Audit 408238

The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the Town of Babylon, New York, (the “Town”) under programs of the federal government for the year ended December 31, 2025. 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 (“Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the Town it is not intended to and does not present the financial position, changes in net position, or cash flows of the Town.

In previous years, the Town received loan proceeds in the amount of $4,100,000 from the Section 108 loan guarantee program for a specific capital project. In accordance with 2 CFR Section 200.502(b), this amount was considered an expenditure of federal awards in the year the loan proceeds were received. This loan guarantee program was considered to have continuing compliance requirements until the activity financed by the loan was designated as completed. As of January 1, 2019, the continuing compliance requirements have been met, therefore there were no amounts included in the Schedule as of December 31, 2025. The aggregate Section 108 loan guarantee outstanding balance at year end was $1,643,000. In a prior year, the Town received loan proceeds to fund a sewer expansion project from the New York State Environmental Facilities Corporation. A portion of the loan proceeds were funded with the Capitalization Grant for Clean Water State Revolving Fund AL# 66.458. In accordance with 2 CFR Section 200.502(a), subrecipients receiving these loans report the expenditures of federal awards in the year the project expenditures were incurred. The project expenditures took place in previous years and there are no continuing compliance requirements for this loan. In accordance with 2 CFR Section 200.502(d), the federally funded portion of the outstanding loan balance as of December 31, 2025, of $7,017,650 is not reported on the Schedule.