Audit 299259

Title: Note C - Outstanding Loans Accounting Policies: A) The accompanying schedule of federal and state awards (the Schedule) includes federal and state award activity of Appalachian Electric Cooperative under programs of the federal and state governments for the year ended June 30, 2023. 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 Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Appalachian Electric Cooperative, it is not intended to and does not present the financial position, changes in net position, or cash flows of Appalachian Electric Cooperative. B) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and/or OMB Circular A87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowed or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Appalachian Electric Cooperative has not elected to use the 10 percent de minimus indirect cost rate as allowed under the Uniform Guidance. At June 30, 2023, there was a total outstanding balance of $1,879,074 to Appalachian Electric Cooperative from subrecipients made under the Rural Development Loans and Grants Programs. The original principal amount of the loans was $3,140,000. Principal repayments in 2023 were $348,889.