Notes to SEFA
Title: NOTE 1 BASIS OF PRESENTATION
Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principle contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The accompanying schedule of expenditures of federal awards (Schedule) includesthe federal award activity of Watts Healthcare Corporation (WHC) under programs ofthe federal government for the year ended December 31, 2022. The information inthe Schedule is presented in accordance with the requirements of Title 2 U.S. Codeof Federal Regulations Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Becausethe Schedule presents only a selected portion of the operations of WHC, it is notintended to and does not present the financial position, changes in net assets, or cash flows of WHC.
Title: NOTE 2 BASIS OF ACCOUNTING
Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principle contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Expenditures on the Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the UniformGuidance, wherein certain types of expenditures are not allowable or are limited asto reimbursement. Program expenditures in excess of the maximum reimbursementauthorized or the program expenditures that were funded with nonfederal funds areexcluded from the accompanying schedule.WHC has not elected to use the 10% de minimis indirect cost rate as allowed underthe Uniform Guidance.
Title: NOTE 3 RELATIONSHIP OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO THE FI
Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principle contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Consistent with managements policy, federal awards are recorded in various revenuecategories. As a result, the amount of total federal expenditures reported on theSchedule does not agree to total grants and contracts revenue on the statement ofactivities as presented in WHCs audited financial statements as of and for the yearended December 31, 2022.