Notes to SEFA
Title: 1. GENERAL
Accounting Policies: The City neither recovers indirect costs unless expressly allowed by each award. Expenditures for the Schedule are presented using the accrual basis of accounting. Amounts reported as expenditures in the Schedule may not agree with the amounts in the related financial reports filed with the grantor agencies because of accruals that would not be included until the next report filed with the agency.
De Minimis Rate Used: N
Rate Explanation: The City utilize the 10% de minimis indirect cost rate contained in the 2 CRF 200 for entities that have never had an approved rate.
The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") presents the activity of all federal award programs of the City of Kemp, Texas for the year ended September 30, 2024. All federal awards received directly by the City from federal
agencies, as well as federal awards passed through other government agencies, are included in the scope of the Federal Single Audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance) and are included on the Schedule of Expenditures of Federal Awards.
Title: 3. COMMITMENT AND CONTINGENCIES
Accounting Policies: The City neither recovers indirect costs unless expressly allowed by each award. Expenditures for the Schedule are presented using the accrual basis of accounting. Amounts reported as expenditures in the Schedule may not agree with the amounts in the related financial reports filed with the grantor agencies because of accruals that would not be included until the next report filed with the agency.
De Minimis Rate Used: N
Rate Explanation: The City utilize the 10% de minimis indirect cost rate contained in the 2 CRF 200 for entities that have never had an approved rate.
The City participates in several federal grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies. Therefore, to
the extent that the City has not complied with the rules and regulations governing that grant, refunds of any money may be required, and the collectability of any related receivable at September 30, 2024 may be impaired. In the opinion of management, there are no
significant contingent liabilities related to the compliance with rules and regulations governing the grants.
Title: 4. USDA RURAL DEVELOPMENT BONDS
Accounting Policies: The City neither recovers indirect costs unless expressly allowed by each award. Expenditures for the Schedule are presented using the accrual basis of accounting. Amounts reported as expenditures in the Schedule may not agree with the amounts in the related financial reports filed with the grantor agencies because of accruals that would not be included until the next report filed with the agency.
De Minimis Rate Used: N
Rate Explanation: The City utilize the 10% de minimis indirect cost rate contained in the 2 CRF 200 for entities that have never had an approved rate.
The USDA Rural Development bonds outstanding principal balance of September 30, 2024, was $4,662,093 (USDA Series 2021 of $3,867,093 and USDA Series 2021 A of $795,000).