Audit 14994

Title: Summary of Significant Accounting Policies Accounting Policies: Expenditures are reported on the Schedule on the accrual basis of accounting. Federal grant funds are considered to be earned when all eligibility requirements have been met. Any excess of revenues or expenditures is recorded as unearned revenues or accounts receivable, respectively. The disbursement of funds received under federal grant programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of ETCHS. In the opinion of management, such disallowed claims, if any, will not have a material effect on any of the financial statements or on the overall financial position of ETCHS at May 31, 2023. De Minimis Rate Used: N Rate Explanation: ETCHS has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures are reported on the Schedule on the accrual basis of accounting. Federal grant funds are considered to be earned when all eligibility requirements have been met. Any excess of revenues or expenditures is recorded as unearned revenues or accounts receivable, respectively. The disbursement of funds received under federal grant programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of ETCHS. In the opinion of management, such disallowed claims, if any, will not have a material effect on any of the financial statements or on the overall financial position of ETCHS at May 31, 2023.

Title: Basis of Presentation Accounting Policies: Expenditures are reported on the Schedule on the accrual basis of accounting. Federal grant funds are considered to be earned when all eligibility requirements have been met. Any excess of revenues or expenditures is recorded as unearned revenues or accounts receivable, respectively. The disbursement of funds received under federal grant programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of ETCHS. In the opinion of management, such disallowed claims, if any, will not have a material effect on any of the financial statements or on the overall financial position of ETCHS at May 31, 2023. De Minimis Rate Used: N Rate Explanation: ETCHS has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of East Texas Community Health Services, Inc. (ETCHS) under programs of the federal government for the year ended May 31, 2023. The information on this Schedule is prepared 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 ETCHS, it is not intended to and does not present the financial position, changes in net assets, or cash flows of ETCHS.