Title: 1. BASIS OF PRESENTATION
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality under programs of the federal government for the year ended June 30, 2021. 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). Therefore, some amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position and changes in net position of the Municipality.
Title: 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
Title: 3. ASSISTANCE LISTING NUMBER AND PASS-THROUGH ENTITY IDENTIFYING NUMBER
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
The Assistance Listing Number (ALN), 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 award mechanisms, including federal grants and cooperative agreements. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards. The Sam.gov assistance listing is the publicly available online database showing all available Federally funded programs.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 passthrough 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: 4. INDIRECT COST RATE
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
Title: 5. RECONCILIATION OF EXPENDITURES PRESENTED IN THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO THE EXPENDITURES PRESENTED IN THE BASIC FINANCIAL STATEMENTS
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
See Note to SEFA
Title: 6. COMMUNITY DISASTER LOAN
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
FEMA awarded the Municipality a Community Disaster Loan (CDL) with a maximum limit amount of $5 million at 2.75%. The CDL program provides assistance to local governments to overcome a loss in revenues as a result of a natural disaster, and in order to provide funds to continue its governmental operational functions. Neither principal nor interest payments are required to be paid until the CDL maturity. The terms of the CDL provide, as a condition, that the Municipality shall recover sufficient revenues to meet its operating budget after three full years next to the fiscal year in which the natural disaster occurred. In the case in which the Municipality does not recover sufficient revenues, the repayment of the whole or part of the CDL might be cancelled by the Federal Government. In August 2018 and September 2020, FEMA issued to the Municipality a promissory note for the amount of $2,689,394 and $1,170,493 respectively for financial assistance under the CDL.ALN Program Name Loan Outstanding Balance
97.030 Community Disaster Loan – Hurricane Maria $ 2,689,394
97.030 Community Disaster Loan – Earthquake $ 1,170,493 The normal repayment term of a CDL is five years, where the full principal and accumulated interest are due all together at the end of the five-year term on whatever amount is not cancelled. In accordance with the Extending Government Funding and Delivering Emergency Assistance Act (P.L. 117-43) approved by the United States Congress, the outstanding balance of principal and interest accrued of the referenced CDL as of September 30, 2021, was cancelled.
Title: 7. COVID-19 CORONAVIRUS RELIEF FUND (ALN 21.019)
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
In May 2020, the Commonwealth Government announced availability of Coronavirus Relief Fund Assistance (“CRF”) to the municipalities in the form of a transfer. The Municipality signed transfers (grants) agreements with the P.R. Department of Treasury in June 2020, December 2020, and May 2021 for a total amount of $2,000,000. The transfer period of performance begins on November 26, 2020, to April 30, 2021.Generally, expenditures are reported on the SEFA when costs are incurred, and an award is determined to exist. The Municipality reported eligible transfer costs incurred of $1,089,176 from the period July 1, 2020, to June 30, 2021.
Title: 8. LATENESS OF SINGLE AUDIT REPORTING PACKAGE
Accounting Policies: 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:• Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period.
• Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW and (2) eligible expenditures are incurred.
• Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
De Minimis Rate Used: N
Rate Explanation: The Municipality elected not use the 10% de minimis cost rate and it did not charge indirect costs to federal grants during the year ended June 30, 2021.
The Single Audit reporting package, as defined and required in 2 CFR 200 for fiscal year ended June 30, 2021, could not be submitted in a timely manner because of the effects of the Novel Coronavirus COVID-19. As further discussed in the Municipality’s Notes to the Financial Statements included in its audited financial statements for the same year, the Municipality’s activities were affected by the Executive Order issued by the Governor of Puerto Rico.As a result of COVID-19, the United States Office of Management and Budget issued a memorandum granting various disaster relief flexibilities to reduce burden for financial assistance. One of these flexibilities was the extension for Single Audit submission. Awarding agencies, in their capacity as cognizant or oversight agencies for audit, should allow recipients and subrecipients that have not yet filed their single audits with the Federal Audit Clearinghouse as of the date of the issuance of this memorandum that have fiscal year-ends through June 30, 2021, to delay the completion and submission of the Single Audit reporting package, as required under Subpart F of 2 CFR § 200.501 to six months beyond the normal due date. No further action by awarding agencies is required to enact this extension. This extension does not require individual recipients and subrecipients to seek approval for the extension by the cognizant or oversight agency for audit; however, recipients and subrecipients should maintain documentation of the reason for the delayed filing. Recipients and subrecipients taking advantage of this extension would still qualify as a "low-risk auditee" under the criteria of 2 CFR § 200.520(a), (2 CFR § 200.501). For the Municipality, such flexibility extends the period for completion and submission of the June 30, 2021 Single Audit from its original due date of March 31, 2022, to September 30, 2022. On September 18, 2022, Puerto Rico was declared a major disaster area under the Stafford Act. Consistent with this declaration and the complications created by hurricane Fiona, OMB has granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. For the Municipality, such flexibility extends the period for completion and submission of the June 30, 2021 Single Audit from its postponed due date of September 30, 2022, to March 31, 2023.