Title: NOTE 2 BASIS OF PRESENTATION
Accounting Policies: NOTE 1 REPORTING ENTITY - The City of Chicago (the City) is a governmental entity established by laws of the State of Illinois and has the powers of a body corporate, as defined in the statutes. All significant operations of the City are included in the scope of the Office of Management and Budget (OMB) requirements contained in 2 CFR Part 200, Subpart F (Single Audit). The U.S. Department of Health and Human Services (HHS) has been designated as the Citys cognizant agency for the Single Audit. The reporting entity for the City is based upon criteria established by the Governmental Accounting Standards Board.Programs Subject to Single Audit A Schedule of Expenditures of Federal Awards (SEFA) is presented for each federal program and a summary of expenditures by federal agency is as follows:U.S. Department of Agriculture$4,127,946U.S. Department of Housing and Urban Development 194,631,706U.S. Department of Justice 14,812,470 U.S. Department of Transportation 288,328,664U.S. Department of Treasury 513,160,736 U.S. National Endowment for the Arts 655,200U.S. Institute of Museum and Library Services 1,060,957U.S. Small Business Administration 1,264,933 U.S. Environmental Protection Agency8,789,362U.S. Department of Education-410U.S. Department of Health and Human Services 357,965,902 Research and Development Cluster79,593U.S. Corporation for National and Community Service 616,155U.S. Department of Homeland Security 83,426,893 Total Expenditures of Federal Awards $ 1,468,920,107 Passenger Facility Charges collected and expended, as prescribed by Sections 9110 and 9111 of the Aviation Safety and Capacity Expansion Act of 1990 issued by the Federal Aviation Administration of the United States Department of Transportation, are not included in this Single Audit report and are audited separately.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of the City of Chicago under programs of the federal government for the year ended December 31, 2022. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The schedule presents only a selected portion of the operations of the City of Chicago and accordingly, it is not intended to and does not present the financial position, changes in net position or cash flows of the City of Chicago.
Title: NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: NOTE 1 REPORTING ENTITY - The City of Chicago (the City) is a governmental entity established by laws of the State of Illinois and has the powers of a body corporate, as defined in the statutes. All significant operations of the City are included in the scope of the Office of Management and Budget (OMB) requirements contained in 2 CFR Part 200, Subpart F (Single Audit). The U.S. Department of Health and Human Services (HHS) has been designated as the Citys cognizant agency for the Single Audit. The reporting entity for the City is based upon criteria established by the Governmental Accounting Standards Board.Programs Subject to Single Audit A Schedule of Expenditures of Federal Awards (SEFA) is presented for each federal program and a summary of expenditures by federal agency is as follows:U.S. Department of Agriculture$4,127,946U.S. Department of Housing and Urban Development 194,631,706U.S. Department of Justice 14,812,470 U.S. Department of Transportation 288,328,664U.S. Department of Treasury 513,160,736 U.S. National Endowment for the Arts 655,200U.S. Institute of Museum and Library Services 1,060,957U.S. Small Business Administration 1,264,933 U.S. Environmental Protection Agency8,789,362U.S. Department of Education-410U.S. Department of Health and Human Services 357,965,902 Research and Development Cluster79,593U.S. Corporation for National and Community Service 616,155U.S. Department of Homeland Security 83,426,893 Total Expenditures of Federal Awards $ 1,468,920,107 Passenger Facility Charges collected and expended, as prescribed by Sections 9110 and 9111 of the Aviation Safety and Capacity Expansion Act of 1990 issued by the Federal Aviation Administration of the United States Department of Transportation, are not included in this Single Audit report and are audited separately.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Expenditures reported on the schedule are generally reported on the accrual or modified accrual basis of accounting depending on the type of fund. Some expenditures are reported when the reimbursement is received due to uncertainty of the source of funding at the time the expenditure is incurred. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available.Certain financial awards were received by the City in the form of noncash direct assistance. These noncash awards are included on the schedule under ALN 93.268. The schedule of expenditures of federal awards includes a column titled Non-Federal Expenditures. Amounts reported in this column include the Citys required match for federal programs.The City has a cost allocation plan for allocation of common and indirect costs related to grant programs. The amounts allocated to 2022 grant programs are based primarily on 2021 budgeted amounts. Variances between actual costs and budgeted amounts are adjusted on a prospective basis. A copy of the cost allocation plan is kept on file at the City. The Citys cost allocation plan for 2022 has been prepared on a Direct Cost Base that does conform to the direct cost bases in the Uniform Guidance. The Citys 2022 Cost Allocation Plan (Local Organization Cost Allocation Plan LOCAP) was provided for review and negotiation to the Citys indirect cost cognizant agency. This LOCAP was subsequently negotiated and approved during 2022. The City has not elected to use the 10% de minimis indirect cost rate allowed by the Uniform Guidance. Individual City departments indirect cost rate proposals (ICRPs) for 2022 have been prepared on a Salaries and Wages plus all Fringe Benefits (S&W+FB) Direct Cost Base that does conform to the OMB Uniform Guidance. The 2022 Indirect Cost Rate Agreements related to the ICRPs for the Chicago Departments of Planning and Development, Housing, Public Health, and Family and Support Services were negotiated, approved, and signed by the Citys indirect cost cognizant agency and included provisional indirect cost rates for these departments extending from 1/1/2023 through 12/31/2025. Federal/State Commingled Funds The City of Chicago receives various federal awards that are passed through the State of Illinois. Many of these contracts contain a blend of state and federal awards. To the extent practical, the federal funding has been segregated from the state funding based on information provided by the state agencies. In some instances, individual state contracts contain multiple federal ALNs and the City has segregated the federal dollars associated with each contract award based on information received by the pass-through state agency. Due to the timing differences between the pass-through agency fiscal year end and the Citys reporting period, allocation differences may result. The state contract for the Child Care program (federal cluster 93.575/93.596), passed through the Illinois Department of Human Services (IDHS), has been considered a Type A cluster for audit testing purposes each year. The final allocation of federal expenditures varies depending on the most recent available information provided by IDHS and may be reported under both ALNs or one ALN. For FY2022 the Child Care program included federal funds confirmed by IDHS for 93.575 and 93.596.
Title: NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Accounting Policies: NOTE 1 REPORTING ENTITY - The City of Chicago (the City) is a governmental entity established by laws of the State of Illinois and has the powers of a body corporate, as defined in the statutes. All significant operations of the City are included in the scope of the Office of Management and Budget (OMB) requirements contained in 2 CFR Part 200, Subpart F (Single Audit). The U.S. Department of Health and Human Services (HHS) has been designated as the Citys cognizant agency for the Single Audit. The reporting entity for the City is based upon criteria established by the Governmental Accounting Standards Board.Programs Subject to Single Audit A Schedule of Expenditures of Federal Awards (SEFA) is presented for each federal program and a summary of expenditures by federal agency is as follows:U.S. Department of Agriculture$4,127,946U.S. Department of Housing and Urban Development 194,631,706U.S. Department of Justice 14,812,470 U.S. Department of Transportation 288,328,664U.S. Department of Treasury 513,160,736 U.S. National Endowment for the Arts 655,200U.S. Institute of Museum and Library Services 1,060,957U.S. Small Business Administration 1,264,933 U.S. Environmental Protection Agency8,789,362U.S. Department of Education-410U.S. Department of Health and Human Services 357,965,902 Research and Development Cluster79,593U.S. Corporation for National and Community Service 616,155U.S. Department of Homeland Security 83,426,893 Total Expenditures of Federal Awards $ 1,468,920,107 Passenger Facility Charges collected and expended, as prescribed by Sections 9110 and 9111 of the Aviation Safety and Capacity Expansion Act of 1990 issued by the Federal Aviation Administration of the United States Department of Transportation, are not included in this Single Audit report and are audited separately.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
COVID-19While continuing to recover from the impacts of the COVID-19 pandemic the City received revenues such as federal and state grants including $385.0 million of ARP Act funds applied to replace lost revenues due to the impacts of the COVID-19 pandemic totaling $1,855.0 million. These revenues were primarily applied to respond to the COVID-19 pandemic, such as housing and rental assistance, and public safety, as well as provide essential government services.In addition, the City is eligible for the Federal Emergency Management Agency (FEMA) Public Assistance Grant and in FY2022 received reimbursements for eligible costs incurred in FY2020 and FY2021 under this grant in the amount of $36,373 and $32,799,985 respectively, as reflected under ALN 97.036 in the Schedule of Expenditures for Federal Awards.Midway and OHare AirportsMidway was awarded a total of $172.4 million of COVID-19 Relief Funds. Excluding Concessionaire Relief Grants, Midway has applied $161.7 million of the COVID-19 Relief Funds through 2022 to airline rates and charges. Additionally, the City will apply $8.6 million of the Grants directly to Concessionaire Relief in 2023 and future years. O'Hare was awarded a total of $651.8 million of COVID-19 Relief Funds. Excluding Concessionaire Relief Grants, the City has applied $526.0 million of the COVID-19 Relief Funds through 2022 to airline rates and Passenger Facility and Customer Facility charges and has $43.1 million of funds remaining to be applied in 2023 and future years. Additionally, the City will apply $35.0 million of the Grants directly to Concessionaire Relief in 2023.