Audit 25081

Title: NOTE 4 MAJOR PROGRAM Accounting Policies: NOTE 1 BASIS OF PRESENTATIONThe accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federalaward activity of Hawaii Rural Water Association, Inc. (a not-for-profit organization; the Association)under programs of the federal government for the year ended December 31, 2022. The information onthis Schedule is prepared in accordance with the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementsfor Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion ofthe operations of the Association, it is not intended to and does not present the financial position,changes in net assets, or cash flows of the Association.NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in OMB Circular A-122, CostPrinciples for Non-Profit Organizations (codified in 2 CFR Part 230) and Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirementsfor Federal Awards, wherein certain types of expenditures may or may not be allowable or may belimited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Association has elected to not use the 10-percent de minimis indirect cost rate on new grants asallowed under the Uniform Guidance. * Denotes major program, which compromise 49% of total expenditures of federal awards.