Notes to SEFA
Title: REPORTING ENTITY
Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in theaccounts and reported in the financial statements, regardless of measurement focus applied. TheSchedule is presented using the modified accrual basis of accounting for program expendituresaccounted for in governmental funds and the accrual basis of accounting for program expendituresaccounted for in proprietary funds Expenditures of federal awards reported in the Schedule arerecognized when incurred and all eligibility requirements have been met. Such expenditures arerecognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), whereincertain types of expenditures are not allowable or are limited as to reimbursement. The City did notelect to use the 10% de minimis cost rate allowed under the Uniform Guidance.As a result of the COVID19 pandemic, many new federal programs have been established and fundinghas been added to existing federal programs. Expenditures funded from the following acts are denotedby the prefix COVID19 in the federal program title in the Schedule (as applicable):? Coronavirus Preparedness and Response Supplemental Appropriations Act? Families First Coronavirus Response Act? Coronavirus Aid, Relief, and Economic Security Act (CARES Act)? Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)? American Rescue Plan Act (ARP)
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awardsfor the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basicfinancial statements. The information in the Schedule is presented in accordance with the requirementsof Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance).
Title: DIRECT AND INDIRECT (PASSTHROUGH) FEDERAL AWARDS
Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in theaccounts and reported in the financial statements, regardless of measurement focus applied. TheSchedule is presented using the modified accrual basis of accounting for program expendituresaccounted for in governmental funds and the accrual basis of accounting for program expendituresaccounted for in proprietary funds Expenditures of federal awards reported in the Schedule arerecognized when incurred and all eligibility requirements have been met. Such expenditures arerecognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), whereincertain types of expenditures are not allowable or are limited as to reimbursement. The City did notelect to use the 10% de minimis cost rate allowed under the Uniform Guidance.As a result of the COVID19 pandemic, many new federal programs have been established and fundinghas been added to existing federal programs. Expenditures funded from the following acts are denotedby the prefix COVID19 in the federal program title in the Schedule (as applicable):? Coronavirus Preparedness and Response Supplemental Appropriations Act? Families First Coronavirus Response Act? Coronavirus Aid, Relief, and Economic Security Act (CARES Act)? Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)? American Rescue Plan Act (ARP)
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Federal awards may be granted directly to the City by a federal granting agency or may be granted toother government agencies which passthrough federal awards to the City. The Schedule includes bothof these types of federal award programs when related expenditures are incurred.
Title: RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Accounting Policies: Basis of accounting refers to when revenues and expenditures or expenses are recognized in theaccounts and reported in the financial statements, regardless of measurement focus applied. TheSchedule is presented using the modified accrual basis of accounting for program expendituresaccounted for in governmental funds and the accrual basis of accounting for program expendituresaccounted for in proprietary funds Expenditures of federal awards reported in the Schedule arerecognized when incurred and all eligibility requirements have been met. Such expenditures arerecognized following the cost principles contained in 2 CFR 200, Subpart E (Cost Principles), whereincertain types of expenditures are not allowable or are limited as to reimbursement. The City did notelect to use the 10% de minimis cost rate allowed under the Uniform Guidance.As a result of the COVID19 pandemic, many new federal programs have been established and fundinghas been added to existing federal programs. Expenditures funded from the following acts are denotedby the prefix COVID19 in the federal program title in the Schedule (as applicable):? Coronavirus Preparedness and Response Supplemental Appropriations Act? Families First Coronavirus Response Act? Coronavirus Aid, Relief, and Economic Security Act (CARES Act)? Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)? American Rescue Plan Act (ARP)
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Expenditures of federal awards are reported in the Citys basic financial statements as expenditures inthe governmental funds or as expenses/capital assets in the proprietary funds. Federal awardexpenditures agree or can be reconciled with the amounts reported in the Citys basic financialstatements.