

Volunteers contribute significant amounts of time to our program services, administration,
and fundraising and development activities; however, the consolidated financial statements
do not reflect the value of these contributed services because they do not meet recognition
criteria prescribed by U.S. GAAP. Contributed goods are recorded at fair value at the date of
donation. The Organization received $216,083 in supplies to support its health and human
services program. The Organization records donated professional services at the respective
fair values of the services received. The Organization received airtime and production costs
valued at $1,052,524 for the year ended June 30, 2022. The revenues and expenses for
these contributions are recorded in management and general in the consolidated statement
of functional revenue and expenses. The Organization estimates the fair value of donated
materials and services on the basis of estimates of the purchasing of similar assets and
services in the Organization’s market.

ACQUISITION OF FLORENCE CRITTENTON

On October 1, 2021, the board of both Florence Crittenton Services of Arizona, Inc. (Flo Cri)
and Chicanos Por La Causa, Inc. (CPLC) approved the Amended and Restated articles of
Incorporation of Florence Crittenton Services of Arizona, Inc. As of October 1, 2021, Flo Cri,
was Officially acquired by CPLC. Flo Cri is a nonprofit corporation in Arizona providing
residential housing to girls between the ages of 12 and 21, community-based services to
adolescents and young adults, permanent supportive housing to females transitioning out of
foster care or on their way to becoming homeless, and education through its charter school.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 53 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

NOTE 17 ACQUISITION OF FLORENCE CRITTENTON (CONTINUED)

In connection with this purchase, the Organization recorded its investment in the Flo Cri at
October 1, 2021 as follows:

Cash and Cash Equivalents $ 968,796
Accounts Receivable 337,721
Other Assets 61,442
Investments 2,738,854
Property and Equipment, Net 11,110,517

Total Assets 15,217,330
Accounts Payable 55,360
Accrued Payroll and Empioyee Benefits 108,446
Other Liabilities 26,430
Deferred Revenue 100,907
Notes Payable 508,990

Total Liabilities 800,133

Excess of Assets Acquired Over Liabilities
Assumed of Florence Crittenton $ 14,417,197

NOTE 18 SUBSEQUENT EVENTS
Subsequent to year-end, the Organization entered into the following agreements:

In November 2022, CPLC Texas, Inc. was awarded a 1 year grant from Department of
Health and Human Services, Office of Refugee & Resettlement in the amount of $2,779,331
for October 1, 2022 — March 31, 2023. Total approved budget for FY 2023 is $5,558,661
subject to availability of federal funds. It expands Residential Services.for Unaccompanied
Children.

In October 2022, Chicanos Por La Causa, Inc. was awarded a 2-year grant from United
States Department of Agriculture, Agricultural Marketing Services, in the amount of
$10,000,000 for October 4, 2022 — October 4, 2024. The total approved budget for FY 23 is
$10,000,000: it is not subject to the availability of federal funds. It provides relief payments
to frontline farmworkers who incurred expenses preparing for, preventing exposure to, and
responding to the COVID-19 pandemic.

In November 2022, CPLC entered into a purchase agreement for approximately +/- 86.08
Acres of Land in Yuma County, Arizona for $7,075,142.04. The land would be used for
future industrial development.

From July 1, 2022 to November 30, 2022, $479,050,065 of PPP loans funded through
Prestamos CDFI, LLC have been forgiven by Small Business Administration and Prestamos
CDFI, LLC recognized $23,031,678 in PPP loan fees from deferred revenue.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 54 of 75
NOTE 18

NOTE 19

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022

SUBSEQUENT EVENTS (CONTINUED)

Management evaluated subsequent events through January 19, 2023, the date the
consolidated financial statements were available to be issued. Events or transactions
occurring after June 30, 2022, but prior to January 19, 2023, that provided additional
evidence about conditions that existed at June 30, 2022, have been recognized in the
consolidated financial statements for the year ended June 30, 2022. Events or transactions
that provided evidence about conditions that did not exist at June 30, 2022, but arose before
the consolidated financial statements were available to be issued have not been recognized
in the consolidated financial statements for the year ended June 30, 2022.

NEW ACCOUNTING STANDARDS

In February 2016, the FASB issued ASU 2016-02, Leases, to improve financial reporting
about leasing transactions (Topic 842). The ASU affects all lease transactions. Lessors will
classify leases as either a sales-type, direct financing, or operating lease. In a sales-type
lease, the lessor transfers control of the underlying asset to the lessee. At lease
commencement, the lessor should derecognize the leased asset and record its net
investment in the lease. The net investment in the lease consists of a lease receivable and
the unguaranteed residual asset. In a direct financing lease, the lessor should derecognize
the leased asset underlying the lease and record a net investment in the lease at lease
commencement. The net investment in the lease should be measured in the same manner
as a sales-type lease adjusted for selling profit and initial direct costs. An operating lease is
neither a sale nor financing of an asset. The lessor should keep the asset underlying the
lease on its balance sheet and continue to depreciate the asset based on its useful life.
Rental revenue should be recognized on a straight-line basis. CPLC has several leasing
transactions. The amendments in this update are effective for years beginning after
December 15, 2021. The Organization is currently evaluating the impact of adopting
ASU 2016-02 and has not determined the effect to the consolidated financial statements.
The standard requires a modified retrospective approach to implementation.

In June 2016, the FASB approved ASU 2016-13, Financial Instruments — Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments. The main objective of
the ASU is to provide financial statement users with more decision-useful information about
the expected credit losses on financial instruments and other commitments to extend credit
held by a reporting entity at each reporting date. To achieve this objective, the amendments
in the ASU replace the incurred loss impairment methodology in U.S. GAAP with a
methodology that reflects expected credit losses and requires consideration of a broader
range of reasonable and supportable information to inform credit loss estimates. This ASU is
effective for the fiscal year beginning after December 15, 2022. The Organization will
evaluate the impact of ASU 2016-13 on its consolidated financial statements.
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CHICANOS POR LA CAUSA, INC. AND
SUBSIDIARIES AND AFFILIATES

SINGLE AUDIT REPORTS

YEAR ENDED JUNE 30, 2022
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 57 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2022

SINGLE AUDIT REPORTS

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH
MAJOR FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER
COMPLIANCE, AND REPORT ON THE SCHEDULE OF EXPENDITURES
OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 58 of 75
CliftonLarsonAlien LLP
\ A CLAconnect.com

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates
Phoenix, Arizona

We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the consolidated financial statements of
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates, which comprise the consolidated
statement of financial position as of June 30, 2022, and the related consolidated statements of
activities, functional revenues and expenses, and cash flows for the year then ended, and the related
notes to the consolidated financial statements, and have issued our report thereon dated
January 19, 2023.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the consolidated financial statements, we considered Chicanos
Por La Causa, Inc. and Subsidiaries and Affiliates' internal control over financial reporting (internal
control) as a basis for designing audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of
expressing an opinion on the effectiveness of Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates’ internal control. Accordingly, we do not express an opinion on the effectiveness of Chicanos
Por La Causa, Inc. and Subsidiaries and Affiliates’ internal control.

A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s consolidated financial statements will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by
those charged with governance.

CLAglobal.com/disclaimer
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 59 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that were not identified.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether Chicanos Por La Causa, Inc. and
Subsidiaries and Affiliates’ consolidated financial statements are free from material misstatement, we
performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements, noncompliance with which could have a direct and material effect on the consolidated
financial statement. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.

Jef tirnLarsen lon LLP

CliftonLarsonAllen LLP

Phoenix, Arizona
March 7, 2023
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 60 of 75
CliftonLarsonAlien LLP
\ A CLAconnect.com

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR
FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND
REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
REQUIRED BY THE UNIFORM GUIDANCE

Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates
Phoenix, Arizona

Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program

We have audited Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ compliance with the
types of compliance requirements described in the OMB Compliance Supplement that could have a
direct and material effect on each of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ major
federal programs for the year ended June 30, 2022. Chicanos Por La Causa, Inc. and Subsidiaries and
Affiliates’ major federal programs are identified in the summary of auditors’ results section of the
accompanying schedule of findings and questioned costs.

In our opinion, Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates complied, in all material
respects, with the types of compliance requirements referred to above that could have a direct and
material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America (GAAS); the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States; and the audit 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). Our responsibilities under
those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the
Audit of Compliance section of our report.

We are required to be independent of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates and
to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion on compliance for each major federal program. Our audit does not provide a
legal determination of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ compliance with the
compliance requirements referred to above.

CLAglobal.com/disclaimer
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 61 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of
laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ federal programs.

Auditors’ Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the
compliance requirements referred to above occurred, whether due to fraud or error, and express an
opinion on Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ compliance based on our audit.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a
guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting
material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal conirol.
Noncompliance with the compliance requirements referred to above is considered material if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about Chicanos Por La Causa, tnc. and Subsidiaries and
Affiliates’ compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform
Guidance, we:

e Exercise professional judgment and maintain professional skepticism throughout the audit.

e identify and assess the risks of material noncompliance, whether due to fraud or error, and
design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding Chicanos Por La Causa, Inc. and Subsidiaries
and Affiliates’ compliance with the compliance requirements referred to above and performing
such other procedures as we considered necessary in the circumstances.

e Obtain an understanding of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ internal
control over compliance relevant to the audit in order to design audit procedures that are
appropriate in the circumstances and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates’ internal control
over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters,

the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 62 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Report on Internal Control Over Compliance

A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance requirement
of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in
internal control over compliance with a type of compliance requirement of a federal program that is less
severe than a material weakness in internal control over compliance, yet important enough to merit
attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the
Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal
control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal
control over compliance. Accordingly, no such opinion is expressed.

Purpose of This Report

The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 63 of 75
Board of Directors
Chicanos Por La Causa, Inc. and Subsidiaries and Affiliates

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the consolidated financial statements of Chicanos Por La Causa, Inc. and
Subsidiaries and Affiliates as of and for the year ended June 30, 2022, and have issued our report
thereon dated January 19, 2023, which contained an unmodified opinion on those consolidated
financial statements. Our audit was conducted for the purpose of forming an opinion on the
consolidated financial statements as a whole. The accompanying schedule of expenditures of federal
awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not
a required part of the consolidated financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the consolidated financial statements. The information has been subjected to the
auditing procedures applied in the audit of the consolidated financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the consolidated financial statements or to the consolidated financial
Statements themselves, and other additional procedures in accordance with auditing standards
generaliy accepied in the United States of America. In our opinion, the schedule of expenditures of
federal awards is fairly stated in all material respects in relation to the consolidated financial statements
as a whole.

Lf or Larsorfllan LL

CliftonLarsonAllen LLP

Phoenix, Arizona
March 7, 2023
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 64 of 75
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2022

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients | Expenditures
Department of Agriculture
Pass-Through Farmers Home Administration:
Rural Self-Help Housing Technical Assistance 10.420 02-015-0860227210 $ - $ 218,408
Pass-Through Arizona Department of Education:
National School Lunch Program 10.555 ED09-0001 - 153,358
Subtotal Child Nutrition Cluster - 153,358
Child and Adult Care Food Program 10.558 KRO2-1170-ALS - 404,150
Child and Adult Care Food Program 10.558 06982 - 219,324
Child and Adult Care Food Program 10.558 216NM329N1199 - 52,732
Pass-Through State of New Mexico Children, Youth and Families Department:
Child and Adult Care Food Program 10.558 201919N109946 - 3,306,533
Subtotal Child and Adult Care Food Program (10.558) 3,982,739
Pass-Through Arizona Department of Economic Security:
State Administrative Matching Grants for the Supplemental Nutrition
Assistance Program (SNAP) 10.561 CTR040032 - 30,427
State Administrative Matching Grants for SNAP 10.561 CTR0O40032 - 47,303
Subtotal SNAP Cluster - 77,730
Subtotal Department of Agriculture - 4,432,235
Department of Commerce
Science, Technology, Engineering, and Mathematics (STEM)
Talent Challenge 11.023 ED22HDQ0230078 69,116
Pass-Through Economic Development Administration:
Investments for Public Works and Economic Development Facilities 11,300 07 01 07152 - 3,222
Subtotal Economic Development Cluster - 3,222
Pass-Through Minority Business Development Agency:
Minority Business Resource Development 11.805 MB210BD8050199 - 211,070
Subtotal Department of Commerce - 283,408
Department of Housing and Urban Development
Pass-Through National Council of La Raza - Arizona:
Housing Counseling Assistance Program 14.169 HC210011026 - 38,000
Pass-Through Nationa! Council of La Raza - Nevada:
Housing Counseling Assistance Program 14.169 HG210011026 - 45,525
Subtotal Housing Counseling Assistance Program (14.169) - 83,525
Pass-Through City of North Las Vegas:
Community Development Block Grant/Entitlement Grants 14.218 N/A - 459,509
Community Development Block Grant/Entitlement Grants 14.218 N/A - 4,442
Community Development Block Grant/Entitlement Grants 14.218 N/A - 68,397
Community Development Block Grant/Entitlement Grants 14.218 NIA - 142,086
Pass-Through Pima County:
Community Development Block Grant/Entitlement Grants 14.218 CT-CR-22*154 - 9,393
Community Development Block Grant/Entitlement Grants 14.218 CT-CR-21*294 - 3,202
Pass-Through Clark County:
Community Development Block Grant/Entitlement Grants 14.218 N/A - 134,550
Pass-Through City of Yuma:
Community Development Block Grant/Entitlement Grants 14.218 B-20-MC040508 - 14,474

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 65 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
YEAR ENDED JUNE 30, 2022

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients Expenditures
Department of Housing and Urban Development (Continued)
Pass-Through City of Glendale:

Community Development Block Grant/Entitlement Grants 14.218 C21-1175 $ - § 37,770
Pass-Through City of Phoenix:

Community Development Block Grani/Entitlement Grants 14.218 155255 4,327
Pass-Through City of Scottsdale:

Community Development Block Grant/Entitlement Grants 14.218 2021-067-COS - 6,792

Community Development Block Grant/Entitlement Grants 14.218 2021-067-COS-A1 - 23,850

Community Development Block Grant/Entitlement Grants 14.218 2020-093-COS - 6,792

Community Development Block Grant/Entitlement Grants 14.218 2021-070-COS - 18,365
Community Development Block Grant/Entitlement Grants 14.218 15JOVW-21-GG-00634-CY - 17,373
Community Development Block Grant/Entitlement Grants 14,218 N/A - 48,802

Subtotal Community Development Block Grant/Entitlement Grants Cluster - 1,001,224
Emergency Crisis Shelter for Families 14.231 147432 - 175,401
Pass-Through Clark County:

Emergency Solutions Grant 14.231 N/A - 74,404
Pass-Through Arizona Department of Economic Security:

Emergency Solutions Grant 14.231 DES-HMLS-2A23 - 188,155

Emergency Solutions Grant - COVID 14.231 DES-HMLS-2B07 - 137,913

Subtotal Emergency Solutions Grant (14.231) - 575,873
Pass-Through City of Mesa:

Home Investment Partnerships Program 14.239 N/A - 783,606
Pass-Through City of North Las Vegas

Home Investment Partnerships Program 14.239 N/A - 175,011

Subtotal Home Investment Partnerships Program (14.239) - 958,617
Pass-Through City of Las Vegas:
Housing Opportunities for Persons with Aids 14.241 NA - 523,295
Housing Opportunities for Persons with Aids-COVID 14.241 NA - 121,527
Subtotal Housing Opportunities for Persons with Aids (14.241) - 644,822
Pass-Through Tierra del Sol Housing Corporation:

SelfHelp Homeownership Opportunity Program 14.247 SH16-023 - 13,022
Pass-Through Local Initiative Support Corporation:

Section 4 Capacity Building for Community Development and

Affordable Housing 14,252 40909-0045 - 26,383
Pass-Through Office of Community Planning and Development:

Neighborhood Stabilization Program 14,256 B-09-CN-AZ-0001 69,237 2,503,251
Housing and Urban Development Continuum of Care Program 14.267 AZ0203L9T021901 - 248,351
Housing and Urban Develapment Continuum of Care Program 14.267 AZ0203L9T022002 - 209,331

Subtotal Housing Continuum of Care Program (14.267) ~ 457,682

Subtotal Department of Housing and Urban Development 69,237 6,264,399

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 66 of 75
See accompanying Notes to Schedule of Expenditures of Federal Awards.

. CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
YEAR ENDED JUNE 30, 2022
Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients Expenditures
Department of Justice
Pass-Through Arizona Department of Public Safety:

Law Enforcement Assistance Narcotics and Dangerous Drugs Training 16.004 2017-CY-AX-007 $ - $ 9,121

Pass-Through State of Arizona Governor's Office of Youth,
Faith and Family:

Arizona Sexual Assault Services Program 16.017 SASP-WSG-21-080121 - 50,609
Pass-Through Arizona Department of Public Safety:

Sexual Assault Services Culturally Specific Program 16.023 2020-UW-AX-0016 - 152,671
Sexual Assault Services Culturally Specific Program 16.023 15JOVW-21-GG-00762-SASP - 38,113
Pass-Through Office of Violence Against Women:

Sexual Assault Services Culturally Specific Program 16.023 2018KSAX0005 - 120,692

Subtotal Sexual Assault Services Culturally Specific Program (16.023) 311,476
Pass-Through Arizona Department of Public Safety:

Coronavirus Emergency Supplemental Funding Program - COVID 16.034 ACESF-21-008 - 41,875
Services for Trafficking Victims 16.320 2020-VT-BX-0066 - 190,623
Services for Trafficking Victims 16.320 2020-VT-BX-0101 - 124,585

Subtotal for Services of Trafficking Victims(16.230) - 315,208
Pass-Through Arizona Department of Public Safety:

Crime Victim Assistance 16.575 2018-V2-GX-0012 - 380,903
Pass-Through Arizona Department of Public Safety:

Residential Substance Abuse Treatment For State Prisoners 16.593 RSAT-20-003 - 39,602
Pass-Through Office of Juvenile Justice and Delinquency Prevention:

Juvenile Mentoring Program 16.726 NIA - 50,441
Pass-Through Office of Violence Against Women:

Transitional Housing Assistance for Victims of Domestic Violence,

Dating Violence, Stalking, or Sexual Assault 16.736 2016-WH-AX-0005 - 158,933
Subtotal Department of Justice - 1,358,168
Department of Labor
Pass-Through Northeastern Arizona Local Workforce Development
Board (LWDB):
Workforce Innovation and Opportunity Act (WIOA) Adult Program 17,258 N/A - 66,534
Pass-Through Pinal County:
Workforce Innovation and Opportunity Act Adult Program 17.258 182424A2 - 35,006
Subtotal Workforce Innovation and Opportunity Act Adult Program (17.258) - 101,540
Pass-Through Northeastern Arizona Local Workforce Development
Board (LWDB):
Workforce Innovation and Opportunity Act Youth Program 17.529 N/A - 21,595
Pass-Through City of Phoenix:

Workforce Innovation and Opportunity Act Youth Program 17.259 154077-0 - 4,102,826
Passed-Through Maricopa County:

Workforce Innovation and Opportunity Act Youth Program 17.259 16026-RFP - 67,069
Pass-Through Pinal County:

Workforce Innovation and Opportunity Act Youth Program 17.259 182424RFP - 55,605

Subtotal Workforce Innovation and Opportunity Act Youth Program (17.259) - 1,247,095
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 67 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)

YEAR ENDED JUNE 30, 2022

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients | Expenditures
Department of Labor (Continued)
Pass-Through Northeastern Arizona Local Workforce Development
Board {(LWDB):
WIOA Dislocated Worker Formula Grants 17.278 N/A $ - § 48,565
WIOA Dislocated Worker Formula Grants 17.278 N/A - 27,536
Pass-Through Pinal County:
WIOA Dislocated Worker Formula Grants 17.278 182424RFP - 20,599
Subtotal WIOA Dislocated Worker Formula Grants (17.278) - 96,700
Subtotal Workforce Innovation and Opportunity Act Cluster - 1,445,335
Pass-Through Pima Community College
H-1B Job Training Grants 17.268 HG-33037-19-60-A-4 - 43,206
YouthBuild 17.274 YB-36442-21-60-A-32 - 430,391
YouthBuild 17.274 N/A - 4,990
Subtotal Youthbuiid (17.274) - 435,381
Subtotal Department of Labor - 1,923,922
Department of Treasury
Pass-Through NeighborWorks America:
NeighborWorks - Network Supplemental 21.000 G-NISUPEXT-2021-64189 - 50,000
NeighborWorks - Network Supplemental 21.000 G-SUPINT-2021-66101 . 5,000
NeighborWorks - Network Supplemental 21.000 G-SUPINT-2022-67067 - 6,000
Housing Stability Counseling Program Application 21.000 G-HSCP-2021-64188 - 2,550
Expendable and Capital Grant Award 21.000 G-NEG-2022-66216 - 540,000
NeighborWorks - Network Supplemental 21.000 R-SUPEXT-2022-67441 - 15,000
Subtotal NeighborWorks (21.000) - 618,550
Capital Magnet Fund 21.011 1710M022170 - 218,502
Capital Magnet Fund 21.011 N/A - 382,122
Subtotal Capital Magnet Fund (21.011) - 600,624
Pass-Through Community Investment Corporation:
Coronavirus Relief Fund 21.019 N/A - 105,068
Subtotal Coronavirus Relief Fund (21.019) - 105,068
Pass-Through City of Phoenix:
Emergency Rental Assistance 21.023 N/A - 2,529,736
Pass-Through Community Development Financial Institutions:
Community Development Financial Institutions Rapid
Response Program (CFDI RRP) 21.024 21RRP056349 - 857,487
Pass-Through State of Nevada:
Nevada Affordable Housing Assistance Corporation,
Homeowner Assistance Fund 21.026 N/A : 2,194
Pass-Through Town of Guadalupe:
Coronavirus State and Local Fiscal Recovery Funds 21,027 C2022-01 - 41,770 *
Pass-Through Arizona Department of Housing:
Coronavirus State and Local Fiscal Recovery Funds 21.027 413-22 - 61,328
Pass-Through Maricopa County:
Coronavirus State and Locai Fiscal Recovery Funds 21.027 220148-RFP - 37,857
Coronavirus State and Local Fiscal Recovery Funds 21.027 220009-RFP - 968,744
Coronavirus State and Local Fiscal Recovery Funds 21.027 220151-RFP - 43,595
Coronavirus State and Local Fiscal Recovery Funds 21.027 220148-RFP - 200,000
Coronavirus State and Local Fiscal Recovery Funds 21,027 220156-RFP - 16,989

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 68 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)

YEAR ENDED JUNE 30, 2022

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients Expenditures
Department of Treasury (Continued)
Pass-Through Arizona Coalition to End Sexual and Domestic Violence:
Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A $ - § 46,242
Subtotal Coronavirus State and Local Fiscal Recovery Funds (21.027) = 1,416,525
Subtotal Department of Treasury - 6,130,184
Small Business Administration
Women's Business Ownership Assistance 59.043 SBAHQ21W0002-0001 - 150,000
Women's Business Ownership Assistance 59.043 SBAHQ21Wwo0002 - §2,942
Subtotal Women's Business Ownership Assistance (59.043) 202,942
Pass-Through Microloan Demonstration Program:
Microloan Technical Assistance 59.046 SBAOCAML200091-01-00 - 391,972
SBA 7 Loan 59.046 4617795003 - 4,950
SBA 8 Loan 59.046 6447545004 - 269,578
SBA 10 Loan 59,046 7818285003 - 622,071
SBA 11 Loan 59.046 9761145004 - 1,223,504
Subtotal Microloan Program (59.046) - 2,512,075
Prime Technical Assistance 59,050 SBAOCAPR210054-01-00 - 78,534
Prime Technical Assistance 59.050 SBAOCAPR210054-01-00 - 99,593
Subtotal Prime Technical Assistance (59.050) - 178,127
Subtotal Small Business Administration - 2,893,144
Department of Education
Title | Grants to Local Educational Agencies 84.010 22DT1TTI-110454-01A - 35,083
Title | Grants to Local Educational Agencies 84.010 22FTTTI-110134-01A - 19,285
Title | Grants to Local Educational Agencies 84.010 22FT1TTI-210188-01A - 43,441
Title | Grants to Local Educational Agencies 84,010 22FECSIM-110454-01A 152,559
Title | Grants to Local Educational Agencies 84.010 22FECSIM-110134-01A - 177,755
Title | Grants to Local Educational Agencies ; 84.010 22FECSIM-210188-01A - 39,504
Subtotal Grants to Local Educational Agencies (84.010) - 467,627
Special Education Grants to States (IDEA, Part B) 84.027 22FESCBG-110454-09A 26,264
Special Education Grants to States (IDEA, Part B) 84,027 22FESCBG-210188-09A - 21,086
Special Education Grants to States (IDEA, Part B) 84,027 22F1T1I110134-03A - 18,333
Subtotal Special Education Cluster (IDEA) - 65,683
Supporting Effective Instruction State Grant 84.367 22DT1TTII-110454-01A - 398
Supporting Effective Instruction State Grant 84.367 22FT1TII-210188-03A - 3,395
Subtotal Supporting Effective Instruction State Grant (84.367) - 3,793
Education Stabilization Fund 84.425 22FCAAAG-210188-01 - 58,147
Education Stabilization Fund 84.425 20ESSER-010454-01A - 3,028
Education Stabilization Fund 84.425 20FESSER-010134-01A - 3,295
Education Stabilization Fund 84.425 21FESSER-110188-01A - 1,233
Education Stabilization Fund B4,425 21FESSII-10454-01A - 435,176
Education Stabilization Fund 84.425 21FESSI-110134-01A - 103,281
Education Stabilization Fund 84.425 21FESSII-110188-01A - 148,978
Education Stabilization Fund 84.425 21FESHI-110188-01A - 92,305
Subtotal Grants to Local Educational Agencies (84.010) - 545,443
Subtotal Department of Education - 1,082,546
Department of Health and Human Services
Pass-Through Administration on Aging:
Special Programs for the Aging, Title Ill Part C, Nutrition Services 93.045 2019-13-CPL - 45,197
Nutritional Services Incentive Program 93.053 2019-13-CPL - 2,469
Subtotal Aging Cluster - 47,666

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 69 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
YEAR ENDED JUNE 30, 2022

Federal
Assistance Pass-Through Entity Passed Federat
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients | Expenditures
Department of Health and Human Services (Continued)
Pass-Through Bureau of Women and Children's Health:
Injury Prevention and Control Research and State and
Community Based Programs 93.136 N/A $ - § 98,088
Health Center Program 93.224 N/A - 486,644
Health Center Program 93.224 RW185034 - 839,497
Subtotal Health Center Program Cluster - 1,326,141
Pass-Through Bureau of Women and Children's Health:
Titie V Abstinence Education 93.235 RFGA 2021-01-07 - 93,790
Title V Abstinence Education 93.235 RFGA 2021-01 34,413
Subtotal Title V Abstinence Education (93.235) - 128,203
Pass-Through State of Arizona Governor's Office of Youth,
Faith and Family:
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93.243 1H79SP082199-01 - 115,582
Pass-Through Mercy Maricopa Integrated Care:
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93.243 1H79SM084443-01 - 28,598
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93.243 1H79SP082199-01 - 91,978
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93.243 6H79SM080713-03M001 - 186,662
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93,243 6H79SM0807 13-04M001 - 368,441
Substance Abuse and Mental Health Services Projects of Regional
and National Significance 93.243 5H79SP082628-01 - 273,413
Subtotal Substance Abuse and Mental Health Services Projects
of Regional and National Significance (93.243) - 1,064,674
Demonstration Grants for Domestic Victims of Human Trafficking 93.327 90TV0032-01-01 - 270,856
Pass-Through YouthBuild USA:
Cooperative Agreement to Support Navigators in Federally
Facilitated Exchanges 93.332 NAVCA190356-02-01 - 227,155
Provider Relief Funds 93.498 N/A - 668,969
Pass-Through Arizona Department of Economic Security:
Temporary Assistance for Needy Families (TANF) 93,558 ADES17-178657 - 573,427
Social Services Block Grant Program (SSBG) 93.558 ADES17-178657 - 62,442
Pass-Through Pima County:
Temporary Assistance for Needy Families 93.558 CT-CR-20-472 - 75,516
Subtotal TANF Cluster - 711,385
Pass-Through Arizona Department of Economic Security:
Refugee and Entrant Assistance State/Replacement Designee
Administered Programs 93.566 CTR044929 - 174,117

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 70 of 75
YEAR ENDED JUNE 30, 2022

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients | Expenditures
Department of Health and Human Services (Continued)
Pass-Through Pima County:

Low-Income Home Energy Assistance 93.568 CT-CR-20-472 $ - §$ 12,575
Pass-Through Pima County:

Community Services Block Grant 93.569 CT-CR-20-472 - 27,582
Pass-Through Office of Community Services:

Community Services Block Grant Discretionary Awards 93.570 90EE1249-01 - 346,081

Community Services Block Grant Discretionary Awards 93,570 90EE1249-01 - 128,470

Community Services Block Grant Discretionary Awards 93.570 90EE1249-02 - 53,919

Community Services Block Grant Discretionary Awards 93.570 90EE1271-01 - 144,850

Community Services Block Grant Discretionary Awards 93.570 90EE1218-01-00 - 623,908

Subtotal Community Services Block Grant Discretionary Awards (93.570) - 1,297,228
Pass-Through Administration for Children and Families:

Head Start 93.600 90CM009850-01 - 2,591,391

Head Start 93.600 S90CM009850-02 - 13,065,154

Head Start 93.600 90HM000017-02 - 399,737

Head Start 93.600 30HM000017-03 - 1,760,413

Head Start 93.600 90CM009857-01 - 2,362,783

Head Start 93.600 90CM009857-02 - 41,821,226

Head Start 93.600 09CH011020-03 - 1,864,198

Head Start 93.600 90HN00000201C3/C5/C6 - 1,418,614

Head Start 93.600 90HE000281001C5/C6 - 83,949

Subtotal Head Start Cluster - 35,367,470
Pass-Through Dignity Health dba St. Joseph's Hospital & Medical Center

Accountable Health Communities 93.620 1P1C0MS331609-05-00 - 316,211

Pass-Through State of Arizona Governor's Office of Youth,
Faith and Family:

Social Services Block Grant 93.667 2018-12-CPL 5,632
Pass-Through Bureau of Women and Children's Health:

Family Violence Prevention and Services/Domestic Violence

Shelter and Supportive Services 93.671 ADHS17-185597 - 77,946
National Council on Aging 93.710 N/A - 69,959
Pass-Through Bureau of Women and Children's Health:

Arizona Association of Community Health Centers - CK2C 93.767 CMS-1Y1-19-002 CK2C-01 - 40,869
Opioid State Response Grant Program 93.788 YH22-0033-002 - 80,422
Pass-Through State of Arizona Governor's Office of Youth,

Faith and Family:
Opioid State Response Grant Program 93.788 SOR-DSG-19-0801 19-02 - 100,556
Opioid State Response Grant Program 93.788 GR-Ju-21-1001-03 - 63,302
Subtotal Opioid State Response Grant Program (93.788) - 244,280
Section 223 Demonstration Programs to Improve Community Mental
Mental Health Services 93.829 1H79SM083080-01 - 1,137,975

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 71 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)

YEAR ENDED JUNE 30, 2022

Federal
Assistance Pass-Through Entity Passed Federal
Federal Grantor/Pass through Grantor/ Listing Identifying Through to Award
Program or Cluster Title Number Number Subrecipients | Expenditures
Department of Health and Human Services (Continued)
Maternal, Infant, Early Childhood Home Visiting Program 93.870 RFGA FY22 0923 $ - $ 135,830
Pass-Through Health Resources and Services Administration:
HIV - Related Training and Technical Assistance 93.914 12097 - 15,639
HIV - Related Training and Technical Assistance M19PSSCPLC/A19PSSCPL/
93.914 A20PSSCPL/M20PSSCPL - 87,842
HIV - Related Training and Technical Assistance 93.914 12097 - 83,401
HIV - Related Training and Technical Assistance 93.914 A21MCMCPL - 245,531
HIV - Related Training and Technical Assistance A19MCMCPL/M19MCMCPL/
93.914 — A20MCMCPL/M20MCMCPL - 17
HIV - Related Training and Technical Assistance 93.914 A21NMCCPL - 484,111
HIV - Related Training and Technical Assistance 93.914 210173 96,338
Subtotal HIV - Related Training and Technical Assistance (93.914) 712,879
HIV Care Formula Grants 93.917 CTR045482 - 64,773
Pass-Through Arizona Department of Health Services:
HIV Prevention Activities Health Department Based 93.940 CTRO57880 - 139,224
HIV Prevention Activities Health Department Based 93,940 ADHS19-209344 - 24,282
HIV Prevention Activities Health Department Based 93.940 CTR045482 - 165,181
HIV Prevention Activities Health Department Based 93.940 CTRO50826 - 65,145
HIV Prevention Activities Health Department Based - COVID 93.940 CTRO50826 - 591,508
Subtotal HIV Prevention Activities Health Department Based (93.940) - 985,340
Pass-Through City of Las Vegas:
Block Grants for Community Menta! Health Services 93.958 SG 25400 - 659,648
Pass-Through Mercy Maricopa Integrated Care:
Block Grants for Community Mental Health Services 93.958 N/A - 142,572
Block Grants for Community Mental Health Services 93.958 N/A - 50,571
Pass-Through State of Nevada Department of Health and
Human Services
Block Grants for Community Mental Health Services 93.958 BOSSM083986 - 20,434
Subtotal Block Grants for Community Health Services (93.958) - 873,225
Pass-Through State of Arizona Governor's Office of Youth,
Faith and Family:
Block Grants for Prevention and Treatment of Substance Abuse 93.959 YH21-0003-003 - 133,652
Pass-Through Mercy Maricopa Integrated Care:
Block Grants for Prevention and Treatment of Substance Abuse 93.959 N/A - 185,328
Subtotal Block Grants for Prevention and Treatment of
Substance Abuse (93.959) - 318,980
Preventive Health and Health Services Block Grant 93.991 RFGA2020-02-04 - 24,694
Subtotal Department of Health and Human Services - 46,430,702
Corporation for National and Community Service
Pass-Through YouthBuild USA:
Americorps 94.006 2019-20 - 44,896
Americorps 94.006 2020-21 8,078
Subtotal Corporation for National and Community Service 52,974
Total Expenditures of Federal Awards $ 69,237 $ 70,851,682

* Indicates a major program for the fiscal year ended June 30, 2022.

See accompanying Notes to Schedule of Expenditures of Federal Awards.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 72 of 75
NOTE 1

NOTE 2

NOTE 3

NOTE 4

CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2022

BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards and other governmental
awards includes the federal grant activity of Chicanos Por La Causa, Inc. and Subsidiaries
and Affiliates (CPLC), and is presented on the accrual basis of accounting. The information
in this schedule is presented in accordance with the requirements of the Uniform Guidance.
CPLC received federal awards both directly from federal agencies and indirectly through
pass-through entities. Federal financial assistance provided to a subrecipient is treated as
an expenditure when it is pad to the subrecipient. Because the Schedule presents only a
selected portion of the operations of CPLC, it is not intended to and does not present the
financial position, changes in net assets, or cash flows of CPLC.

SIGNIFICANT ACCOUNTING POLICIES

Expenditures are recognized following the cost principles contained in Subpart E — Cost
Principles of the Uniform Guidance, wherein certain types of expenditures are not allowable
or are limited as to reimbursement. CPLC’s summary of significant accounting policies is

presented in Note 1 in the basic consolidated financial statements.

CPLC has elected to use a negotiated indirect cost rate for the year ended June 30, 2022.

CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBERS

The program titles and CFDA numbers were obtained from the federal or pass-through
grantor or the 2022 Catalog of Federal Domestic Assistance.

LOAN PROGRAMS

Expenditures reported in this schedule consist of the beginning of the year outstanding loan
balance plus advances made on the loan during the year. The outstanding balance at

June 30, 2022 for the Small Business Administration loans, Federal Assistance
Listing #59.046, was $1,673,644.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 73 of 75
CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2022

Section |!— Summary of Auditors’ Results

Financial Statements

Zz.

Type auditors' report issued: Unmodified
internal control over financiai reporting:

e Material weakness(es) identified? yes x no

e Significant deficiency(ies) identified
that are not considered to be

material weakness(es)? yes x none reported
3. Noncompliance material to financial
statements noted? yes x no
é
Federal Awards

Internal control over major federal programs:

e Material weakness(es) identified? yes x no

e Significant deficiency(ies) identified
that are not considered to be
material weakness(es)? yes x none reported

Type of auditor's report issued on
compliance for major federal programs: Unmodified

Any audit findings disclosed that are
required to be reported in accordance
with 2 CFR 200.516(a)? yes x no

Identification of Major Federal Programs

Federal Assistance Listing Numbers Name of Federal Program or Cluster
93.600 Head Start
10.558 Child and Adult Care Food Program
21.023 City of Phoenix Emergency Rental Assistance
21.027 Coronavirus State and Local Fiscal Recovery Fund

Dollar threshold used to distinguish between

Type A and Type B programs: $ 2,125,550
Auditee qualified as low-risk auditee? xX yes no
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 74 of 75
7 CHICANOS POR LA CAUSA, INC. AND SUBSIDIARIES AND AFFILIATES
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
YEAR ENDED JUNE 30, 2022

Section Il — Financial Statement Findings

Our audit did not disclose any matters required to be reported in accordance with Government Auditing
Standards.

Section Ill — Findings and Questioned Costs — Major Federal Programs

Our audit did not disclose any matters required to be reported in accordance with 2 CFR 200.516(a).

Section IV — Findings and Questioned Costs — Schedule of Prior Year Findings

There were no findings in the prior year.
Case 5:21-cv-04337-JMG     Document 86-22     Filed 10/27/23     Page 75 of 75


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