Item 3C: Resolution on FY11 CAFR

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CITY OF EUGENE, OREGON Notes to Schedule of Expenditures of Federal Awards June 30, 2011 (1) Purpose of the Schedule The accompanying schedule of expenditures of federal awards (the “Schedule”) is a supplementary schedule to the City of Eugene’s basic financial statements and is presented for purposes of additional analysis. Because the Schedule presents only a selected portion of the activities of the City of Eugene, Oregon, it is not intended to and does not present either the financial position, changes in fund balances, or the operating funds’ revenues or expenditures of the City of Eugene, Oregon. (2) Significant Accounting Policies Basis of Presentation The information in the Schedule is presented in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Federal Financial Assistance Pursuant to the Single Audit Act of 1984 and OMB Circular A-133, federal financial assistance is defined as assistance provided by a federal agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance or direct appropriations. Accordingly, nonmonetary federal assistance, including federal surplus property, is included in federal financial assistance and, therefore, is reported on the Schedule, if applicable. Federal financial assistance does not include direct federal cash assistance to individuals. Solicited contracts between the state and federal government for which the federal government procures tangible goods or services are not considered to be federal financial assistance. Major Programs The Single Audit Act of 1984 and OMB Circular A-133 establish criteria to be used in defining major federal financial assistance programs. Major programs for the City of Eugene, Oregon are those programs selected for testing by the auditor using a risk-assessment model, as well as certain minimum expenditure requirements, as outlined in OMB Circular A-133. Programs with similar requirements may be grouped into a cluster for testing purposes. Reporting Entity The reporting entity is fully described in Note 1(A) to the City of Eugene, Oregon’s Basic Financial Statements. Additionally, the Schedule includes all federal programs administered by the City of Eugene, Oregon for the year ended June 30, 2011. Revenue and Expenditure Recognition The receipt and expenditure of federal awards are accounted for under the modified accrual basis of accounting. Revenues are recorded as received in cash or on the accrual basis where measurable and available. Expenditures are recorded when the liability is incurred. 165