Audit 334058

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on tha Scehdule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost pronciples contained in the Uniform Guide, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For pass-through awards, the Authority records the expenditures of federal programs in the year in which the pass-through entity makes the reimbursement of the cost to the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10% minimis cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the Puerto Rico Integrated Transit Authority (the Authority), a component unit of the Commonwealth of Puerto Rico, under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR Part 200), Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from the amounts presented in, or used in the preparation of, the basic financial statements. 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 and changes in net position of the Authority. The Catalog of Federal Domesctic Assistance (CFDA) NUmber is a program identification number. The first two digits identify the federal department or agency that administers the program, and the last three numbers are assigned by numerical sequence. State or local government redistributions of federal awards to the Authority , known as "pass - through entity and the identifyig number assigned by the pass - through entity and the identifying number assigned by the pass - through entity for the federal awards received as a subrecipient. Numbers identified as N/A are not applicable, and nummbers identified as N/AV are not available.

Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on tha Scehdule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost pronciples contained in the Uniform Guide, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For pass-through awards, the Authority records the expenditures of federal programs in the year in which the pass-through entity makes the reimbursement of the cost to the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10% minimis cost rate allowed under the Uniform Guidance. Expenditures included on the Schedule are reported on the accrual basis of accounting. Such 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. For pass-through awards, the Authority records the ependitures of federal programs in the year in which the pass-through entity makes the reimbursement of the cost to the Authority.

Title: INDIRECT COST RATE Accounting Policies: Expenditures reported on tha Scehdule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost pronciples contained in the Uniform Guide, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For pass-through awards, the Authority records the expenditures of federal programs in the year in which the pass-through entity makes the reimbursement of the cost to the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10% minimis cost rate allowed under the Uniform Guidance. The Authority has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.

Title: CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY (CARES) ACT PROGRAM Accounting Policies: Expenditures reported on tha Scehdule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost pronciples contained in the Uniform Guide, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For pass-through awards, the Authority records the expenditures of federal programs in the year in which the pass-through entity makes the reimbursement of the cost to the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10% minimis cost rate allowed under the Uniform Guidance. The Authority was granted with additional CARES Act funds on June 25, 2020, for an amount of approximately $2,407,525.  Generally, expenditures are reported on the SEFA when costs are incurred, and an award is determined to exist. The Authority reported eligible costs incurred of $1,073,441 from the period January 11, 2021 to March 1, 2022.