Housing Works, Inc.

, and Affiliates

Consolidated Financial Statements

(With Supplementary Information)
Schedule of Expenditures of Federal Awards
and Independent Auditor's Report

June 30, 2022

 Housing Works, Inc., and Affiliates

Index

Page

Independent Auditor's Report 2

Consolidated Financial Statements

Consolidated Statement of Financial Position 5

Consolidated Statement of Activities 6

Consolidated Statement of Functional Expenses 7

Consolidated Statement of Cash Flows 8

Notes to Consolidated Financial Statements 9

Supplementary Information

Consolidating Schedule of Financial Position 31

Consolidating Schedule of Revenue and Expenses 32

Schedule of Expenditures of Federal Awards 33

Notes to Schedule of Expenditures of Federal Awards 36

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 38

Independent Auditor’s Report on Compliance for Each Major Federal Program and on Report
on Internal Control over Compliance Required by the Uniform Guidance 40

Schedule of Findings and Questioned Costs 43

1
 Independent Auditor's Report

To the Board of Directors

Housing Works, Inc., and Affiliates

Report on the Audit of the Financial Statements

Opinion

We have audited the consolidated financial statements of Housing Works, Inc., and Affiliates (collectively,
the "Organization"), which comprise the consolidated statement of financial position as of June 30, 2022,
and the related consolidated statements of activities, functional expenses and cash flows for the year
then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Organization as of June 30, 2022, and the changes in its net
assets and its cash flows for the year then ended in accordance with accounting principles generally
accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States
of America ("GAAS") and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are required to be independent of the Organization, and
to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion. The financial statements of Housing Works, Used Book Café, Inc., Housing
Works, Thrift Shop, Inc., Housing Works, Food Services, Inc., Housing Works, Services II, Inc., Housing
Works, Services IV, Inc., Housing Works Services V, Inc., Housing Works, Services VI, Inc., Housing
Works Housing Development Fund Corporation, Housing Works, East New York Housing Development
Fund Corporation, Housing Works, Harlem Housing Development Fund Corporation, Inc., Housing Works
Pitkin Avenue Housing Development Fund Corporation, Inc., Housing Works 874 Jefferson Avenue
Housing Development Fund Corporation, Inc., Bronx Claremont Parkway G.P., Inc., Housing Works, 220
Hull Housing Development Fund Corporation, Positive Health Project, Inc., Housing Works, Lyman
Prospect Housing Development Fund Corporation, and Bronx Claremont Housing Development Fund
Corporation were not audited in accordance with Government Auditing Standards.

Responsibilities of Management for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is required to evaluate whether there
are conditions or events, considered in the aggregate, that raise substantial doubt about the
Organization's ability to continue as a going concern for one year after the date that the consolidated
financial statements are issued.

2
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Organization's internal control. Accordingly, no such opinion
is expressed.

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

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Organization's ability to continue as a going concern for a
reasonable period of time.

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

3
Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements
as a whole. The consolidating supplementary information on pages 31 and 32 and the schedule of
expenditures of federal awards on pages 33 to 35, as required by Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, are presented for purposes of additional analysis and are not a required part of the
consolidated financial statements. Such information is the responsibility of management and was derived
from and relates directly to the underlying accounting and other records used to prepare the consolidated
financial statements. The information has been subjected to the auditing procedures applied in the audit
of the consolidated financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
consolidated financial statements or to the consolidated financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated in all material respects in relation to the
consolidated financial statements taken as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 30,
2023 on our consideration of the Organization’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the Organization’s internal control over financial reporting or on compliance. That report
is an integral part of an audit performed in accordance with Government Auditing Standards in
considering Housing Works, Inc., and Affiliates' internal control over financial reporting and compliance.

New York, New York

March 30, 2023

4
 Housing Works, Inc., and Affiliates

Consolidated Statement of Financial Position

June 30, 2022

Assets

Cash $ 5,463,889
Health service receivables, net 4,337,480
Grants and contract service receivables 35,473,914
Pharmacy receivables 2,973,596
Thrift shop and bookstore inventory, net 4,598,384
Prepaid expenses and other assets 2,962,397

Total current assets 55,809,660

Long-term assets
Restricted cash - debt service and contingency reserve funds 428,366
Security deposits and other assets 2,379,816
Operating right-of-use assets 37,195,298
Property and equipment, net 49,628,146

Total long-term assets 89,631,626

Total assets $ 145,441,286

Liabilities and Net Assets

Current liabilities
Accounts payable and accrued expenses $ 27,530,522
Current portion of operating lease liabilities 6,065,772
Current maturities of loans payable 810,730

Total current liabilities 34,407,024

Long-term liabilities
Loans payable 3,777,293
Deferred revenue 12,509,473
Operating lease liabilities, net of current portion 34,639,409
Other liabilities 100,007

Total long-term liabilities 51,026,182

Total liabilities 85,433,206

Commitments and contingencies

Net assets
Net assets without donor restrictions 59,136,863
Net assets with donor restrictions 871,217

Total net assets 60,008,080

Total liabilities and net assets $ 145,441,286

See Notes to Consolidated Financial Statements.

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 Housing Works, Inc., and Affiliates

Consolidated Statement of Activities

Year Ended June 30, 2022

Net assets Net assets

without donor with donor
restrictions restrictions Total

Operating revenues and other support

Grants and contract services $ 79,115,722 $ - $ 79,115,722
Bookstore sales 876,479 - 876,479
Thrift shops sales 13,509,327 - 13,509,327
Health service revenue 29,153,738 - 29,153,738
Pharmacy revenue 27,396,654 - 27,396,654
In-kind contributions 14,381,169 - 14,381,169
Contributions 3,902,495 456,397 4,358,892
Rental income on apartments 5,021,451 - 5,021,451
Food services 173,726 - 173,726
Extinguishment of debt 2,530,337 - 2,530,337
Other revenue 3,336,237 - 3,336,237
Net assets released from restrictions 479,534 (479,534) -

Total operating revenues and other support 179,876,869 (23,137) 179,853,732

Expenses
Program services
Housing programs 39,839,096 - 39,839,096
Bookstore 2,973,117 - 2,973,117
Thrift shops 25,097,196 - 25,097,196
Health and service programs 77,808,944 - 77,808,944
Food services 903,260 - 903,260
Advocacy, legal and advisory services 12,510,342 - 12,510,342
Property and facility management 1,308,952 - 1,308,952

Total program services 160,440,907 - 160,440,907

Management and general 12,875,724 - 12,875,724

Fundraising 909,042 - 909,042

Total expenses 174,225,673 - 174,225,673

Change in net assets 5,651,196 (23,137) 5,628,059

Net assets, beginning of year 53,485,667 894,354 54,380,021

Net assets, end of year $ 59,136,863 $ 871,217 $ 60,008,080

See Notes to Consolidated Financial Statements.

6
 Housing Works, Inc., and Affiliates

Consolidated Statement of Functional Expenses

Year Ended June 30, 2022

Program Services Supporting Services

Advocacy,
Health and Legal and Property Total Management
Housing Service Food Advisory and Facility Program and Total
Programs Bookstore Thrift Shops Programs Services Services Management Services General Fundraising Expense

EXPENSES
Salaries and wages $ 12,325,044 $ 424,563 $ 3,447,657 $ 29,414,114 $ 299,008 $ 6,772,320 $ 841,275 $ 53,523,981 $ 4,909,492 $ 306,655 $ 58,740,128
Fringe benefits 2,527,481 91,062 721,781 6,083,559 62,553 1,471,885 174,844 11,133,165 1,096,795 64,912 12,294,872
Professional service fees 55,369 36,789 90,194 466,248 866 287,556 3,440 940,462 2,240,581 13,312 3,194,355
Contracted services 1,536,651 182,268 1,355,459 16,334,019 24,624 716,176 33,647 20,182,844 749,294 39,201 20,971,339
Client stipends and reimbursements 21,178 - - 231,794 24,225 366,231 52,403 695,831 18,279 - 714,110
Supplies 739,820 29,004 214,196 753,088 36,825 327,469 25,024 2,125,426 227,232 1,027 2,353,685
Occupancy:
Office/retail 501,641 564,039 3,672,270 2,251,240 122,046 904,223 87,346 8,102,805 889,414 55,610 9,047,829
Client 14,730,828 - - - - - - 14,730,828 - - 14,730,828
Utilities:
Office/retail 1,081,029 121,615 266,779 944,837 28,258 335,922 31,289 2,809,729 182,300 9,769 3,001,798
Client 213,411 - - - - 9,670 - 223,081 - - 223,081
Transportation 259,710 - 148,187 2,400,845 1,524 362,031 5,096 3,177,393 180,203 271 3,357,867
Equipment rental, repairs and maintenance 150,402 121,104 94,048 186,139 28,056 56,613 9,883 646,245 506,567 1,344 1,154,156
Facility repairs and maintenance 1,326,715 20,513 69,951 91,542 10,433 30,456 13,474 1,563,084 23,404 816 1,587,304
Client participation expenses 1,332,101 - - 518,166 254,595 234,373 - 2,339,235 231,712 2,570,947
Staff expense 38,273 48,909 103,818 608,136 4,840 72,291 7,873 884,140 269,697 916 1,154,753
Insurance expense 205,025 11,991 75,481 499,193 5,342 238,773 17,048 1,052,853 88,256 5,674 1,146,783
Depreciation and amortization 974,637 31,470 167,861 382,378 - 168,363 - 1,724,709 342,870 - 2,067,579
Gifts-in-kind expense - 1,050,025 13,509,327 - - - - 14,559,352 - - 14,559,352
Events expense - 3,088 339,899 8,754 - 64,326 - 416,067 135,019 297,111 848,197
Interest and finance fees 389,707 9,446 295,076 263,214 50 2,025 6 959,524 350,338 16,734 1,326,596
Cost of goods sold - 42,462 7,026 16,260,451 - - - 16,309,939 - - 16,309,939
Other expenses 1,430,074 184,769 518,186 111,227 15 89,639 6,304 2,340,214 434,271 95,690 2,870,175

Total expenses $ 39,839,096 $ 2,973,117 $ 25,097,196 $ 77,808,944 $ 903,260 $ 12,510,342 $ 1,308,952 $ 160,440,907 $ 12,875,724 $ 909,042 $ 174,225,673

See Notes to Consolidated Financial Statements.

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 Housing Works, Inc., and Affiliates

Consolidated Statement of Cash Flows

Year Ended June 30, 2022

Cash flows from operating activities

Change in net assets $ 5,628,059
Adjustments to reconcile change in net assets to net cash provided by
operating activities
Depreciation and amortization 2,067,579
Forgiveness of Paycheck Protection Program Loan (2,530,337)
Changes in operating assets and liabilities:
Health service receivables, net 584,443
Grants and contract service receivables (13,305,225)
Operating right-of-use assets (2,103,032)
Pharmacy receivables (666,149)
Thrift shop and bookstore inventory 178,185
Prepaid expenses and other assets (131,748)
Security deposits and other assets 50,511
Accounts payable and accrued expenses 10,965,335
Deferred revenue 213,865
Operating lease liabilities 2,297,727
Other liabilities (233,720)

Net cash provided by operating activities 3,015,493

Cash flows from investing activities

Purchases of property and equipment (563,144)

Net cash used in investing activities (563,144)

Cash flows from financing activities

Proceeds from loans payable 4,809,899
Payments on finance leases (160,052)
Payments on loans payable (7,796,235)

Net cash used in financing activities (3,146,388)

Net decrease in cash and restricted cash (694,039)

Cash and restricted cash at beginning of year 6,586,294

Cash and restricted cash at end of year $ 5,892,255

Supplemental cash flow information

Cash paid for interest $ 266,509

Supplemental disclosure of noncash investing and financing activities

Accounts payable for property and equipment $ 71,570

See Notes to Consolidated Financial Statements.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 1 - Nature of operations

Housing Works, Inc. ("HWI") was organized in May 1990 for the purpose of providing assistance and
expertise to homeless persons living with AIDS or HIV-related illnesses; advocating for homeless
services; and providing expertise in the development of housing for homeless persons living with
AIDS or HIV-related illnesses.

To assist in providing these services, HWI established the following separately incorporated affiliates
(collectively, the "Organization"), which, through sole membership, are controlled by HWI:

Housing Works, Used Book Café, Inc. (the "Bookstore") was organized exclusively for the benefit
of and to carry out the purposes of HWI by providing relief, assistance, and financial support,
directly or indirectly, to homeless persons living with AIDS or HIV-related illnesses. The Bookstore
primarily sells donated books and records; the café serves sandwiches, soups and assorted
refreshments and hosts special events.

Housing Works, Thrift Shop, Inc. ("Thrift") was organized exclusively for the benefit of and to carry
out the purposes of HWI by providing relief, assistance, and financial support, directly or indirectly,
to homeless persons living with AIDS or HIV-related illnesses. Thrift receives and primarily sells
clothing and other donated goods from 12 shops located in New York City ("NYC").

Housing Works, Food Services, Inc. ("HWFSC") was organized exclusively for the benefit of and
to carry out the purposes of HWI by providing relief, assistance, and financial support, directly or
indirectly, to homeless persons living with AIDS or HIV-related illnesses. HWFSC provides
institutional catering services to day treatment centers, supportive residences and other facilities,
including community catering.

Housing Works, Services, Inc. ("HWS1"), located at 743-749 East 9th Street, NYC, was organized
to establish one or more freestanding diagnostic and treatment facilities; be licensed under Article
28 of the New York State health law; and be located in NYC. These facilities provide a broad
range of health services to persons living with AIDS or HIV-related illnesses. In addition, HWS1
promotes and carries out certain research and educational activities related to providing care to
the sick, injured and disabled, and promoting the health of the public.

Housing Works, Services II, Inc. ("HWS2"), with facilities located at 57 Willoughby Street,
Brooklyn, New York, was organized to establish one or more freestanding diagnostic and
treatment facilities; be licensed under Article 28 of the New York State health law; and be located
in NYC. The facilities provide a broad range of health services to persons living with AIDS or HIV-
related illnesses. In addition, HWS2 promotes and carries out certain research and educational
activities related to providing care to the sick, injured and disabled, and promoting the health of
the public.

Housing Works, Health Services III, Inc. ("HWS3"), located at 2626 Pitkin Avenue, Brooklyn, New
York, was organized to establish one or more freestanding diagnostic and treatment facilities; be
licensed under Article 28 of the New York State health law; and be located in NYC. This facility
provides a broad range of health services to persons living with AIDS or HIV-related illnesses. In
addition, HWS3 promotes and carries out certain research and educational activities related to
providing care to the sick, injured and disabled, and promoting the health of the public.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Housing Works, Health Services IV, Inc. ("HWS4"), located at 301 West 37th Street, NYC, was
organized to establish one or more freestanding diagnostic and treatment facilities; be licensed
under Article 28 of the New York State health law; and be located in NYC. This facility provides a
broad range of health services to persons living with AIDS or HIV-related illnesses. In addition,
HWS4 promotes and carries out certain research and educational activities related to providing
care to the sick, injured and disabled, and promoting the health of the public.

Housing Works, Health Services V, Inc. ("HWS5"), located at 1751 Park Avenue, NYC, was
organized to establish one or more freestanding diagnostic and treatment facilities; be licensed
under Article 28 of the New York State health law; and be located in NYC. This facility provides a
broad range of health services to persons living with AIDS or HIV-related illnesses. In addition,
HWS5 promotes and carries out certain research and educational activities related to providing
care to the sick, injured and disabled, and promoting the health of the public.

Housing Works Health Services VI, Inc. ("HWS6") will be located at 326 West 48th Street, NYC,
and be a freestanding diagnostic and treatment facilities licensed under Article 28 of the New York
State health law. HWS6 construction is completed but the clinic is waiting for the license to start
operation.

Housing Works, Housing Development Fund Corporation ("HWDC1"), located at 743-749 East
9th Street, NYC, was organized to develop a housing project for homeless or formerly homeless
persons of low income with AIDS or HIV-related illnesses.

Housing Works, East New York Housing Development Fund Corporation ("HWDC2"), located at
2640 Pitkin Avenue, Brooklyn, New York, was organized to develop a housing project for
homeless or formerly homeless persons of low income with AIDS or HIV-related illnesses.

Housing Works, Harlem Housing Development Fund Corporation, Inc. ("HWDC3"), located at
143-145 West 130th Street, NYC, was organized to develop a housing project for homeless or
formerly homeless persons of low income with AIDS or HIV-related illnesses.

Housing Works, Pitkin Avenue Housing Development Fund Corporation, Inc. ("PitkinHDFC"),
located at 2609 Pitkin Avenue, Brooklyn, New York, was organized to develop a housing project
for homeless or formerly homeless persons of low income with AIDS or HIV-related illnesses.

Housing Works, 454 Lexington Avenue Housing Development Fund Corporation, Inc. ("LEX"),
located at 454 Lexington Avenue, NYC, was organized to develop a housing project for homeless
or formerly homeless persons of low income with AIDS or HIV-related illnesses.

Housing Works, 874 Jefferson Avenue Housing Development Fund Corporation, Inc. ("JEFF"),
located at 874 Jefferson Avenue, Brooklyn, New York, was organized to develop a housing project
for homeless or formerly homeless persons of low income with AIDS or HIV-related illnesses.

Bronx Claremont Parkway G. P., Inc. ("BCP"), an entity controlled by HWI, was established and
subsequently received a 0.01% general partnership interest in Fitzpatrick Associates Limited
Partnership ("Fitzpatrick"). Fitzpatrick was formed to acquire, own, finance, construct, develop
and manage a multifamily supportive housing project. As of year-end, Fitzpatrick operates a
housing facility consisting of 16 apartment units, and BCP and Bronx Claremont Housing
Development Fund Corporation ("BCHDFC") retain their ownership interest to Fitzpatrick.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Housing Works, 220 Hull Housing Development Fund Corporation ("Hull"), located at 220 Hull
Street, Brooklyn, New York, was organized to develop vacant land, located at its address, into a
supportive housing residence. Capital funding for the construction of the new housing facility is
pending.

Positive Health Project, Inc. ("PHP") is a not-for-profit, culturally diverse, community-based

organization whose mission is to improve the health and quality of life of drug users, sex workers,
and others who engage in behavior that puts them and the community at risk for HIV/AIDS,
hepatitis and other sexually transmitted diseases. PHP accomplishes this by providing disease
prevention, social and clinical health services, and education based in the harm reduction
philosophy. PHP is funded primarily from government agencies.

HIV Law Project, Inc. ("HLP") is a not-for-profit, community-based organization which believes
that all people deserve the same rights, including the right to live with dignity and respect, the
right to be treated as equal members of society, and the right to fulfill basic human needs. Yet,
these fundamental rights are elusive for many people living with HIV/AIDS ("PLWHAs"). Through
innovative legal services and advocacy programs, HLP fights for the rights of the most
underserved PLWHAs.

Housing Works, Lyman Prospect Housing Development Fund Corporation ("LPHDFC"), located
at 57 Willoughby Street, Brooklyn, New York, was organized to provide supportive housing
residences for homeless or formerly homeless persons of low income with AIDS or HIV-related
illnesses at two buildings located at 1344 Lyman Place, Bronx, New York and 1412 Prospect
Avenue, Bronx, New York.

BCHDFC was formed in fiscal year 2019; it took over the partnership share owned by USA
Institutional Tax Credit Fund VII L.P. (the "Prior Limited Partner"). On December 21, 2018, the
Prior Limited Partner transferred 99.99% limited partnership interest to BCHDFC. BCP, which has
a 0.01% interest, remains the general partner. Due to this, Fitzpatrick is now 100% owned by
HWI.

Bailey House, Inc. ("BH") was acquired by HWI on January 1, 2019. BH, Inc., which was
incorporated under New York State law in August 1983 as the AIDS Resource Center (the name
was changed in 1996), provides housing, supportive services, and behavioral health treatment to
individuals in NYC living with HIV/AIDS and other chronic illnesses, including mental health
concerns and substance use. BH receives the majority of its funding from government agencies.
BH, Inc. is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code
("IRC"). Contributions to BH qualify donors for the charitable contribution deduction.

Bailey-Holt House Housing Development Fund Corporation ("BHH") was acquired by HWI on
January 1, 2019. BH, Inc. is the sole member of BHH. BHH was established to acquire Bailey-
Holt House from the City of New York. BHH receives the majority of its funding from government
agencies. BHH is a tax-exempt organization under Section 501(c)(3) of the IRC and has been
granted nonprivate foundation status under Section 509(a). Contributions to BHH qualify donors
for the charitable contribution deduction.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 2 - Summary of significant accounting policies

Basis of presentation
The accompanying consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America ("US GAAP") using the
accrual basis of accounting. All intercompany transactions and balances have been eliminated in
consolidation.

Net assets
Net assets, revenues and releases from restriction are classified based on the existence or absence
of donor or board-imposed restrictions. Accordingly, the net assets of HWI and the changes therein
are classified and reported in two categories of net assets:

Net assets without donor restrictions - Represent net assets which are not restricted by donors.
Net assets without donor restrictions are funds that are fully available for the Organization to utilize
in any of its programs or supporting services. Net assets without donor restrictions may also be
designated for specific purposes by the Organization's Board of Directors or may be limited by
legal requirements or contractual agreements with outside parties.

Net assets with donor restrictions - Represent net assets which are subject to donor-imposed
restrictions whose use is restricted by time and/or purpose. Net assets with donor restrictions are
subject to donor-imposed restrictions that require the Organization to use or expend the gifts as
specified, based on purpose or passage of time. Net assets released from restrictions reflect the
fulfillment of the time or purpose restrictions specified by the donors.

Net assets with donor restrictions also include the corpus of gifts, which must be maintained in
perpetuity, but allows for the expenditure of net investment income and gains earned on the
corpus for either specified or unspecified purposes in accordance with donor stipulations.

Thrift shop and bookstore inventory

Inventory, which consists of donated goods for the thrift shops and bookstore, is stated at estimated
fair value at the date of the gift. Fair value is determined using sales history and, as such,
approximates the actual sales price of the donated items. The Organization receives donated goods
via store drop-offs and residential pick-ups. In fiscal 2022, through an agreement with the NYC
Department of Sanitation, the Organization also received donated items via collection bins in buildings
located throughout NYC.

Property and equipment, net

Property and equipment, net, are stated at cost at date of acquisition or fair value at date of
contribution, if donated. Depreciation is recorded on a straight-line basis over the estimated useful
lives of the assets. Amortization of leasehold improvements has been calculated over the lesser of
the estimated useful lives of the assets or the related lease term. The Organization depreciates its
assets using the half-year convention method in the first year the assets are placed in service. Assets
are capitalized when the acquisition cost equals or exceeds the capitalization threshold of $5,000.
Assets are depreciated over the following useful lives:

Buildings and building improvements 30 years

Leasehold improvements Lesser of the life of the lease or the asset 4 -15 years
Equipment, furniture and fixtures 4 - 13 years
Vehicles 4 years

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Long-lived assets
The Organization reviews its long-lived assets for possible impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. Some factors
the Organization considers important, which could trigger an impairment review, include: (i) significant
underperformance compared to expected historical or projected future operating results; (ii)
significant changes in the Organization's use of the acquired assets or the strategy for its overall
business; and (iii) significant negative industry or economic trends.

Leases
The Organization determines if an arrangement is a lease or contains a lease at inception of a
contract. A contract is determined to be or contain a lease if the contract conveys the right to control
the use of identified property, plant, or equipment (an identified asset) in exchange for consideration.
The Organization determines these assets are leased because the Organization has the right to
obtain substantially all of the economic benefit from and the right to direct the use of the identified
asset. Assets in which the supplier or lessor has the practical ability and right to substitute alternative
assets for the identified asset and would benefit economically from the exercise of its right to
substitute the asset are not considered to be or contain a lease because the Organization determines
it does not have the right to control and direct the use of the identified asset. The Organization's lease
agreements do not contain any material residual value guarantees or material restrictive covenants.

In evaluating its contracts, the Organization separately identifies lease and non-lease components,
such as common area and other maintenance costs, in calculating the right-of-use assets and lease
liabilities for its office buildings, apartments, and vehicles. The Organization has elected the practical
expedient to not separate lease and non-lease components and classifies the contract as a lease if
consideration in the contract allocated to the lease component is greater than the consideration
allocated to the non-lease component.

Contributions, grants and contracts

The Organization evaluates whether a transfer of assets is (1) an exchange transaction in which a
resource provider is receiving commensurate value in return for the resources transferred or (2) a
contribution. If the transfer of assets is determined to be an exchange transaction, the Organization
applies guidance under Accounting Standards Codification ("ASC") Topic 606, Revenue from
Contracts with Customers ("ASC 606"). If the transfer of assets is determined to be a contribution,
the Organization evaluates whether the contribution is conditional based upon whether the agreement
includes both (1) one or more barriers that must be overcome before the Organization is entitled to
the assets transferred and promised and (2) a right of return of assets transferred or a right of release
of a promisor's obligation to transfer assets.

Contributions, both cash and in-kind, are recorded in the period received as revenue with donor
restrictions and revenue without donor restrictions depending upon the existence or absence of
donor-imposed stipulations. When a donor restriction expires, that is, when a stipulated time
restriction ends or purpose restriction is met, net assets with donor restrictions are reclassified to net
assets without donor restrictions and reported in the accompanying consolidated statement of
activities as net assets released from restrictions. Contributions to be received after one year are
discounted at an appropriate discount rate. Amortization of the discount is recorded as additional
contribution revenue in accordance with donor imposed restrictions, if any. Conditional promises to
give are not recognized until they become unconditional, that is, when the condition on which they
depend is substantially met.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

In-kind contributions of clothing, books and various other items are recorded as revenue and also
capitalized as part of the Organization's inventory. Upon the sale of these goods, the inventory is
relieved, and a related gift-in-kind expense is recorded representing the cost of the goods sold.

Revenue from governmental grants and contracts is recognized as either contributions or exchange
transaction revenues, depending on whether the transaction is reciprocal or nonreciprocal. For
contributions, revenue is recognized when a contribution becomes unconditional. Typically, the
contract and grant agreements contain a right of return or right of release from the respective
obligation provision on the part of the grantor and the Organization has limited discretion over how
funds transferred should be spent. As such, the Organization recognizes revenue for these
conditional contributions when the related barrier to entitlement has been overcome, which is primarily
when the related expenses are incurred in accordance with the terms of the respective grant or
contract agreement. Funds received in advance of conditions being met are reported as deferred
revenue within the accompanying consolidated statement of financial position.

Revenues
In accordance with ASC 606, the Organization recognizes revenue when control of the promised
goods or services are transferred to the customers or outside parties in an amount that reflects the
consideration the Organization expects to be entitled to in exchange for those goods or services. The
standard outlines a five-step model whereby revenue is recognized as performance obligations within
a contract are satisfied.

ASC 606 also requires new and expanded disclosures regarding revenue recognition to ensure an
understanding as to the nature, amount, timing and uncertainty of revenue and cash flows arising
from contracts with customers. The Organization has identified bookstore sales, thrift shops sales,
health service revenue, pharmacy revenue, rental income on apartments, food services and other
revenue as revenue categories subject to the adoption of ASC 606. The Organization recognizes
contracts with customers, as goods or services are transferred or provided in accordance with ASC
606.

Health service revenue

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

Performance obligations are determined based on the nature of the services provided by the
Organization. Revenue for performance obligations satisfied over time is recognized based on actual
charges incurred in relation to total expected (or actual) charges. The Organization believes that this
method provides a faithful depiction of the transfer of services over the term of the performance
obligation based on the inputs needed to satisfy the obligation. Generally, performance obligations
satisfied over time relate to patients receiving services in outpatient centers. The Organization
measures the performance obligation from the commencement of an outpatient service to the point
when it is no longer required to provide services to that patient, which is generally at the time of
completion of the outpatient services.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

The Organization's performance obligations consist primarily of outpatient services that occur within
one day of a patient's visit; thus, there were no unsatisfied or partially unsatisfied performance
obligations at the end of the reporting period.

The Organization determines the transaction price based on standard charges for goods and services
provided, reduced by contractual adjustments provided to third-party payors, discounts provided to
uninsured patients in accordance with the Organization's policy, and implicit price concessions
provided to uninsured patients. The Organization determines its estimates of contractual adjustments
and discounts based on contractual agreements, its discount policies, and historical experience. The
Organization determines its estimate of implicit price concessions based on its historical collection
experience with this class of patients.

Agreements with third-party payors typically provide for payments at amounts less than established
charges. A summary of the payment arrangements with major third-party payors follows:

Medicaid - Reimbursements for Medicaid services are generally paid at prospectively determined
rates per visit or per covered member.

Medicare - Outpatient services are paid using prospectively determined rates.

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

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

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

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

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Generally, patients who are covered by third-party payors are responsible for related deductibles and
coinsurance, which vary in amount. The Organization also provides services to uninsured patients
and offers those uninsured patients a discount, either by policy or law, from standard charges. The
Organization estimates the transaction price for patients with deductibles and coinsurance and from
those who are uninsured based on historical experience and current market conditions. The initial
estimate of the transaction price is determined by reducing the standard charge by any contractual
adjustments, discounts, and implicit price concessions. Subsequent changes to the estimate of the
transaction price are generally recorded as adjustments to health service revenue in the period of the
change.

Subsequent changes that are determined to be the result of an adverse change in the patient's ability
to pay are recorded as bad debt expense.

Consistent with the Organization's mission, care is provided to patients regardless of their ability to
pay. Therefore, the Organization has determined it has provided implicit price concessions to
uninsured patients and patients with other uninsured balances (for example copays, and deductibles).
The implicit price concessions included in estimating the transaction price represent the difference
between amounts billed to patients and the amounts the Organization expects to collect based on its
collection history with those patients.

The Organization is open to all patients, regardless of their ability to pay. In the ordinary course of
business, the Organization renders services to patients who are financially unable to pay for
healthcare. The Organization provides care to these patients who meet certain criteria under its
sliding fee discount policy without charge or at amounts less than established rates. Charity care
services are computed using a sliding fee scale based on patient income and family size.

The Organization maintains records to identify and monitor the level of sliding fee discount it provides.
For uninsured self-pay patients that do not qualify for charity care, the Organization recognizes
revenue on the basis of its standard rates for services provided or on the basis of discounted rates,
if negotiated or provided by policy. On the basis of historical experience, a significant portion of the
Organization's uninsured patients will be unable or unwilling to pay for the services provided. Thus,
the Organization records an explicit concession to uninsured patients in the period the services are
provided based on historical experience.

Community benefit represents the cost of services for Medicaid, Medicare, and other public patients
for which the Organization is not reimbursed. Based on the cost of patient services, charity care and
community benefit amounted to $17,526,195 and $28,539,474, respectively, for the year ended June
30, 2022. Such amounts determined to qualify as charity care are not reported as revenue.

The Organization has determined that the nature, amount, timing, and uncertainty of revenue and
cash flows are affected by the following factors: payors, geography, service lines, method of
reimbursement, and timing of when revenue is recognized.

Pharmacy receivable and revenue

The Organization participates in Section 340B of the Public Health Service Act ("PHS Act"), Limitation
on Prices of Drugs Purchased by Covered Entities. Participation in this program allows the
Organization to purchase pharmaceuticals at discounted rates for prescriptions to eligible patients.
Pharmacy revenue is generated through the pharmacy and 340B program that the Organization
operates through its agreements with third parties. Under this program, the Organization uses the
third parties as its agents for the purpose of operating and managing the pharmacy and providing
pharmacy services. See Note 8 for revenues and receivables related to this program.

16
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

During the year ended June 30, 2022, the Organization wrote off $885,050 of pharmacy receivable
based on third party-specific impairment events.

Thrift shops and bookstore sales and food services

Revenues from the thrift shops and bookstore are recognized at the point of sale. Food services,
which are generally driven by catering events, are recognized upon completion of the event.

Rental income on apartments

Rental income is recognized as rents become due. Rental payments received in advance are deferred
until earned. Rental income is typically billed on a monthly basis, which is consistent with the timing
of the delivery of services. All leases between the Organization and the tenants are operating leases.

Apartment rents are paid partially by the tenants and partially subsidized through various federal
programs.

Allowance for uncollectible accounts

The carrying value of grants and contract services receivables, contributions receivable, pharmacy
receivables, and health services receivables is reduced by an appropriate allowance for uncollectible
accounts and, therefore, approximates net realizable value. The Organization determines its
allowance by considering a number of factors, including the length of time receivables are past due,
the Organization's previous loss history, the donor's current ability to pay its obligation, and the
condition of the general economy and the industry as a whole. Receivables outstanding longer than
the payment terms are considered past due. The Organization writes off accounts receivables when
they become uncollectible, and payments subsequently received on such receivables are recorded
as income in the period received. During the year ended June 30, 2022, the Organization wrote off
$941,637 of health services receivable based on patient-specific impairment events.

Concentration of credit risk

Cash is exposed to various risks, such as interest rate, market, and credit risks. To minimize such
risks, the Organization maintains its cash in various bank deposit accounts which, at times, may
exceed federally insured limits. At June 30, 2022, the Organization's cash was placed with high credit
quality financial institutions and, accordingly, the Organization does not anticipate any losses with
respect to these depository accounts.

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

Performance indicator
The consolidated statement of activities includes change in net assets as the performance indicator.

Debt issuance costs

Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the
face amount of the mortgage loans payable to which such costs relate. Amortization of debt issuance
costs is reported as a component of interest expense and is computed using imputed interest rates
on the related loans.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Advertising
Advertising costs are expensed as incurred. Advertising costs amounted to $327,000 for the year
ended June 30, 2022 and are included in "Other expenses" on the consolidated statement of
functional expenses.

Taxes
The Organization, except BCP, is exempt from federal income taxation by virtue of being an
organization described in Section 501(c)(3) of the IRC. Nevertheless, the Organization may be
subject to tax on income unrelated to its exempt purpose, unless that income is otherwise excluded
by the IRC.

The Organization follows guidance that clarifies the accounting for uncertainty in tax positions taken
or expected to be taken in a tax return, including issues relating to consolidated financial statement
recognition and measurement. This guidance provides that the tax effects from an uncertain tax
position can only be recognized in the consolidated financial statements if the position is "more-likely-
than-not" to be sustained if the position were to be challenged by a taxing authority. The assessment
of the tax position is based solely on the technical merits of the position, without regard to the
likelihood that the tax position may be challenged.

Management has analyzed tax positions taken by the consolidated entities and has concluded that,
as of June 30, 2022, there are no uncertain tax positions taken or expected to be taken that would
require recognition of a liability or disclosure in the consolidated financial statements.

Functional allocation of expenses

The costs of supporting the various programs and other activities have been summarized on a
functional basis in the consolidated statement of activities. Costs that can be identified with a specific
program or support service are charged directly to that program or support service. Costs common
to multiple functions have been allocated among the program services, management and general
and fundraising categories based on time and effort measurements and other methods:

 Staff costs are allocated based on time and effort.

 Occupancy and depreciation costs are allocated based on square footage.

 Management and general expenses include costs not identifiable with any specific program, but
which provide for the overall support and direction of the Organization.

 Fundraising costs are expensed as incurred, even though they may result in contributions
received in future years.

Adoption of accounting principles

In September 2020, the FASB issued ASU 2020-07, Not-for-Profit Entities (Topic 958), Presentation
and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets, to increase
transparency around contributed nonfinancial assets (also known as "gifts-in-kind") received by not-
for-profit ("NFP") organizations - including transparency on how those assets are used and how they
are valued. The ASU does not change existing recognition and measurement requirements but
requires an NFP to present contributed nonfinancial assets as a separate line item in the consolidated
statement of activities, apart from contributions of cash or other financial assets and disclose the
following: (1) contributed nonfinancial assets received, disaggregated by category, that depicts the
type of contributed nonfinancial assets; (2) for each category of the contributed nonfinancial assets
received (as identified above):

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

(i) qualitative information about whether the contributed nonfinancial assets were or are intended to
be either monetized or utilized during the reporting period and future periods; if utilized, a description
of the programs or other activities in which those assets were or are intended to be used; (ii) a
description of any donor restrictions associated with the contributed nonfinancial assets; and (iii) the
valuation techniques and inputs used to arrive at a fair value measure, including the principal market
(or most advantageous market) if significant, in accordance with the requirements in Topic 820. The
Organization has only one type of nonfinancial asset, which consists of donated goods for the thrift
shops and bookstore. The nonfinancial asset is stated at estimated fair value at the date of the gift.
Fair value is determined using sales history and, as such, approximates the actual sales price of the
donated items.

New pronouncement
In June 2016, the FASB issued ASU 2016-13 to reflect management's current estimate of expected
credit losses as opposed to current US GAAP, which delayed recognition until the loss was probable.
As a result of the ASU, management will be required to perform an assessment of expected credit
losses on relevant information about past events, including historical experience, current conditions,
and reasonable and supportable forecasts that affect the collectability of the reported amount.

In the period of adoption, the entity will record a cumulative-effect adjustment to changes in net assets
and in subsequent years, changes in the current expected credit loss for the reporting period are
reported on the consolidated statement of activities. The amendments affect loans, debt securities,
trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance
receivables and any other financial assets not excluded from the scope that have a contractual right
to receive cash.

In November 2018, the FASB issued ASU 2018-19 - "Codification Improvements to Topic 326,
Financial Instruments - Credit Losses". There were additional amendments to this ASU in May 2019,
when the FASB issued ASU 2019-05 - "Financial Instruments - Credit Losses (Topic 326): Targeted
Transition Relief". The amendments in these ASUs extended the implementation of ASU 2016-13 to
be effective for fiscal years beginning after December 15, 2021 and will therefore be effective for the
Organization's 2023 fiscal year. The Organization is in the process of evaluating the impact this
standard will have on the consolidated financial statements.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 3 - Property and equipment, net

At June 30, 2022, property and equipment, net, consisted of the following:

Land $ 18,384,068
Buildings and building improvements 37,134,452
Equipment, furniture and fixtures 613,226
Vehicles 49,686
Software 45,258
Leasehold improvements 20,601,643
Finance leases 1,551,679

78,380,012

Less: Accumulated depreciation and amortization (34,112,390)

Add: Construction in progress 5,360,524

$ 49,628,146

A portion of the Organization's property and equipment was purchased with funding received from
the U.S. Department of Health and Human Services and the U.S. Department of Housing and Urban
Development. Funding for certain capital expenditures was provided with the stipulation that if the
Organization ceases to operate certain programs, which in management's opinion is unlikely, the
related property and equipment could revert to the funding source.

Depreciation and amortization expense for the year ended June 30, 2022, totaled approximately
$2,607,000. Construction in progress amount is not depreciated until the asset is placed in service.
Management expects construction related to BH to be completed within the next four years and
estimates the cost to amount to approximately $32,000,000.

Finance lease liabilities

The Organization leases various office equipment under noncancelable leasing arrangements that
are classified as financing leases. The related cost and accumulated depreciation are included within
"Property and equipment, net" in the accompanying consolidated statement of financial position at
June 30, 2022, and accumulated depreciation amounted to $1,551,679.

Leases have been fully paid as per contract in fiscal year ended June 30, 2022.

Note 4 - Investments

Related entities
During fiscal 2003, the Organization acquired an 18% ownership interest in Amida Care, Inc. for
$300,000, which was accounted for at cost. A $300,000 impairment of this investment was recorded
during fiscal 2005. During the year ended June 30, 2017, the Organization contributed no additional
capital but the ownership interest in Amida Care, Inc. was reduced to 14%. During the year ended
June 30, 2018, the Organization contributed no additional capital but the ownership interest in Amida
Care, Inc. was increased to 16.67%. As of June 30, 2022, the Organization maintains the same
ownership interest in Amida Care, Inc. and the investment is fully reserved for since Amida Care, Inc.
had an accumulated deficit.

20
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

On June 7, 2010, BCP, an entity controlled by HWI, was admitted without consideration as General
Partner to Fitzpatrick with a partnership interest of 1%. Fitzpatrick was formed to acquire, own,
construct, develop, manage and operate a supportive housing facility. The facility consists of 18
apartment units available for rental to homeless and low-income individuals. The facility was financed
through a note from the Homeless Housing Assistance Corporation ("HHAC") in the amount of
approximately $2.1 million and through the sale of limited partnership interests to the Prior Limited
Partner. On December 21, 2019, the Prior Limited Partner transferred its 99.99% interest in Fitzpatrick
to BCHDFC, effectively making HWI 100% owner of Fitzpatrick. BCP still owns 0.01% of the
partnership and remains General Partner, whereas BCHDFC is the limited partner.

Note 5 - Loans payable

At June 30, 2022, loans payable consisted of the following:

NFF Loan to buyout 2611 Pitkin - $936,000 at 6% fixed rate. Maturity date is July
2023. $ 936,000

Leviticus Promissory note for Bailey Holt House for $900,000, of which $384,681
has been disbursed. Interest rate is 5.75% and maturity date is November 2023. 384,681

LOC from Dime Community Bank (formerly BNB Bank) - LOC bears an interest
rate of 6% payable monthly. Total LOC is $1,500,000 and matures on December
27, 2022. 810,730

Chase term loan in the principal sum of $2,456,612 at 4.22% fixed rate. Maturity
date is June 21, 2029. 2,456,612

Total loans payable 4,588,023

Less: Current maturities 810,730

Long-term portion $ 3,777,293

Loans not associated with housing facilities are collateralized by the thrift shops inventory and/or the
Medicaid receivables.

Future principal payments on loans payable are as follows at for years ending June 30:

2023 $ 810,730
2024 1,320,681
2025 2,456,612

$ 4,588,023

For the year ended June 30, 2022, interest expense totaled approximately $266,000.

In November 12, 2021, the Organization secured a line of credit in the amount of $6,000,000. At June
30, 2022, there were no outstanding balances or related interest expense on this line of credit. The
maturity date is March 12, 2023.

21
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

On May 1, 2020, HWS3 entered into an unsecured promissory note with a commercial bank for
$2,530,337 pursuant to the Paycheck Protection Program (the "PPP" Loan), which was established
under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and is administered by
the U.S. Small Business Administration (the "SBA"). Under the CARES Act, PPP Loan recipients
meeting certain criteria set by the SBA may be eligible for full or partial forgiveness of such loans.
During the year ended June 30, 2022, HWS3 submitted its application for PPP Loan forgiveness and
received notice from its lender in August 6, 2021 that the SBA approved forgiveness of the full amount
of the loan and related interest thereon. Accordingly, the Organization derecognized $2,530,337 of
the PPP Loan and recognized a corresponding gain on debt forgiveness, included in "Extinguishment
of debt" on the consolidated statement of activities. There is a six-year period during which the SBA
can review BH's forgiveness calculation.

Note 6 - Statement of cash flows

The following table provides a reconciliation of cash and restricted cash reported within the
consolidated statement of financial position that sum to the total of the same such amounts in the
consolidated statement of cash flows as of June 30, 2022:

Cash $ 5,463,889
Restricted cash - debt service and contingency reserve
funds 428,366

Total cash and restricted cash $ 5,892,255

Restricted cash at June 30, 2022, consists of cash on deposit for debt service and contingency
reserve funds. These assets are maintained as collateral with financial institutions as required by the
respective loan agreements.

Note 7 - Health service revenue and receivables

For the year ended June 30, 2022, health service revenue consists of the following:

Medicaid (including Managed Care) $ 25,299,317

Medicare 925,320
Other third-party 1,971,680
New York State uncompensated care 957,421

Total $ 29,153,738

Health service receivables, net consist of amounts due from government programs, commercial
insurance companies, other group insurance programs, and private pay patients. Other third-party
includes value based and other incentive payments for patient care.

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Health service receivables, net amounted to $4,920,880 as of July 1, 2021. Health service
receivables, net consist of the following at June 30, 2022:

Medicaid (including Managed Care) $ 4,193,736

Medicare 71,474
Other third-party 72,270

Total $ 4,337,480

The Organization's concentration of credit risk related to health service receivables primarily related
to uninsured patient accounts and patient accounts for which the primary insurance payor has paid
but patient responsibility amounts remain outstanding.

Note 8 - Pharmacy 340B program

The Organization participated in the United States federal program requiring drug manufactures to
provide outpatient drugs to eligible healthcare organizations at significantly reduced prices. The intent
of the program is to allow entities to stretch federal resources, reaching more eligible patients and
providing more comprehensive services to them. The Organization has contracted with community
pharmacies to administer these services to their patients for a fee. These contracts authorize the
pharmacy to bill Medicaid, Medicare and third-party insurance remitting the collected funds less their
fees to the Organization. The pharmacy fees cover the cost of drugs and administrative fees and
allow the pharmacy to purchase directly from the drug wholesalers the drugs which replenish their
stock. As of July 1, 2022, the Organization had pharmacy receivables amounting to approximately
$2,974,000. At June 30, 2022, the Organization recognized revenue of approximately $27,397,000,
and expenses of approximately $17,838,000 for the cost of drugs and administrative fees. For the
year ended June 30, 2022, the cost of drugs in the amount of approximately $16,310,000 is presented
as cost of goods sold and the administrative fees in the amount of approximately $3,591,000 is
presented as contracted services within the accompanying consolidated statement of functional
expenses.

Note 9 - Deferred revenue

The Bronx-Claremont homeless housing facility associated with Fitzpatrick was financed through two
notes. The first note is from the HHAC, and closed on July 30, 1997, in the amount of $2,113,216
with a term of 30 years. The note bears no interest and repayment is not required as long as the
housing facility remains available for low-income persons in accordance with regulatory agreements
and regulations. The Organization believes that the possibility of the facility not maintaining its status
as a low-income housing facility throughout the term of the advance is remote, and therefore,
repayment would not be required. At June 30, 2022, the unamortized balance of approximately
$569,000 was reflected in the consolidated statement of financial position as "Deferred revenue". The
second note is from the NYC Department of Housing and Urban Development and closed in
November 1995 in the amount of $150,000 under a similar arrangement also covering a 30-year term.
At June 30, 2022, the unamortized balance of approximately $31,000 was reflected in the
consolidated statement of financial position as "Deferred revenue".

During the fiscal year 2012, the Organization's JEFF received funds of $252,608 from the NYC
Department of Housing Preservation and Development under a similar arrangement which covers a
25-year term. At June 30, 2022, the unamortized balance of approximately $177,000 was reflected
in the consolidated statement of financial position as part of "Deferred revenue".

23
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

During the fiscal year 2014, the Organization acquired two additional properties with a fair value of
approximately $2,250,000 as part of a contract with the HHAC. The contract has a remaining term of
14 years and requires the Organization to provide housing for persons that would otherwise be
homeless. Performance under the terms of the contract is secured by mortgage notes on the
properties that are only payable in the event the Organization defaults under the terms of the contract.
The Organization believes that the possibility of the facility not maintaining its status as a homeless
housing facility throughout the term of the contract to be remote, and therefore, repayment would not
be required. At June 30, 2022, the unamortized balance of approximately $1,380,000 was reflected
in the consolidated statement of financial position as "Deferred revenue".

During the fiscal year 2017, the Organization's HULL entered into an agreement with the HHAC and
other agencies to establish and operate a project to provide housing for homeless people. The
agreements cover a 25-year term with the maximum amount to be received of approximately
$9,216,000. Repayment is not required as long as the housing facility remains available for low-
income persons in accordance with regulatory agreements and regulations. The Organization
believes that the possibility of the facility not maintaining its status as a low-income housing facility
throughout the term of the advance is remote, and therefore, repayment would not be required. At
June 30, 2022, the unamortized balance of approximately $8,586,000 was reflected in the
consolidated statement of financial position as part of "Deferred revenue".

During the fiscal year 2019, HWI acquired two more entities, BH, Inc., and Bailey Holt House. Bailey
Holt House had entered into an agreement with the HHAC to operate a project and provide housing
for homeless and low-income people. The agreement ("performance mortgage") was signed in 1999
for a 30-year term in the amount of approximately $5,165,000. Repayment is not required if the
housing facility remains for homeless and low-income individuals and all regulations and
requirements of the performance mortgage are met. As of June 30, 2022, the unamortized balance
of approximately $1,693,000 is reflected as part of "Deferred revenue".

Deferred revenue also includes amounts collected in advance of special events which were
postponed until local venues re-opened. These amounts totaled approximately $74,000 as of June
30, 2022.

Note 10 - Net assets and endowment funds

As of June 30, 2022, net assets with donor restrictions are restricted for the following purposes or
periods.

Purpose-restricted $ 213,702
Endowment fund held in perpetuity 657,515

Total $ 871,217

Net assets were released from donor restrictions by incurring expenses satisfying the restricted
purposes, by the expiration of a time restriction, or by the occurrence of other events specified by
donors.

Time-restricted $ 111,421
Purpose-restricted 368,113

Total $ 479,534

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 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

During fiscal 2006, the Organization received two donor-restricted endowments. One was established
in the name of Keith Cylar and the other as a general endowment. During the year ended June 30,
2012, the Organization received permission from the two largest contributors to the endowment
stating that the funds they contributed could be borrowed to cover operating costs and as such
liquidated these assets during the year. Management plans to replenish the borrowed endowment
funds.

On September 17, 2010, New York State passed the New York State Prudent Management of
Institutional Funds Act ("NYPMIFA"), its version of the UPMIFA. All not-for-profit organizations formed
in New York must apply this law. The Organization classifies donor-restricted endowment funds as
permanently restricted net assets, unless otherwise stipulated by the donor: (a) the original value of
gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent
endowment and (c) accumulations to the permanent endowment made in accordance with the
direction of the applicable donor gift instrument at the time the accumulation is added to the funds.

The remaining portion of the donor-restricted endowment fund not classified in permanently restricted
net assets is classified as temporarily restricted net assets until those amounts are appropriated for
expenditure by the Organization in a manner consistent with the uses, benefits, purposes and
duration for which the endowment is established and the standard of prudence prescribed by
NYPMIFA.

In accordance with NYPMIFA, the Organization considers the following factors in making a
determination to appropriate or accumulate donor-restricted endowment funds: the purpose, duration,
and preservation of the endowment fund; expected total return of investments; general economic
conditions; the possible effects of inflation and deflation; other resources of the Organization; and the
investment policy of the Organization.

The following table illustrates the changes in the Organization's endowment net assets as of June
30, 2022:

Net assets Net assets

without donor with donor
restrictions restrictions Total

Donor-restricted (endowment) $ (657,515) $ 657,515 $ -

There were no endowment related activities for the year ended June 30, 2022.

Note 11 - Defined contribution plan

The Organization established a defined contribution plan for all eligible employees effective
December 21, 1999. Effective July 1, 2019, after modifying the plan, the Organization began
matching half of each employee's contribution to the 403(b) plan up to 4% of their salary. Additionally,
a vesting schedule applies to all employer contributions made to the plan. Vesting occurs at intervals
of 20% starting at two years of employment until six years when the employee would be considered
100% vested in all contributions made by the Organization. The Organization's contributions for the
year ended June 30, 2022, amounted to approximately $280,000.

25
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 12 - Operating lease liabilities

The Organization leases building space and office equipment. All contracts that implicitly or explicitly
involve property, plant and equipment are evaluated to determine whether they are or contain a lease.

At lease commencement, the Organization recognizes a lease liability, which is measured at the
present value of future lease payments, and a corresponding right-of-use asset equal to the lease
liability, adjusted for prepaid lease costs, initial direct costs and lease incentives, where the initial term
of the lease exceeds 12 months. The Organization has elected and applies the practical expedient
available to lessees to combine non-lease components with their related lease components and
account for them as a single combined lease component for all its leases. The Organization
remeasures lease liabilities and related right-of-use assets whenever there is a change to the lease
term and/or there is a change in the amount of future lease payments, but only when such modification
does not qualify to be accounted for as a separate contract. Variable lease payments are excluded
for purposes of calculating the operating right-of-use assets and operating lease obligations unless
the variable lease payments depend on an index or rate or are in substance fixed payments.

The Organization determines an appropriate discount rate to apply when determining the present
value of the remaining lease payments for purposes of measuring or remeasuring lease liabilities. As
the rate implicit in the lease is generally not readily determinable, the Organization estimates its
incremental borrowing rate as the discount rate. The Organization’s incremental borrowing rate,
which is determined at either lease commencement or when a lease liability is remeasured, is an
estimate of the interest rate it would pay on a collateralized borrowing, for an amount equal to the
amount and currency of denomination of the lease payments, over a period commensurate with the
lease term and in a similar economic environment.

For accounting purposes, the Organization’s leases commence on the earlier of (i) the date upon
which the Organization obtains control of the underlying asset and (ii) the contractual effective date
of a lease. Lease commencement for most of the Organization’s leases coincides with the contractual
effective date. The Organization’s leases generally have minimum base terms with renewal options
or fixed terms with early termination options. Such renewal and early termination options are
exercisable at the option of the Organization and, when exercised, usually provide for rental payments
during the extension period at then current market rates or at pre-determined rental amounts. Unless
the Organization determines that it is reasonably certain that the term of a lease will be extended,
such as through the exercise of a renewal option or non-exercise of an early termination option, the
term of a lease begins at lease commencement and spans for the duration of the minimum non-
cancellable contractual term. When the exercise of a renewal option or non-exercise of an early
termination option is reasonably certain, the lease term is measured as ending at the end of the
renewal period or on the date an early termination may be exercised. There are no residual value
guarantees.

Lease expense for operating leases continues to be recognized on a straight-line basis over the term
of the lease and is included in "Occupancy" expenses on the consolidated statement of functional
expenses.

26
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

The components of lease expense included in the consolidated statement of activities consist of the
following for the year ended June 30, 2022:

Finance lease cost

Amortization of right-of-use assets included in depreciation and amortization $ 385,368
Interest on finance lease obligations included in interest and finance fees 1,612
Operating lease cost included in office/retail occupancy 8,313,667

Total lease cost $ 8,700,647

Other information
Cash paid for amounts included in the measurement of lease obligations
Operating cash flows for operating leases $ 8,356,991
Operating cash flows for finance leases 1,612
Financing cash flows for finance leases 160,049

Right-of-use assets obtained

In exchange for new operating lease obligations $ 7,095,718

Weighted-average remaining lease term

Operating leases 8.7 years

Weighted-average discount rate

Operating leases 6%

Aggregate future minimum lease payments under operating leases as of June 30, 2022 are as
follows:

2023 $ 8,299,429
2024 7,822,778
2025 6,200,831
2026 4,182,281
2027 3,545,866
Thereafter 23,301,406

Total minimum lease payments 53,352,591

Less: Imputed interest (12,647,410)

Total operating lease liabilities $ 40,705,181

27
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 13 - Commitments and contingencies

The Organization has been named in several lawsuits in the normal course of business. In the opinion
of management, these claims are not expected to have a material adverse effect on the
Organization's consolidated financial position, changes in net assets or cash flows.

The Organization participates in a number of federal and state programs. These programs require
that the Organization comply with certain requirements of laws, regulations, contracts, and
agreements applicable to the programs in which it participates. All funds expended in connection with
government grants and contracts are subject to audit by government agencies. While the ultimate
liability, if any, from such audits of government contracts by government agencies is presently not
determinable, it should not, in the opinion of management, have a material effect on the
Organization's consolidated financial position or change in net assets. Accordingly, no provision for
any such liability that may result has been made in the accompanying consolidated financial
statements.

Note 14 - Availability of resources and liquidity

The Organization regularly monitors liquidity required to meet its operating needs and other
contractual commitments, while also maintaining sufficient funds to provide reasonable assurance
that commitments and obligations supporting mission fulfillment will continue to be met. The
Organization has various sources of liquidity at its disposal, including approximately $6 million of
cash. Additionally, the Organization has a $6 million line of credit available to utilize for purposes of
operating expenditures.

For purposes of analyzing resources available to meet general expenditures over a 12-month period,
the Organization considers all expenditures related to its ongoing operating activities to support those
activities to be general expenditures. As of June 30, 2022, the following table shows the total financial
assets held by the Organization that could readily be made available within one year of the
consolidated statement of financial position date to meet general expenditures:

Financial assets at year-end

Cash $ 5,463,889
Health service receivables, net 4,337,480
Grants and contract service receivables 35,473,914
Pharmacy receivables 2,973,596

Total financial assets at year-end 48,248,879

Less amounts not available to be used within one year

Net assets with donor restrictions (871,217)

Financial assets available to meet general expenditures

over the next 12 months $ 47,377,662

28
 Housing Works, Inc., and Affiliates

Notes to Consolidated Financial Statements

June 30, 2022

Note 15 - Contributed nonfinancial assets

For the year ended June 30, 2022, contributed nonfinancial assets recognized within the consolidated
statement of activities included:
Revenue Utilization in
Recognized Programs/Activities Donor Restriction Valuation Techniques and Inputs

Inventory, which consists of household items and clothing for sale in the
thrift shops and bookstore, is stated at estimated fair value at the date of
Bookstore and Thrift No associated donor
Household items/books/clothing $ 14,381,169 the gift. Fair value is determined using sales history and, as such,
Shops restrictions
approximates the actual sales price of the donated items.

Note 16 - Subsequent events

The Organization evaluated its June 30, 2022, consolidated financial statements for subsequent
events through March 30, 2023, the date the consolidated financial statements were issued. The
Organization is not aware of any subsequent events that would require recognition or disclosure in
the consolidated financial statements, except as noted below.

Effective November 2022, the Organization formed a Limited Liability Company (“LLC”) that is
controlled by the organization. The LLC obtained a license to operate and opened a retail recreational
cannabis store on December 29, 2022.

29
Consolidating Supplementary Information
 Housing Works, Inc., and Affiliates

Consolidating Schedule of Financial Position

June 30, 2022

HWI THRIFT Bookstore HWFSC HWDC1 HWDC2 HWDC3 PitkinHDFC LEX JEFF BCP HULL LPHDFC LPHDFC PHP HLP HWS1 HWS2 HWS3 HWS4 HWS5 HWS6 BH BHH TOTAL
ASSETS

CURRENT ASSETS
Cash $ 246,229 $ 1,528,133 $ 176,007 $ 1,000 $ 181,927 $ 7,677 $ 77,930 $ - $ 1,058 $ 85,300 $ (3,387) $ 20,000 $ 95,255 $ - $ 1,000 $ 161,822 $ 7,501 $ 31,750 $ 2,262,577 $ - $ - $ - $ 556,011 $ 26,099 $ 5,463,889

Health service receivables, net 1,202,755 - - - - - - - - - - - - - - - 725,742 1,521,720 257,954 253,841 24,599 - 350,869 - 4,337,480
Grant and contract service receivables 17,063,006 - - - - - - - - - - - - - 109,648 89,297 39,371 48,167 11,315,121 - - - 6,809,304 - 35,473,914
Contributions receivable - - - - - - - - - - - - - - - - - - - - - - - - -
Pharmacy receivable - - - - - - - - - - - - - - - - - - 2,973,596 - - - - - 2,973,596

Thrift shop and bookstore inventory, net - 3,535,140 1,049,233 14,011 - - - - - - - - - - - - - - - - - - - - 4,598,384

Intercompany receivable/payable 6,065,655 8,288,857 (3,405,176) (4,299,799) 92,399 (1,293,066) (3,800,432) (871,459) (3,019,835) (1,324,327) (1,233,907) (843,305) (723,659) 388,487 (2,196,987) (1,270,714) (7,647,008) (8,443,784) 35,214,155 (1,093,984) (597,062) (172,006) 9,311,549 (17,124,592) -

Prepaid expenses and other assets 1,733,600 180,850 (8,960) - 21,924 89,499 21,473 - 620 70,841 205,161 (613) 159,230 - 3,333 - 4,050 1,230 175,123 - 3,500 - 301,536 - 2,962,397

Total current assets 26,311,245 13,532,980 (2,188,896) (4,284,788) 296,250 (1,195,890) (3,701,029) (871,459) (3,018,157) (1,168,186) (1,032,133) (823,918) (469,174) 388,487 (2,083,006) (1,019,595) (6,870,344) (6,840,917) 52,198,526 (840,143) (568,963) (172,006) 17,329,269 (17,098,493) 55,809,660

LONG-TERM ASSETS
Property and equipment 5,300,985 4,233,326 157,350 12,500 3,683,134 5,418,204 4,147,695 2,034,617 3,262,410 3,408,345 1,474,548 9,455,998 2,834,946 - 505,891 - 5,485,340 5,016,751 7,574,434 - 50,625 19,305 176,189 19,487,942 83,740,535
Accumulated depreciation (4,547,183) (3,947,525) (89,165) (12,500) (1,939,214) (2,577,481) (2,078,409) (612,536) (1,637,958) (1,047,052) (789,166) (203,455) (2,381,130) - (203,439) - (4,346,219) (4,694,051) (2,462,371) - (5,484) - (169,384) (368,667) (34,112,389)
Restricted cash - debt service and
contingency reserve funds 7,569 - - - - - - - - - 402,598 - - - - - - - 18,199 - - - - - 428,366

Operating right of use assets 4,457,350 13,107,592 4,296,182 - - - - - - - - - - - 391,928 - - 12,776,506 - 203,501 - - 1,962,239 - 37,195,298

Security deposits and other assets 564,755 833,261 - - - - 5,545 99,716 3,210 - 5,470 - 1,695 - 24,665 57,800 1,750 97,999 7,925 - - - 600,332 75,693 2,379,816

Total long-term assets 5,783,476 14,226,654 4,364,367 - 1,743,920 2,840,723 2,074,831 1,521,797 1,627,662 2,361,293 1,093,450 9,252,543 455,511 - 719,045 57,800 1,140,871 13,197,205 5,138,187 203,501 45,141 19,305 2,569,376 19,194,968 89,631,626

Total assets $ 32,094,721 $ 27,759,634 $ 2,175,471 $ (4,284,788) $ 2,040,170 $ 1,644,833 $ (1,626,198) $ 650,338 $ (1,390,495) $ 1,193,107 $ 61,317 $ 8,428,625 $ (13,663) $ 388,487 $ (1,363,961) $ (961,795) $ (5,729,473) $ 6,356,288 $ 57,336,713 $ (636,642) $ (523,822) $ (152,701) $ 19,898,645 $ 2,096,475 $ 145,441,286

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Account payable and accrued expenses $ 13,738,888 $ 786,414 $ 343,319 $ 80,608 $ 21,674 $ 99 $ 1,142 $ - $ - $ 1,506 $ 39,426 $ 219,740 $ 55,723 $ - $ 43,508 $ 634 $ 116,879 $ 213,576 $ 9,487,697 $ 23,481 $ 48,327 $ - $ 2,299,631 $ 8,250 $ 27,530,522
Lease Liability ST 1,947,719 2,401,306 99,955 - - - - - - - - - - - 181,017 - - 498,490 - 91,416 - - 845,869 - 6,065,772
Current maturities of loans payable - - - - - - - - - - - - - - - - - - - - - 810,730 - 810,730

Total current liabilities 15,686,607 3,187,720 443,274 80,608 21,674 99 1,142 - - 1,506 39,426 219,740 55,723 - 224,525 634 116,879 712,066 9,487,697 114,897 48,327 - 3,956,230 8,250 34,407,024

LONG-TERM LIABILITIES
Loans payable - - - - - - - 936,000 - - - - - - - - - - 2,456,612 - - - - 384,681 3,777,293
Deferred revenue - HHAC 80,797 (16,850) - - - - - - - 176,826 600,406 8,586,046 1,379,464 - - - - - - - - - 10,000 1,692,784 12,509,473
Lease Liability LT 3,014,138 11,556,409 4,259,274 - - - - - - - - - - - 242,051 - - 14,209,627 - 120,118 - - 1,237,792 - 34,639,409
Other liabilities (43) 98,663 1,387 - - - - - - - - - - - - - - - - - - - - - 100,007

Total long-term liabilities 3,094,892 11,638,222 4,260,661 - - - - 936,000 - 176,826 600,406 8,586,046 1,379,464 - 242,051 - - 14,209,627 2,456,612 120,118 - - 1,247,792 2,077,465 51,026,182

Total liabilities 18,781,499 14,825,942 4,703,935 80,608 21,674 99 1,142 936,000 - 178,332 639,832 8,805,786 1,435,187 - 466,576 634 116,879 14,921,693 11,944,309 235,015 48,327 - 5,204,022 2,085,715 85,433,206

NET ASSETS (DEFICIT)

Without donor restrictions 12,442,005 12,933,692 (2,528,464) (4,365,396) 2,018,496 1,644,734 (1,627,340) (285,662) (1,390,495) 1,014,775 (578,515) (377,161) (1,448,850) 388,487 (1,830,537) (962,429) (5,846,352) (8,565,405) 45,392,404 (871,657) (572,149) (152,701) 14,694,623 10,760 59,136,863
With donor restrictions 871,217 - - - - - - - - - - - - - - - - - - - - - - 871,217

Total net assets (deficit) 13,313,222 12,933,692 (2,528,464) (4,365,396) 2,018,496 1,644,734 (1,627,340) (285,662) (1,390,495) 1,014,775 (578,515) (377,161) (1,448,850) 388,487 (1,830,537) (962,429) (5,846,352) (8,565,405) 45,392,404 (871,657) (572,149) (152,701) 14,694,623 10,760 60,008,080

Total liabilities and net assets (deficit) $ 32,094,721 $ 27,759,634 $ 2,175,471 $ (4,284,788) $ 2,040,170 $ 1,644,833 $ (1,626,198) $ 650,338 $ (1,390,495) $ 1,193,107 $ 61,317 $ 8,428,625 $ (13,663) $ 388,487 $ (1,363,961) $ (961,795) $ (5,729,473) $ 6,356,288 $ 57,336,713 $ (636,642) $ (523,822) $ (152,701) $ 19,898,645 $ 2,096,475 $ 145,441,286

See Independent Auditor's Report.

31
 Housing Works, Inc., and Affiliates

Consolidating Schedule of Revenue and Expenses

Year Ended June 30, 2022

HWI THRIFT Bookstore HWFSC HWDC1 HWDC2 HWDC3 PitkinHDFC LEX JEFF BCP Hull LPHDFC LPHDFC PHP HLP HWS1 HWS2 HWS3 HWS4 HWS5 HWS6 BH BHH TOTAL Eliminating Total

OPERATING REVENUES
AND OTHER SUPPORT
Grants and contract
services $ 30,749,851 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 417,664 $ 428,571 $ 316,389 $ 198,324 $ 32,061,362 $ - $ - $ - $ 14,943,561 $ - $ 79,115,722 $ - $ 79,115,722
Bookstore sales - - 876,479 - - - - - - - - - - - - - - - - - - - - - 876,479 - 876,479
Thrift shops sales - 13,509,327 - - - - - - - - - - - - - - - - - - - - - - 13,509,327 - 13,509,327
Health service revenue 9,015,839 - - - - - - - - - - - - - 417 - 4,057,864 7,678,711 4,130,268 1,327,866 36,884 - 2,905,889 - 29,153,738 - 29,153,738
Pharmacy revenue - - - - - - - - - - - - - - - - - - 27,396,654 - - - - - 27,396,654 - 27,396,654
In-kind contributions - 13,335,820 1,045,349 - - - - - - - - - - - - - - - - - - - - - 14,381,169 - 14,381,169
Contributions 1,127,384 1,582,731 348,240 - - - - - - - - - - - - 5,334 - - - - - - 838,806 - 3,902,495 - 3,902,495
Rental income on
apartments 1,072,191 - 107,821 - 350,954 389,061 35,154 81,102 (873) 105,546 290,462 20,635 223,311 - - - - - - - - - 3,094,522 162,225 5,932,111 (910,660) 5,021,451
Food services - - 173,726 549,160 - - - - - - - - - - - - - - - - - - - - 722,886 (549,160) 173,726
Extinguished of debt - - - - - - - - - - - - - - - - - - 2,530,337 - - - - - 2,530,337 - 2,530,337
Other revenue 2,558,258 79,170 88,847 - - - - 28 - - - - - - 60,225 1,062 74,426 107,158 244,736 34,318 325 - 87,684 - 3,336,237 - 3,336,237
Net assets released from
restrictions 415,625 - - - - - - - - - 10,000 - - - - 25,000 - - - - - - 28,909 - 479,534 - 479,534

Total operating revenues

and other support 44,939,148 28,507,048 2,640,462 549,160 350,954 389,061 35,154 81,130 (873) 105,546 300,462 20,635 223,311 - 478,306 459,967 4,448,679 7,984,193 66,363,357 1,362,184 37,209 - 21,899,371 162,225 181,336,689 (1,459,820) 179,876,869

EXPENSES
Salaries and wages 23,452,202 3,447,657 424,563 270,894 - - - - - - 80,801 - 93,875 - 288,231 464,377 2,178,942 3,643,050 16,342,061 729,144 103,172 - 7,221,159 - 58,740,128 - 58,740,128
Fringe benefits 4,936,992 721,781 91,062 56,918 - - - - - - 16,311 - 18,982 - 60,789 98,991 454,017 764,162 3,364,394 153,010 20,722 - 1,536,741 - 12,294,872 - 12,294,872
Professional service fees 2,426,173 90,194 36,789 767 2,041 2,008 1,529 - 511 1,101 1,815 1,171 598 - 4,912 6,050 74,742 24,457 321,804 17,808 5,557 - 172,200 2,128 3,194,355 - 3,194,355
Contracted services 3,605,178 1,355,459 182,268 16,862 5,796 5,838 4,273 - 1,500 3,128 13,536 4,497 6,161 - 81,616 14,309 776,373 873,754 13,985,787 171,096 54,158 9,775 343,447 5,688 21,520,499 (549,160) 20,971,339
Client stipends and
reimbursements 427,702 - - 24,225 - - - - - - - - - - 40,857 600 22,139 108,608 85,127 3,604 - - 1,248 - 714,110 - 714,110
Supplies 884,790 214,196 29,004 33,291 1,249 4,420 2,082 - 3,214 4,112 20,627 3,656 11,598 - 34,766 1,396 90,378 110,453 419,669 61,815 32,760 2,183 388,006 20 2,353,685 - 2,353,685
Occupancy:
Office/retail 2,693,828 3,672,270 564,039 75,124 - - - - - 4 - - - - 16,655 40,208 228,247 762,552 637,370 72,865 115,471 5,594 1,074,262 - 9,958,489 (910,660) 9,047,829
Client 7,819,483 - - - - - - - - - - - - - - - - - - - - - 6,911,345 - 14,730,828 - 14,730,828
Utilities:
Office/retail 1,263,577 266,779 121,615 14,041 14,074 10,672 8,587 643 6,067 6,925 30,514 7,410 81,490 - 31,504 9,573 122,558 154,798 311,495 18,194 39,934 5,449 465,357 10,542 3,001,798 - 3,001,798
Client 1,956 - - - - - - 1,725 - - 43,052 - - - - - - - - - - - 176,348 - 223,081 - 223,081
Transportation 729,679 148,187 - 1,524 - - - - - 340 - - - - 7,591 977 64,258 123,789 2,139,794 34,243 996 - 106,489 - 3,357,867 - 3,357,867
Equipment rental, repairs
and maintenance 690,766 94,048 121,104 27,959 1,957 1,494 - - 747 1,113 3,960 - 5,314 - 5,267 4,371 14,395 31,265 76,555 1,052 5,813 1,943 65,033 - 1,154,156 - 1,154,156
Facility repairs and
maintenance 867,194 69,951 20,513 10,162 5,612 2,606 1,799 1,815 4,065 4,235 111,262 10 80,311 - 2,392 - 5,837 44,509 13,425 709 6,288 5,957 328,652 - 1,587,304 - 1,587,304
Client participation
expenses 1,343,251 - - 228,787 - - 432 - - - 624 - 1 - 2,615 - 113,337 262,277 113,152 13,000 - - 493,471 - 2,570,947 - 2,570,947
Staff expense 465,015 103,818 48,909 4,667 - - - - 591 - - - - - 3,633 12,516 38,268 114,533 298,598 23,876 19,072 - 21,257 - 1,154,753 - 1,154,753
Insurance expense 440,235 75,481 11,991 4,746 12,564 12,190 9,517 - 3,126 6,761 1,135 7,108 2,228 - 32,395 8,745 44,067 60,834 244,012 19,235 7,016 - 129,716 13,681 1,146,783 - 1,146,783
Depreciation and
amortization 217,777 167,861 31,470 - 129,012 187,957 125,484 37,428 107,455 99,047 66,313 198,623 18,395 - 168,363 - 187,865 87,927 101,523 - 5,063 - 24,683 105,333 2,067,579 - 2,067,579
Gifts-in-kind expense - 13,509,327 1,050,025 - - - - - - - - - - - - - - - - - - - - - 14,559,352 - 14,559,352
Events expense 368,558 339,899 3,088 - - - - - - - - - - - - - 2,754 6,000 - - - - 127,898 - 848,197 - 848,197
Interest and finance fees 356,037 295,076 9,445 50 275 250 25 25 25 250 7,826 25 3,912 - 50 50 63,990 65 198,386 - - - 377,424 13,410 1,326,596 - 1,326,596
Cost of Goods Sold - 7,026 42,462 - - - - - - - - - - - - - - - 16,260,451 - - - - - 16,309,939 - 16,309,939
Other expenses 866,002 518,186 184,769 15 10,989 219 311 14,429 5,274 213 295 5,818 19 - 39 3,735 12,707 32,682 58,928 2,562 2,169 - 1,150,814 - 2,870,175 - 2,870,175
Management expenses (8,532,186) 1,006,692 150,403 68,418 88,045 43,915 88,336 - 7,568 14,632 16,374 9,410 20,811 - 117,173 31,031 960,481 1,066,848 2,848,380 274,498 - - 1,719,171 - - - -

Total expenses 45,324,209 26,103,888 3,123,519 838,450 271,614 271,569 242,375 56,065 140,143 141,861 414,445 237,728 343,695 - 898,848 696,929 5,455,355 8,272,563 57,820,911 1,596,711 418,191 30,901 22,834,721 150,802 175,685,493 (1,459,820) 174,225,673

Changes in net assets (385,061) 2,403,160 (483,057) (289,290) 79,340 117,492 (207,221) 25,065 (141,016) (36,315) (113,983) (217,093) (120,384) - (420,542) (236,962) (1,006,676) (288,370) 8,542,446 (234,527) (380,982) (30,901) (935,350) 11,423 5,651,196 - 5,651,196

Increase (decrease) in
unrestricted net assets (385,061) 2,403,160 (483,057) (289,290) 79,340 117,492 (207,221) 25,065 (141,016) (36,315) (113,983) (217,093) (120,384) - (420,542) (236,962) (1,006,676) (288,370) 8,542,446 (234,527) (380,982) (30,901) (935,350) 11,423 5,651,196 - 5,651,196

CHANGES IN TEMPORARILY
RESTRICTED NET ASSETS
Contributions 391,397 - - - - - - - - - 10,000 - - - - 25,000 - - - - - - 30,000 - 456,397 - 456,397
Net assets released from
restrictions (415,625) - - - - - - - - - (10,000) - - - - (25,000) - - - - - - (28,909) - (479,534) - (479,534)

Decrease in temporarily
restricted net assets (24,228) - - - - - - - - - - - - - - - - - - - - - 1,091 - (23,137) - (23,137)

Changes in net assets (409,289) 2,403,160 (483,057) (289,290) 79,340 117,492 (207,221) 25,065 (141,016) (36,315) (113,983) (217,093) (120,384) - (420,542) (236,962) (1,006,676) (288,370) 8,542,446 (234,527) (380,982) (30,901) (934,259) 11,423 5,628,059 - 5,628,059

Net assets beginning of the

year 13,722,511 10,530,532 (2,045,407) (4,076,106) 1,939,156 1,527,242 (1,420,119) (310,727) (1,249,479) 1,051,090 (464,532) (160,068) (1,328,466) 388,487 (1,409,995) (725,467) (4,839,676) (8,277,035) 36,849,958 (637,130) (191,167) (121,800) 15,628,882 (663) 54,380,021 - 54,380,021

Net assets end of year $ 13,313,222 $ 12,933,692 $ (2,528,464) $ (4,365,396) $ 2,018,496 $ 1,644,734 $ (1,627,340) $ (285,662) $ (1,390,495) $ 1,014,775 $ (578,515) $ (377,161) $ (1,448,850) $ 388,487 $ (1,830,537) $ (962,429) $ (5,846,352) $ (8,565,405) $ 45,392,404 $ (871,657) $ (572,149) $ (152,701) $ 14,694,623 $ 10,760 $ 60,008,080 $ - $ 60,008,080

See Independent Auditor's Report.

32
 Housing Works, Inc., and Affiliates

Schedule of Expenditures of Federal Awards

June 30, 2022

Assistance
Listing Pass-through entity Provided to Expenditures of
Federal agency grantor/pass-through grantor/program or cluster title number identifying number subrecipients federal awards

U.S. Department of Health and Human Services:

Passed through Public Health Solutions:
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-MHV-503 $ - $ 263,352
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-MHV-503 - 105,929
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-STH-503 - 571,014
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-STH-503 - 215,205
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 17-LSN-660 - 307,987
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 17-LSN-660 - 152,716
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 18-CCR-870 - 349,854
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 18-CCR-870 - 168,080
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-HRM-503 - 363,568
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-HRM-503 - 168,087
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-MHV-540 - 244,713
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 16-MHV-540 - 123,401
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-STH-540 - 408,650
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-STH-540 - 154,538
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-HPC-540 - 220,679
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 14-HPC-540 - 100,456
HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) 93.914 23-PHN-540 - 57,024

Total HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) - 3,975,253

Passed through Public Health Solutions:

Ending the HIV Epidemic: A Plan for America 93.686 21-DTC-870 - 21,770
Ending the HIV Epidemic: A Plan for America 93.686 21-DTC-870 - 58,608
Ending the HIV Epidemic: A Plan for America 93.686 21-BHZ-870 - 57,044
Ending the HIV Epidemic: A Plan for America 93.686 21-BHZ-870 - 90,875

Total Ending the HIV Epidemic: A Plan for America - 228,297

Passed through Health Research Inc.:

HIV Care Formula Grants 93.917 5320-05 - 242,123
HIV Care Formula Grants 93.917 5320-06 - 76,196

Total HIV Care Formula Grants - 318,319

Passed through NYC Human Resources Administration:

Temporary Assistance for Needy Families 93.558 CT1 069 20171426363 - 47,466
Temporary Assistance for Needy Families 93.558 CT1 069 20171426363 - 21,362

Total Temporary Assistance for Needy Families - 68,828

Health Center Program Cluster

Health Center Program (Community Health Centers, Migrant Health Centers
Health Care for the Homeless, and Public Housing Primary Care) 93.224 N/A - 1,431,223
Health Center Program (Community Health Centers, Migrant Health Centers
Health Care for the Homeless, and Public Housing Primary Care) 93.224 N/A - 121,158
COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers
Health Care for the Homeless, and Public Housing Primary Care) 93.224 N/A - 296,146
Affordable Care Act (ACA) Grants for New and Expanded Services under the Health Center Program 93.527 N/A - 17,611

Total Health Center Program Cluster - 1,866,138

National Organizations of State and Local Officials 93.011 N/A - 737,264

Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 178,736
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 391,231
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 70,135
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 233,407
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 109,534
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 312,227
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 175,125
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 260,527
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 52,381
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 294,366
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 130,658
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 337,655
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 126,634
Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 N/A - 385,186

Total Substance Abuse and Mental Health Services Projects of Regional and National Significance - 3,057,802

Passed through National Alliance of State & Territorial AIDS Directors:

Strengthening Public Health Systems and Services through
National Partnerships to Improve and Protect the Nation's Health 93.421 NU65PS923686 - 9,210
Strengthening Public Health Systems and Services through
National Partnerships to Improve and Protect the Nation's Health 93.421 NU380T000285 - 43,847

- 53,057

33
 Housing Works, Inc., and Affiliates

Schedule of Expenditures of Federal Awards

June 30, 2022

Assistance
Listing Pass-through entity Provided to Expenditures of
Federal agency grantor/pass-through grantor/program or cluster title number identifying number subrecipients federal awards

Passthrough AIDS & United

Strengthening Public Health Systems and Services through NU38OT000285
National Partnerships to Improve and Protect the Nation's Health 93.421 - 20,920
Total Strengthening Public Health Systems and Services through
National Partnerships to Improve and Protect the Nation's Health - 73,977

Passed through National Foundation for Centers for Disease Control and Prevention
Immunization Research, Demonstration, Public Information and Education Training and Clinical
Skills Improvement Projects 93.185 1 NH23IP922652-01-00 - 8,693
Immunization Research, Demonstration, Public Information and Education Training and Clinical
Skills Improvement Projects 93.185 1 NH23IP922652-02-00 - 48,000
Total Immunization Research, Demonstration, Public Information and Education Training and Clinical
Skills Improvement Projects - 56,693

Passed through Primary Care Development Corporation:

Immunization Cooperative Agreements 93.268 CDC-RFA-IP19-1901 - 103,127

Passed through Cicatelli Associates Inc.:

AIDS Education and Training Centers 93.145 U69HA33964-01-00 - 38,239
AIDS Education and Training Centers 93.145 U69HA33964-01-00 - 20,025

Total AIDS Education and Training - 58,264

Passed through Research Foundation for Mental Hygiene, Inc.:

Opioid STR 93.788 H79TI083327-01 - 13,894
Opioid STR 93.788 H79TI083327-01 - 36,955

Total Opioid STR - 50,849

Passed through New York State Office of Addiction Services and Supports
Block Grants for Prevention and Treatment of Substance Abuse 93.959 CFA0268 - 5,935
Block Grants for Prevention and Treatment of Substance Abuse 93.959 CFA0277-D - 13,002
Block Grants for Prevention and Treatment of Substance Abuse 93.959 CFA0064SQ - 72,295
Block Grants for Prevention and Treatment of Substance Abuse 93.959 CFA0277SQ - 376,034

Total Block Grants for Prevention and Treatment of Substance Abuse - 467,266

Total U.S. Department of Health and Human Services - 11,062,077

U.S. Department of Homeland Security:

Passed through United Way:
Emergency Food and Shelter National Board Program 97.024 631400-351 - 10,603

Passed through NYC Mayor's Office of Criminal Justice:

COVID-19 Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 CT100220211405596 - 595,004

Total U.S. Department of Homeland Security - 605,607

U.S. Department of Housing and Urban Development:

Continuum of Care Program 14.267 N/A - 14,350
Continuum of Care Program 14.267 N/A - 337,656
Continuum of Care Program 14.267 N/A - 963,648
Continuum of Care Program 14.267 N/A - 1,010,660
Continuum of Care Program 14.267 N/A - 141,416
Continuum of Care Program 14.267 N/A - 86,231
Continuum of Care Program 14.267 N/A - 295,141
Continuum of Care Program 14.267 N/A - 24,473
Continuum of Care Program 14.267 N/A - 154,189
Continuum of Care Program 14.267 N/A - 348,622
Continuum of Care Program 14.267 N/A - 336,214

- 3,712,600

Passed through NYC Human Resources Administration:

Continuum of Care Program 14.267 NY0196L2T001811 - 33,396
Continuum of Care Program 14.267 NY0196L2T001912 - 486,194
Continuum of Care Program 14.267 NY0249L2T001912 - 471,530
Continuum of Care Program 14.267 NY0719L2T001809 - 62,514
Continuum of Care Program 14.267 NY0719L2T001910 - 312,750
Continuum of Care Program 14.267 POD07120192021815 - 21,629

- 1,388,013

Total Continuum of Care Program - 5,100,613

34
 Housing Works, Inc., and Affiliates

Schedule of Expenditures of Federal Awards

June 30, 2022

Assistance
Listing Pass-through entity Provided to Expenditures of
Federal agency grantor/pass-through grantor/program or cluster title number identifying number subrecipients federal awards

Housing Opportunities for Persons with AIDS 14.241 N/A - 446,150

Housing Opportunities for Persons with AIDS 14.241 N/A - 77,746

- 523,896

Passed through NYC Department of Health and Mental Hygiene:

Housing Opportunities for Persons with AIDS 14.241 14F-SPH-003 - 467,803

Passed through NYC Human Resources Administration:

Housing Opportunities for Persons with AIDS 14.241 CT1 069 20171426363 - 695,351
Housing Opportunities for Persons with AIDS 14.241 CT1 069 20171426363 - 312,946
Housing Opportunities for Persons with AIDS 14.241 NY-H180013 - 188,953
Housing Opportunities for Persons with AIDS 14.241 NY-H17-0026-00 - 5,477

- 1,202,727

Total Housing Opportunities for Persons with AIDS - 2,194,426

Housing Voucher Cluster

Passed through NYC Department of Housing Preservation and Development:
Section 8 Housing Choice Vouchers 14.871 CT180620228801738 - 77,306

Total Housing Voucher Cluster - 77,306

Total U.S. Department of Housing and Urban Development - 7,372,345

U.S. Department of Treasury

Passed through NYC Department of Health and Mental Hygiene:
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 CT181620228804250 - 339,017
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 CT181620228804095 - 229,650

Total U.S. Department of Treasury - 568,667

Total Expenditures of Federal Awards $ - $ 19,608,696

See Notes to Schedule of Expenditures of Federal Awards.

35
 Housing Works, Inc., and Affiliates

Notes to Schedule of Expenditures of Federal Awards

June 30, 2022

Note 1 - Basis of presentation

The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal
grant expenditures of Housing Works, Inc., and Affiliates (collectively, the "Organization") for the year
ended June 30, 2022, and is prepared on the accrual basis of accounting. The information in this
Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a
selected portion of the operations of the Organization, it is not intended to and does not present the
consolidated financial position, changes in net assets, or cash flows of the Organization.

Note 2 - Summary of significant accounting policies

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such
expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein
certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through
entity identifying numbers are presented where available.

Note 3 - Grant revenue from Public Health Solutions

The following fiscal 2022 grant revenue from Public Health Solutions is included within "Grants and
contract services" in the accompanying consolidated statement of activities for the year ended
June 30, 2022:

Fiscal 2022
Program title Grant number revenue

Housing Placement Assistance 14-HPC-540 $ 309,632

Short Term Housing - Ryan White 14-STH-503 786,220
Short Term Housing - Ryan White 14-STH-540 563,186
Harm Reduction Services 16-HRS-760 1,395,808
Harm Reduction Services 16-HRS-503 667,769
Harm Reduction Services 16-HRM-503 363,370
Harm Reduction Services 16-HRM-503P 179,386
Harm Reduction Services 16-MTH-870 555,256
Mental Health Services 16-MHV-503 316,390
Mental Health Services 16-MHV-540 287,891
Ryan White Part A - Legal Services (HLP) 17-LSN-660 397,204
Ryan White Part A Care Coordination
Program for New York City 18-CCR-870 488,564

Building Equity: Intervening Together for

Health (BE InTo Health): Black and/or
Hispanic/Latina Women (including cisgender,
transgender, nonbinary, and/or genderqueer) 22-BHZ-870 265,652
PlaySure Network 2.0 in Non-Health Care
Settings (PNH) 22-PNH-540 57,024

Total $ 6,633,353

36
 Housing Works, Inc., and Affiliates

Notes to Schedule of Expenditures of Federal Awards

June 30, 2022

Note 4 - Indirect cost rate

The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under
the Uniform Guidance.

37
 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

Housing Works, Inc., and Affiliates

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 consolidated financial statements of Housing
Works, Inc., and Affiliates (collectively, the "Organization"), which comprise the consolidated statement
of financial position as of June 30, 2022, and the related consolidated statements of activities, functional
expenses, and cash flows for the year then ended, and the related notes to the consolidated financial
statements and have issued our report thereon dated March 30, 2023. The financial statements of
Housing Works, Used Book Café, Inc., Housing Works, Thrift Shop, Inc., Housing Works, Food Services,
Inc., Housing Works, Services II, Inc., Housing Works, Services IV, Inc., Housing Works, Services V, Inc.,
Housing Works, Services VI, Inc., Housing Works, Housing Development Fund Corporation, Housing
Works, East New York Housing Development Fund Corporation, Housing Works, Harlem Housing
Development Fund Corporation, Inc., Housing Works Pitkin Avenue Housing Development Fund
Corporation, Inc., Housing Works 454 Lexington Avenue Housing Development Fund Corporation, Inc.,
Housing Works 874 Jefferson Avenue Housing Development Fund Corporation, Inc., Bronx Claremont
Parkway G.P., Inc., Housing Works, 220 Hull Housing Development Fund Corporation, Positive Health
Project, Inc., Housing Works, Lyman Prospect Housing Development Fund Corporation, and Bronx
Claremont Housing Development Fund Corporation, were not audited in accordance with Government
Auditing Standards and, accordingly, this report does not include reporting on internal control over
financial reporting or instances of reportable noncompliance associated with these entities.
Report on Internal Control over Financial Reporting

In planning and performing our audit of the consolidated financial statements, we considered the
Organization's internal control over financial reporting ("internal control") as a basis for designing audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the
consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the Organization'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 Organization's consolidated financial statements will not be prevented, or detected and corrected
on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control that is less severe than a material weakness, yet important enough to merit attention by those
charged with governance.

38
Our consideration of internal control over financial reporting 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 and therefore, material weaknesses or significant
deficiencies may exist that were not identified. 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. We identified a certain deficiency in internal control,
as item 2022-01, described in the accompanying schedule of findings and questioned costs, that we
consider to be a significant deficiency.
Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Organization's consolidated financial
statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have
a direct and material effect on the consolidated financial 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.

Housing Works, Inc., and Affiliates’ Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on the Organization’s
response to the finding identified in our audit and described in the accompanying schedule of findings
and questioned costs as item 2022-01. The Organization’s response was not subjected to the auditing
procedures applied in the audit of the consolidated financial statements and, accordingly, we express no
opinion on the response.

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.

New York, New York

March 30, 2023

39
 Independent Auditor's Report on Compliance for Each Major
Federal Program and Report on Internal Control over
Compliance Required by the Uniform Guidance

To the Board of Directors of

Housing Works, Inc., and Affiliates

Report on Compliance for Each Major Federal Program

Opinion on Each Major Federal Program

We have audited Housing Works, Inc., and Affiliates’ (collectively, the "Organization’s") compliance with
the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement
that could have a direct and material effect on the Organization's major federal programs for the year
ended June 30, 2022. The Organization's major federal programs are identified in the summary of
auditor's results section of the accompanying schedule of findings and questioned costs.

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

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America ("GAAS"); the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States ("Government Auditing
Standards"); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform
Guidance”). Our responsibilities under those standards and the Uniform Guidance are further described
in the Auditor's Responsibilities for the Audit of Compliance section of our report.

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

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of
laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the
Organization's federal programs.

40
Auditor's Responsibilities for the Audit of Compliance Auditor's Responsibility

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

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

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

 Identify and assess the risks of material noncompliance, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on
a test basis, evidence regarding the Organization's compliance with the compliance requirements
referred to above and performing such other procedures as we considered necessary in the
circumstances.

 Obtain an understanding of the Organization's internal control over compliance relevant to the
audit in order to design audit procedures that are appropriate in the circumstances and to test and
report on internal control over compliance in accordance with the Uniform Guidance, but not for
the purpose of expressing an opinion on the effectiveness of the Organization's internal control
over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and any significant deficiencies and material weaknesses in
internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

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

41
Our consideration of internal control over compliance was for the limited purpose described in the
Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all
deficiencies in internal control over compliance that might be material weaknesses or significant
deficiencies in internal control over compliance. Given these limitations, during our audit we did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above. However, material weaknesses or significant deficiencies in internal control over
compliance may exist that were not identified.

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

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.

New York, New York

March 30, 2023

42
 Housing Works, Inc. and Affiliates

Schedule of Findings and Questioned Costs

June 30, 2022

Section I - Summary of Auditor's Results

Financial Statements:

Type of report the auditor issued on whether the financial

statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
● Material weakness(es) identified? yes X no
● Significant deficiency(ies) identified? X yes none reported

Noncompliance material to financial statements noted? yes X no

Federal Awards:

Internal control over major programs:

● Material weakness(es) identified? yes X no
● Significant deficiency(ies) identified? yes X none reported
Type of auditor's report issued on compliance for
major programs Unmodified
Any audit findings disclosed that are required to be reported in
accordance with 2 CFR section 200.516(a)? yes X no
Identification of major programs:

Federal Assistance
Listing Number Federal Agency Grantor/Program or Cluster Title
14.241 Housing Opportunities for Persons with AIDS

14.267 Continuum of Care Program

21.027 Coronavirus State and Local Fiscal Recovery Funds

Dollar threshold used to distinguish between type A and

type B programs: $750,000

Auditee qualified as low-risk auditee? X yes no

43
 Housing Works, Inc. and Affiliates

Schedule of Findings and Questioned Costs

June 30, 2022

Section II - Financial Statement Findings

Finding 2022-01 Reconciliation of Financial Statement Accounts and Inaccurate SEFA (Significant
Deficiency)

Criteria:
Subledgers for significant account balances should be reconciled to the general ledger on a timely basis
in order to ensure accurate reporting and to investigate unreconciled balances.

Further, the Uniform Guidance requires that the auditee prepare a SEFA for the period covered by the
auditee’s financial statements. At a minimum, the schedule shall:

 List all individual Federal programs by Federal agency.

 Include the name of the pass-through entity and the identifying number assigned by the pass-
through entity for all Federal awards expended for each individual Federal program and the
Assistance Listing Number or other identifying number when the Assistance Listing Number
information is not available.

 Identify to the extent practical, the total amount provided to subrecipients from each Federal
program for Federal awards received as a pass-through entity.

Condition:
Certain significant account balances were not reconciled throughout the fiscal year under audit resulting
in two large adjustments provided by management and one adjustment provided by the auditors to correct
year-end balances. One of these adjustments impacted grants and contracts revenue, which in turn
affected the SEFA reporting.

The Organization’s processes over identifying federally funded grants and confirming federal funds was
not performed until five months after year end, which resulted in delays preparing a SEFA. In addition,
the SEFA provided to the auditors by the Organization did not accurately reflect certain Federal
expenditures and Assistance Listing Number information.

Cause:
Internal controls over reporting and over the accurate preparation and completeness of the SEFA were
not operating effectively or in a timely manner.

Effect:
Management had to record adjusting entries during the audit which led to increased audit procedures,
audit delays, and an improper SEFA. Improper SEFA and delays in identifying whether an award is
federally funded could result in errors in accounting, revenue recognition, disallowed costs, and
noncompliance with Uniform Guidance requirements.

Recommendation:
We recommend the Organization strengthen its policies and procedures for reconciliation of significant
account balances during the year and at year-end and for the identification of Federal awards to ensure
preparation of financial reports and a complete and accurate SEFA is performed in a timely manner and
in accordance with the requirements of Office and Management and Budget.

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 Housing Works, Inc. and Affiliates

Schedule of Findings and Questioned Costs

June 30, 2022

View of responsible officials:

To ensure that account balances during the year are reconciled properly and in a timely manner, the
finance team meets semi-monthly to make sure all assigned reconciliation tasks are performed timely
and are complete and accurate. Moreover, the finance team continues to perform internal audits to ensure
appropriate reporting of all fiscal activities.

Management will evaluate and make necessary adjustments for any funding awards received after the
fiscal year end that relate to the current period under audit to include any potential federal funding in the
proper period. Grant Accountants will reach out to all contract funders prior to the fiscal year end, to
confirm the funding source for new and recurring contracts in case the source has changed from prior
years.

The finance department also re-allocated other senior accounting personnel to concentrate on
processing grant claims, so that the Organization can prepare and submit required financial reports in
accordance with its grant agreements.

Section III - Federal Awards Findings and Questioned Costs

None reported.

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