Title: Note A - Basis of Presentation
Accounting Policies: Accrual basis of accounting; pass through entity identifying numbers are presented where available.
De Minimis Rate Used: N
Rate Explanation: None necessary
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the City of Mt. Shasta (the City) under programs of the federal government for the fiscal year ended June 30, 2024. The information in this Schedule is presented in accordance with the audit 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 the City, it is not intended to and does not present the financial net position or changes in net position of the City.
Title: Note B - Summary of Significant Accounting Policies
Accounting Policies: Accrual basis of accounting; pass through entity identifying numbers are presented where available.
De Minimis Rate Used: N
Rate Explanation: None necessary
1. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, when applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Also, when applicable, recognition is following the Uniform Guidance for federal awards granted after December 26, 2014.
2. Pass-through entity identifying numbers are presented where available.
Title: Note C - Subrecipients
Accounting Policies: Accrual basis of accounting; pass through entity identifying numbers are presented where available.
De Minimis Rate Used: N
Rate Explanation: None necessary
Of the federal expenditures presented in the schedule, the City provided $233,242 of the federal awards to subrecipients.
Title: Note D - Indirect Cost Rate
Accounting Policies: Accrual basis of accounting; pass through entity identifying numbers are presented where available.
De Minimis Rate Used: N
Rate Explanation: None necessary
The City did not elect to use the 10% de Minimis indirect cost rate on the federal awards presented in this schedule.
Title: Note E - Federal Loans
Accounting Policies: Accrual basis of accounting; pass through entity identifying numbers are presented where available.
De Minimis Rate Used: N
Rate Explanation: None necessary
a) The City was approved by the United States Department of Agriculture (USDA) Rural Development to receive a loan totaling $9,209,000 for the State Mandated Wastewater Treatment Plant and Disposal Improvement Project. Interim loan financing was received for the construction period. Due to this loan having “continuing compliance requirements” pursuant to the 2024 Compliance Supplement, the amount listed for this loan includes the beginning of the period loan balance plus proceeds used during the year. The balance owing at the end of the period is $9,209,000.
b) The City was approved by the pass-through entity, California State Water Resources Control Board, to receive a pass-through loan (i.e. sub-award) from the Environmental Protection Agency Clean Water State Revolving Fund totaling $6,926,942 for the State Mandated Wastewater Treatment Plant and Disposal Improvement Project. $2,000,000 of this loan is funded using Principal Forgiveness subsidy funding and has reduced the loan balance at the end of the period. Due to this loan not having “continuing compliance requirements” pursuant to the 2024 Compliance Supplement, the amount listed for ALN 66.458 is the fiscal year expenditures funded by this loan during the fiscal year under audit without the beginning loan balance. The balance owing at the end of the period is $3,457,209.