Notes to SEFA
The Reporting entity for the schedule of expenditures of federal awards includes the City of Gadsden, Alabama (“the City”). The City’s discretely presented component units: the Gadsden Board of Education, the Gadsden Airport Authority, and the Public Building Authority of the City of Gadsden are not included.
Basis of Presentation The Schedule of Expenditures of Federal Awards has been prepared on the modified accrual basis of accounting. Federal grant revenues are recorded for financial reporting purposes when the City has met the qualifications for the respective grants. Encumbrances for purchase orders and contracts are not recorded as expenditures because the liability has not been incurred for goods received or services rendered; however, these encumbrances (if any) are reserved in the fund balances of the governmental funds. Costs incurred in programs partially funded by Federal grants are applied against grant funds to the extent of revenue available when they properly apply to the grant, except as described below. Indirect Cost The City has elected not to use the 15% de minimis indirect cost rate allowed under the Uniform Guidance during the fiscal year ended September 30, 2025. Federally Funded Insurance and Federally Funded Loans The City has no federally funded insurance and no federally funded loans or loan guarantees for the fiscal year ended September 30, 2025.