Reporting Entity The financial reporting entity consists of the primary government, City of San Bernardino (the City), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. For the purposes of the Schedule of Expenditures of Federal Awards (SEFA), the reporting entity consists of all City departments except the water department, which has a separate independent single audit. The City Council acts as the governing body and is able to impose its will on the following organizations, establishing financial accountability. Basis of Accounting Funds received under the various grant programs have been recorded within the General Fund and special revenue funds of the City. The City utilizes the modified accrual method of accounting for the General Fund and special revenue funds. The accompanying Schedule of Expenditures of Federal Awards (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 the schedule may differ from amounts presented in, or used in, the preparation of the City’s basic financial statements. Schedule of Expenditures of Federal Awards The accompanying Schedule presents the activity of all federal assistance programs of the City except those programs of the City’s Water Department, which are not included in the City’s Schedule of Expenditures of Federal Awards but are reported in an independent single audit by a separate auditing firm. Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through the State of California and the County of San Bernardino, is not included in the Schedule. The Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the financial position, change in fund balance, or results of operations of the City.
Effective October 1, 2024, the Office of Management and Budget (OMB) revised the Uniform Guidance under 2 CFR Part 200 to increase the de minimis indirect cost rate from 10% to 15% of Modified Total Direct Costs (MTDC). Awards issued prior to October 1, 2024 (and not subsequently amended) continue to apply the 10% de minimis rate. Awards issued or amended on or after October 1, 2024 apply the revised 15% de minimis rate. The Agency has elected not to use the de minimis indirect cost rate for any federal awards.
The City of San Bernardino entered into a Contract for Loan Guarantee Assistance, a Master Fiscal Agency Agreement, and executed a promissory note with the United States Department of Housing and Urban Development pursuant to Section 108 of the Housing and Community Development Act of 1974, as amended (Section 108 Loan). The proceeds of the loan were then loaned to the EDA to be used for the Arden-Guthrie Focused Neighborhood Revitalization Project, which affects approximately 20 acres of land located at the northwest corner of Arden Avenue and 20th Street (Arden-Guthrie Site). Once the Arden-Guthrie Site is sold to a third-party, the proceeds of the sale are required to be paid to the City. All debt service payments on the Section 108 Loan are the responsibility of the City. The source of funds available for the repayment of the Loan is the CDBG Program Revenue of the City. In the event of default, the City’s annual CDBG allocation may be reduced by the amount necessary to satisfy the annual debt service requirement. Interest payments are due semiannually on February 1 and August 1 at a rate of 2.7% per annum and continue through August 1, 2026. Principal payments are due annually on August 1, and continue through August 1, 2026. The outstanding balance of this loan at June 30, 2025 is $1,268,000.
During the fiscal year ended June 30, 2025, the City disbursed $437,072 of federal awards to subrecipients for the Community Development Block Grants/Entitlement Grants (AL No. 14.218), $309,214 to subrecipients for the Emergency Solutions Grants Program (AL No. 14.231), $21,065 to subrecipients for the Home Investment Partnerships Program (AL No. 14.239), $14,424 to subrecipients for the Safe Streets and Roads for All (AL No. 20.939), $8,500 to subrecipients for the Minimum Penalties for Repeat Offenders for Driving While Intoxicated (AL No. 20.608), $849,479 to subrecipients for Coronavirus State and Local Fiscal Recovery Funds (AL No. 21.027).