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6.B. - Page 11 of 55 <br />CITY OF REDWOOD CITY <br />NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS <br />For The Fiscal Year Ended June 30, 2020 <br />NOTE 1— REPORTING ENTITY <br />The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for <br />the City of Redwood City, California (City) and its component units as disclosed in the notes to the Basic <br />Financial Statements. <br />NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br />Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts <br />and reported in the financial statements, regardless of the measurement focus applied. All governmental <br />funds and agency funds are accounted for using the modified accrual basis of accounting. All proprietary <br />funds are accounted for using the accrual basis of accounting. Expenditures of Federal Awards reported on <br />the Schedule are recognized when incurred. <br />NOTE 3 — INDIRECT COST ELECTION <br />The City has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. <br />4 68 <br />