Audit 318282

Title: RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: BASIS OF PRESENTATION The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all expenditures of federal awards and state financial assistance programs of the Middlesex County Utilities Authority (the “Authority”). The Authority is defined in Note 1 to the financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the basis of accounting as described in Note 1 to the Authority’s financial statements. The information in these schedules are 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) and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Because the schedules present only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in the financial position or cash flows of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Amounts reported in the accompanying schedules agree with amounts reported in the Authority’s financial statements.

Title: RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS Accounting Policies: BASIS OF PRESENTATION The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all expenditures of federal awards and state financial assistance programs of the Middlesex County Utilities Authority (the “Authority”). The Authority is defined in Note 1 to the financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the basis of accounting as described in Note 1 to the Authority’s financial statements. The information in these schedules are 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) and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Because the schedules present only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in the financial position or cash flows of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Amounts reported in the accompanying schedules of expenditures of federal awards and state financial assistance agree with the amounts reported in the related federal and state financial reports, where required. Expenditures incurred for Statewide Assistance Infrastructure Loans are based upon expenditures incurred for these projects. When expenditures are incurred, a requisition is submitted to the NJIB for reimbursement for eligible costs. Expenditures incurred for COVID-19 Coronavirus State and Local Fiscal Recovery Funds are based upon expenditures incurred due to the public health emergency with respect to Coronavirus 2019 (COVID-19). When expenditures are incurred, a request for reimbursement is submitted to the County of Middlesex, New Jersey, for reimbursement of eligible costs.