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Uniformi Guidance Written Controls and Micro -Purchase Threshold Federal Uniform Guidance requires that nonfederal entities must haye`and use documented procurement procedures consistent with.2CFR § 200317=326 for the -acquisition of - property or services required under a federal award or subaward. Effective August3l:, 2020, the, federal micro -purchase threshold;*whieh is the threshold that allows for procurements witltout.-solicitmg*competitive:price or rate quotations givon certain conditions; was increased'frorn $3,500 to $10,000 in tne'Federal Acquisition Regulations (FAR). Effective Novbtribe>r 12; 2020, the Uniform Guidance was also. tevised.to allow nonfederal entities. -to establish. a.micropurchase-threshold higfier than;he S 10,000 threshold established in the FAR under certain circumstances. The nonfederal entity may self. -certify a micro purchase threshold up -to $50,000 -if the re itirements=in 2CFR. § 200.320(a)(1)(iv) are followed. Requirements, include -an &Mudlxelf-certification an clear documentation of the. justification to support the increase in*the threshold. Acceptable,remons for justification gust meet one ofthe following criteria: • A qualification as a low riskauditee, in accordance with the eriteria in § 200.520 for. the-mostrecent audit, • An annual internal institutional risk assessment to. identify, mitigate; and manage. #financial rinks, or, A higher threshold consistent with state law. This flexibility would allow Minnesota local governments td increase am -align their federal procurement procedures, specifically the micro -purchase threshold, with state law, which allows for procurements below $25,000 to be made without competitive. price:or rate quotations. We. recommend that the City review its.euttent.federal procurement policy. I.fthe micro -purchase threshold in your currently adopted policy N below the,allbwable FAR limit of$1-0,OOU,;you would need to make: a orie-time amendment to. the policy to adopt the $1`0,000TAR limit before using it..I.f you prefer to increase. Your federal miero-�purchase threshold. to $25,000 to align it with stele law, in addition to amending, your. federal procurement policy, you would need to annually certify the: .i'iiigher threshold and the. justification for usingthe higher threshold, SIGNIFICANT ACCOUNTING POLICIES Management .is responsible for -the. -selection and use of appir fate: accounting. policies. The significant accounting policies used by the City are desenbed in Note 1 ofthe motes to basic financial statements. No new accounting policies were adopted.and the..application of existing policies was not changed during the year elided Deeember31, 2020. We noted. no, transactions entered into by.ihe City during the Year: (or -which there is.a1ack:ofauthoritative guidance. or. consensus.. All signifieant.transactions have been recognized in the financial statements in the proper period, ACCOUNTING ESTIMATES AND. MANAGEMENT JUDGMENTS Accounting. estimates are an integral.pit of tho.`ftnaupial statements prepared by management andare based on inanagement's knowledge and experience about past:and current events. auw assumptions. about future events. Certain accounting estimates.are particularly sensitive because.of their significance to the financial statements and because. of -the possibility that future events: affecting them may'differ significantly from .those expected The mostlensitive estimate affecting the financial Statements -was: ;; • The.dopreciatiwof capital assets involves estimates pertaining.to useful. lives. -3-