Single Audit of Federal Financial Assistance Programs for Fiscal Year 2017 - 2018

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County of Hawaii, State of Hawaii NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2018 NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of the County of Hawaii and its discretely presented component unit, the Department of Water Supply, under programs of the federal government for the fiscal year ended June 30, 2018. 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 the County of Hawaii , it is not intended to, and does not present the financial position, changes in financial position, or cash flows of the County of Hawaii. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE C - INDIRECT COST RATE The County of Hawaii has elected not to use the 10 -percent de minimis indirect cost rate allowed under the Uniform Guidance. 23