Audit 13517

Title: I. BASIS OF PRESENTATION Accounting Policies: FOR ALL FEDERAL PROGRAMS, THE DISTRICT USES THE FUND TYPES SPECIFIED IN TEXAS EDUCATION AGENCY'S FINANCIAL ACCOUNTABILITY SYSTEM RESOURCE GUIDE. SPECIAL REVENUE FUNDS ARE USED TO ACCOUNT FOR RESOURCES RESTRICTED TO, OR DESIGNATED FOR, SPECIFIC PURPOSES BY A GRANTOR. FEDERAL AND STATE FINANCIAL ASSISTANCE GENERALLY IS ACCOUNTED FOR IN A SPECIAL REVENUE FUND. EXPENDITURES REPORTED ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ARE REPORTED ON THE MODIFIED ACCRUAL BASIS OF ACCOUNTING. THESE 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. NEGATIVE AMOUNTS SHOWN ON THE SCHEDULE, IF ANY, REPRESENT ADJUSTMENTS OR CREDITS MADE IN THE NORMAL COURSE OF BUSINESS TO AMOUNTS REPORTED AS EXPENDITURES IN PRIOR YEARS. THE DISTRICT HAS ELECTED NOT TO USE THE 10-PERCENT DE MINIMIS INDIRECT COST RATE ALLOWED UNDER THE UNIFORM GUIDANCE. NONMONETARY ASSISTANCE IS REPORTED IN THE SCHEDULE AT FAIR MARKET VALUE OF COMMODITIES RECEIVED AND DISBURSED. De Minimis Rate Used: N Rate Explanation: KARNACK INDEPENDENT SCHOOL DISTRICT DID NOT CLAIM ANY INDIRECT COSTS DURING THE CURRENY YEAR. THE ACCOMPANYING SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS INCLUDES THE FEDERAL GRANT ACTIVITY OF THE DISTRICT. THE INFORMATION IN THE SCHEDULE IS PRESENTED IN ACCORDANCE WITH THE REQUIREMENTS OF TITLE 2 U.S. CODE OF FEDERAL REGULATIONS (CFR) PART 200 UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS ("UNIFORM GUIDANCE"). THEREFORE, SOME AMOUNTS MAY DIFFER FROM AMOUNTS PRESENTED IN, OR USED IN THE PREPARATION OF, THE BASIC FINANCIAL STATEMENTS.

Title: II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: FOR ALL FEDERAL PROGRAMS, THE DISTRICT USES THE FUND TYPES SPECIFIED IN TEXAS EDUCATION AGENCY'S FINANCIAL ACCOUNTABILITY SYSTEM RESOURCE GUIDE. SPECIAL REVENUE FUNDS ARE USED TO ACCOUNT FOR RESOURCES RESTRICTED TO, OR DESIGNATED FOR, SPECIFIC PURPOSES BY A GRANTOR. FEDERAL AND STATE FINANCIAL ASSISTANCE GENERALLY IS ACCOUNTED FOR IN A SPECIAL REVENUE FUND. EXPENDITURES REPORTED ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ARE REPORTED ON THE MODIFIED ACCRUAL BASIS OF ACCOUNTING. THESE 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. NEGATIVE AMOUNTS SHOWN ON THE SCHEDULE, IF ANY, REPRESENT ADJUSTMENTS OR CREDITS MADE IN THE NORMAL COURSE OF BUSINESS TO AMOUNTS REPORTED AS EXPENDITURES IN PRIOR YEARS. THE DISTRICT HAS ELECTED NOT TO USE THE 10-PERCENT DE MINIMIS INDIRECT COST RATE ALLOWED UNDER THE UNIFORM GUIDANCE. NONMONETARY ASSISTANCE IS REPORTED IN THE SCHEDULE AT FAIR MARKET VALUE OF COMMODITIES RECEIVED AND DISBURSED. De Minimis Rate Used: N Rate Explanation: KARNACK INDEPENDENT SCHOOL DISTRICT DID NOT CLAIM ANY INDIRECT COSTS DURING THE CURRENY YEAR. 1. FOR ALL FEDERAL PROGRAMS, THE DISTRICT USES THE FUND TYPES SPECIFIED IN TEXAS EDUCATION AGENCY'S FINANCIAL ACCOUNTABILITY SYSTEM RESOURCE GUIDE. SPECIAL REVENUE FUNDS ARE USED TO ACCOUNT FOR RESOURCES RESTRICTED TO, OR DESIGNATED FOR, SPECIFIC PURPOSES BY A GRANTOR. FEDERAL AND STATE FINANCIAL ASSISTANCE GENERALLY IS ACCOUNTED FOR IN A SPECIAL REVENUE FUND. 2. EXPENDITURES REPORTED OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ARE REPORTED ON THE MODIFIED ACCRUAL BASIS OF ACCOUNTING. THESE 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. NEGATIVE AMOUNTS SHOWN ON THE SCHEDULE, IF ANY, REPRESENT ADJUSTMENTS OR CREDITS MADE IN THE NORMAL COURSE OF BUSINESS TO AMOUNTS REPORTED AS EXPENDITURES IN PRIOR YEARS. 3. THE DISTRICT HAS ELECTED NOT TO USE THE 10-PERCENT DE MINIMIS INDIRECT COST RATE ALLOWED UNDER THE UNIFORM GUIDANCE. 4. NONMONETARY ASSISTANCE IS REPORTED IN THE SCHEDULE AT FAIR MARKET VALUE OF COMMODITIES RECEIVED AND DISBURSED.