Audit 365611

Title: Note 1 – Significant Accounting Policies Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of King City, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of King City, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements.

Title: Note 2 – Basis of Accounting Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of King City, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in Note 1 to the City’s basic financial statements. The information in the SEFA is presented in accordance with the 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). Therefore, some amounts presented in, or used in the preparation of, the SEFA may differ from amounts presented in the basic financial statements.

Title: Note 3 – Relationship to the Financial Statements Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of King City, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. Expenditures of federal awards are reported in the City’s basic financial statements as expenditures/expenses in the General Fund, nonmajor special revenue funds, nonmajor capital project funds, and the enterprise funds.

Title: Note 4 – Indirect Cost Rate Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of King City, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. De Minimis Rate Used: N Rate Explanation: The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414.