Audit 358649

Title: Note 1    BASIS OFRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) presents the activity of federal award programs administered by the City, which is described in Note 1 to the City's accompanying financial statements, using the modified accrual basis of accounting. Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the City’s financial statements. Federal awards that are included in the Schedule may be received directly from federal agencies, as well as federal awards that are passed through from other government agencies. The information presented in the Schedule is presented in accordance with the 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).

Title: Note 2    SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance.

Title: Note 3 SCOPE OF AUDIT Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs. The City is an independent municipal corporation. All federal grant operations of the City are included in the scope of the single audit.

Title: Note 4    INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs. The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs.

Title: Note 5    OTHER DISCLOSURES Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. The amounts reported as federal expenditures were obtained from the federal financial reports for the applicable program and periods. The amounts reported in these reports are prepared from records maintained for each program, which are reconciled with the City’s financial reporting system. The federal expenditures are recognized under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimis cost rate. Indirect costs may be included in the reported expenditures, to the extent that they are included in the federal financial reports used as the source for the data presented. The City’s policy is not to charge federal award programs with indirect costs. No insurance is carried specifically to cover equipment purchased with federal funds. Equipment purchased with federal funds is covered by the City’s casualty insurance policies. There were no loans or loan guarantees outstanding at year-end.