Audit 358581

Accounting Policies: Note A - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the City of Lanett, Alabama, and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance. Because the schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City. Note B – Summary of Significant Accounting Policies Expenditures reported in the schedule are reported on the modified 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. Federal awards expended include the amount of new Federal loans made or received during the year, plus the beginning of the year balance of loans from previous years for which there are continuing compliance requirements, plus any interest subsidy, cash, or administrative cost allowance received. The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.