Audit 350938

Title: RELATIONSHIP TO THE FINANCIAL STATEMENTS Accounting Policies: The accompanying Schedules of Federal, State and City Awards includes the federal, state, and city grant activity of St. Francis-St.Joseph Homes for Children (the Organization) and is presented on an accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance and the City of Philadelphia Subrecipient Audit Guide. The expenditures in this schedule may differ from certain financial reports submitted to funding agencies due to those reports being submitted on a cash or modified basis of accounting. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. There are adminstrative ( executive and financial ) home office expenses from Catholic Social Services allocated on a pro rated expenditure total of Organization to all CSS programs. There is information technology cost from Catholic Health Care Services allocated on a CSS pro rated expenditure total of Organization to all CSS Programs. The adminstrative costs and technology costs combine to form the indirect costs. The indirect rate are those combined costs over the direct expenses of the Organization. Federal, state and city awards expenditures are reported on the statement of activites and changes in net assets. In certain programs, the expenditures reported in the financial statements may differ from the expenditures reported in the Schedule of Expenditures of Federal, State and City Awards due to program expenditures exceeding grant or contract budget limitations, which are not included as federal, state and city awards. Because the schedule presents only a selected portion of the activites of the Organization, it is not intended to, and does not , present either the financial position, changes in net assets or cash flows of the Organization.