Audit 337834

Title: Reconciliation of Schedule of Expenditures of Federal Awards to Actual Reimbursements Accounting Policies: Summary of Significant Accounting Policies Reporting Entity The Schedule of Expenditures of Federal Awards presents the activities of federal award programs expended by the Saint Paul Regional Water Services (Regional Water), a discretely presented component unit of the City of Saint Paul, Minnesota. Regional Water’s reporting entity is defined in Note 2.A. to the basic financial statements. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Regional Water under programs of the federal government 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 Guidance). Because the schedule presents only a selected portion of the operations of Regional Water, it is not intended to and does not present the net position, changes in net position, or cash flows of Regional Water. Expenditures reported on the schedule are reported on the full accrual basis of accounting. Such expenditures are recognized following the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: De Minimus Cost Rate Regional Water has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Saint Paul Regional Water Services had federal expenses under four federal awards in 2023. The first federal award is the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (SLFRF), of $16,000,000 for lead pipe replacement. A subrecipient agreement signed and dated May 24, 2022, between the Saint Paul Regional Water Services and the City of Saint Paul with an initial award of $4,000,000 was amended twice. The first amendment was effective on February 9, 2023, with an additional $10,500,000 and the second amendment was effective on August 23, 2023, with an additional $1,500,000. A total of $8,746,322 was expended during fiscal year 2023, and the unexpended balance carried forward to fiscal year 2024 is $4,837,335. The next three are Capitalization Grants for Drinking Water State Revolving Funds, which are passed through the MNPFA, a component unit of the State of Minnesota. These awards are in the form of Drinking Water Notes Payable secured by Net Revenues of the Saint Paul Regional Water Services repaid over 20-year periods. Expenses for the Capitalization Grants for Drinking Water State Revolving Funds during the year ended December 31, 2023, totaled $37,771,163. Reimbursement during fiscal year 2023 totaled $37,771,163; $8,640,685 was for 2022 expenses and the remaining $29,130,478 was for 2023 expenses.