Audit 301946

Title: Reconciliation to Actual Reimbursements Accounting Policies: Summary of Significant Accounting Policies Reporting Entity The Schedule of Expenditures of Federal Awards presents the activities of federal award programs expended by the Saint Paul Regional Water Services, a discretely presented component unit of the City of Saint Paul, Minnesota. The Saint Paul Regional Water Services’ reporting entity is defined in Note 2.A to the financial statements. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Saint Paul Regional Water Services under programs of the federal government for the year ended December 31, 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 Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Saint Paul Regional Water Services, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Saint Paul Regional Water Services. Expenditures reported on the schedule are reported on the full accrual basis of accounting. Such expenditures are recognized following the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The expenditures for the Capitalization Grants for Drinking Water State Revolving Funds, specifically the Drinking Water Notes Payable, are reported as the amount of the loan received during the year presented as requested by the Minnesota Public Facilities Authority (MNPFA). De Minimis Rate Used: N Rate Explanation: De Minimis Cost Rate The Saint Paul Regional Water Services has elected not to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. The Saint Paul Regional Water Services had federal expenses under four federal awards in 2022. The first federal award is the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (SLFRF), of $4,000,000 for lead pipe replacement. A subrecipient agreement was signed on May 6, 2022, between the Saint Paul Regional Water Services and the City of Saint Paul. A total of $2,416,343 was expended during fiscal year 2022, and the unexpended balance carried forward to fiscal year 2023 is $1,583,657. The second two are Capitalization Grants for Drinking Water State Revolving Funds, which are passed through the MNPFA, a component unit of the State of Minnesota. These awards are in the form of Drinking Water Notes Payable secured by Net Revenues of the Saint Paul Regional Water Services repaid over 20-year periods. Expenses for the Capitalization Grants for Drinking Water State Revolving Funds during the year ended December 31, 2022, totaled $38,958,680. Reimbursements during fiscal year 2022 totaled $41,801,069; $2,842,389 was for 2021 expenses and the remaining $38,958,680 was for 2022 expenses. The fourth federal award is a Principal Forgiveness Grant of $250,000 passed through the MNPFA for approximately 128 lead service lines, to be disbursed by June 30, 2024. The Principal Forgiveness Grant is not required to be repaid with the Saint Paul Regional Water Services’ adherence to the terms of the agreement dated July 7, 2021. Expenses during the year ended December 31, 2022, were $12,000.