Audit 321477

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: BASIS OF ACCOUNTING - Expenditures reported on the Schedule are presented using the cash basis of accounting. Under this method, loan proceeds are recorded when received and are recognized as debt obligations on the statement of net position. Expenditures are recognized on the Schedule to the extent of the federal loan proceeds portion of the total PENNVEST loan awarded to the Authority. The federal expenditures are recognized, as applicable, under 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 limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The Cecil Township Municipal Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the ‘Schedule’) includes the federal grant activity administered by the Cecil Township Municipal Authority for the year ended December 31, 2023. 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 Grant Guidance – UGG). Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position or changes in net position of the Cecil Township Municipal Authority.

Title: NOTE 3 - RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: BASIS OF ACCOUNTING - Expenditures reported on the Schedule are presented using the cash basis of accounting. Under this method, loan proceeds are recorded when received and are recognized as debt obligations on the statement of net position. Expenditures are recognized on the Schedule to the extent of the federal loan proceeds portion of the total PENNVEST loan awarded to the Authority. The federal expenditures are recognized, as applicable, under 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 limited to reimbursement. De Minimis Rate Used: N Rate Explanation: The Cecil Township Municipal Authority has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Federal proceeds received from the Pennsylvania Infrastructure Investment Authority are recorded as long-term liabilities – Note Payable (PENNVEST) – in the accompanying financial statements. The Note Payable (PENNVEST) amount as of December 31, 2023 is comprised of federal funding received totaling $4,616,617 and state funding received of $1,170,787.