The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of the primary government of the City under programs of the federal government for the year ended September 30, 2025. The City’s reporting entity is defined in Note 1 in the City’s basic financial statements for the year ended September 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). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position/fund balance, or cash flows of the City.
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for Community Development Block Grants Section 108 Loan Guarantees. 2 CFR Section 200.502(b)(2) requires that the Schedule present loan guarantees as the value of new loans made or received during the audit period plus beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements. The beginning balance of the Section 108 loan guarantee in fiscal year 2025 is therefore presented on the Schedule. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
The City has elected not to use the de minimis indirect cost rate allowed under the Uniform Guidance.
The City participates in the Community Development Block Grants Section 108 Loan Guarantee Program (Assistance Listing Number 14.248). The activity of the City’s Section 108 loans guaranteed by the U.S. Department of Housing and Urban Development is as follows: Project - Georgia Farrow Recreation Center Expansion Project; Balance 10/1/2024 - $1,088,000; Increases - $-; Decreases - $-; Balance 9/30/2025 - $1,088,000
During the fiscal year ended September 30, 2024, the City incurred substantial costs related to the Texas Severe Storms, Straight-Line Winds, Tornadoes and Flooding in Spring 2024. Per the OMB Compliance Supplement, any reimbursements from the Federal Emergency Management Agency (FEMA) under ALN 97.036 are not to be recognized as expenditures for purposes of the Schedule of Expenditures of Federal Awards until the respective Project Worksheets (PW) have been approved. At September 30, 2024, the City’s PWs from this storm had not yet been approved by FEMA. As a result, there was $1,076,751 of expenditures and the related revenues which were not recorded for financial statement purposes and not on the Schedule of Expenditures of Federal Awards at September 30, 2024. As of September 30, 2025, these expenditures have been recognized on the Schedule of Expenditures of Federal Awards and the related revenues recorded in the financial statements as the PWs were approved by FEMA during the fiscal year.