Audit 19468

Title: Adjustments on the Schedule of Federal Awards Accounting Policies: GeneralThe accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance present the activity of all federal awards and state financial assistance programs of the Highland Park Borough Public School District. The District is defined in Note 1 (A) to the District's basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, is included on the Schedules of Expenditures of Federal Awards and State Financial Assistance.Basis of accountingThe accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the food service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Notes 1 (C) and 1 (D) to the Board's financial statements.Relationship of financial statementsThe basic financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison statements or schedules are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the audit year, whereas for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made.The general fund is presented in the accompanying schedules on the modified accrual basis with the exception of the revenue recognition of the one or more deferred June state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes payments are not recognized until the subsequent budget year due to the state deferral and recording of the one or more June state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the budgetary basis which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. The special revenue fund also recognizes the one or more state aid June payments in the current budget year, consistent with N.J.S.A. 18A:22-4.2.The net adjustment to reconcile from the budgetary basis to the GAAP basis is ($18,759) for the general fund, ($238,329) for the special revenue fund and $194,932 for the capital projects fund. See Exhibit C-3 for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds and Exhibit F-2 for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the capital projects fund. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. On Schedule A; the adjustments of $112 for the ESSA Title II A program for fiscal year 2021; $1,497 for ESSA Title IV for the fiscal year 2021 and $1,576 for FEMA for fiscal year 2021 represent prior year encumbrances canceled in the current year. The adjustment of $3,776 for the COVID-19 Digital Divide Grant represents adjustments to activity to correspond to board financial reports. In addition, the District determined that a reclassification of prior year expenditures charged to FEMA was necessary and reclassified $21,535 of expenses to the CRRSA ESSER II Grant.