Notes to SEFA
Title: Contingencies
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis ofaccounting. Such expenditures are recognized following the cost principles contained inUniform Guidance, wherein certain types of expenditures are not allowable or are limited as toreimbursement. Any negative amounts shown in the Schedule represent adjustments or creditsmade in the normal course of business to amounts reported as expenditures in prior years.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The federal and state awards received by the government are subject to audit andadjustment. If any expenditures are disallowed by the grantor agencies as a result of such an audit, the grantor agency could make a claim for reimbursement.
Title: Basis of Presentation
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis ofaccounting. Such expenditures are recognized following the cost principles contained inUniform Guidance, wherein certain types of expenditures are not allowable or are limited as toreimbursement. Any negative amounts shown in the Schedule represent adjustments or creditsmade in the normal course of business to amounts reported as expenditures in prior years.
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 and state financialassistance (the Schedule) includes the federal and state grant activity of City of Gatlinburg(the City) and is presented on the modified accrual basis of accounting. The information inthis schedule is presented in accordance with the requirements of Subpart F of Title 2 U.S.Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, CostsPrinciples, and Audit Requirements for Federal Awards (Uniform Guidance). Because theSchedule presents only a selected portion of the operation of the City, they are not intendedto and do present the financial position, changes in net position, or cash flows of the City.Federal Financial Assistance. The Single Audit Act Amendments of 1996 (Public Law 104-156) and Uniform Guidance define federal financial assistance as grants, loans, loanguarantees, property (including donated surplus property), cooperative agreements, interestsubsidies, insurance, food commodities, direct appropriations or other assistance. Federalfinancial assistance does not include direct federal cash assistance to individuals.Direct Payments. Assistance received directly from the Federal government is classified asdirect payments on the Schedule.Pass-through Payments. Assistance received in a pass-through relationship from entitiesother than the Federal government is classified as pass-through payments on the Schedule.Major Programs. The Single Audit Act Amendments of 1996 and Uniform Guidanceestablish the criteria to be used in defining major programs. Major programs for the City weredefined using a risk-based approach in accordance with Uniform Guidance.Assistance Listing. The Assistance Listing is a government-wide compendium of individualfederal programs. Each program is assigned a five-digit program identification number(Assistance Listing Number), which is reflected in the Schedule.