Audit 353206

Title: RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: "GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance include federal and state award activity of the Board of Education of the City of Bayonne School District. The Board of Education is defined in Note 1 to the District’s basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the Food Service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the Board’s basic financial statements. The information in this schedule is presented in accordance with the requirements of the OMB Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal grants, State grants, and State aid. Therefore, some amounts presented in these schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements." De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Amounts reported in the accompanying schedules agree with amounts reported in the District’s basic financial statements. The basic financial statements present the General Fund and Special Revenue Fund on a GAAP basis. Budgetary comparison statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the audit year, whereas for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made. The General Fund is presented in the accompanying schedules on the modified accrual basis with the exception of the revenue recognition of the last state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes, payments are not recognized until the subsequent budget year due to the state deferral and recording of the last state aid payments in the subsequent year. The Special Revenue Fund is presented in the accompanying schedules on the grant accounting budgetary basis, which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. The Special Revenue Fund also recognizes the last state aid payments in the current budget, consistent with N.J.S.A. 18A:22-4.2. The Proprietary Fund (Enterprise Fund – Food Service) is presented in the accompanying schedules on the GAAP basis. The net adjustment to reconcile from the budgetary basis to the GAAP basis is $(22,663) for the General Fund. See Exhibit “C-3” (the Notes to the Required Supplementary Information) for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the General and Special Revenue Funds. Awards and financial assistance revenues are reported in the Board’s basic financial statements on a GAAP basis as presented below: "See the Notes to the SEFA for chart/table"

Title: RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS Accounting Policies: "GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance include federal and state award activity of the Board of Education of the City of Bayonne School District. The Board of Education is defined in Note 1 to the District’s basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the Food Service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the Board’s basic financial statements. The information in this schedule is presented in accordance with the requirements of the OMB Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal grants, State grants, and State aid. Therefore, some amounts presented in these schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements." De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.

Title: OTHER Accounting Policies: "GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance include federal and state award activity of the Board of Education of the City of Bayonne School District. The Board of Education is defined in Note 1 to the District’s basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the Food Service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the Board’s basic financial statements. The information in this schedule is presented in accordance with the requirements of the OMB Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal grants, State grants, and State aid. Therefore, some amounts presented in these schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements." De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Revenues and expenditures reported under the Food Distribution Program represent current year value received and current year distributions, respectively. TPAF Social Security Contributions represents the amount reimbursed by the state for the employer’s share of social security contributions for TPAF members for the year ended June 30, 2024.

Title: FEDERAL AND STATE LOANS OUTSTANDING Accounting Policies: "GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance include federal and state award activity of the Board of Education of the City of Bayonne School District. The Board of Education is defined in Note 1 to the District’s basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the Food Service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the Board’s basic financial statements. The information in this schedule is presented in accordance with the requirements of the OMB Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal grants, State grants, and State aid. Therefore, some amounts presented in these schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements." De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The District had no loan balances outstanding at June 30, 2024.

Title: ADJUSTMENTS Accounting Policies: "GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance include federal and state award activity of the Board of Education of the City of Bayonne School District. The Board of Education is defined in Note 1 to the District’s basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies is included on the schedule of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the Food Service fund, which are presented using the accrual basis of accounting. These bases of accounting are described in Note 1 to the Board’s basic financial statements. The information in this schedule is presented in accordance with the requirements of the OMB Uniform Guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal grants, State grants, and State aid. Therefore, some amounts presented in these schedules may differ from amounts presented in, or used in the preparation of, the basic financial statements." De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The adjustments presented on schedule K-3 and K-4 are the result of the cancellation of prior year encumbrances and accounts receivable.