The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality under programs of the federal government for the year ended June 30, 2025. 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 the amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position and changes in net position of the Municipality.
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Expenditures are recognized when the related liability is incurred, following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV). Expenditures are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. • Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs. Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred. The Assistance Listing Number (ALN), formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all federal assistance award mechanisms, including federal grants and cooperative agreements. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards. The Sam.gov assistance listing is the publicly available online database showing all available Federally-funded programs. State or local government redistributions of federal awards to the Municipality, known as “pass–through awards”, should be treated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass–through entity and the identifying number assigned by the pass-through entity for the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect cost to federal grants during the year ended June 30, 2025.
Amounts reported in the accompanying Schedule are included in the General Fund, Public Assistance Grant Fund, American Rescue Plan Act Fund and Other Governmental Funds in the Municipality’s fund financial statements. The reconciliation between the expenditures in the fund financial statements and the expenditures in the Schedule of Expenditures of Federal Awards is as follows: During the fiscal year 2024-2025, the Municipality incurred substantial costs related to Hurricane Fiona. Per OMB Compliance Supplement, non-federal entities must record expenditure on the Schedule when FEMA has approved the non-Federal entity’s PW and the non-Federal entity has incurred the eligible expenditures. Any expenditure from FEMA under ALN 97.036 are not to be recognized as expenditures for purposes of the Schedule until the respective Project Worksheet (PW) have been approved.
As reported in Note 10 of the financial statements, the Municipality had an outstanding loan balance as of June 30, 2025. The loan is a Community Disaster Loans (CDL) (FEMA-DR-4671-PR), awarded by the Federal Emergency Management Agency (FEMA) in the amount of $5,000,000. The note bears interest at 4.125% annually. The purpose of this note is to provide operational funding to the Municipality to continue operating after substantial revenue losses caused by the Hurricane Fiona disaster. During the fiscal year 2024-2025, the Municipality drew down $3,321,914. Accrued interest for the period is $97,911. Loans transactions during fiscal year 2024-2025 are as follows: