Title: NOTE 1 – REPORTING ENTITY
Accounting Policies: The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awards
for the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basic
financial statements. The information in the 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).
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awards
for the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basic
financial statements. The information in the 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).
Title: NOTE 2 – BASIS OF ACCOUNTING
Accounting Policies: The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awards
for the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basic
financial statements. The information in the 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).
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts
and reported in the financial statements, regardless of measurement focus applied. The Schedule is
presented using the modified accrual basis of accounting for program expenditures accounted for in
governmental funds and the accrual basis of accounting for program expenditures accounted for in
proprietary funds Expenditures of federal awards reported in the Schedule are recognized when incurred
and all eligibility requirements have been met. Such expenditures are recognized following the cost
principles contained in 2 CFR 200, Subpart E (Cost Principles), wherein certain types of expenditures are
not allowable or are limited as to reimbursement. The City did not elect to use the 10% de minimis cost rate
allowed under the Uniform Guidance.
As a result of the COVID-19 pandemic, many new federal programs have been established and funding has
been added to existing federal programs. Expenditures funded from the following acts are denoted by the
prefix COVID-19 in the federal program title in the Schedule (as applicable):
• Coronavirus Preparedness and Response Supplemental Appropriations Act
• Families First Coronavirus Response Act
• Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
• Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)
• American Rescue Plan Act (ARP)
Title: NOTE 3 – DIRECT AND INDIRECT (PASS-THROUGH) FEDERAL AWARDS
Accounting Policies: The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awards
for the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basic
financial statements. The information in the 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).
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Federal awards may be granted directly to the City by a federal granting agency or may be granted to other
government agencies which pass-through federal awards to the City. The Schedule includes both of these
types of federal award programs when related expenditures are incurred.
Title: NOTE 4 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Accounting Policies: The Schedule of Expenditures of Federal Awards (the Schedule) includes expenditures of federal awards
for the City of Palo Alto, California (City), and its component unit as disclosed in the notes to the basic
financial statements. The information in the 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).
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
Expenditures of federal awards are reported in the City’s basic financial statements as expenditures in the
governmental funds or as expenses/capital assets in the proprietary funds. Federal award expenditures agree
or can be reconciled with the amounts reported in the City’s basic financial statements.