Title: NOTE 1: ORGANIZATION
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Foundation for the Homeless, Inc. (Foundation) was incorporated in the State of Texas on 7 February 1989. The Foundation’s mission is to provide families experiencing homelessness with hope, opportunity, and solutions while also promoting the dignity of individuals who experience homelessness. The Foundation provides the central administration, coordination and planning required to mobilize faith-based and community resources in a spirit of compassion to restore hope and alleviate homelessness. The Foundation is supported in part by the City of Austin, Texas, (City) and the State of Texas.
The Foundation conducts the following activities:
Feed My People - This is open to anyone experiencing homelessness and poverty. This long-standing activity is a partnership of eight churches and schools in the Austin community. Together the organizations provide a filling, hot breakfast along with other services including showers, AA meetings, a clothing closet, and haircuts.
Family Stability - This is rapid re-housing for families with minor children experiencing homelessness. This is a multi-agency collaborative focused on case management for obtaining and maintaining safe and stable housing.
Title: NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
BASIS OF ACCOUNTING
The Foundation uses the accrual basis method of accounting. Using this method of accounting, revenue and accounts receivable are reported when funds are considered earned, regardless of when cash is received. Expenses and accounts payable are reported when obligations are incurred, regardless of when cash is disbursed.
FINANCIAL STATEMENT PREPARATION
Net assets are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:
Net Assets Without Donor Restrictions
Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. These result from operating revenues and unrestricted contributions, less expenses incurred in operations to raise contributions and for administrative functions.
Net Assets With Donor Restrictions
Net assets subject to donor (or certain grantor) imposed restrictions. Some donor imposed restrictions are temporary in nature, such as those that will be met by passage of time or other events specified by the donor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity.
Donor imposed restrictions are released when the restriction expires, which includes when the stipulated time has elapsed, when the stipulated purpose for which the restricted resource has been fulfilled, or both.
INVESTMENTS
Investments consist of mutual funds carried at fair value.
PROPERTY AND EQUIPMENT
Fixed assets are capitalized at cost if the value of the item is more than $1,000 and the estimated useful service life of the item is more than one year. Donations of fixed assets are recorded as support at their estimated fair value at the date of donation. Depreciation is computed over the estimated useful service life of the asset (generally 3 to 35 years) using the straight line method. Assets donated with explicit restrictions regarding their use and contributions of cash must be used to acquire property and equipment are reported as restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Foundation reports expiration of donor restrictions when the donated or acquired assets are placed into service as instructed by the donor.
RECEIVABLES
Unconditional grants and contributions are recorded as revenue and receivable at fair value on the date of the award. Foundation earns revenue from cost-reimbursement grants when expenses are incurred in performance of the grant contract.
Rental income is recorded as revenue and receivable at the beginning of each month within the tenant’s lease term. Amounts are considered past due in accordance with lease agreements.
Uncollectible receivables are provided for using the allowance method of accounting for bad debts, whereby a provision for uncollectible accounts is charged to expense. This estimate is based on management’s experience with tenants, individual grantors and donors. The Foundation considers all receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed services that create or enhance non-financial assets or that require specialized skills, which are provided by individuals possessing those skills, and which would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received. Contributed goods are recorded at their fair value in the period received.
GRANTS AND CONTRIBUTIONS
Unconditional grants and contributions received are recorded as support with donor restrictions or without donor restrictions depending on the existence and/or nature of any donor restrictions. Net assets with donor restrictions are reclassified to net assets without donor restrictions upon expiration of time or purpose restrictions. The Foundation’s policy is to report restricted support that is satisfied in the year of receipt as support without donor restrictions.
FEDERAL INCOME TAX
The Foundation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, except to the extent it has unrelated business activities. As such, no provision for federal income taxes has been made in the accompanying financial statements.
FUNCTIONAL ALLOCATION OF EXPENSES
The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. Expenses are allocated based on estimates of personnel time and management’s review and analysis of individual transactions and costs. Expenses that are allocated are personnel costs, client mortgage and rental assistance, office rent and utilities, professional services, general insurance, and other.
COST REIMBURSEMENT GRANTS
A portion of the Foundation’s revenue is derived from cost reimbursable federal, state and local grants, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue when the Foundation has incurred expenditures in compliance with specific grant provisions. Amounts received prior to incurring qualifying expenditures are reported as deferred grant revenue in the statement of financial position. The Foundation has contracts for cost reimbursable grants of $1,989,040 for which qualifying expenditures have not been incurred and accordingly have not been recognized as revenue at year end.
ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
LEASES
The Foundation determines if an arrangement is or contains a lease at inception. Leases are included in right of use (ROU) assets and operating lease obligation in the statement of financial position. ROU assets and lease obligations reflect the present value of the future minimum lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. The Foundation does not report ROU assets and leases liabilities for its short-term leases (leases with a term of 12 months or less). Instead, the lease payments of those leases are reported as lease expense on a straight-line basis over the lease term.
SUBSEQUENT EVENTS
The Foundation has evaluated subsequent events as of the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
Title: NOTE 3: CONTINGENCY
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
The Foundation receives grants for specific purposes that are subject to grantor review. Such reviews could result in a request for reimbursement by the grantor if unallowable costs are identified. The Foundation’s management believes that any liability for reimbursement which could arise as the result of these audits would not be material to the financial position of the Foundation.
Title: NOTE 4: FAIR VALUE MEASUREMENTS
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Carrying
Amount Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Investments in mutual funds $70,472 $70,472 N/A N/A
Title: NOTE 5: CONCENTRATIONS
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Funding from two grantors accounted 71% of the Foundation’s total revenue and 72% of total federal awards receivable at year end.
Title: NOTE 6: PROPERTY AND EQUIPMENT
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Vehicles $66,832
Furniture and equipment 9,253
76,085
Accumulated depreciation (51,294)
$24,791
Title: NOTE 7: CONTRIBUTED GOODS
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
During the year, the Foundation recognized revenue from contributed nonfinancial assets that were received without donor-imposed restrictions, which are included in contributions on the statement of activities:
Annual bus passes $24,720
Shelter facilities 8,130
Hygiene kits 3,642
$36,492
All contributed goods are utilized in the Foundation’s program. Contributed goods are reported at fair value at the date of contribution. Annual bus passes are based on capital metro’s reduce fare rate. The fair value of donated shelter facilities is based on the rate for similar properties in similar areas in Austin, Texas. Household items and hygiene kits are valued at the price the Foundation would have paid if it had purchased similar quantities of the same items from vendors.
Title: NOTE 8: RELATED PARTY TRANSACTIONS
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Members of the Foundation’s Board of Directors provide various supporting contributions such as general contributions and contributed services. Total contributions from Board members for the year were $56,206.
Title: NOTE 9: NET ASSETS WITH DONOR RESTRICTIONS
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Satisfaction of purpose restrictions during the year:
Direct client assistance $18,085
Homeless prevention 24,448
42,533
Satisfaction of time restriction during the year: 46,500
$89,033
Title: NOTE 10: LIQUIDITY AND AVAILABILITY
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following:
Cash $345,625
Investments 70,472
Federal awards receivable 376,060
Local awards receivable 15,558
Contributions receivable 48,375
$856,090
As part of the Foundation’s liquidity management, financial assets are structured to be available as general expenditures, liabilities and other obligations come due. The policy is that monthly revenues are to cover monthly expenses. Monthly revenues and expenditures are deposited in and deducted from the Foundation’s operating accounts.
Title: NOTE 11: RETIREMENT PLAN
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
The Foundation provides a Savings Incentive Match Plan for Employees retirement plan, also known as a SIMPLE IRA plan. All employees are eligible to participate. Employees can contribute the maximum allowed under the Internal Revenue Service limitations. The Foundation makes nonelective contributions of 2% for each eligible employee’s compensation. Participants are immediately vested in their contributions and any employer contributions. During the year the Foundation contributed $6,288 to the retirement plan.
Title: NOTE 12: LEASES
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
The Foundation evaluated current contracts to determine which met the criteria of a lease. The ROU assets represent the Foundation’s right to use underlying assets for the lease term, and the lease obligation represents the Foundation’s obligation to make lease payments arising from these leases.
The ROU asset and lease obligation, all of which arise from operating leases, were calculated based on the present value of future lease payments over the lease term using a discount rate. The discount rate applied to calculate lease obligation as of 31 December 2023 was 0.910%, a risk free rate discount rate using a period comparable with that of the lease term.
Components of rent and utilities:
Operating lease cost $37,576
Common area maintenance and utilities 39,499
$77,075
The Foundation’s operating lease consist of one lease for office space located in Austin, Texas, which expires in 2024 and it is not expected to be renewed. The lease requires the Foundation to pay separate amounts for common area maintenance, taxes and insurance.
Remaining lease commitment for the operating leases are:
Through 31 December 2024 $21,919
Less: Discount to present value (66)
$21,853
As of 31 December 2023, ROU assets related to operating leases were as follows:
Cost $95,975
Less: accumulated amortization (74,122)
$21,853
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from operating leases $35,576
Title: NOTE 13: FUNCTIONAL EXPENSE ALLOCATION
Accounting Policies: Basis of Accounting: The Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
De Minimis Rate Used: N
Rate Explanation: The audit did not use the minimis cost rate
Program Administrative Fundraising Total
Client rental and mortgage
assistance
$1,333,286
$40
$0
$1,333,326
Personnel costs 492,918 92,358 39,731 625,007
Client utility assistance 165,600 0 0 165,600
Office rent and utilities 68,368 5,096 3,611 77,075
Fundraising costs 0 0 38,543 38,543
Professional services 24,603 1,877 1,397 27,877
Contract labor 27,230 0 0 27,230
General insurance 13,042 980 696 14,718
Other 84,728 22,484 11,037 118,249
$2,209,775 $122,835 $95,015 $2,427,625