Audit 358810

Title: Basis of Presentation Accounting Policies: Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 4. Indirect Cost Allocations AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation. The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of The American Institute in Taiwan (AIT). The information in the SEFA 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). Because the schedule presents only a selected portion of the operations of AIT, it is not intended to and does not present the financial position, changes in net assets, or cash flows AIT.

Title: Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 4. Indirect Cost Allocations AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation. Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients.

Title: De Minimus Indirect Cost Rate Accounting Policies: Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 4. Indirect Cost Allocations AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation. AIT has elected not to use the 10% de minimus rate as allowed by the Uniform Guidance.

Title: Indirect Cost Allocations Accounting Policies: Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 4. Indirect Cost Allocations AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation. AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation.

Title: Federal Assistance Listing Numbers and Contract Numbers Accounting Policies: Expenditures reported on the SEFA 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. Therefore, some amounts presented in the SEFA may differ from amounts presented in the basic financial statements, which have been presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). On January 1, 2005, AIT made an advanced rent payment on a 99-year land lease in Taipei totaling $10,500,080. The advanced rent payment was reported in the SEFA during the year ended September 30, 2005, which was the year in which the payment was made. With adopting Topics 842 on October 1, 2022, the advance rent payment was reported in the financial statements as right-of-use lease assets. The future benefit of the advanced rent payment is being amortized on a straight-line basis over the lease term. Therefore, for financial statement purposes, AIT records annual amortization expense in the financial statements totaling $106,061 but this annual amortization is not reported in the SEFA since the full payment was already reported in a prior year SEFA.AIT does not provide any awards to subrecipients. Therefore, the schedule of expenditures of federal awards has no separate column for amounts awarded to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 4. Indirect Cost Allocations AIT allocates indirect costs based on an indirect cost allocation methodology that has been approved by the U.S. Department of State. AIT’s contracts and other funding agreements with U.S. Agencies allow AIT to fully recover indirect costs based on the relative share attributable to each U.S. Agency. Certain direct costs are removed from the allocation base, such as salaries for certain funding sections, because the funding is received as a reimbursement of direct costs through AIT’s contract with the U.S. Department of State. AIT also expends the proceeds from the sale of disposed property and equipment in order to purchase new equipment, and such costs are not included in the allocation base. Furthermore, actuarially determined adjustments to the funded status of the defined benefit pension plan, such as the pension benefits expense, are included in the SEFA but pension benefits expense has been excluded from the indirect cost allocation. AIT’s contracts and funding agreements are not assigned Federal Assistance Listing Numbers (ALN). The ALN for each contract or funding agreement presented in the SEFA follows the format required by Form SF-SAC (the data collection form) which is submitted to the Federal Audit Clearinghouse. Furthermore, AIT has several memoranda of agreement with U.S. Agencies other than the U.S. Department of State, which have no contract numbers. Certain U.S. Agencies may have more than one contract, or funding agreement, with AIT, and, for purposes of the determination of major programs, common purpose programs were aggregated and considered to be one program. Individual contracts not grouped together as one program on the SEFA were treated as separate programs for purposes of the major program determination.