Audit 33025

Accounting Policies: (1) Basis of PresentationThe accompanying schedule of expenditures of federal awards (the Schedule)includes the federal awards activity of the City of San Marcos (the City) underfederal programs of the federal government for the year ended June 30, 2022.The information in this Schedule is presented in accordance with therequirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements forFederal Awards (Uniform Guidance). Because the Schedule presents only aselected portion of the City, it is not intended to and does not present thefinancial position, changes in net assets, or cash flows of the City.(2) Summary of Significant Accounting PoliciesExpenditures reported on the Schedule are reported on the modified accrualbasis of accounting. Under the modified accrual basis of accounting,expenditures are incurred when the City becomes obligated for payment as aresult of the receipt of the related goods and services. Expenditures reportedinclude any property or equipment acquisitions incurred under the federalprogram. The City did not elect to use the 10% de minimis indirect cost rateallowed under the Uniform Guidance.(3) Sub-recipientsOf the federal expenditures presented in the schedule, the City provided federalawards to sub-recipients for the Community Development Block Grant(Assistance Listing No. 14.218) in the amount of $125,664. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.