Audit 40165

Title: Note 4:Federal Loan Programs Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the City of Pearland, Texas (the City) under programs of the federal government for the year ended September 30, 2022. 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 or cash flows of the City. The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or other applicable guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The City reports expenditures of federal awards for amounts provided to subrecipients when paid in cash. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance The City has outstanding loan commitments under the Capitalization Grants for Clean WaterState Revolving Funds (CFDA 66.458) and Capitalization Grants for Drinking Water StateRevolving Funds (CFDA 66.468) from the Texas Water Development Board (TWDB), as apass-through agency for the Environmental Protection Agency. As of September 30, 2022, the outstanding loan payable balances were: Program Title Federal Assistance Loan Balance Listing Number September 30,2022 Clean Water State Revolving Funds: Series 2016 A 66.458 $ 6,210,000Clean Water State Revolving Funds: Series 2016 B 66.458 3,700,000Clean Water State Revolving Funds: Series 2016 C 66.458 39,105,000TWDB Drinking Water State Revolving Funds: Series 2017 A 66.468 5,175,000TWDB Drinking Water State Revolving Funds: Series 2017 B 66.468 10,325,000TWDB Drinking Water State Revolving Funds: Series 2018 A 66.468 7,490,000TWDB Drinking Water State Revolving Funds: Series 2019 A 66.468 18,900,000TWDB Drinking Water State Revolving Funds: Series 2020 A 66.468 104,010,000TWDB Drinking Water State Revolving Funds: Series 2021 A 66.468 73,275,000