Notes to SEFA
Title: Note 2 Basis of Presentation
Accounting Policies: Note 1 Summary of Significant Accounting Policies The City accounts for awards under federal and state programs in the General, Special Revenue, and in the local Capital Projects governmental funds. In the Governmental funds, these programs are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e. revenues and other financing sources) and decreases (i.e. expenditures and other financing uses) in net current assets. The modified accrual basis of accounting is used for these funds. This basis of accounting recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both measurable and available, and expenditures in the accounting period in which the liability is incurred, if measurable, except for certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Expenditures are recognized following the cost principles contained in the Uniform Guidance and State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited to reimbursement. Passthrough entity identifying numbers are presented where available. Federal and state grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. Generally, unused balances are returned to the grantor at the close of specified project periods. The City has elected not to use a 10 percent de minimis indirect cost rate under the Uniform Guidance on an overall basis. Certain grants allow for a negotiated indirect cost rate using a consistent basis, which has been implemented.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate. See note 1, paragraph 3, second to last sentence.
The accompanying schedule of expenditures of federal and state awards (the Schedule) includes the federal and state grant activity of the City under programs of federal and state government for the year ended September 30, 2022. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance and State of Texas Uniform Grant Management Standards. Because the schedule presents on a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes innet assets or cash flows of the City.