Audit 338269

Title: SCOPE OF AUDIT Accounting Policies: BASIS OF PRESENTATION, BASIS OF ACCOUNTING, INDIRECT COST ALLOCATION De Minimis Rate Used: N Rate Explanation: ENTITY DID NOT RECEIVE ANY INDIRECT COST ALLOCATION AND DID NOT USE THE DE MINIMIS INDIRECT COST RATE ALLOWED UNDER UNIFORM GUIDANCE Pohnpei Utilities Corporation (PUC) is a component unit of the Government of the State of Pohnpei. PUC commenced operations on October 1, 1991, with assets and liabilities of the Division of Public Utilities of the Pohnpei State Department of Public Works transferred as of that date. Only the activities of PUC are included in the scope of the Single Audit.

Title: BASIS OF PRESENTATION Accounting Policies: BASIS OF PRESENTATION, BASIS OF ACCOUNTING, INDIRECT COST ALLOCATION De Minimis Rate Used: N Rate Explanation: ENTITY DID NOT RECEIVE ANY INDIRECT COST ALLOCATION AND DID NOT USE THE DE MINIMIS INDIRECT COST RATE ALLOWED UNDER UNIFORM GUIDANCE The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of PUC under programs of the federal government for the year ended September 30, 2022. 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 PUC, it is not intended to and does not present the financial position or changes in financial position of PUC.

Title: BASIS OF ACCOUNTING Accounting Policies: BASIS OF PRESENTATION, BASIS OF ACCOUNTING, INDIRECT COST ALLOCATION De Minimis Rate Used: N Rate Explanation: ENTITY DID NOT RECEIVE ANY INDIRECT COST ALLOCATION AND DID NOT USE THE DE MINIMIS INDIRECT COST RATE ALLOWED UNDER UNIFORM GUIDANCE Expenditures reported on the Schedule are reported on the accrual basis of accounting, consistent with the manner in which PUC maintains its accounting records, 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. All expenses and capital outlays are reported as expenditures when incurred. Pass-through entity identifying numbers are presented where available.

Title: INDIRECT COSTS Accounting Policies: BASIS OF PRESENTATION, BASIS OF ACCOUNTING, INDIRECT COST ALLOCATION De Minimis Rate Used: N Rate Explanation: ENTITY DID NOT RECEIVE ANY INDIRECT COST ALLOCATION AND DID NOT USE THE DE MINIMIS INDIRECT COST RATE ALLOWED UNDER UNIFORM GUIDANCE PUC elected not to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414 of the Uniform Guidance. PUC did not receive any indirect cost allocation and no indirect costs were recorded against any federal program reported on the accompanying Schedule of Expenditures of Federal Awards for the year ended September 30, 2022.