Audit 406523

The accompanying schedule of expenditures of federal and state awards includes the federal grant activity of Young Men’s Christian Association of Metropolitan Chattanooga. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.

Expenditures reported on the Schedule of Federal and State Awards are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited to reimbursement. Young Men’s Christian Association of Metropolitan Chattanooga has elected not to use the 15-percent de minimis indirect cost rate allowed under the Uniform Guidance.

For financial statement purposes, the Organization recognized a $500,000 award as donor-restricted contribution revenue in the current year in accordance with generally accepted accounting principles, as the underlying donor-imposed restriction was purpose-based rather than a barrier to entitlement. Accordingly, the amount is included in government grants and net assets with donor restrictions in the financial statements. For purposes of the Schedule of Federal and State Financial Assistance, however, awards are presented based on the timing of eligible expenditures incurred under the related grant agreements. Amounts received or awarded but not yet expended are therefore not reported as current-year expenditures on the Schedule. As a result, the $500,000 recognized as donor-restricted contribution revenue in the financial statements is reflected in the “Grant Revenue Receivable / Deferred” column of the Schedule to reconcile the difference between financial statement revenue recognition and Schedule expenditure reporting.