Audit 319729

Title: FEDERAL LOANS Accounting Policies: This schedule is prepared on the same basis of accounting as the City of Prosser’s financial statements. The City uses cash basis accounting, which is a departure from generally accepted accounting principles (GAAP). De Minimis Rate Used: Y Rate Explanation: The City has elected to use the 10% de minimis indirect cost rate allowed under the uniform guidance. It might be helpful to note that for the following grant awards, the indirect cost rate (or administrative rate) is set at a maximum amount of 8%, per the grant conditions. - Block Grants for Prevention and Treatment of Substance Abuse – ALN #93.959 - High Intensity Drug Trafficking Areas Program – ALN#95.001 Street Sweeper Loan: In 2020, the City of Prosser was approved by USDA’s Community Facilities Program to receive a loan totaling $177,000 for the purchase of a Street Sweeper The amount listed for this loan includes the beginning of the period loan balance. The balance owing at the end of the period is $137,446.78. also for the purchase of the same Street Sweeper. The current loan is also reported on the City of Prosser Schedule 9: Liabilities.

Title: PROGRAM COSTS Accounting Policies: This schedule is prepared on the same basis of accounting as the City of Prosser’s financial statements. The City uses cash basis accounting, which is a departure from generally accepted accounting principles (GAAP). De Minimis Rate Used: Y Rate Explanation: The City has elected to use the 10% de minimis indirect cost rate allowed under the uniform guidance. It might be helpful to note that for the following grant awards, the indirect cost rate (or administrative rate) is set at a maximum amount of 8%, per the grant conditions. - Block Grants for Prevention and Treatment of Substance Abuse – ALN #93.959 - High Intensity Drug Trafficking Areas Program – ALN#95.001 The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs, including the City of Prosser’s portion, are more than shown. Such expenditures are recognized following, as applicable, either the cost principles in the OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement.