Audit 353331

Title: Note 2 Accounting Policies: Basis of Presentation – The accompanying financial statements and the schedule of expenditures of federal awards (the schedule) have been prepared from the Child and Adult Care Food Program of the Child Nutrition Program of Southern California, Inc.’s (the Program) accounting records and is presented according to the accrual basis method of accounting. The information in the financial statements and the schedule is presented in accordance with the requirements of the Uniform Guidance. Because the financial statements and the schedule present only a selected portion of the activities of the Program, it is not intended to and does not present either the financial position or changes in net assets of the Program. Basis of Accounting – The financial statements and the 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. Revenue Recognition Federal revenues – Federal revenues consist of revenues from cost-reimbursement contracts that are recognized as expenditures are incurred. Accounts Receivable – Accounts receivable is primarily comprised of reimbursements due from contracted services pursuant to contractual agreements. The allowance for doubtful accounts balance represents management’s estimate of uncollectible accounts based upon historical information. At September 30, 2024, the Program has determined that no allowance is necessary. Indirect Cost Rate – The Program elected not to use the 10% de minimis cost rate as allowed under the Uniform Guidance. Subsequent Events – Subsequent events are events or transactions that occur after the statement of financial position date but before financial statements are available to be issued. The Program recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at that date, including the estimates inherent in the process of preparing financial statements. The Program’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the statement of financial position, but arose after that date and before the financial statements are available to be issued. The Program has evaluated subsequent events through March 18, 2025, which is the date the financial statements are available for issuance, and concluded that there are no events or transactions that need to be disclosed. De Minimis Rate Used: N Rate Explanation: CNPSC did not elect to use 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization has been granted tax exempt status by the Internal Revenue Service under Section 501(c)(3) and the California Franchise Tax Board under Section 23701(d). This report includes an opinion only on the activity of the Program. The source of funding for the Program is the United States Department of Agriculture and the California Department of Social Services.