Title: 1. The Organization and Purpose
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
Houston Business Development, Inc. (“HBDi”) received federal funds to grant assistance to small businesses in the greater Houston area, who qualified for assistance due to an interruption of business operations as a result of Covid-19 pandemic, such as stay-at-home orders and other adverse economic impacts of Covid-19.
Title: 2. Basis of Presentation
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activities of HBDi under programs of the federal government for the 6-month period ended December 31, 2020. The information in the 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 (“federal Uniform Guidance”). Because the Schedule presents only a selected portion of HBDi’s operations, it is not intended to and does not present the financial position, changes in net assets, or cash flows of HBDi.
Title: 3. Summary Significant Accounting Policies
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
In accordance with U.S. generally accepted accounting principles, HBDi accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
Title: 4. Indirect Costs
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
HBDi did not elect to use the 10% de minimis cost rate.
Title: 5. Program Income
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
HBDi did not generate program income. Accordingly, no program income was used to reduce the amount of federal funds expended in providing the programs.
Title: 6. Relationship of the Schedule to Financial Reports Submitted to Grant Awarding Agencies
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons:
1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency evens though included as part of program expenses on the Schedule.
2. Differences may exist between grant periods and HBDi’s accounting period.
Title: 7. Contingencies
Accounting Policies: In accordance with U.S. generally accepted accounting principles, the entity accounts for all federal award programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract.
Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the entity, the funds are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
De Minimis Rate Used: N
Rate Explanation: No indirect costs were charged to the program.
Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors.