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CITY OF SANTA ANA, CALIFORNIA <br />NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS <br />For the year ended June 30, 2019 <br />1. BASIS OF PRESENTATION <br />The accompanying Schedules of Expenditures of Federal and State Awards (the Schedules) include <br />the federal and state award activities of the City of Santa Ana, California (the City), under <br />programs of the federal government and the State of California, as well as federal and state <br />financial assistance passed through other government agencies for the year ended June 30, 2019. <br />The information in the Schedule of Expenditures of Federal Awards (SEFA) is presented in <br />accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform <br />Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards <br />(Uniform Guidance). Because the Schedules present only a selected portion of the operations of the <br />City, they are not intended to, and do not, present the financial statements of the City. The City's <br />reporting entity is defined in Note I of the notes to the City's financial statements. <br />2. BASIS OF ACCOUNTING <br />The accompanying Schedules are presented using the modified accrual basis of accounting for <br />governmental funds and the accrual basis for proprietary funds, which is described in the Note 1 of <br />the notes to the City's financial statements. Such expenditures are recognized following the cost <br />principles contained in the Uniform Guidance, wherein certain types of expenditures are not <br />allowable or are limited as to reimbursement. The information in the SEFA is presented in <br />accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in <br />the SEFA may differ from amounts presented in, or used in the preparation of, the basic financial <br />statements. Pass -through entity identifying numbers are identified where available. <br />1►11 1: • 1 <br />The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform <br />Guidance. <br />4. CONTINGENCIES <br />Under the terms of federal and state grants, additional audits may be requested by the grantor <br />agencies and certain costs may be questioned as not being appropriate expenditures under the terms <br />of the grants. Such audits could lead to a request for reimbursement to the grantor agencies. <br />196-18 <br />