Title: NOTE 1 – GENERAL
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of the Municipality of Peñuelas, Puerto Rico (Municipality) under programs of the federal government for the fiscal year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The reporting entity is defined in Note 1 (b) to the basic financial statements.
Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
Title: NOTE 3 – ASSISTANCE LISTING NUMBER
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
The Assistance Listing Number, formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all Federal assistance awards, including Federal grants and cooperative agreements.
Title: NOTE 4 – INDIRECT COST RATE
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Title: NOTE 5 – MAJOR PROGRAMS
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
Title: NOTE 6 – RELATIONSHIP TO FINANCIAL STATEMENTS
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Expenditures of federal awards are reported in the Municipality’s Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds as follows: During the fiscal year 2022-2023, the Municipality incurred substantial costs related to Hurricane Fiona. Per OMB Compliance Supplement, non-federal entities must record expenditure on the Schedule when FEMA has approved the non-Federal entity’s PW and the non-Federal entity has incurred the eligible expenditures. Any expenditure from FEMA under Assistance Listing Number 97.036 are not to be recognized as expenditures for purposes of the Schedule until the respective Project Worksheet (PW) have been approved. At June 30, 2023, one PW has been approved for DR-4671 and $183,211 has been recognized as expenditures on the Schedule. The remaining $2,992,659 in expenditures presented on the financial statements will be recognized on the Schedule in future years once the PW’s are approved by FEMA. “See the Notes to the SEFA for chart/table”
Title: NOTE 7 – COMMUNITY DISASTER LOANS- EMN-2018-LF-4339PR13/ EMN-2021-LF-4473PR11
Accounting Policies: The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: 1) Section 8 Housing Choice Vouchers (HCV) expenditures are equal to the ACC subsidy for the PHA fiscal period; and 2) Disaster Grants- Public Assistance (FEMA) expenditures are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
De Minimis Rate Used: N
Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
On September 30, 2021, the United States Congress passed the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43). According to P.L. 117-43 SEC. 1601. (a): “Repayments of the remaining balances of all loans, as of September 30, 2021, by the Federal Emergency Management Agency under section 417 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5184) are hereby cancelled”. Accordingly, the outstanding balances of principal and interest of the referenced Community Disaster Loans, as of September 30, 2021 were cancelled. Loans transactions during fiscal year 2022-2023 are as follows: “See the Notes to the SEFA for chart/table”