Notes to SEFA
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Sacramento Municipal Utility District (SMUD) 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 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 operations of SMUD, it is not intended to and does not present the financial position, changes in net position or cash flows of SMUD.
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, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available.
Expenditures for federal awards include indirect costs relating primarily to facilities operations and maintenance and general and departmental administrative services. Indirect costs are allocated to federal award programs based on a negotiated formula commonly referred to as an indirect cost rate which SMUD negotiates with the Department of Energy (DOE), it is cognizant federal agency. SMUD does not elect to use the 10% de minimis indirect cost rate. Indirect costs are not allocated to FEMA award programs. SMUD uses a negotiated indirect cost rate of 93.11% for reporting indirect costs on federal awards. Any additional indirect costs that cannot be reported for reimbursement are usually reported as additional cost share.