Notes to SEFA
Accounting Policies: The accompanying schedule of expenditures of federal awards (“SEFA”) includes the federal award activity of the State of Arkansas Safe Drinking Water Revolving Loan Fund Program under programs of the federal government for the year ended June 30, 2023. The information in the SEFA 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 SEFA presents only a selected portion of the operations of the State of Arkansas Safe Drinking Water Revolving Loan Fund Program, it is not intended to and does not present the net position, changes in net position or cash flows of the State of Arkansas Safe Drinking Water Revolving Loan Fund Program. Expenditures reflected in FAL 66.468, Capitalization Grants for Drinking Water State Revolving Funds, include loans to counties, municipalities, and other tax-exempt water system entities for construction of new water systems, expansion, or repair of existing water systems and/or consolidation of new or existing water systems. The funding source for these loans includes federal grant funds, state match funds, bond funds and revolving program funds. The funds are disbursed to the subrecipients after expenses have been incurred as forgiveness of principal and repayable loans. The State of Arkansas Safe Drinking Water Revolving Loan Fund Program’s outstanding loan receivable balance from subrecipients from all funding sources was $205.3 million for the year ended June 30, 2023. There were no federal loan disbursements for repayable loans during fiscal year 2023. Total loans forgiven totaled $283,000 during fiscal year 2023. For the year ended June 30, 2023, the State of Arkansas Safe Drinking Water Revolving Loan Fund Program received $3.7 million in federal funds for administrative costs, which were disbursed to the administration agencies. Expenditures reported on the SEFA are reported on the accrual basis of accounting. Disbursements are recognized following, as applicable, the cost principles in U.S. Office of Management and Budget’s Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The State of Arkansas Safe Drinking Water Revolving Loan Fund Program has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
De Minimis Rate Used: N
Rate Explanation: See significant accounting policies