2022-09-20 Public Comment — Fairfield City Council, September 20, 2022

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Mr. John Eckstrom
Chief Executive Officer
SHELTER, Inc, of Contra Costa County
1333 Willow Pass Rd., Suite 206
Concord, CA 94520
Dear Mr. Esckstrom:

U.S. Department of Housing and Urban Development
San Francisco Regional Office— Region 1X
One Sansome Street, Suite 1200
San Francisco, CA 94104-4430
www.hud.gov
espanol.hud.gov
AUG 18 2016
SUBJECT: Results of Programmatic Monitoring Review
HUD Continuum of Care Homeless Assistance Program —
FY2013 Grants with 2014 — 2015 Operating Years
During July 19`h — 22nd, 2016, the Community Planning and Development Division of the HUD San Francisco Regional Office, conducted an on-site programmatic monitoring of SHELTER, Inc.'s administration and operation of its FY2013 HUD -funded Continuum of Care Program homeless assistance projects. The primary purpose of the monitoring was to assess your organization's performance and compliance with applicable Continuum of Care (CoC) Program and other Federal regulations and requirements. Program performance was assessed through a review of participants' file records, written policies and procedures, limited financial documentation, annual reporting, LOCCS data and on-site project visits.

This letter transmits the results of the monitoring review. No Findings or Concerns were identified and only several recommendations were provided by HUD. The Department determined that SHELTER, Inc., effectively supported the housing stabilization and supportive efficiently operated and caring program. Furthermore, SHELTER, Inc.'s administration and operation of its CoC Program grants/projects was deemed an exemplary Best Practice.

Monitoring is the principal means by which HUD ensures that programs and technical areas are carried out efficiently, effectively, and that the programs comply with applicable laws and regulations. It assists grantees in improving their performance, developing or increasing capacity and augmenting their management and technical skills. Also, it provides a method for staying abreast of the efficacy of CPD -administered programs and technical areas within the communities HUD programs serve. Monitoring is not limited to a one-time review but is meant to be an ongoing process that assesses the quality of a grantee's performance over a period of time involving continuous'communication and evaluation.

SUMMARY OF RESULTS AND CONCLUSIONS
The following areas were reviewed:

Pro ram Performance and Oversi ht
The programmatic review examined the operations of specific CoC-funded projects for compliance with program requirements concerning homeless and at -risk determination, housing operations/leasing/rapid re -housing activities, policies and procedures, supportive services delivery, progress and overall grant management performance, including recordkeeping and reporting.

The documentation pertaining to the following six Contra Costa County FY2013 funded grants/projects was reviewed and HUD's determinations are described below:
• CCCO Transitional Housing Program (FamilyllH)
• Permanent Step (PH)
■ Pittsburg Family Center (TH)
■ REACH Plus (SinglesITH)
■ REACH Plus Family — Rapid Re -housing (PH)
• Transitional Housing Partnership (PH)
Policies and Procedures
The Program has developed specific policies and procedures manuals for the Permanent Supportive Housing (including master -leased properties), Transitional Housing at SHELTER, Inc. -owned facilities and Rapid Re -housing (scattered -site, tenant -leased) units under the projects listed above. The manuals covered among other items, the participant eligibility determination process, including referrals, intake/screening application and verification of homelessness as defined by HUD, client needs evaluation, delivery of case management, housing search (TH) and other supportive services, individual case plan, organization and management of client files documentation and confidentiality, application appeals, waiting lists, safety, HMIS data entry, monthly reporting and quality assurance program evaluations.

Complementary policies and procedures were also utilized by the Property Management Department, in order to process participants' application for a specific type of housing or housing assistance, which included a referrals process, client interview, eligibility and income determination and computation of rent, move -in process, Housing Quality Standards unit inspections, lease requirements, LBP disclosure (as applicable), annual re -certifications, tenant orientation, house rules and resident grievance procedures, and tenant files organization.

All manuals were very detailed and informative. We only made several recommendations, which are described below under the respective headings.

Participants' Ries indicated the type of supportive services that were provided by SHELTER, Inc. staff or via outside agency referrals. However, in order to review the complete services track -record for each participant household, it was necessary to research various components of each file. We recommended that the supportive services provided to each participant be reflected on a basic chart which should reflect the type of service provided (including case management), date provided, SHELTER, Inc. staff and the estimated number of hours per service delivery, and/or external -service provided and name of the provider, and including any workshops attended by the participant.

This would provide a practical management tool for staff, as well as program reviewers to easily assess the supportive services record of each participant household.

Housing Facilities Management
The property management files corresponding to the 34 participants' eligibility/intake files were also reviewed. Documentation contained in every file indicated that income determinations (initial and annual re -certifications) were properly completed using standard Section 8 Program forms. We noted that files contained primary income information sources, i.e., employment verifications and salary statements, Social Security/other public assistance, income tax forms, in addition to other timely data such as consumer credit reports, bank statements, disability confirmation (if applicable). Tenant rent contributions were accurately computed using the proper forms, and did not exceed the greater of 30 percent of adjusted monthly household income or 10 percent of gross monthly income. Tenant leases (including month-to-month with private owners) were fully executed and consistent with HUD tenant protection provisions.

We reviewed several files of participants who were evicted from a project for just -cause and found that the grievance process was satisfactorily completed in each case. We conducted site visits, met management staff and inspected several units of the Lyle Morris Family Center (CCCTHP) and Pittsburg Family Center projects. The management of the projects and particularly the condition of units was deemed above average. Given HUD's emphasis in CoC funding for permanent housing projects and the resulting lower ranking of the projects by the local Continuum of Care body—these two projects will no longer receive future CoC funding and tenants are being gradually transferred into other transitional or permanent housing sites within the County, with minimal disruption.

Fire safety and code inspections of each transitional and permanent housing facility were conducted on an annual basis for compliance with local codes. All units under all six CoC- assisted projects received Housing Quality Standards inspections at move -in and annually.

Furthermore, Lead -Based Paint regulations and requirements, where applicable, were carried out with respect to PH, TH and Rapid Re -housing projects, including tenant notifications, paint assessments and abatement actions, although no cases involving abatement actions were recorded.

If you disagree with any of HUD's determinations or conclusions in this monitoring letter, please address these issues in writing to the Department within 15 days from the date of this letter. Your written communication should explain your reasons why you disagree along with supporting evidence and documentation. All communication should be addressed to my attention at the Department of Housing and Urban Development, San Francisco Regional Office, Community Planning and Development Division, One Sansome Street, Suite 1200, San Francisco, CA 94104-4430.

I would like to thank you and your staff at SHELTER, Inc. for the assistance and cooperation offered to HUD staff during the review. If you wish to discuss the results of this monitoring review or to request technical assistance from the Community Planning and Development Division, please contact Rafael Cedillos, Senior CPD Representative at (415) 489-6585, or [email protected] .

Sincerely,
(�A� ��
Maria Cremer
Director
Community Planning
and Development Division
cc: Bill Froning, CFO
Leslie Gleason, Director of Program Operations
Sandi Mendez, Director of Property Management
Laurel teVelde, Director of Transition Services
Sara Perez, Property Compliance Manager
Deborah Heffelmire, Transition Services Manager

SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED FINANCIAL STATEMENTS WITH

INDEPENDENT AUDITOR'S REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019

IRYNA
Accountancy Corporation
1000 Broadway #200G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of SHELTER, INC., (a nonprofit organization), which comprise the statement of financial position as of June 30, 2019, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to SHELTER, INC.'s preparation and fair presentation of the financial statements 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 SHELTER, INC. internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 BASIC FINANCIAL STATEMENTS

SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2019

OPERATING REVENUES
Contributions
Federal grants
Other grants
Rental income - net of vacancies
Revenue from special events
Less: cost of special events
Other income
In-kind contribution
Net assets released from restrictions
Total operating revenues

OPERATING EXPENSES
Program service
Management and general
Fundraising
Total operating expenses
Operating income (loss)

NONOPERATING INCOME(LOSS)
Interest income
Interest expense
Net realized and unrealized gain(loss) on investments
Gain (loss) on disposal of property
Total nonoperating income (loss)
Change in net assets
Net assets, beginning of year
Net assets, end of year
Without Donor
With Donor
Restrictions
Restrictions
Total
$ 2,292,073 $
611,596 $
2,903,669
3,029,201
-
3,029,201
5,013, 604
5,013, 604
1,194, 603
1,194, 603
224,430
224,430
(78,674)
(78,674)
46,142
46,142
602,818
602,818
811,599
(811,599)
-
13,135,796
(200,003)
12,935,793
10,008,791
-
10,008,791
1,783,230
1,783,230
560,426
560,426
12,352,447
12,352,447
783,349
(200,003)
583,346
645
645
(119,733)
-
(119,733)
8 8
3,447
-
3,447
(115,633)
-
(115,633)
667,716
(200,003)
467,713
3,227,394
571,843
3,799,237
3,895,110 $
371,840 $
4,266,950
See independent auditor's report and accompanying notes to financial statements. 4 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities:

Depreciation and amortization
Unrealized (gain) loss on investments
Forgiveness of mortgage payable
(Increase) decrease in assets:

Accounts receivable
Other receivables
Inventory
Prepaid expenses and other assets
Increase (decrease) in liabilities:

Accounts payable and accrued expenses
Interest payable
Deferred revenue
Net cash provided by (used in) in operating activities
Cash flows from investing activities
Proceeds from sale and maturities of investments
Purchase, net of disposal of property and equipment
Net (increase) decrease in restricted deposits
Net (increase) decrease in other deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Payment of lease payable
Payment of notes payable
Net cash provided by (used in) financing activities
Increase (decrease) in cash
Cash and equivalents, beginning of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and equivalents, beginning of year
Cash and equivalents, end of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and equivalents, end of year
Supplemental information: noncash investing activities
$ 467,713
206,097
241
(12,252)
(243,593)
(216,976)
(17,856)
(58,100)
431,819
6,516
(51,494)
512,115
81 (152,963)
28,411
(55,610)
(180,081)
(17,883)
(78,164)
(96,047)
235,987
216,469
526,214
742,680
652,456
326,211
$ 978,667
Interest paid $ 119,733
See independent auditor's report and accompanying notes to financial statements. 6 Note 1. Nature of activities and summary of significant accounting policies (Continued) Basis of Accounting
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Adoption of New Accounting Pronouncement
For the year ended June 30, 2019, SHELTER, INC. adopted the Financial Accounting Standards Board's Accounting Standards Update (ASU) No. 2016-14 - Not -for -Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-profit Entities. This update addresses the complexity and understandability of net assets classification, deficiencies in information about liquidity and availability of resources, and the lack of consistency in the type of information provided about expenses and investment return between not-for-profit entities. A key change required by ASU 2016-14 are the net asset classes used in these financial statements. Amounts previously reported as unrestricted net assets are now reported as net assets without donor restrictions and amounts previously reported as temporarily restricted net assets and permanently restricted net assets, if applicable, are now reported as net assets with donor restrictions.

Net Assets
Financial statement presentation follows the requirement of the Financial Accounting Standard Board.

SHELTER, INC. is required to report information regarding its financial position and activities according to two classes of net assets: without donor restrictions and with donor restrictions.

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 can designate, 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.

Cash and Cash Equivalents
SHELTER, INC. considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The carrying amount approximates fair value because of the short maturity of those instruments.

Not included as cash are funds restricted as to their use, regardless of liquidity, such as security deposits, replacement reserves, operating reserves residual receipts and mortgage impound deposits.

See independent auditor's report and accompanying notes to financial statements. 8 Note 1. Nature of activities and summary of significant accounting policies (Continued) Accounts Receivable
Accounts receivable are stated at unpaid balances, less an allowance for doubtful accounts. SHELTER, INC. uses the allowance method to determine uncollectible receivable. The allowance is based on prior years' experience and management's analysis of specific promises made. SHELTER, INC. charges off uncollectible contributions receivable when management determines amounts are not collectable. No allowance was recorded as of June 30, 2019 since all amounts are expected to be collected in full.

Property, Equipment and Deferred Costs
All acquisitions of property and equipment in excess of $5,000 and all expenditures for repairs, maintenance, or improvements that significantly prolong the useful lives of the assets are capitalized.

Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated asset to a specific purpose. Property and equipment are depreciated using the straight-line method over estimated useful lives of the assets.

Deferred costs are incurred in order to obtain permanent financing for the purchase of certain properties. Deferred costs are stated at cost and amortized on a straight-line basis.

The useful lives of the assets are estimated as follows:

Buildings 30 to 40 years
Building improvements 10 to 30 years
Furniture and equipment 5 to 10 years
Deferred costs 10 to 30 years
SHELTER, INC. reviews its investments in property for impairment whenever events or changes in circumstances indicate that the carrying value of any of their properties may not be recoverable.

Recoverability is measured by a comparison of the carrying amount of the real estate to the future net undiscounted cash flows expected to be generated by the rental property. If the real estate is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the real estate exceeds the fair value of such property.

Income Taxes
SHELTER, INC. is a not-for-profit organization that is exempt from federal income tax on income under Section 501(c)(3) of the Internal Revenue Code and from state franchise tax under California Revenue and Taxation Code Section 23701 (d). However, income from activities not directly related to its tax- exempt purpose is subject to taxation as unrelated business income. There was no tax on unrelated business income for year ended June 30, 2019.

See independent auditor's report and accompanying notes to financial statements. 10 Note 2. Cash and Cash Equivalents
Cash and cash equivalents consisted of the following at June 30, 2019:

Petty cash $ 400
Cash in bank 978,267
Total cash and equivalents $ 978,667
FASB ASC 825 requires disclosure of significant concentrations of credit risk arising from all financial instruments. Financial instruments that potentially subject SHELTER, INC. to concentrations of credit risk consist of cash deposits and investments.

At times, a portion of the cash balances may not be insured by (FDIC). The FDIC insures cash balances held in banks up to $250,000 for each bank. The potential concentration of credit risk pertaining to cash balances will vary throughout the year depending upon the level of cash deposits versus amounts insured. As of June 30, 2019, deposits in amount of $720,218 were not FDIC insured.

Note 3. Liquidity and Availability of Financial Assets
The following reflects SHELTER, INC.'s financial assets as of the statement of financial position date, reduced by amounts not available for general use because of contractual or donor -imposed restrictions within one year of the statement of financial position date.

Cash and cash equivalents $ 978,667
Accounts receivables 1,878,045
Other receivables 224,138
Short-term investments 2,724
Less those unavailable for general expenditures within one year, due to:

Restricted by donor with time or purpose restrictions (326,211) Financial assets available to meet cash needs for general expenditure within one year $ 2,757,363 As of June 30, 2019, $2,757,363 of financial assets are available to cover SHELTER, INC.'s liquidity needs, which is greater than SHELTER, INC.'s general expenditure for the year ended June 30, 2019, $2,505,606.

Note 4. Special Events
SHELTER, INC. had two fundraising events, Swing for Shelter and Rock for Shelter, during the year ended June 30, 2019. The revenue for the events were derived from selling individual tickets and sponsorship. The income and expenses for the events were as follow:

Swing for Shelter revenue
$ 220,409
Rock for Shelter revenue
4,021
Total fundraising events revenue
224,430
Cost of fundraising events
(78,674)
Net income from fundraising events
$ 145,756
See independent auditor's report and accompanying notes to financial statements. 12 Note 7. Property and Equipment
Property and equipment as of June 30, 2019 is summarized as follows:

Land
$ 1,496,949
Construction in progress
-
Building and improvement
5,232,856
Furniture and equipment
508,718
Vehicles
94,533
Less accumulated depreciation
(2,342,774)
Total property and equipment - net
$ 4,990,282
Land, and building and improvements consist principally of condominiums, multifamily apartments, and one commercial office building.

The depreciation expense for the year ended June 30, 2019 was $206,097.

Note 8. Net Assets With Donor Restrictions
Net assets with donor restrictions are restricted for the following purposes or periods for the year ended June 30, 2019 is as follows:

Purpose
June 30, 2018
Mountain View House
$ 184,450
Supportive Housing
30,450
General Prevention
259,505
Adopt -A -Family
7,639
Quest
19,452
Endowment fund
45,629
Other
24,718
Total
$ 571,843
Note 9. Line of Credit
Additions
Released
June 30, 2019
$ 221,800 $
(268,792)
$ 137,458
-
30,450
128,040
(329,036)
58,509
5,200
(8,939)
3,900
-
(19,452)
-
-
-
45,629
256,556
(185,380)
95,894
$ 611,596 $
(811,599)
$ 371,840
SHELTER, INC. had an open line of credit with Bank of the West amounting to $400,000 that was utilized during the year. As of June 30, 2019, the balance in the line of credit was $0.

See independent auditor's report and accompanying notes to financial statements. 14 Note 10. Investments (Continued)
Investment Return Objectives, Risk Parameters and Strategies. The endowment fund has been created with the purpose of moving the organization toward self-sufficiency. To this end, the investment objectives are to protect the fund corpus, provide current income to meet service needs, and allow for capital appreciation of the fund. Endowment assets are invested in a well -diversified asset mix, which includes mutual funds investing in equity and debt securities.

Spending Policy. SHELTER, INC. does not have a specific policy of appropriating the net appreciation for endowments. SHELTER, INC.'S executive committee meets periodically and decides whether or not any earnings will be distributed.

Note 11. Commitments and Contingencies
SHELTER, INC. has elected to be self-insured for state unemployment claims. Under this method, the State of California bills SHELTER, INC. on a quarterly basis for all the claims paid on behalf of SHELTER, INC. Management estimated future liability for unemployment claims as of June 30, 2019 to be $30,827.

SHELTER, INC. receives various support and revenue that are subject to compliance with the requirements and regulations of these grantors. The management believes that it has substantially complied with these requirements and regulations.

SHELTER, INC. is especially vulnerable to the inherent risks associated to revenue that is substantially dependent on government funding, public support, and contributions. Its continued growth and well- being is contingent upon successful achievement of its long-term revenue -raising goals.

Note 12. Notes Payable
Notes payable are secured by the property unless otherwise noted and consist of the following:

Interest
Payable Principal
NCC
Sun West Mortgage, in the original amount of $304,200, insured by HUD.

The loan bears interest at 8.25% per annum and requires monthly payments of $2,285. The mortgage matures on August 1, 2029. Interest expense for the year ended June 30, 2019 was $16,051. $ 1,373 $ 188,317 City of Concord, in the original amount of $381,500 bears no interest and requires annual payments of 100% of residual receipts are due through 2034. (2) 379,391
Contra Costa County HOPWA loan bears no interest and is expected to be forgiven at end of 36 -year term. Debt forgiveness recognized for the year ended June 30, 2019 was $5,945. (1) 95,111
See independent auditor's report and accompanying notes to financial statements. 16 Note 12. Notes Payable (Continued)
1333 Willow Pass Road
City National Bank, in the original amount of$1,500,000. The loan bears interest at 4.5% per annum and requires monthly payments of $8,393.

Interest expense for the year ended June 30, 2019 was $62,195. $ HERO Program, in the original amount of $210,000. The loan bears interest at 6.25% per annum and requires annual installments of $27,647 to be paid through their property tax bill. Interest expense for the year ended June 30, 2019 was $15,076.

Totals
Less: current portion
Longterm portion
Interest
Payable Principal
5,316 $ 1,342,378
13,167 174,462
223,560 2,981,038
11U R1;F1 W 8441
$ 203,704 $ 2,893,694
(')These loans are expected to be forgiven at the end of the term provided that the SHELTER, INC. operates the property in compliance with the agreements. It is management's intent to comply with these restrictions throughout the term of the loan and accordingly accrues forgiveness, using straight-line method over the entire term of mortgage and reports mortgage payable balance net of forgiveness. The amounts of loan reported are stated net of the amounts forgiven which as of June 30, 2019 was $359,993.
(Z)The loan with balance of $379,391 is from the City of Concord to NCC. In accordance to the loan provisions, the nature of NCC's operation is such that NCC does not expect to make payments on this loan for the foreseeable future.

Principal payments on notes payable for the next five years, excluding those expected to be forgiven, are subject to changes in net cash flow and are estimated as follows:

For the year ending June 30,
2020 $
72,287
2021
76,712
2022
81,246
2023
86,064
2024
91,043
Thereafter
1,777,838
Total $
2,185,190
See independent auditor's report and accompanying notes to financial statements. 18 Note 14. Donated Services and Other In -Kind Contributions Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization.

During the year ended June 30, 2019, SHELTER, INC. received a significant amount of donated services from unpaid volunteers who assist in fundraising event setup and other program related services that do not satisfy the criteria for recognition under FASB ASC 958-605-25-16.

The management estimated that SHELTER, INC. received about 8,032 hours from 350 volunteers.

In-kind contributions mainly consist of donated goods and services for various SHELTER, INC. programs.

For the year ended June 30, 2019, SHELTER, INC. received $602,818 in donated goods and services as in- kind contribution.

Note 15. Subsequent Events
In accordance with ASC 855, Subsequent Events topic, SHELTER, INC. evaluated subsequent events for recognition and disclosure through February 27, 2020, the date these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2019 that required recognition or disclosure in such financial statements.

See independent auditor's report and accompanying notes to financial statements. 20 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
U.S. Department of Veteran Affairs
Direct awards
Supportive Services for Veteran Families 64.033 720,937 Total U.S. Department of Veteran Affairs 720,937
U.S. Department of Health and Human Services
Pass-through awards
Community Services Block Grant 93.569 Contra Costa County 64,529 Total U.S. Department of Health and Human Services 64,529 See independent auditor's report and accompanying notes to financial statements. 22 Federal
Current
CFDA
Agency or Pass -Through
Federal
Federal Grantor/Pass-Through Grantor/Program Title
Number
Number
Expenditures
U.S. Department of Housing and Urban Development
Community Development Block Grant:

Pass-through awards
Emergency Housing and Homeless Assistance

14.218
Contra Costa County
$ 17,190
Emergency Housing and Homeless Assistance

14.218
City of Antioch
24,407
Total Community Development Block Grant
41,597
Emergency Solutions Grant Program:

Pass-through awards
Federal Emergency Solutions Grant

14.231
Contra Costa County
353,322
Sacramento Housing and
Federal Emergency Solutions Grant

14.231
Redevelopment Agency
77,864
Total Emergency Solutions Grant Program
431,186
Continuum of Care Program:

Direct awards
Permanent Step

14.267
133,736
Project Thrive

14.267
420,541
Reach Family Rapid Rehousing

14.267
201,401
Transitional Housing Program

14.267
387,113
Pass-through awards
Destination Home

14.267
Contra Costa County
259,094
Satellite Affordable Housing
Tabora Gardens

14.267
Associate
97,552
Total Continuum of Care Program*
1,499,437
Total U.S. Department of Housing and Urban Development
1,972,220
U.S. Department of Veteran Affairs
Direct awards
Supportive Services for Veteran Families 64.033 720,937 Total U.S. Department of Veteran Affairs 720,937
U.S. Department of Health and Human Services
Pass-through awards
Community Services Block Grant 93.569 Contra Costa County 64,529 Total U.S. Department of Health and Human Services 64,529 See independent auditor's report and accompanying notes to financial statements. 22 SHELTER, INC.
(A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION)

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal award activity of SHELTER, INC. under programs of the federal government for the year ended June 30, 2019 and is presented on the accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule of expenditures of federal awards presents only a selected portion of the operations of SHELTER, INC. it is not intended to and does not present the financial position, change in net assets or cash flows of SHELTER, INC.

Note 2. Program Cost
The amounts shown as current year expenses represent only the federal grant portion of the program costs. Entire program costs, including the City, State and County portion, are more than shown.

Note 3. Indirect Cost Rate
SHELTER, INC. has not elected to use the 10% de minims indirect cost rate allowed under the Uniform Guidance.

Note 4. Prior Year's Expenditures
The schedule below provides information regarding balances of loans for which continuing compliance is required.

See independent auditor's report and accompanying notes to financial statements. 24 OTHER AUDITOR'S REPORTS
See independent auditor's report and accompanying notes to financial statements. 26 contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. 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 organization'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 organization's internal control and compliance.

Accordingly, this communication is not suitable for any other purpose. %" ,� " %viii aM&M
Oakland, California
February 27, 2020
See independent auditor's report and accompanying notes to financial statements. 28 Opinion on Each Major Federal Program
In our opinion, SHELTER, INC. 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, 2019.

Report on Internal Control Over Compliance
Management of SHELTER, INC. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered SHELTER, INC.'s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of SHELTER, INC.'s 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. Asignificant 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 first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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.

Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance We have audited the financial statements of SHELTER, INC. as of and for the year ended June 30, 2019, and have issued our report thereon dated February 27, 2020, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Uniformed Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived See independent auditor's report and accompanying notes to financial statements. 30 FINDINGS AND RECOMMENDATIONS
32 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
JUNE 30, 2019
Auditee qualified as low-risk auditee? X Yes No
SECTION II—FINANCIAL STATEMENT FINDINGS
No findings.

SECTION III—FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No findings.

SECTION IV—STATE AWARD FINDINGS AND QUESTIONED COSTS
No findings.

SCHEDULE OF PRIOR AUDIT FINDINGS
No matters were reported.

See independent auditor's report and accompanying notes to financial statements. 34 SHELTER SOLANO, INC.

FINANCIAL STATEMENTS
WITH

INDEPENDENT AUDITOR'S REPORT
YEAR ENDED JUNE 30, 2019

IRYNA
—. Accountancy Corporation
1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER SOLANO, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of Shelter Solano, Inc., a California nonprofit corporation, which comprise the statement of financial position as of June 30, 2019, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Shelter Solano, Inc.'s preparation and fair presentation of the financial statements 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 the Shelter Solano, Inc.'s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

SHELTER SOLANO, INC.

STATEMENT OF FINANCIAL POSITION
JUNE 30, 2019
Without Donor
ASSETS
Restrictions

CURRENT ASSETS
Cash and cash equivalents
$ 271,931 $
Receivables
312,538
Prepaid expenses
1,218
Total current assets
585,687
Total assets
585,687

LIABILITIES AND NET ASSETS

CURRENT LIBILITIES
Accounts payable and accrued expenses
238,102
Related -party payable
21,023
Total current liabilities
259,125
Total liabilities
259,125

NET ASSETS
Without donor restrictions
326,562
With donor restrictions
-
Total net assets
326,562
Total liabilities and net assets
$ 585,687 $
With Donor
Restrictions Total
- $ 271,931
312,538
1,218
585,687
585,687
238,102
- 21,023
- 259,125
259,125
326,562
326,562
$ 585,687
See Independent Auditor's Report and Accompanying Notes. 3 Salaries and benefits
Payroll taxes
Rent and other client assistance
Repairs and maintenance
Professional fees
Administrative expenses
Depreciation and amortization
Totalexpenses
SHELTER SOLANO, INC.

STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED JUNE 30, 2019
Program
Management
Services
and General
Fundraising
Total
$ 383,562 $
147,978
$ 22,820 $
554,360
28,826
11,206
1,720
41,752
27,047
-
-
27,047
11,786
-
11,786
5,955
-
5,955
67,717
-
67,717
$ 524,893 $
159,184
$ 24,540 $
708,617
See Independent Auditor's Report and Accompanying Notes. 5 SHELTER SOLANO, INC.

NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of activities and summary of significant accounting policies Nature of Activities
Shelter Solano, Inc. (SSI) a California nonprofit public benefit corporation, was formed on November 20, 2018 with the mission of providing an emergency shelter.

SSI is a year-round emergency shelter located on serving the community in Solano County. SSI meets the emergency housing needs of individuals and families with accommodations including dormitory style rooms, family -sized rooms, and separate apartment -style units. Participants at SSI receive intensive case management, housing assistance, life skills and wellness programs, vocational and employment services, and educational programs.

Members of the board of directors of SSI also serve on the board of directors of SHELTER, Inc. (SHELTER), a nonprofit social service agency and operator of affordable housing. All board members serve without compensation.

Basis of Accounting
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Adoption of New Accounting Pronouncement
For the year ended June 30, 2019, SSI adopted the Financial Accounting Standards Board's Accounting Standards Update (ASU) No. 2016-14 - Not -for -Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-profit Entities. This update addresses the complexity and understandability of net assets classification, deficiencies in information about liquidity and availability of resources, and the lack of consistency in the type of information provided about expenses and investment return between not- for-profit entities. A key change required by ASU 2016-14 are the net asset classes used in these financial statements. Amounts previously reported as unrestricted net assets are now reported as net assets without donor restrictions and amounts previously reported as temporarily restricted net assets and permanently restricted net assets, if applicable, are now reported as net assets with donor restrictions.
7 Note 1. Nature of activities and summary of significant accounting policies (Continued) Property and Equipment
All acquisitions of property and equipment in excess of $5,000 and all expenditures for repairs, maintenance, or improvements that significantly prolong the useful lives of the assets are capitalized.

Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as contributions without donor restrictions unless the donor has restricted the donated asset to a specific purpose.

Property and equipment are depreciated using the straight-line method over estimated useful lives of the assets.

The useful lives of the assets are estimated as follows:

Building 30 to 40 years
Building improvements 10 to 30 years
Furniture and equipment 5 to 10 years
Income Taxes
SSI is a not-for-profit organization that is exempt from federal income tax on income under Section 501(c)(3) of the Internal Revenue Code and from state franchise tax under California Revenue and Taxation Code Section 23701 (d). However, income from activities not directly related to its tax-exempt purpose is subject to taxation as unrelated business income. There was no tax on unrelated business income for year ended June 30, 2019.

Note 3. Liquidity and Availability of Financial Assets
The following reflects SSI financial assets as of the statement of financial position date, reduced by amounts not available for general use because of contractual or donor -imposed restrictions within one year of the statement of financial position date.

Cash and cash equivalents $ 271,931
Account receivable 312,538
Financial assets available to meet cash needs for general expenditure within one year $ 584,469 SSI is supported by grants without donor restrictions, so all the current cash and receivable are available for the current operation expense.
9 IRYNA
Accountancy Corporation
1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
SHELTER SOLANO, INC.

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 financial statements of Shelter Solano, Inc. (a California nonprofit corporation), which comprise the statement of financial position as of June 30, 2019, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated February 27, 2020.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered of Shelter Solano, Inc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Shelter Solano, Inc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's 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 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.

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 have not been identified.
11 A Ar A
I RYN
Accountancy Corporation
SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED FINANCIAL STATEMENTS WITH

INDEPENDENT AUDITOR'S REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
f'
f

IRYNA
Accountancy Corporation
1000 Broadway #200G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of SHELTER, INC., (a nonprofit organization), which comprise the statement of financial position as of June 30, 2020, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 BASIC FINANCIAL STATEMENTS

SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2020

OPERATING EXPENSES
Program service
Management and general
Fundraising
Total operating expenses
Operating income (loss)

NONOPERATING INCOME(LOSS)
Interest income
Interest expense
Net realized and unrealized gain(loss) on investments
Gain (loss) on disposal of property
Total nonoperating income (loss)
Change in net assets
Net assets, beginning of year before adjustment
Less: prior year adjustment
Net assets, beginning of year adjusted
Net assets, end of year
Without Donor
With Donor
Restrictions
Restrictions
Total
$ 2,664,960 $
337,864 $
3,002,824
4,034,352
-
4,034,352
6,283,889
-
6,283,889
1,259,601
1,259,601
208,551
208,551
(74,214)
-
(74,214)
1,256,296
-
1,256,296
340,648
-
340,648
279,339
(279,339)
-
16,253,422
58,525
16,311,947
13,043,522
-
13,043,522
1,677,344
-
1,677,344
982,425
-
982,425
15,703,291
-
15,703,291
550,131
58,525
608,656
490
-
490
(127,421)
-
(127,421)
655
655
5,206
5,206
(121,070)
(121,070)
429,061
58,525
487,586
3,895,110
371,840
4,266,950
(81,474)
-
(81,474)
3,813,636
371,840
4,185,476
4,242,697 $
430,365 $
4,673,062
See independent auditor's report and accompanying notes to financial statements. 4 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities:

Depreciation and amortization
Unrealized (gain) loss on investments
Forgiveness of mortgage payable
(Increase) decrease in assets:

Accounts receivable
Other receivables
Inventory
Prepaid expenses and other assets
Increase (decrease) in liabilities:

Accounts payable and accrued expenses
Interest payable
Deferred revenue
Net cash provided by (used in) in operating activities
Cash flows from investing activities
Purchase of investment
Proceeds from sale and maturities of investments
Purchase, net of disposal of property and equipment
Net (increase) decrease in restricted deposits
Net (increase) decrease in other deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Receipt of line of credit
Payment of line of credit
Payment of lease payable
Payment of notes payable
Net cash provided by (used in) financing activities
Increase(decrease)in cash
Cash and equivalents, beginning of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Less: prior year adjustment
Total cash and equivalents, beginning of year
Cash and equivalents, end of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and equivalents, end of year
Supplemental information: noncash investing activities
487,586
174,991
(655)
(12,162)
(762,759)
153,235
27,339
18,425
356,331
8,015
915,255
1,365,601
(59,482)
60,382
(27,611)
(15,442)
(8,588)
(50,741)
62,000
(61,500)
( 20,186)
(72,945)
(92,631)
1,222,229
652,456
326,211
(81,474)
897,193
1,734,687
384,735
$ 2,119,422
Interest paid $ 127,421
See independent auditor's report and accompanying notes to financial statements.

Note 1. Nature of activities and summary of significant accounting policies (Continued) Basis of Accounting
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Adoption of New Accounting Pronouncement
(ASU) No. 2014-09 and (ASU) No. 2016-10
SHELTER, INC. implemented the following recent accounting pronouncements. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the existing transaction and industry -specific revenue recognition guidelines. The new guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Net Assets
Financial statement presentation follows the requirement of the Financial Accounting Standard Board.

SHELTER, INC. is required to report information regarding its financial position and activities according to two classes of net assets: without donor restrictions and with donor restrictions.

See independent auditor's report and accompanying notes to financial statements. 8 Note 1. Nature of activities and summary of significant accounting policies (Continued) Inventory
Inventory consists of donated goods and is stated at cost which is the fair market value at the time of acquisition.

Accounts Receivable
Accounts receivable are stated at unpaid balances, less an allowance for doubtful accounts. SHELTER, INC. uses the allowance method to determine uncollectible receivable. The allowance is based on prior years' experience and management's analysis of specific promises made. SHELTER, INC. charges off uncollectible contributions receivable when management determines amounts are not collectable.

Allowance for doubtful accounts as of June 30, 2020 was 17,277.

Deferred costs are incurred in order to obtain permanent financing for the purchase of certain properties. Deferred costs are stated at cost and amortized on a straight-line basis.

The useful lives of the assets are estimated as follows Buildings 30 to 40 years
Building improvements 10 to 30 years
Furniture and equipment 5 to 10 years
Deferred costs 10 to 30 years
SHELTER, INC. reviews its investments in property for impairment whenever events or changes in circumstances indicate that the carrying value of any of their properties may not be recoverable.

See independent auditor's report and accompanying notes to financial statements. 10 Note 2. Cash and Cash Equivalents
Cash and cash equivalents consisted of the following at June 30, 2020:

Petty cash $ 900
Cash in bank 2,118,522
Total cash and equivalents $ 2,119,422
FASB ASC 825 requires disclosure of significant concentrations of credit risk arising from all financial instruments. Financial instruments that potentially subject SHELTER, INC. to concentrations of credit risk consist of cash deposits and investments.

At times, a portion of the cash balances may not be insured by (FDIC). The FDIC insures cash balances held in banks up to $250,000 for each bank. The potential concentration of credit risk pertaining to cash balances will vary throughout the year depending upon the level of cash deposits versus amounts insured. As of June 30, 2020, deposits in amount of $1,719,611 were not FDIC insured.

Cash and cash equivalents $ 2,119,422
Accounts receivables 2,640,804
Other receivables 70,796
Short-term investments 2,922
Less those unavailable for general expenditures within one year, due to:

Restricted by donor with time or purpose restrictions (384,735) Financial assets available to meet cash needs for general expenditure within one year $ 4,449,209 As of June 30, 2020, $4,449,209 of financial assets are available to cover SHELTER, INC.'s liquidity needs, which is greater than SHELTER, INC.'s general expenditure for the year ended June 30, 2020, $2,824,366.

Note 4. Special Event
SHELTER, INC. had one fundraising event, Swing for Shelter during the year ended June 30, 2020. The revenue for the event was derived from selling individual tickets and sponsorship. The income and expenses for the event were as follows:

Swing for Shelter revenue $ 208,551
Cost of fundraising events (74,214)
Net income from fundraising events $ 134,337
See independent auditor's report and accompanying notes to financial statements. 12 Note 7. Property and Equipment
Property and equipment as of June 30, 2020 is summarized as follows:

Land
Construction in progress
Building and improvement
Furniture and equipment
Vehicles
Less accumulated depreciation
Total property and equipment - net
$ 1,496,949
100,000
5,118,119
513,718
^lam X01
$ 4,842,902
Land, and building and improvements consist principally of condominiums, multifamily apartments, and one commercial office building.

The depreciation expense for the year ended June 30, 2020 was $174,991.

Note 8. Net Assets With Donor Restrictions
Net assets with donor restrictions are restricted for the following purposes or periods for the year ended June 30, 2020 is as follows:

Purpose
June 30, 2019
Additions
Released
June 30, 2020
Mountain View House
$ 137,458
$ 106,089 $
(129,469)
$ 114,080
Supportive Housing
30,450
-
30,450
General Prevention
58,509
166,575
(55,229)
169,855
Adopt -A -Family
3,900
5,200
(5,200)
3,900
Other
95,894
60,000
(89,443)
66,451
Total
$ 326,211
$ 337,864 $
(279,339)
$ 384,735
Note 9. Line of Credit
SHELTER, INC. had an open line of credit with Bank of the West amounting to $700,000 that was utilized during the year. As of June 30, 2020, the balance in the line of credit was $500.

Note 12. Notes Payable
Notes payable are secured by the property unless otherwise noted and consist of the following:

Interest
Payable Principal
NCC
Sun West Mortgage, in the original amount of $304,200, insured by HUD.

The loan bears interest at 8.25% per annum and requires monthly payments of $2,285. The mortgage matures on August 1, 2029. Interest expense for the year ended June 30, 2020 was $15,076. $ 1,373 $ 175,969 City of Concord, in the original amount of $381,500 bears no interest and requires annual payments of 100% of residual receipts are due through 2034. (z) - 379,391
Contra Costa County HOPWA loan bears no interest and is expected to be forgiven at end of 36 -year term. Debt forgiveness recognized for the year ended June 30, 2020 was $5,945. (l) - 89,166
See independent auditor's report and accompanying notes to financial statements. 16 Note 12. Notes Payable (Continued)
1333 Willow Pass Road
City National Bank, in the original amount of$1,500,000. The loan bears interest at 4.5% per annum and requires monthly payments of $8,393.

Interest expense for the year ended June 30, 2020 was $60,598. $ HERO Program, in the original amount of $210,000. The loan bears interest at 6.25% per annum and requires annual installments of $27,647 to be paid through their property tax bill. Interest expense for the year ended June 30, 2020 was $14,290.

Totals
Less: current portion
Longterm portion
Interest
Payable Principal
5,049 $ 1,302,248
13,357 161,105
231,575 2,895,931
(19,779) (88,872)
$ 211,769 $ 2,807,059
(')These loans are expected to be forgiven at the end of the term provided that the SHELTER, INC. operates the property in compliance with the agreements. It is management's intent to comply with these restrictions throughout the term of the loan and accordingly accrues forgiveness, using straight-line method over the entire term of mortgage and reports mortgage payable balance net of forgiveness. The amounts of loan reported are stated net of the amounts forgiven which as of June 30, 2020 was $372,156.
(2)The loan with balance of $379,391 is from the City of Concord to NCC. In accordance with the loan provisions, the nature of NCC's operation is such that NCC does not expect to make payments on this loan for the foreseeable future.

Principal payments on notes payable for the next five years, excluding those expected to be forgiven, are subject to changes in net cash flow and are estimated as follows:

For the year ending June 30,
2021 $
76,712
2022
81,246
2023
86,064
2024
91,043
2025
96,630
Thereafter
1,680,551
Tota 1 $
2,112, 246
See independent auditor's report and accompanying notes to financial statements. 18 Note 14. Donated Services and Other In -Kind Contributions Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization.

During the year ended June 30, 2020, SHELTER, INC. received a significant amount of donated services from unpaid volunteers who assist in fundraising event setup and other program related services that do not satisfy the criteria for recognition under FASB ASC 958-605-25-16.

The management estimated that SHELTER, INC. received about 13,790 hours from 860 volunteers.

In-kind contributions mainly consist of donated goods and services for various SHELTER, INC. programs.

For the year ended June 30, 2020, SHELTER, INC. received $340,648 in donated goods and services as in- kind contribution.

Note 15. Correction of an Error
It was determined that certain expense was incorrectly capitalized to fixed asset during the year ended June 30, 2019. Therefore, a correction was made to reduce net assets of $81,474.

Note 16. Subsequent Events
In accordance with ASC 855, Subsequent Events topic, SHELTER, INC. evaluated subsequent events for recognition and disclosure through October 30, 2020, the date these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2020 that required recognition or disclosure in such financial statements.

In the US, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on 27 March 2020. While the extent and duration of the economic fallout from the COVID- 19 pandemic remains unclear, the Organization's future performance might be affected by the pandemic.

See independent auditor's report and accompanying notes to financial statements. 20 H
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SHELTER, INC.
(A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION)

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal award activity of SHELTER, INC. under programs of the federal government for the year ended June 30, 2020 and is presented on the accrual basis of accounting. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule of expenditures of federal awards presents only a selected portion of the operations of SHELTER, INC. it is not intended to and does not present the financial position, change in net assets or cash flows of SHELTER, INC.

Note 3. Indirect Cost Rate
SHELTER, INC. has not elected to use the 10% de minims indirect cost rate allowed under the Uniform Guidance.

Note 4. Prior Year's Expenditures
The schedule below provides information regarding balances of loans for which continuing compliance is required.

See independent auditor's report and accompanying notes to financial statements. 24 OTHER AUDITOR'S REPORTS
See independent auditor's report and accompanying notes to financial statements. 26 Compliance and Other Matters
As part of obtaining reasonable assurance about whether SHELTER, INC.'s financial statements are free of 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 determination of financial statement amounts. 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.

Accordingly, this communication is not suitable for any other purpose. l 6"AOUMM
Oakland, California
October 30, 2020
See independent auditor's report and accompanying notes to financial statements. 28 Opinion on Each Major Federal Program
In our opinion, SHELTER, INC. 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, 2020.

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.

Report on Schedule of Expenditures of Federal Awards Required by Uniform Guidance We have audited the financial statements of SHELTER, INC. as of and for the year ended June 30, 2020, and have issued our report thereon dated October 30, 2020, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Uniformed Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived See independent auditor's report and accompanying notes to financial statements. 30 FINDINGS AND RECOMMENDATIONS
32 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
JUNE 30, 2020
Auditee qualified as low-risk auditee? X Yes No
SECTION II—FINANCIAL STATEMENT FINDINGS
No findings.

SECTION III—FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No findings.

SECTION IV—STATE AWARD FINDINGS AND QUESTIONED COSTS
No findings.

SCHEDULE OF PRIOR AUDIT FINDINGS
No matters were reported.

See independent auditor's report and accompanying notes to financial statements. 34 jFA
,RY NA
Accountancy Corporation
SHELTER SOLANO, INC.

FINANCIAL STATEMENTS
WITH

INDEPENDENT AUDITOR'S REPORT
YEAR ENDED JUNE 30, 2020
f,.

IRYNA
Accountancy Corporation
1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER SOLANO, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of Shelter Solano, Inc., a California nonprofit corporation, which comprise the statement of financial position as of June 30, 2020, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Shelter Solano, Inc.'s preparation and fair presentation of the financial statements 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 the Shelter Solano, Inc.'s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 SHELTER SOLANO, INC.

STATEMENT OF FINANCIAL POSITION
JUNE 30, 2020
ASSETS

CURRENT ASSETS
Cash and cash equivalents
Receivables
Prepaid expenses
Inventory
Total current assets
Property and equipment, net
Total assets

LIABILITIES AND NET ASSETS

CURRENT LIBILITIES
Accounts payable and accrued expenses
Related -party payable
Total current liabilities
Total liabilities

NET ASSETS
Without donor restrictions
With donor restrictions
Total net assets
Total liabilities and net assets
Without Donor With Donor
Restrictions Restrictions
Total
$ 74,061 $ $ 74,061
387,695 387,695
2,008 2,008
2,716 2,716
466,480
4bb,48U
297,326
332,422
332,422
240,058
240,058
$ 572,480 $
See Independent Auditor's Report and Accompanying Notes. 466,480
106,000
572,480
297,326
332,422
240,058
240,058
572,480
3 Salaries and benefits
Payroll taxes
Rent and other client assistance
Repairs and maintenance
In-kind expenses
Conference cost
Professional fees
Office expenses
Office rent
Insurance
Taxes and licenses
Depreciation and amortization
Total expenses
SHELTER SOLANO, INC.

STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED JUNE 30, 2020
Program Management
Services and General
Fundraising
Total
$ 1,191,256 $
$ - $
1,191,256
78,960 -
-
78,960
111,929
-
111,929
58,539 -
-
58,539
- -
7,817
7,817
20,328
-
20,328
28,413
-
28,413
50,229 -
117
50,346
37,538 -
-
37,538
14,586 -
14,586
60,466
-
60,466
1,500 -
-
1,500
$ 1,653,744 $ -
$ 7,934 $
1,661,678
See Independent Auditor's Report and Accompanying Notes. 5 SHELTER SOLANO, INC.

Adoption of New Accounting Pronouncement
(ASU) No. 2014-09 and (ASU) No. 2016-10
The Organization implemented the following recent accounting pronouncements. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the existing transaction and industry -specific revenue recognition guidelines. The new guidance requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Also the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, to clarify whether revenue should be recognized at a point in time or over time, based on whether the license provides a right to use an entity's intellectual property or a right to access the entity's intellectual property.
7 Note 1. Nature of activities and summary of significant accounting policies (Continued) Property and Equipment
All acquisitions of property and equipment in excess of $5,000 and all expenditures for repairs, maintenance, or improvements that significantly prolong the useful lives of the assets are capitalized.

Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as contributions without donor restrictions unless the donor has restricted the donated asset to a specific purpose.

Property and equipment are depreciated using the straight-line method over estimated useful lives of the assets.

The useful lives of the assets are estimated as follows:

Cash and cash equivalents $ 74,061
Account receivable 387,695
Financial assets available to meet cash needs for general expenditure within one year $ 461,756 SSI is supported by grants without donor restrictions, so all the current cash and receivable are available for the current operation expense.
9 IRYNA
Accountancy Corporation
1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
SHELTER SOLANO, INC.

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 financial statements of Shelter Solano, Inc. (a California nonprofit corporation), which comprise the statement of financial position as of June 30, 2020, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 30, 2020.

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 have not been identified.
11 IRYNA ACCOUNTANCY CORPORATION
1000 Broadway 200-G
Oakland, CA 94612
(510) 467-9506 Tel
(510)280-9756 Fax
inl'ol2imnacpatom
www.irynacya.com

IRYNA►.

Accountancy Corporacion
shelterinc
SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED FINANCIAL STATEMENTS WITH

INDEPENDENT AUDITOR'S REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
f'

IRYNA
Accountancy Corporation
1000 Broadway #200G, Oakland, CA 94607 1 (S10) 467-9506 1 [email protected] 1 www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of SHELTER, INC., (a nonprofit organization), which comprise the combined statement of financial position as of June 30, 2021, and the related combined statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 BASIC FINANCIAL STATEMENTS

SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

OPERATING EXPENSES
Program service
Management and general
Fundraising
Total operating expenses
Operating income (loss)

NONOPERATING INCOME(LOSS)
Interest income
Interest expense -
Net realized and unrealized gain(loss) on investments
Gain (loss) on disposal of property
Total nonoperating income (loss)
Change in net assets
Net assets, beginning of year
Net assets, end of year
Without Donor With Donor
Restrictions
Restrictions
$ 1,330,291 $
1,387,812 $
9,011,335
-
7,974,958
-
1,413,034
-
181,655
-
(28,797)
1,116,129
1,975,205
-
83,959
-
271,683
(271,683)
22,213,323
1,116,129
-_1
2,718,103
9,011,335
7,974,958
1,413,034
181,655
(28,797)
1,975,205
83,959
23,329,452
18,998,837
-
18,998,837
1,360,209
1,360,209
674,688
-
674,688
21,033,734
-
21,033,734
1,179,589
1,116,129
2,295,718
293
-
293
(112,584)
-
(112,584)
1,478
-
1,478
(110,813)
-
(110,813)
1,068,776
1,116,129
2,184,905
4,242,697
430,365
4,673,062
5,311,474 $
1,546,493 $
6,857,967
See independent auditor's report and accompanying notes to financial statements. 4 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

COMBINED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities:

Depreciation and amortization
Unrealized (gain) loss on investments
Forgiveness of mortgage payable
(Increase) decrease in assets:

Accounts receivable
Other receivables
Inventory
Prepaid expenses and other assets
Increase (decrease) in liabilities:

Accounts payable and accrued expenses
Interest payable
Deferred revenue
Net cash provided by (used in) in operating activities
Cash flows from investing activities
Purchase of investment
Proceeds from sale and maturities of investments
Purchase, net of disposal of property and equipment
Net (increase) decrease in restricted deposits
Net (increase) decrease in other deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Receipt of line of credit
Payment of line of credit
Payment of lease payable
Payment of notes payable
Net cash provided by (used in) financing activities
Increase (decrease)in cash
Cash and equivalents, beginning of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and equivalents, beginning of year
Cash and equivalents, end of year
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
Total cash and equivalents, end of year
Supplemental information: noncash investing activities
$ 2,184,905
160,993
(1,478)
(12,161)
(1,899,417)
67,928
(25,251)
19,310
770,584
1,762
4,146,922
5,414,097
(5,243)
5,229
(793,294)
(3,333,749)
(138,425)
(4,265,482)
1,525,000
(850,500)
(21,440)
(23,218)
629,842
1,778,457
1,734,687
384,735
2,119,422
2,397,015
1,500,864
$ 3,897,879
Interest paid $ 110,822
See independent auditor's report and accompanying notes to financial statements - 6 Note 1. Nature of activities and summary of significant accounting policies (Continued) Basis of Accounting
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which involves the application of accrual accounting; consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

Adopted Accounting Pronouncement
During the year ended June 30, 2020, SHELTER, INC. implemented the following accounting pronouncements: ASU No. 2014-09, Revenue from Contracts with Customers, and ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.

Analysis of various provisions of the standards resulted in no significant changes in the way SHELTER, INC. recognizes revenue, and therefore no changes to the previously issued audited financial statements were required on a retrospective basis. The presentation and disclosures of revenue have been enhanced in accordance with these standards.

Net Assets
Financial statement presentation follows the requirement of the Financial Accounting Standard Board.

SHELTER, INC. is required to report information regarding its financial position and activities according to two classes of net assets: without donor restrictions and with donor restrictions.

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 can designate, from net assets without donor restrictions, net assets for an operating reserve and board -designated endowment.

Allowance for doubtful accounts as of June 30, 2021 was $41,698.

Deferred costs are incurred in order to obtain permanent financing for the purchase of certain properties. Deferred costs are stated at cost and amortized on a straight-line basis.

The useful lives of the assets are estimated as follows:

See independent auditor's report and accompanying notes to financial statements. 10 Note 2. Cash and Cash Equivalents
Cash and cash equivalents consisted of the following at June 30, 2021:

Petty cash $ 1,958
Cash in bank 3,895,921
Total cash and equivalents $ 3,897,879
FASB ASC 825 requires disclosure of significant concentrations of credit risk arising from all financial instruments. Financial instruments that potentially subject SHELTER, INC. to concentrations of credit risk consist of cash deposits and investments.

At times, a portion of the cash balances may not be insured by (FDIC). The FDIC insures cash balances held in banks up to $250,000 for each bank. The potential concentration of credit risk pertaining to cash balances will vary throughout the year depending upon the level of cash deposits versus amounts insured. As of June 30, 2021, deposits in amount of $6,803,106 were not FDIC insured.

Cash and cash equivalents $ 3,897,879
Accounts receivables 4,540,221
Other receivables 3,300
Short-term investments 4,403
Less those unavailable for general expenditures within one year, due to:

Restricted by donor with time or purpose restrictions (1,500,864) Financial assets available to meet cash needs for general expenditure within one year $ 6,944,939 $6,944,939 of financial assets are available to cover SHELTER, INC.'s liquidity needs. SHELTER, INC. has a goal to maintain sufficient financial assets on hands, which consists of cash and cash equivalents, receivables, and short-term investments, to meet the goal of next fiscal year's projected management and fundraising expenses, which are expected to be $2,139,225. SHELTER, INC.'s program activity is primary funded by expense reimbursement contracts. Based on projected estimate, SHELTER, INC. has sufficient liquid assets to cover its current liabilities.

Note 4. Line of Credit
SHELTER, INC. had an open line of credit with Bank of the West amounting to $700,000 that was utilized during the year. As of June 30, 2021, the balance in the line of credit was $675,000.

See independent auditor's report and accompanying notes to financial statements. 12 Note 7. Special Event
SHELTER, INC. had one fundraising event, Unite for SHELTER during the year ended June 30, 2021. The revenue for the event was derived from selling individual tickets and sponsorship. The income and expenses for the event were as follows:

Unite for SHELTER revenue $ 181,655
Cost of fundraising events (28,797)
Net income from fundraising events. $ 152,858
Note 8. Property and Equipment
Property and equipment as of June 30, 2021 is summarized as follows:

Land
Construction in progress
Building and improvement
Furniture and equipment
Vehicles
Less accumulated depreciation
Total property and equipment - net
$ 1,496,949
838,976
5,172,303
351,055
(2,421,861)
$ 5,475,203
Land, and building and improvements consist principally of condominiums, multifamily apartments, and one commercial office building.

The depreciation expense for the year ended June 30, 2021 was $160,993.

Note 9. Net Assets With Donor Restrictions
Net assets with donor restrictions are restricted for the following purposes or periods for the year ended June 30, 2021 is as follows:

Purpose
June 30, 2020
Additions
Released
June 30, 2021
Mountain View House
$ 114,080
$ 222,458 $
(55,416)
$ 281,122
Supportive Housing
30,450
-
(12,046)
18,404
General Prevention
169,855
183,824
(202,005)
151,674
Adopt -A -Family
3,900
29,302
(2,216)
30,986
COVID related
-
772,478
772,478
Employment Services
-
153,500
153,500
Other
66,450
26,250
-
92,700
Total
$ 384,735
$ 1,387,812 $
(271,683)
$ 1,500,864
See independent auditor's report and accompanying notes to financial statements. 14 Note 10. Investments (Continued)
Investment Return Objectives, Risk Parameters and Strategies. The endowment fund has been created with the purpose of moving the organization toward self-sufficiency. To this end, the investment objectives are to protect the fund corpus, provide current income to meet service needs, and allow for capital appreciation of the fund. Endowment assets are invested in a well -diversified asset mix, which includes mutual funds investing in equity and debt securities.

Note 12. Notes Payable
Notes payable are secured by the property unless otherwise noted and consist of the following:

Interest
Payable Principal
NCC
Sun West Mortgage, in the original amount of $304,200, insured by HUD.

The loan bears interest at 8.25% per annum and requires monthly payments of $2,285. The mortgage matures on August 1, 2029. Interest expense for the year ended June 30, 2021 was $12,744. $ 99 $ 162,563 City of Concord, in the original amount of $381,500 bears no interest and requires annual payments of 100% of residual receipts are due through 2034.(2) 379,391
Contra Costa County HOPWA loan bears no interest and is expected to be forgiven at end of 36 -year term. Debt forgiveness recognized for the year ended June 30, 2021 was $5,945. (l) - 83,222
See independent auditor's report and accompanying notes to financial statements. 16 Note 12. Notes Payable (Continued)
1333 Willow Pass Road
City National Bank, in the original amount of$1,500,000. The loan bears interest at 4.5% per annum and requires monthly payments of $8,393.

Interest expense for the year ended June 30, 2021 was $58,593. $ HERO Program, in the original amount of $210,000. The loan bears interest at 6.25% per annum and requires annual installments of $27,647 to be paid through their property tax bill. Interest expense for the year ended June 30, 2021 was $13,455.53.

Totals
Less: current portion
Long term portion
Interest
Payable Principal
5,049 $ 1,260,078
12,569 201,097
233 337
(17,717)
2,860,552
191.2131
$ 215,620 $ 2,779,339
(')These loans are expected to be forgiven at the end of the term provided that the SHELTER, INC. operates the property in compliance with the agreements. It is management's intent to comply with these restrictions throughout the term of the loan and accordingly accrues forgiveness, using straight-line method over the entire term of mortgage and reports mortgage payable balance net of forgiveness. The amounts of loan reported are stated net of the amounts forgiven which as of June 30, 2021 was $384,316.

MThe loan with balance of $379,391 is from the City of Concord to NCC. In accordance with the loan provisions, the nature of NCC's operation is such that NCC does not expect to make payments on this loan for the foreseeable future.

Principal payments on notes payable for the next five years, excluding those expected to be forgiven, are subject to changes in net cash flow and are estimated as follows:

For the year ending June 30,
2022 $
81,246
2023
86,064
2024
91,043
2025
96,630
2026
102,427
Thereafter
1,726,592
Total $
2,184,002
See independent auditor's report and accompanying notes to financial statements. 18 Note 14. Donated Services and Other In -Kind Contributions Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization.

During the year ended June 30, 2021, SHELTER, INC. received a significant amount of donated services from unpaid volunteers who assist in fundraising event setup and other program related services that do not satisfy the criteria for recognition under FASB ASC 958-605-25-16.

The management estimated that SHELTER, INC. received about 2,175 hours from 197 volunteers.

In-kind contributions mainly consist of donated goods and services for various SHELTER, INC. programs.

For the year ended June 30, 2021, SHELTER, INC. received $83,959 in donated goods as in-kind contribution.

Note 15. Subsequent Events
In accordance with ASC 855, Subsequent Events topic, SHELTER, INC. evaluated subsequent events for recognition and disclosure through March 04, 2022, the date these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2021 that required recognition or disclosure in such financial statements.

See independent auditor's report and accompanying notes to financial statements. 20 O1
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SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (LOAN BALANCES) FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Federal Grantor/Pass-Through Grantor/Program Title
U.S. Department of Housing and Urban Development
New Century Center
Pass-through awards
Section 223(f)/207 mortgage insurance for the
purchase of existing multifamily housing projects
Housing Opportunities for Persons with AIDS:

SHELTER_ Inc.

Supportive Housing Program
Pass-through awards
Permanent Housing for Handicapped
Homeless Program - Sunset
Community Development Block Grant
Pass-through awards
Community Development Loan for Next Step
Community Development Rehab Loan for
Next Step
Housing Opportunities for Persons with AIDS
Pass-through awards
Housing Opportunities for persons with AIDS
HOPWA loan for Landings
Home Investment Partnerships Program
HOME loan for Landings
Total Federal Loans
Federal Loan
Assistance
Listing (AL) Agency or Pass -Through Balances
Number Number June 30, 2021

14.155 Contra Costa County

14.241 Contra Costa County
Department of Housing

14.235 and Community
Development

14.218 Contra Costa County

14.241 Contra Costa County

14.239 Contra Costa County
$ 162,563
214,000
376,563
94,975
82,321
21,060
110,556
125,030
433,942
$ 810,505
See independent auditor's report and accompanying notes to financial statements. 26 IRYNA.

Accountancy Corporation
1000 Broadway #200G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
SHELTER, INC.

We have audited, 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, the financial statements of (a nonprofit organization), which comprise the combined statement of financial position as of June 30, 2021, and related combined statement of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 04, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered SHELTER, INC.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of SHELTER, INC.'s internal control.

Accordingly, we do not express an opinion on the effectiveness of SHELTER, Inc's internal control.

See independent auditor's report and accompanying notes to financial statements. 28 IRYNA
Accountancy Corporation
1000 Broadway #200G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors
SHELTER, INC.

Report on Compliance for Each Major Federal Program
We have audited SHELTER, INC..'s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of SHELTER, INC.'s major federal programs for the year ended June 30, 2021. SHELTER, INC.'s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of SHELTER, INC.'s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; 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). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about SHELTER, INC..'s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of SHELTER, INC.'s compliance.

See independent auditor's report and accompanying notes to financial statements. 30 FINDINGS AND RECOMMENDATIONS
32 SHELTER, INC.
(A California Nonprofit Public Benefit Corporation)

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
JUNE 30, 2021
Auditee qualified as low-risk auditee? X Yes No
SECTION II—FINANCIAL STATEMENT FINDINGS
No findings.

SECTION III—FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No findings.

SECTION IV—STATE AWARD FINDINGS AND QUESTIONED COSTS
No findings.

SCHEDULE OF PRIOR AUDIT FINDINGS
No matters were reported.

See independent auditor's report and accompanying notes to financial statements. 34 TPVNT A
Accountancy Corporacion
SHELTER SOLANO, INC.

FINANCIAL STATEMENTS
WITH

INDEPENDENT AUDITOR'S REPORT
YEAR ENDED JUNE 30, 2021

I RY NA
Accountancy Corporation
1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com

INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
SHELTER SOLANO, INC.

Report on the Financial Statements
We have audited the accompanying financial statements of Shelter Solano, Inc., a California nonprofit corporation, which comprise the statement of financial position as of June 30, 2021, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Shelter Solano, Inc.'s preparation and fair presentation of the financial statements 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 the Shelter Solano, Inc.'s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 SHELTER SOLANO, INC.

STATEMENT OF FINANCIAL POSITION
JUNE 30. 2021
See Independent Auditor's Report and Accompanying Notes.

Without Donor With Donor
ASSETS
Restrictions Restrictions
Total

CURRENT ASSETS
Cash and cash equivalents
$ 2,912,753 $ $
2,912,753
Receivables
260,536
260,536
Prepaid expenses
-
-
Inventory
3,092
3,092
Total current assets
3,176,381
3,176,381
Property and equipment, net
843,476 _
843,476
Total assets
4,019,857
4,019,857

LIABILITIES AND NET ASSETS

CURRENT LIBILITIES
Accounts payable and accrued expenses
679,881
679,881
Deferred revenue
1,723,550
1,723,550
Related -party payable
1,439,178
1,439,178
Total current liabilities
3,842,609 -
3,842,609
Total liabilities
3,842,609 -
3,842,609

NET ASSETS
Without donor restrictions
177,248
177,248
With donor restrictions
-
Total net assets
177,248
177,248
Total liabilities and net assets
$ 4,019,857 $ - $
4,019,857
See Independent Auditor's Report and Accompanying Notes.

SHELTER SOLANO, INC.

STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED JUNE 30, 2021
See Independent Auditor's Report and Accompanying Notes. 61 Program
Management
Services
and General Fundraising
Total
Wages and salaries $
853,880 $
$ $
853,880
Payroll taxes
-
Employee benefits
211,019
211,019
Rent and other client assistance
131,912
131,912
Repairs and maintenance
63,827
63,827
In-kind expenses
-
224
224
Travel and conference cost
9,487
9,487
Accounting fees
12,300
-
12,300
Other professional fees
8,955
-
8,955
Office expenses
22,969
- 426
23,395
Occupancy expenses
115,205
-
115,205
Insurance
19,354
19,354
Taxes, licenses and dues
157
157
Depreciation and amortization
1,500
-
1,500
Cost of special events
-
_ 595
595
Total expenses $
1,450,565 $
- $ 1,245 $
1,451,810
See Independent Auditor's Report and Accompanying Notes. 61 SHELTER SOLANO, INC.

Adopted Accounting Pronouncement
During the year ended June 30, 2020, SSI implemented the following accounting pronouncements: ASU No. 2014-09, Revenue from Contracts with Customers, and ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.

Analysis of various provisions of the standards resulted in no significant changes in the way SSI recognizes revenue, and therefore no changes to the previously issued audited financial statements were required on a retrospective basis. The presentation and disclosures of revenue have been enhanced in accordance with these standards.

Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 1. Nature of activities and summary of significant accounting policies (Continued) Property and Equipment
All acquisitions of property and equipment in excess of $5,000 and all expenditures for repairs, maintenance, or improvements that significantly prolong the useful lives of the assets are capitalized.

Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as contributions without donor restrictions unless the donor has restricted the donated asset to a specific purpose.

Property and equipment are depreciated using the straight-line method over estimated useful lives of the assets.

The useful lives of the assets are estimated as follows:

Cash and Cash Equivalents
SSI considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The carrying amount approximates fair value because of the short maturity of those instruments.

Contributions In-kind
Donated equipment and other donated goods are recorded at their estimated fair market value on the day of donation. Donated services are recognized as contributions if the services create or enhance a financial asset or require specialized skills which the donor has and would otherwise be purchased by SSI.

Note 2. Concentration of Credit Risk
FASB ASC 825 requires disclosure of significant concentrations of credit risk arising from all financial instruments. Concentrations of credit risk financial instruments which potentially subject SSI to concentrations of credit risk consist principally of cash investments and account receivable. At times, a portion of these cash investments may not be insured by Federal Deposit Insurance Corporation. The potential concentration of credit risk pertaining to temporary cash investments will vary throughout the year depending upon the level of cash deposits versus amounts insured. SSI is maintaining all deposits in high quality financial institutions. As of June 30, 2021, amount of $2,664,785 were uninsured. 9 Note 6. Contingencies
Conditions contained within the various contracts awarded to SSI are subject to the funding agencies' criteria and regulations under which expenditures may be charged against and are subject to audit under such regulations and criteria. Occasionally, such audits may determine that certain costs incurred against the grants may not comply with the established criteria governing them. In such cases, SSI could be held responsible for repayments to the funding agency or be subject to reductions of future funding.

Management does not anticipate any material questioned costs for the contracts and grants administered during the period.

Note 7. Subsequent Events
in accordance with ASC 855, Subsequent Events topic, the Organization evaluated subsequent events for recognition and disclosure through March 04, 2022, the date these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2021 that required recognition or disclosure in such financial statements. 11 1000 Broadway 200-G, Oakland, CA 94607 1 (510) 467-9506 1 [email protected] I www.irynacpa.com Compliance and Other Matters
As part of obtaining reasonable assurance about whether Shelter Solano, Inc.'s 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 financial statements. 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.

Fairfield City CouncilSeptember 20, 2022

Fairfield City Council
September 20, 2022