Audit 46662

Accounting Policies: NOTE 1 GENERALThe accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal awardprograms of City of Lyford, Texas, for the year ended September 30, 2022. The reporting entity consists ofthe primary government, organizations for which the primary government is financially accountable, andother organizations for which the primary government is not accountable, but for which the nature andsignificance of their relationship with the primary government are such that exclusion would cause thereporting entitys financial statements to be misleading or incomplete.Financial accountability exists if a primary government appoints a voting majority of an organizationsgoverning Board and is either able to impose its will on that organization or there is a potential for theorganization to provide specific financial benefits to, or impose specific financial burdens on, the primarygovernment. A primary government may also be financially accountable for governmental organizations witha separately elected governing Board, a governing Board appointed by another government, or a jointlyappointed Board that is fiscally dependent on the primary government.In accordance with Governmental Accounting Standards Board requirements, the City has reviewed otherentities and activities for possible inclusion in the reporting entity and determined that there are none;however, federal financial assistance passed through other governmental agencies is included on theschedule.NOTE 2 MEASUREMENT FOCUS AND BASIS OF ACCOUNTINGThe federal and state grant funds were accounted for in the Special Revenue Funds and within the GeneralFund. The accounting and financial reporting treatment applied to a fund is determined by its measurementfocus. The Governmental Fund types are accounted for using a current financial resources measurementfocus. With the Governmental Fund type measurement focus, only current assets and current liabilitiesgenerally are included on the balance sheet. Operating statements of these funds present increases (i.e.,revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in netcurrent assets.The modified accrual basis of accounting is used for the Governmental Fund types. This basis of accountingrecognizes revenues in the accounting period in which they become susceptible to accrual, i.e., bothmeasurable and available, and expenditures in the accounting period in which the fund liability is incurred, ifmeasurable, except for certain compensated absences and claims and judgments, which are recognizedwhen the obligations are expected to be liquidated with expendable available financial resources.NOTE 3 SUBRECIPIENTSDuring the year ended September 30, 2022, the City had no subrecipients. NOTE 4 FEDERAL LOANS AND LOAN GUARANTEESDuring the year ended September 30, 2022, the City had no outstanding federal loans payable or loanguarantees.NOTE 5 FEDERALLY FUNDED INSURANCEDuring the year ended September 30, 2022, the City had no federally funded insurance.NOTE 6 NONCASH AWARDSDuring the year ended September 30, 2022, the City did not receive any noncash federal awards.NOTE 7 INDIRECT COST RATEThe City does not utilize the de minimus 10% indirect cost rate. Indirect costs, where applicable, arenegotiated with the agency providing the grant award to the City. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.