Audit 353347

Title: 1. REPORTING ENTITY Accounting Policies: The audit of compliance was conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has not elected to use the ten percent de minimis cost rate as covered in Section 200.414 Indirect (F&A) costs of the Uniform Guidance. The financial reporting entity consists of (a) the primary government, City of El Centro (City), and other organizations for which the primary government is not accountable, but for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Title: 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The audit of compliance was conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has not elected to use the ten percent de minimis cost rate as covered in Section 200.414 Indirect (F&A) costs of the Uniform Guidance. Basis of Accounting Funds received under the various grant programs have been recorded within special revenue and capital projects funds of the City. The City utilizes the modified accrual method of accounting for the special revenue, and capital projects funds. The accompanying Schedule of Expenditures of Federal Awards (Schedule) has been prepared accordingly. Schedule of Expenditures of Federal Awards The accompanying Schedule presents the activity of all federal financial assistance programs of the City. Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through the State of California is included in the Schedule. The Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City. The City has not elected to use the ten percent de minimis cost rate as covered in Section 200.414 Indirect (F&A) costs of the Uniform Guidance.

Title: 3. PROGRAM DESCRIPTIONS Accounting Policies: The audit of compliance was conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). De Minimis Rate Used: N Rate Explanation: The City has not elected to use the ten percent de minimis cost rate as covered in Section 200.414 Indirect (F&A) costs of the Uniform Guidance. U. S. Department of Housing and Urban Development Community Development Block Grant/Entitlement Grant The Community Development Block Grant/Entitlement Grant provides funding for communities to undertake a wide range of community-based activities directed toward neighborhood revitalization, economic development, and community services, facilities, and improvements. Entitlement communities develop their programs and set their funding priorities in conformance with the statutory standards, program regulations, and other federal requirements. Specific activities that can be carried out with Community Development Block Grant (CDBG) funds include acquisition of real property; relocation; clearance and demolition; rehabilitation of residential and nonresidential structures; provision of public facilities and improvements, such as water and sewer facilities (which require reviews by the State single point of contact or a Regional Planning Agency in accordance with Executive Order 12372), streets, and neighborhood centers. Funds made available under an emergency appropriation on March 27, 2020, known as CDBG-CV, are to be used similarly, but specifically to prevent, prepare for, and respond to coronavirus. U. S. Department of Commerce Economic Adjustment Assistance Economic Adjustment Assistance grants address the needs of distressed communities experiencing adverse economic changes that may occur suddenly or over time, and generally result from industrial or corporate restructuring, new Federal laws or requirements, reduction in defense expenditures, depletion of natural resources, or natural disaster. Economic Adjustment Assistance grants are intended to enhance a distressed community's ability to compete economically by stimulating private investment in targeted areas. U. S. Department of Justice Equitable Sharing Program The Department of Justice Asset Forfeiture Program is a nationwide law enforcement initiative that removes the tools of crime from criminal organizations, deters crime and deprives wrongdoers of their criminal proceeds, and recovers property that may be used to compensate victims. Equitable sharing further enhances the law enforcement mission by fostering cooperation among federal, state, and local law enforcement agencies. U. S. Department of Transportation Highway Planning and Construction The objective of the Highway Planning and Construction cluster is to: (1) assist states in the planning and development of an integrated, interconnected transportation system important to interstate commerce and travel by constructing and rehabilitating the national highway system, including interstate highways and most other public roads; (2) provide aid for the repair of roads following disasters; (3) foster safe highway design and replace or rehabilitate structurally deficient or functionally obsolete bridges; and (4) provide for other special purposes. U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Through SLFRF, over 30,000 recipient governments across the country are investing these funds to address the unique needs of their local communities and create a stronger national economy by using these essential funds to: - Fight the pandemic and support families and businesses struggling with its public health and economic impacts - Maintain vital public services, even amid declines in revenue resulting from the crisis - Build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity Coronavirus Relief Fund The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") established the $150 billion Coronavirus Relief Fund ("the Fund"). Payments must be used for necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) between March 1, 2020, to December 30, 2020. Payments must be used to cover costs that were not accounted for in the budget most recently approved as of March 27, 2020. Governments otherwise have broad discretion to utilize payments for expenditures ranging from COVID-19 testing to reimbursing small businesses for the costs of business interruption caused by required closures.