Notes to SEFA
Title: CONTINGENCIES
Accounting Policies: The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The Governmental Fund types are accounted for using a current financial resources measurement focus. Most federal grant funds were accounted for in the Special Revenue Funds, a component of the Governmental Fund types. With this measurement focus, only current assets and current liabilities on the modified cash basis of accounting are generally included on the balance sheet. Operating statements of these funds present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.The modified cash basis of accounting is used for the Governmental Fund types. This basis of accounting recognizes assets, liabilities, fund equities, revenues and expenditures when they result from cash transactions. This basis is a comprehensive basis of accounting other than generally accepted accounting principles in the United States of America (GAAP).The Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting. Federal grant funds are ordinarily considered to be earned to the extent of expenditures made under the provisions of the grant and, accordingly, when such funds are received, they are deferred revenues until earned.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
In connection with the federal programs, the County is required to comply with specific terms and agreements as well as applicable federal laws and regulations. Such compliance is subject to review and audit by the grantors and their representatives.Since such programs are subject to audit or review, the possibility of disallowed expenditures exists. In the event of any disallowance of claimed expenditures, the County expects the resulting liability to be immaterial.