The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality of Utuado, Puerto Rico (Municipality) and is presented on the modified accrual basis. The information in this schedule 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the general-purpose financial statements. The reporting entity is defined in Note (1) (A) to the general-purpose combined financial statements.
1. The accompanying Schedule of Expenditures of Federal Awards is prepared from Municipality’s accounting records and is not intended to present financial position or the results of operations. 2. The Municipality in accordance with the terms records the financial transactions and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 3. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the program Disaster Grants- Public Assistance. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred 5. The Municipality has selected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance, and did not charge indirect cost to federal grants during the year ended June 30, 2024.
The federal assistance listing number included in this Schedule are determined based on the program name, review of grant contract information and the Office of Management and Budget's Catalogue of Federal Domestic Assistance.
State or local government redistribution of federal awards to the Municipality, treated as if they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass-through entity and identifying number assigned by the pass-through entity for federal awards received as a sub recipient. Numbers identified as N/AV are not available.
The Uniform Guidance requires the Schedule to present the total amounts passed through to sub- recipients from each federal program. The Municipality did not have any sub-recipients during the year.
Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
SEE NOTE TO SEFA IN FINANCIAL STATEMENT
In fiscal year 2020-2021 FEMA issued to the Municipality a five-year promissory note for a maximum amount of $4,593,850 for financial assistance under the Community Disaster Loans (“CDL”) program, bearing interest at 2.50% annually. The program helps local governments to overcome a loss in revenues as a result of a natural disaster, in order to perform its governmental operational functions. Neither principal nor interest payments are required until maturity. The terms of the loan provide that if the Municipality has not recovered sufficiently to meet its operating budget after three full fiscal years, repayment of all or part of the loan may be cancelled. The principal balance at June 30, 2024, was $4,593,850. Federal statutes and regulations do not impose continuing compliance requirements on the outstanding balance of the loan, other than the repayment of the loan. Therefore, the outstanding balance of the loan is not included in the face of the Schedule. Program transactions during fiscal year 2022-2023 year are as follows: