Title: Basis of Presentation
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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 (the Schedule) includes the federal award activity of City of Midland under programs of the federal government for the year ended June 30, 2022. The information in this Schedule 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 Schedule presents only a selected portion of the operations of City of Midland, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City of Midland.
Title: Reconciliation to the Financial Statements
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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.
Federal revenues per the financial statements: $4,418,651, Prior year deferred revenue - unavailable: $(984,539), Deferred revenue - unavailable: $2,820,335, City-wide revenue for projects: $37,843, Total expenditures of federal awards: $6,292,290.
Title: Subrecipients
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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.
Of the federal expenditures presented in the Schedule, the City provided federal awards to subrecipients as follows: Assistance Listing Number: 14.218, Amount: $43,045, Assistance Listing Number: 97.067, Amount: $611,381, $654,426.
Title: Adjustments
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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.
An adjustment of $53,290 was made to increase expenditures reported for the Rural Business Development Grant #10-351(FY20 RBDG) AL# 10.351 for amounts incurred in the prior year but not properly reported on the schedule of expenditures of federal awards at June 30, 2021.
Title: Prior Year Expenditures
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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.
Certain grants that were awarded for disaster relief, allowed recipients to reimburse eligible costs incurred during prior years. Therefore, $1,717,246 of prior year expenditures related to AL# 97.036 Disaster Grants Public Assistance (Presidentially Declared Disasters), Grant #FEMA-4547-DR-MI, are included in the June 30, 2022 Schedule of Expenditures of Federal Awards.
Title: Disaster Grants - Public Assistance (Presidentially Declared Disasters)
Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual and accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance where 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 expenditures reported for Disaster Grants Public Assistance AL# 97.036 in the Schedule of Expenditures of Federal Awards include estimates for mandatory insurance deductions that can be applied by the oversight agency (FEMA) at completion of the project. Estimates are based on historical calculations performed by FEMA on completed projects. The total estimated mandatory insurance deduction was $739,464 for the year ended June 30, 2022. Estimated amounts may differ depending on final project costs and oversight agency determinations. In addition, expenditures reported for these grants in many instances exceed obligated amounts for the projects. The Citys projects are considered large and are eligible to be reimbursed for more than the obligated amounts. FEMA will adjust obligated amounts based on actual cost.