Notes to SEFA
Title: 4. RECONCILIATION OF FEDERAL EXPENDITURES TO GRANT REVENUE
Accounting Policies: 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Flathead Municipal Airport Authority (the Authority) under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance). 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, changes in net assets, or cash flows of the Authority. Expenditures reported 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. Reported federal expenditures include capital asset purchases which are capitalized and not reported as expenses in the financial statements.
De Minimis Rate Used: N
Rate Explanation: The Authority has elected not to use the 10.0% de minimis indirect cost rate described under the Uniform Guidance.
In August 2019, the Flathead Municipal Airport Authority (FMAA) began design work for an expansion project to renovate and increase the size of the Glacier Park International Airport terminal. During design, but prior to construction, the project was split into two phases to allow for greater flexibility in responding to unprecedented market conditions caused by the COVID-19 pandemic. Should market impacts have persisted, FMAA retained the option to decline to bid the second project phase. In February 2020, Phase I design work was completed and the Northwest Mountain Region of the Federal Aviation Administration (FAA) concurred with FMAA that the eligible portions of the project under the Airport Improvement Program (AIP) and passenger facility charge (PFC) programs were 64.6%and 80.19%, respectively. FAA gave its concurrence when Phase II of the project was only 35% designed. FMAA began constructing Phase I in earnest during Spring of 2021, one year post-pandemic when the nation was reeling from unprecedented supply chain disruptions and labor shortages. These market conditions resulted in significant cost escalation, thus necessitating major design changes for Phase I and Phase II to remain within an acceptable budget range. Once Phase II design work was complete, FMAA worked with the Helena Airports District Office of the FAA to determine the new AIP and PFC eligible portions. In February 2024, with concurrence from the FAA, the eligible portions were decreased from 64.6% to 59.7% for AIP and 80.19% to 78.1% for PFC.