Notes to SEFA
Entitlement to grant funds is generally conditional upon compliance with terms and conditions of the grant agreements and applicable laws and regulations. Federal and state grants, entitlements and cost reimbursements are subject to financial and compliance audits by grantors. Such contingencies are fully disclosed in the Notes to the Financial Statements.
Under the requirements of the Single Audit Act and State regulations, if the City, as a primary recipient, receives federal and state financial assistance and provides $1,000,000 or more of such assistance to a sub-recipient in a fiscal year, the City is responsible for determining that the expenditures of federal and state monies passed through to sub-recipients are utilized in accordance with applicable laws and regulations. Further, the Uniform Guidance places other related responsibilities upon the City. Those responsibilities may be discharged in any of several ways, including relying on independent audits performed by subrecipients. Subrecipient audit reports for the ended December 31, 2025 were reviewed and findings and questioned costs, if any, were disclosed.
The regulations and guidelines governing the preparation of federal and State financial reports vary by federal and state agency and among programs administered by the same agency. Accordingly, the amounts reported in the federal and state financial reports do not necessarily agree with the amounts reported in the accompanying schedules of expenditures of federal awards and state financial assistance, which are prepared on the basis of accounting explained in Note 1.
The City receives federal and State awards passed-through different levels of government. As a result, the individual sources of federal and State awards may be commingled and not always separately identifiable. In instances in which the federal amounts received are commingled by the State or other levels of government with other funds and cannot be separately identified, they are reported as federal expenditures. In instances in which the State amounts received are commingled by other levels of government, other than federal, and cannot be separately identified, they are reported as State expenditures.