Audit 23766

Accounting Policies: North Dakota Rural Water Systems Association and SubsidiaryNotes to Schedule of Expenditures of Federal AwardsFor the Year Ended December 31, 2022Page 18NOTE 1 PURPOSE OF SCHEDULEThe Schedule of Expenditures of Federal Awards (schedule) is a supplementary schedule to the financialstatements and is presented for purposes of additional analysis. The schedule is required by Title 2 U.S. Codeof Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance).NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESA. Basis of PresentationFederal Financial Assistance - Pursuant to the Uniform Guidance, federal financial assistance is defined asassistance that nonfederal entities receive or administer in the form of grants, cooperative agreements, loans,loan guarantees, property (including donated surplus property), interest subsidies, insurance, food commodities,direct appropriations and other assistance, but does not include amounts received as reimbursements forservices rendered to individuals. Accordingly, nonmonetary federal assistance may be included in federalfinancial assistance and therefore, may be reported on the schedule. Federal financial assistance does notinclude direct federal cash assistance to individuals.Assistance Listing Number Uniform Guidance requires the schedule to show the total expenditures for eachof the federal financial assistance programs as identified in theAssistance Listing Number (ALN). The ALN isa government wide compendium of individual federal programs. Pass-through entity identifying numbers arepresented where available.B. Major ProgramsThe Uniform Guidance established the levels of expenditures to be used in defining major federal financialassistance programs. The dollar threshold to distinguish type A and type B programs was $750,000.C. Reporting EntityThe schedule includes all federal financial assistance programs administered by the association.D. Basis of AccountingFederal financial assistance expenditures included in the schedule are reported using the accrual basis ofaccounting.E. ElectionsThe Association has not elected to use the 10 percent de minimis indirect cost rate. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.