Audit 289762

Title: NOTE 1 - BASIS OF ACCOUNTING Accounting Policies: The schedule is prepared on the same basis of accounting as the Town's financial statements. The Town uses the cash basis method of accounting. De Minimis Rate Used: N Rate Explanation: The Town has not elected to use the de minimis cost rate under Uniform Guidance This schedule is prepared on the same basis of accounting as the Town of Odessa financial statements. The Town uses the Cash Basis method of accounting.

Title: NOTE 2 - PROGRAM COSTS Accounting Policies: The schedule is prepared on the same basis of accounting as the Town's financial statements. The Town uses the cash basis method of accounting. De Minimis Rate Used: N Rate Explanation: The Town has not elected to use the de minimis cost rate under Uniform Guidance The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the Town of Odessa portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Title: Note 3 – INDIRECT COST RATIO Accounting Policies: The schedule is prepared on the same basis of accounting as the Town's financial statements. The Town uses the cash basis method of accounting. De Minimis Rate Used: N Rate Explanation: The Town has not elected to use the de minimis cost rate under Uniform Guidance The Town of Odessa has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.