Audit 307476

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: Expenditures reflected on the accompanying schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: STRAC has elected not to use the 10 percent de minimis indirect cost rate. The accompanying schedule of expenditures of federal and state awards includes the federal and state grant activity of Southwest Texas Regional Advisory Council (STRAC) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the State of Texas Single Audit Circular issued by the Office of the Governor of the State. Because the schedule presents only a selected portion of the operations of STRAC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of STRAC.

Title: NOTE 2 – SUMMARY OF ACCOUNTING POLICIES Accounting Policies: Expenditures reflected on the accompanying schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: STRAC has elected not to use the 10 percent de minimis indirect cost rate. Expenditures reflected on the accompanying schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Title: NOTE 3 – OTHER DISCLOSURES Accounting Policies: Expenditures reflected on the accompanying schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: STRAC has elected not to use the 10 percent de minimis indirect cost rate. No insurance is carried specifically to cover equipment purchased with federal funds. Any equipment purchased with federal funds is covered by STRAC’s casualty insurance policies. There were no loans or loan guarantees outstanding at year-end. STRAC disbursed $1,349,953 in state awards to subrecipients for the year ended August 31, 2023. STRAC has elected not to use the 10 percent de minimis indirect cost rate.