Title: 3. FEDERAL LOAN
Accounting Policies: 1. BASIS OF ACCOUNTING
The Village accounts for all awards under federal programs in a special revenue fund or a capital project fund. Special revenue funds are used to account for resources restricted to, or committed for specific purposes by a grantor. Capital project funds are used to account for resources restricted for capital outlays, including the acquisition or construction of capital facilities and other capital assets. If balances have not been expended by the end of the project period, grantors sometimes require the Village to refund all or part of the unused amount. For the year ended September 30, 2022, the Village accounted for federal grant funds in special revenue funds and capital project funds.
These programs are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources generally are included on the balance sheet. Operating statements of these funds present increased (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in fund balance.
The modified accrual basis of accounting is used for these funds. The basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on long-term debt, which is recognized when due, and certain compensated absences, which are recognized when the obligations are expected to be liquidated with expandable available financial resources. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Passthrough entity identifying numbers are presented where available.
Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. When grant funds are received before expenditures are made, they are recorded as unearned revenues until earned.
2. BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (the “schedule”) includes the federal activity of the Village under programs of the federal government for the year ended September 30, 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 Award (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Village, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Village.
Period of Performance - The period of performance for federal grants for the purpose of liquidation of outstanding obligations made on or before the ending date of the federal project period extended 90 days beyond the federal project period ending date, in accordance with provisions in Section H, Period of Performance of Federal Funds, Part 3, OMB Compliance Supplement - April 2022. Matching - Matching contributions for the Highway Planning and Construction Program was $9,986 for the year ended September 30, 2022.
Program Income - Program income was not generated from any of the federal awards.
Non-Cash Assistance - The Village did not receive any federal awards in the form of non-cash assistance during the year.
Indirect Cost Rate - The Village did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: The Village did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
The Village was approved by the USDA Rural Utilities Service to receive a loan totaling $2,909,000 for the construction of the Village’s waterworks system. As of September 30, 2022, the amount outstanding on the loan balance was $2,850,000. The total loan proceeds from prior years is included in the Schedule of Expenditures of Federal Awards.
The loan is reported in the Village’s Long-Term Debt. See Note III.E. for details.
Title: 4. RECONCILIATIONS
Accounting Policies: 1. BASIS OF ACCOUNTING
The Village accounts for all awards under federal programs in a special revenue fund or a capital project fund. Special revenue funds are used to account for resources restricted to, or committed for specific purposes by a grantor. Capital project funds are used to account for resources restricted for capital outlays, including the acquisition or construction of capital facilities and other capital assets. If balances have not been expended by the end of the project period, grantors sometimes require the Village to refund all or part of the unused amount. For the year ended September 30, 2022, the Village accounted for federal grant funds in special revenue funds and capital project funds.
These programs are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources generally are included on the balance sheet. Operating statements of these funds present increased (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in fund balance.
The modified accrual basis of accounting is used for these funds. The basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on long-term debt, which is recognized when due, and certain compensated absences, which are recognized when the obligations are expected to be liquidated with expandable available financial resources. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Passthrough entity identifying numbers are presented where available.
Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. When grant funds are received before expenditures are made, they are recorded as unearned revenues until earned.
2. BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (the “schedule”) includes the federal activity of the Village under programs of the federal government for the year ended September 30, 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 Award (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Village, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Village.
Period of Performance - The period of performance for federal grants for the purpose of liquidation of outstanding obligations made on or before the ending date of the federal project period extended 90 days beyond the federal project period ending date, in accordance with provisions in Section H, Period of Performance of Federal Funds, Part 3, OMB Compliance Supplement - April 2022. Matching - Matching contributions for the Highway Planning and Construction Program was $9,986 for the year ended September 30, 2022.
Program Income - Program income was not generated from any of the federal awards.
Non-Cash Assistance - The Village did not receive any federal awards in the form of non-cash assistance during the year.
Indirect Cost Rate - The Village did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: The Village did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
The total revenue presented on Exhibit K-1 can be reconciled to Exhibit C-3 as follows: See the Notes to the SEFA for chart/table.