Audit 317125

Title: NOTE 1 – GENERAL Accounting Policies: The accompanying Schedule is presented using the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de Minimis indirect cost rate as allowed under the Uniform Guidance The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the Federal activity of the City of South Bay, Florida (the “City”) under for the fiscal year ended September 30, 2023. The information in this Schedule is presented in accordance with the requirement of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance) and Chapter 10.550, Rules of the Auditor General. Therefore, the Schedule presents only a selected portion of the operations of the City; it is not intended to, and does not present the financial position, changes in net position, or cash flows of the City.

Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying Schedule is presented using the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de Minimis indirect cost rate as allowed under the Uniform Guidance The accompanying Schedule is presented using the accrual basis of accounting. 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.

Title: NOTE 3 – INDIRECT COST RATE Accounting Policies: The accompanying Schedule is presented using the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de Minimis indirect cost rate as allowed under the Uniform Guidance The City has elected not to use the 10% de Minimis indirect cost rate as allowed under the Uniform Guidance.

Title: NOTE 4 – CONTINGENCY Accounting Policies: The accompanying Schedule is presented using the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10% de Minimis indirect cost rate as allowed under the Uniform Guidance The grant revenue amounts received are subject to audit and adjustment. If any expenditure is disallowed by a grantor agency as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the City. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreement and applicable federal laws and regulations.