Title: NOTE 3. CONTINGENCIES
Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of the City ofUnion City (the City) under programs of the federal government for the year ended June 30, 2022. The information in theSEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSEFA represents only a selected portion of the operations of the City, it is not intended to and does not present the financialposition or changes in fund balance of the City. The accompanying schedule of expenditures of State financial assistance (SESFA) includes New Jersey State (the State)award activity of the City under programs of the State government for the year ended June 30, 2022. The information in theSESFA is presented in accordance with the requirements of New Jersey Office of Management and Budget Circular 15-08,Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (NJ 15-08-OMB). Because the SESFArepresents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in fund balance of the City. Reporting EntityAdministration of the federal and State grant programs awarded to the City is performed by the various departments of theCity. The City is the reporting entity for these federal and State grant programs. The City, for purposes of the SEFA andSESFA, includes all of the primary government as defined criteria established by the Governmental Accounting StandardsBoard. The City administers certain federal and state award programs through subrecipients. Those subrecipients are notconsidered part of the Citys reporting entity. Basis of AccountingThe accounting policies of the City conform to the accounting principles and practices prescribed by the Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey (the Division). Such principles andpractices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a meansof reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Cityaccounts for federal awards and state financial assistance through accounting practices which differ from those required byaccounting principles generally accepted in the United States of America, as described in the following paragraph.In accordance with directives from the Division, the City fully realizes revenues and charges appropriations when grants areadopted by the governing body in the budget of its Current Fund. Grant revenues are realized in the Current Fund and theamount awarded is accounted for as a receivable. Appropriations are charged in the Current Fund and the amount allotted forspending is accounted for as an appropriated grant reserve. Programs within the General Capital Fund and various trust fundsare accounted for within the equivalent revenue accounts for those respective funds. Expenditures are measured frompayments charged directly to specific grant programs. Local ContributionsLocal matching contributions are required by certain federal and state grants. The amount or percentage of matchingcontributions varies with each program. Local matching contributions are generally raised in the Current Fund budget.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Entitlement to grant funds is generally conditional upon compliance with terms and conditions of the grant agreements andapplicable laws and regulations. Federal and state grants, entitlements and cost reimbursements are subject to financial andcompliance audits by grantors. Such contingencies are fully disclosed in the Notes to the Financial Statements.
Title: NOTE 4. MONITORING OF SUB-RECIPIENTS
Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of the City ofUnion City (the City) under programs of the federal government for the year ended June 30, 2022. The information in theSEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSEFA represents only a selected portion of the operations of the City, it is not intended to and does not present the financialposition or changes in fund balance of the City. The accompanying schedule of expenditures of State financial assistance (SESFA) includes New Jersey State (the State)award activity of the City under programs of the State government for the year ended June 30, 2022. The information in theSESFA is presented in accordance with the requirements of New Jersey Office of Management and Budget Circular 15-08,Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (NJ 15-08-OMB). Because the SESFArepresents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in fund balance of the City. Reporting EntityAdministration of the federal and State grant programs awarded to the City is performed by the various departments of theCity. The City is the reporting entity for these federal and State grant programs. The City, for purposes of the SEFA andSESFA, includes all of the primary government as defined criteria established by the Governmental Accounting StandardsBoard. The City administers certain federal and state award programs through subrecipients. Those subrecipients are notconsidered part of the Citys reporting entity. Basis of AccountingThe accounting policies of the City conform to the accounting principles and practices prescribed by the Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey (the Division). Such principles andpractices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a meansof reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Cityaccounts for federal awards and state financial assistance through accounting practices which differ from those required byaccounting principles generally accepted in the United States of America, as described in the following paragraph.In accordance with directives from the Division, the City fully realizes revenues and charges appropriations when grants areadopted by the governing body in the budget of its Current Fund. Grant revenues are realized in the Current Fund and theamount awarded is accounted for as a receivable. Appropriations are charged in the Current Fund and the amount allotted forspending is accounted for as an appropriated grant reserve. Programs within the General Capital Fund and various trust fundsare accounted for within the equivalent revenue accounts for those respective funds. Expenditures are measured frompayments charged directly to specific grant programs. Local ContributionsLocal matching contributions are required by certain federal and state grants. The amount or percentage of matchingcontributions varies with each program. Local matching contributions are generally raised in the Current Fund budget.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Under the requirements of the Single Audit Act and State regulations, if the City, as a primary recipient, receives federal andstate financial assistance and provides $750,000 or more of such assistance to a sub-recipient in a fiscal year, the City isresponsible for determining that the expenditures of federal and state monies passed through to sub-recipients are utilized inaccordance with applicable laws and regulations. Further, the Uniform Guidance places other related responsibilities upon theCity. Those responsibilities may be discharged in any of several ways, including relying on independent audits performed bysubrecipients. Subrecipient audit reports for the fiscal year ended June 30, 2020 were reviewed and findings and questionedcosts, if any, were disclosed.
Title: NOTE 5. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of the City ofUnion City (the City) under programs of the federal government for the year ended June 30, 2022. The information in theSEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSEFA represents only a selected portion of the operations of the City, it is not intended to and does not present the financialposition or changes in fund balance of the City. The accompanying schedule of expenditures of State financial assistance (SESFA) includes New Jersey State (the State)award activity of the City under programs of the State government for the year ended June 30, 2022. The information in theSESFA is presented in accordance with the requirements of New Jersey Office of Management and Budget Circular 15-08,Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (NJ 15-08-OMB). Because the SESFArepresents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in fund balance of the City. Reporting EntityAdministration of the federal and State grant programs awarded to the City is performed by the various departments of theCity. The City is the reporting entity for these federal and State grant programs. The City, for purposes of the SEFA andSESFA, includes all of the primary government as defined criteria established by the Governmental Accounting StandardsBoard. The City administers certain federal and state award programs through subrecipients. Those subrecipients are notconsidered part of the Citys reporting entity. Basis of AccountingThe accounting policies of the City conform to the accounting principles and practices prescribed by the Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey (the Division). Such principles andpractices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a meansof reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Cityaccounts for federal awards and state financial assistance through accounting practices which differ from those required byaccounting principles generally accepted in the United States of America, as described in the following paragraph.In accordance with directives from the Division, the City fully realizes revenues and charges appropriations when grants areadopted by the governing body in the budget of its Current Fund. Grant revenues are realized in the Current Fund and theamount awarded is accounted for as a receivable. Appropriations are charged in the Current Fund and the amount allotted forspending is accounted for as an appropriated grant reserve. Programs within the General Capital Fund and various trust fundsare accounted for within the equivalent revenue accounts for those respective funds. Expenditures are measured frompayments charged directly to specific grant programs. Local ContributionsLocal matching contributions are required by certain federal and state grants. The amount or percentage of matchingcontributions varies with each program. Local matching contributions are generally raised in the Current Fund budget.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The regulations and guidelines governing the preparation of federal and State financial reports vary by federal and stateagency and among programs administered by the same agency. Accordingly, the amounts reported in the federal and statefinancial reports do not necessarily agree with the amounts reported in the accompanying schedules of expenditures of federalawards and state financial assistance, which are prepared on the basis of accounting explained in Note 1.
Title: NOTE 6. PASS-THROUGH AWARDS AND COMMINGLED ASSISTANCE
Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of the City ofUnion City (the City) under programs of the federal government for the year ended June 30, 2022. The information in theSEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSEFA represents only a selected portion of the operations of the City, it is not intended to and does not present the financialposition or changes in fund balance of the City. The accompanying schedule of expenditures of State financial assistance (SESFA) includes New Jersey State (the State)award activity of the City under programs of the State government for the year ended June 30, 2022. The information in theSESFA is presented in accordance with the requirements of New Jersey Office of Management and Budget Circular 15-08,Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (NJ 15-08-OMB). Because the SESFArepresents only a selected portion of the operations of the City, it is not intended to and does not present the financial position or changes in fund balance of the City. Reporting EntityAdministration of the federal and State grant programs awarded to the City is performed by the various departments of theCity. The City is the reporting entity for these federal and State grant programs. The City, for purposes of the SEFA andSESFA, includes all of the primary government as defined criteria established by the Governmental Accounting StandardsBoard. The City administers certain federal and state award programs through subrecipients. Those subrecipients are notconsidered part of the Citys reporting entity. Basis of AccountingThe accounting policies of the City conform to the accounting principles and practices prescribed by the Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey (the Division). Such principles andpractices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a meansof reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Cityaccounts for federal awards and state financial assistance through accounting practices which differ from those required byaccounting principles generally accepted in the United States of America, as described in the following paragraph.In accordance with directives from the Division, the City fully realizes revenues and charges appropriations when grants areadopted by the governing body in the budget of its Current Fund. Grant revenues are realized in the Current Fund and theamount awarded is accounted for as a receivable. Appropriations are charged in the Current Fund and the amount allotted forspending is accounted for as an appropriated grant reserve. Programs within the General Capital Fund and various trust fundsare accounted for within the equivalent revenue accounts for those respective funds. Expenditures are measured frompayments charged directly to specific grant programs. Local ContributionsLocal matching contributions are required by certain federal and state grants. The amount or percentage of matchingcontributions varies with each program. Local matching contributions are generally raised in the Current Fund budget.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The City receives federal and State awards passed-through different levels of government. As a result, the individual sources of federal and State awards may be commingled and not always separately identifiable. In instances in which the federalamounts received are commingled by the State or other levels of government with other funds and cannot be separately identified, they are reported as federal expenditures. In instances in which the State amounts received are commingled by other levels of government, other than federal, and cannot be separately identified, they are reported as State expenditures.