Notes to SEFA
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the federal grant activity for North Alamo Water Supply Corporation (the Corporation). The reporting entity is defined in Note A to the Corporation's financial statements. The information in this schedule is presented in accordance with the 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 SEFA presents only a selected portion of the operations of the Corporation, it is not intended and does not present the financial position, changes in net assets, or cash flows of the Corporation.
The accompanying SEF A is presented using the accrual basis of accounting, which is described in Note A of the Corporation's financial statements. Such expenses are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenses are not allowable or are limited to reimbursement. Federal grants are generally considered earned to the extent expenses made under the provisions of the grant are incurred. Where applicable, the Corporation has elected not to use the 10 percent de minimis indirect rate allowed under the Uniform Guidance.
The following is a reconciliation of the SEFA with the amount reported on the Statement of Activities: See the Notes to the SEFA for chart/table
No amounts were passed through to sub-recipients for the year ended December 31, 2025
The Corporation was approved by USDA-RD to receive $46 million to finance system-wide improvements to be completed in four phases. In 2022, the approved amount was increased to $58 million due to additional funds approved for Phase II. In 2023 and 2024, the Corporation received advances on the interim loan, which represented the approved funds for Phase II. The funds were obtained from interim loan financing provided by CoBank through the construction period and will be paid off with permanent financing to be provided by USDA at time of maturity. The amount listed for this loan includes the beginning of the period loan balance plus activity during the year. See the Notes to the SEFA for chart/table The USDA Phase II Project: Plant #5 expansion was financed with federal awards. The contract included retainage provisions under which a percentage of amounts billed by contractors were retained pending satisfactory completion of the work. For purposes of the Schedule of Expenditures of Federal Awards, the Corporation excluded retainage payable amounts that were withheld and not yet paid as of the fiscal year. This project was completed in the 2025 year. The current year SEFA includes $724,000 incurred but not previously reported. These costs were incurred within the allowable period of performance. Management has determined that the omission did not impact the major program determination of prior years and has included them in the current period to ensure full reporting of federal awards.