Notes to SEFA
Title: Basis of Presentation
Accounting Policies: The Schedule of Expenditures of Federal Awards (the Schedule) is presented on the cash basis of accounting. In this basis of accounting, expenses are recognized upon payment by the Department, receipt of obligation of authority, and request for reimbursement. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local and Indicial Tribal Governments, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance), wherein certain types of expenditures are now allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The Department uses an indirect cost rate, approved by the Federal Highway Administration, as it applies to programs funded by that agency. The Department used an 8.23% indirect cost rate through October 31,2016. A rate of 11% was approved and applied to new projects beginning November 1, 2016. The rate of 11% is applied to existing projects when the project changes to a new activity or phase after November 1,2016; current project activities as of November 1, 2016 will continue with the previous rate of 8.23%. An exception is for projects let to construction phase after March 31, 2016, the Department will use the rate of 11% on construction activity transactions starting November 1, 2016. For other programs not awarded by the Federal Highway Administration, the Department does not charge indirect costs under the de minimis rate. The Federal Highway Administration approved the 11% indirect cost rate for the period of October 1, 2020 to September 30, 2024.
The accompanying Schedule includes the Federal award activity of the Department under programs of the Federal government for the year ended September 30, 2022. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of the Department, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Department.