Economic and Community Development Institute Inc.

“The form 990 is distributed to all board members prior to filing.”

“The conflict of interest policy is included in the employee handbook and employees must sign as having read and understood. The policy is also discussed at quarterly staff meetings. Potential conflicts are to be disclosed in writing to human resources who then investigate, make an initial finding as to whether a conflict exists, and recommend to management potential action to remedy the situation. The company has a whistleblower policy that protects individuals who identify a conflict of interest in an effort to encourage open disclosure of conflicts or wrong doing. This whistleblower policy can be found in the ecdi employee handbook as well as our board policy manual.”

“Governing documents, the conflict of interest policy and financial statements are not made available to the public since there is no legal provision to do so.”

“Partnership income not recognized for book purposes 259,516.”

“The financial information for 2017 has been restated to correct errors in accounting for certain agency agreements, grant revenue recognition, and financial statement line and net asset classifications. Agency agreements: over the past twelve years ecdi has been the sub recipient of grants from certain local governmental entities, to receive and manage federal community development block grant (cdbg) revolving loan funds awarded to those governmental entities. The agreements state any remaining balance of cash and/or loans receivable from the cdbg revolving loan funds are to be returned to the governmental entity upon termination of the grants. Based on the facts and circumstances surrounding the grants, ecdi assessed the likelihood of grant termination as remote, and recognized grant revenue for the cdbg loan funds received consistent with generally accepted accounting principles. During 2018 while reviewing the grant agreements, ecdi determined the historical accounting for the receipt of cdbg loan funds as revenue was incorrect. The contracts were determined to be agency agreements with ecdi managing the cdbg loan funds on behalf of the governmental entities. The financial statements for fiscal year ended june 30, 2017 have been restated to reduce grant revenue for cdbg loan funds received in 2017, reduce interest on loans receivable and loan loss expense attributed to the cdbg loans, and aggregate the agency assets into a single financial statement line item, with an offsetting agency liability from reduction of the permanently restricted net assets. Ecdi revised its financial reporting processes to properly account for the agency funds beginning in the fiscal year ended june 30, 2018. Cdfi grant revenue recognition: during 2017 ecdi received a federal community development financial institutions (cdfi) fund assistance agreement grant. Ecdi assessed the likelihood of not meeting the conditional performance requirements of the grant agreement as remote, and recognized grant revenue in accordance with generally accepted accounting principles. In june 2018 the financial accounting standards board (fasb) issued additional guidance in accounting standard update 2018-08. Based on the additional guidance, and the significance of the cdfi grant in 2017, ecdi re-evaluated the revenue recognition of the cdfi grant and determined it would be appropriate to restate the 2017 financial statements. The financial statements for fiscal year ended june 30, 2017 have been restated to reduce grant revenue, increase deferred revenue, and decrease temporarily restricted net assets. Revenue will be recognized as the conditional performance requirements under the grant are satisfied. Net asset and financial statement line reclassifications: net assets are classified as unrestricted, temporarily restricted, or permanently restricted depending on the presence and characteristics of donor imposed restrictions limiting ecdi's ability to use or dispose of contributed assets or the economic benefits embodied in those assets. During 2018 ecdi determined the classification of certain net assets as permanently restricted was not consistent with the donor agreements. These net assets were reclassified to either temporarily restricted or unrestricted net assets as of the first day of the fiscal year ended june 30, 2017. Additionally during the process of restating the 2017 financial statements certain revenue lines on the statement of activities were found to be in error and the balances have been corrected in conjunction with the restatement.”