Audit 364837

Title: 3. SINGLE AUDIT MAJOR PROGRAM DETERMINATION Accounting Policies: 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the “schedule”) includes the federal award activity of the Public Service Board - El Paso Water Utilities (EPWater), a component unit of the City of El Paso, under programs of the federal government for the year ended February 28, 2025. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulation 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 the EPWater, it is not intended to and does not present the financial position, changes in net position, or cash flows of EPWater. 2. BASIS OF ACCOUNTING Expenditures reported on the schedule 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. De Minimis Rate Used: Y Rate Explanation: 4. INDIRECT COST RATE EPWater elected to use the 10% de minimis indirect cost rate, when indirect costs are allowed as part of the grant budget. The Uniform Guidance prescribes a risk-based approach to determining which federal programs are major programs. The approach includes consideration of current and prior audit experience, oversight by federal agencies and pass-through entities, and the inherent risk of the program.