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EXHIBIT 3 <br /> 37 HB Fiscal Polices Et Procedures <br /> according to GAAP for the fiscal year audited. These statements are distributed to Board <br /> members, senior management, and funders. The annual audit includes the reports in the following <br /> chart. <br /> Mil <br /> Statement of Financial ' Provides a snapshot of HB's assets, liabilities, and net assets at a fixed point <br /> Position in time. <br /> Also known as the Balance Sheet. <br /> Details income recognized less expense incurred over the course of the fiscal <br /> Statement of Activities year, resulting in the total change to the net asset balance. <br /> • Includes restricted revenue raised for future periods. <br /> • Also known as the Income Statement or Profit Et Loss Statement. <br /> Reports the cash inflows and outflows of the organization on an annual <br /> Statement of Cash basis. <br /> Flows . This statement is used to adjust accrual reporting to obtain a snapshot view <br /> of the or anization's position on a cash basis. <br /> Statement of a Discloses expenses by functional classification (Program, Administration, and <br /> Functional Expenses Fundraising). <br /> Reporting and Audit Requirements <br /> The Audit Committee of the Board reviews and approves the contract with the external auditor <br /> annually. HB rotates its lead audit partner a minimum of once every seven years. In addition, HB <br /> also issues a formal RFP and conducts a competitive bidding process for external auditors once <br /> every five years. <br /> ReportingState and Federal RequirementsTYPE • P•RDEFINITION/PURPOSE <br /> • Annual report to IRS. <br /> IRS Form 990 • Public document showing financial position (hard copies must be available to <br /> public upon request). <br /> Prepared two months after annual financial audit. <br /> California Exempt Organization annual information return. <br /> CA Form 199 . Required for CA nonprofits with gross receipts normally equal to or greater <br /> than $50,000. <br /> RBF-1 Form Registration/Renewal Fee Report <br /> • Annual filing to CA Attorney General for charitable organizations <br /> Annual review of financial records. <br /> Annual Audit • Performed by independent, external auditor. <br /> According to best practice, should be completed within 6 months after fiscal <br /> year close. <br /> Applicable only if HB expends $750,000 or more a year in federal awards. <br /> Single Audit . Covers the entire operation of the organization, or at a minimum, the <br /> departments and/or units that receive and expend federal awards. <br /> Last updated September 2022 <br />