Audit 348477

Title: 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying schedule of expenditures of federal awards presents the activity of federal award programs of the Regional Transit Authority of Southeast Michigan (“RTA”). Federal awards received directly from federal agencies, as well as federal awards passed through other agencies, are included on this schedule. The information in the accompanying schedule of expenditures of federal awards 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 (the “Uniform Guidance”). Because this schedule presents only a selected portion of RTA’s operations, it is not intended to, and does not, present the financial position or changes in financial position of RTA. The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is the basis of accounting used to prepare RTA’s government-wide financial statements. There were no differences between the expenditures presented in the accompanying schedule of expenditures of federal awards and the expenditures incurred under these programs using the modified accrual basis of accounting, which is the basis of accounting used to prepare RTA’s fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, in which certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: For purposes of charging indirect costs to federal awards, RTA has not elected to use the 10 percent de minimis cost rate as permitted by §200.414 of the Uniform Guidance. The information in the accompanying schedule of expenditures of federal awards 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 (the “Uniform Guidance”). Because this schedule presents only a selected portion of RTA’s operations, it is not intended to, and does not, present the financial position or changes in financial position of RTA. The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is the basis of accounting used to prepare RTA’s government-wide financial statements. There were no differences between the expenditures presented in the accompanying schedule of expenditures of federal awards and the expenditures incurred under these programs using the modified accrual basis of accounting, which is the basis of accounting used to prepare RTA’s fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, in which certain types of expenditures are not allowable or are limited as to reimbursement.

Title: 2. 10% DE MINIMIS COST RATE Accounting Policies: The accompanying schedule of expenditures of federal awards presents the activity of federal award programs of the Regional Transit Authority of Southeast Michigan (“RTA”). Federal awards received directly from federal agencies, as well as federal awards passed through other agencies, are included on this schedule. The information in the accompanying schedule of expenditures of federal awards 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 (the “Uniform Guidance”). Because this schedule presents only a selected portion of RTA’s operations, it is not intended to, and does not, present the financial position or changes in financial position of RTA. The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is the basis of accounting used to prepare RTA’s government-wide financial statements. There were no differences between the expenditures presented in the accompanying schedule of expenditures of federal awards and the expenditures incurred under these programs using the modified accrual basis of accounting, which is the basis of accounting used to prepare RTA’s fund financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, in which certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: For purposes of charging indirect costs to federal awards, RTA has not elected to use the 10 percent de minimis cost rate as permitted by §200.414 of the Uniform Guidance. For purposes of charging indirect costs to federal awards, RTA has not elected to use the 10 percent de minimis cost rate as permitted by §200.414 of the Uniform Guidance.