Audit 363207

Title: RELATIONSHIP TO FINANCIAL STATEMENTS Accounting Policies: GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal awards and state financial assistance programs of the Township of Monroe, County of Middlesex (“Township”). The Township is defined in Note 1(A) to the financial statements. All federal awards and state financial assistance received directly from federal agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the modified accrual basis of accounting as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (OCBOA), which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units and as detailed in the Notes to the Financial Statements. The federal awards and state financial assistance expended amounts included in the respective expenditure schedules do not reflect amounts encumbered, which encumbered amounts are considered as expended as reported in the NJ OCBOA financial statements. De Minimis Rate Used: N Rate Explanation: The Township has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. Unless specifically noted, the amounts reported in the accompanying schedules agree with amounts reported in Township’s financial statements.

Title: RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: GENERAL The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all federal awards and state financial assistance programs of the Township of Monroe, County of Middlesex (“Township”). The Township is defined in Note 1(A) to the financial statements. All federal awards and state financial assistance received directly from federal agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. BASIS OF ACCOUNTING The accompanying schedules of expenditures of federal awards and state financial assistance are presented using the modified accrual basis of accounting as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (OCBOA), which differ in certain respects from generally accepted accounting principles (GAAP) applicable to local government units and as detailed in the Notes to the Financial Statements. The federal awards and state financial assistance expended amounts included in the respective expenditure schedules do not reflect amounts encumbered, which encumbered amounts are considered as expended as reported in the NJ OCBOA financial statements. De Minimis Rate Used: N Rate Explanation: The Township has elected not to use the ten percent de minimis indirect cost rate as allowed by the Uniform Guidance. Unless specifically required, the amounts reported in the accompanying schedules agrees with the amounts reported in the related federal financial reports, where required.