Audit 316145

Title: NOTE A - GENERAL Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: No additional information needed. The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the Town of Lyons, Colorado (the Town). All federal financial assistance received by the Town directly from federal agencies, as well as federal financial assistance passed through other government agencies, including the State of Colorado, is included on the schedule.

Title: NOTE B- BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: No additional information needed. The accompanying Schedule of Expenditures of Federal Awards includes the federal award activity of the Town under programs of the federal government for the year ended December 31, 2023. The information in the 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 Town, it is intended to and does not present the financial position or changes in net position of the Town.

Title: NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: No additional information needed. Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance

Title: NOTE D - SIGNIFICANT ESTIMATE Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: No additional information needed. As discussed in Note 1 to the financial statements, the allowability of federal grant expenditures for the FEMA program is a significant estimate. Due to the nature of the grants, the amounts which will ultimately be reimbursed by the State of Colorado is an estimate which may have a significant effect on future year’s financial results. The Town believes that all costs which have been reported on this schedule are allowable and will be collected.

Title: NOTE E - SUBRECIPIENTS Accounting Policies: Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Expenditures of federal awards are recognized in the accounting period when the liability is incurred. Such 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. See Note 1 of the financial statements for summary of significant accounting policies. The Town has not elected to use the ten percent de Minimis indirect cost rate as allowed under the Uniform Guidance De Minimis Rate Used: N Rate Explanation: No additional information needed. The Town provided no federal awards to subrecipients for the year ended December 31, 2023.