Title: NOTE 3. GENERAL
Accounting Policies: The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 2, Organization and Basis of Accounting, of the County's financial statements. The information in the schedule of expenditures of federal and state awards is presented in accordance with the OMB Uniform Guidance and New Jersey OMB 1508.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The accompanying schedules present the activity of federal and state financialassistance programs of the County of Somerset, New Jersey (County). All federalfinancial assistance received directly from the federal government, as well as federalfinancial assistance passed through other government agencies is included on theSchedule of Expenditures of Federal Awards. All state financial assistance receivedfrom the State of New Jersey is included on the Schedule of Expenditures of StateFinancial Assistance. The accompanying Schedules are the responsibility of theCounty. The County has prepared the Schedules.
Title: NOTE 4. ORGANIZATION AND BASIS OF ACCOUNTING
Accounting Policies: The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 2, Organization and Basis of Accounting, of the County's financial statements. The information in the schedule of expenditures of federal and state awards is presented in accordance with the OMB Uniform Guidance and New Jersey OMB 1508.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
OrganizationThe County is the prime sponsor and subrecipient of various federal and state grantfunds. The County has designated the administration of grant programs and the reporting function to various departments within the County. Substantially all grant and program cash funds are deposited with the County's other funds, although each grant is accounted for separately within the County's financial records, and the County maintains separate accounts where required. The County Comptroller's officeperforms accounting functions for all grants, as well as the various departments.Basis of AccountingThe accounting policies of the County of Somerset conform to the accounting principles and practices applicable to municipalities and counties, which have been prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Such principles and practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the County accounts for its financial transactions through separate funds. In addition, the County has not elected to use the 10 percent de minimus indirect cost rate allowed under the Uniform Guidance and has not charged any indirect costs to its federal and/or state financial assistance programs. County federal and state grants are presented within the County's overall financial statements on the basis of accounting in accordance with accounting principles and practices prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. Accordingly, the financial statements of the County are not intended to present financial position and results of operations in accordance with generally accepted accounting principles (GAAP). The accounting principles and practices prescribed for municipalities and counties by the Division differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. The more significant differences, as disclosed in the Notes to Financial Statements Regulatory Basis for the year ended December 31, 2022, are included in our report. Notification of Federal AwardsThe State of New Jersey reports notification of federal award amounts included in state grant allocations on the state fiscal year basis. The County has utilized an allocation of reported amounts for recording and reporting federal financial awards on the Countys fiscal reporting period.
Title: NOTE 5. RELATIONSHIP TO FINANCIAL STATEMENTS
Accounting Policies: The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 2, Organization and Basis of Accounting, of the County's financial statements. The information in the schedule of expenditures of federal and state awards is presented in accordance with the OMB Uniform Guidance and New Jersey OMB 1508.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 4 as described above.
Title: NOTE 6. SCH. OF EXP. OF FED AWARDS AND STATE FINANCIAL ASSIST. INFORMATION
Accounting Policies: The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 2, Organization and Basis of Accounting, of the County's financial statements. The information in the schedule of expenditures of federal and state awards is presented in accordance with the OMB Uniform Guidance and New Jersey OMB 1508.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The County of Somerset is a recipient of considerable grant awards. With respect to the grant notification process followed by agencies that pass-through federal and state assistance to the County, the County does not always receive timely information with respect to grant funding sources along with the relevant federal assistance listing and account number information from its grantor agencies, which can inhibit the accuracy of information contained in the schedules of expenditures of federal awards and state financial assistance. County management asserts that all reasonable efforts have been made to obtain the appropriate relevant evidence to support the reported federal and state award categories and the federal assistance listing numbers and state grant account numbers presented in the schedules, but limited to the extent of the information provided by these agencies.
Title: NOTE 7. CONTINGENCIES
Accounting Policies: The accompanying schedules of expenditures of federal and state awards is presented using the modified accrual basis of accounting, adjusted for encumbrances, as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units. This basis of accounting is set forth in Note 2, Organization and Basis of Accounting, of the County's financial statements. The information in the schedule of expenditures of federal and state awards is presented in accordance with the OMB Uniform Guidance and New Jersey OMB 1508.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The County participates in a number of federal and state assisted programs that are subject to audit and adjustment by the respective grantors. The audits of these programs for or including the year ended December 31, 2022, may have not been conducted or completed as of the date of this report. Grantor agencies reserve the right to conduct additional audits of the County's grant program for economy, efficiency, and program results, which may result in disallowed costs to the County. However, County management does not believe such audits would result in any material amounts of disallowed costs.