Title: NOTE 1: ORGANIZATION
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
Interfaith Action of Central Texas (iACT), formerly known as Austin Area Interreligious Ministries, brings people of all faiths together to build respect, foster understanding, and address community needs through service, education, dialogue, and celebration. Rooted in a public, ethical, and moral imperative, iACT’s mission is to unite faith communities in collaborative action and advocacy. Incorporated in June 1988 under the laws of the State of Texas, iACT is primarily supported by government grants, special events, and individual donations.
iACT’s core activities:
• Hands on Housing: Volunteers repair and renovate homes for low-income homeowners, with a focus on safety and accessibility. Projects often include electrical upgrades, gas leak repairs, and improvements to kitchens, bathrooms, and hot water systems.
• Community Education: iACT promotes understanding and collaboration across diverse faith communities in Austin and beyond by:
• Fostering knowledge of various beliefs and practices
• Addressing issues of shared concern to people of faith
• Encouraging joint action among congregations, businesses, and nonprofits to meet community needs
• The Red Bench: Interfaith Conversations that Matter: A monthly dialogue program that brings people together to address the most pressing needs of our time: improving interfaith understanding and civil discourse in our society.
• The Passport Program: Guided visits to houses of worship across different faith traditions, designed to build deeper appreciation and connection between communities.
• iACT for Refugees: A comprehensive program supporting refugees and other displaced individuals through:
• English Language Instruction (ELI): Free classes for adult refugees, asylees, parolees, and victims of trafficking who have been in the U.S. for less than five years.
• Youth Mentoring and Tutoring: Academic and cultural support during the school year, plus the iLearn summer program that helps refugee youth build skills in English, math, and American culture.
• Health and Wellness: Workshops and classes to promote physical and mental well-being, healthcare navigation, stress management, and self-care.
• Financial Literacy Program: Equips youth (grades 6-12) with essential skills and knowledge for achieving financial independence and long-term success.
Title: NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
BASIS OF ACCOUNTING
The financial statements are prepared on the accrual basis of accounting whereby revenues and expenses are recognized in the period earned or incurred.
ESTIMATES
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
INCOME TAXES
iACT is an organization other than a private foundation exempt from Federal income taxes under IRS Code Section 501(c)(3). Therefore, no provision has been made for Federal income taxes in the accompanying financial statements.
FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of iACT 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.
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 the 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 a restriction expires, that is when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both.
FIXED ASSETS
Fixed asset purchases of $1,000 and greater are recorded at cost. Donated fixed assets are recorded at their estimated fair value at the date of donation. Depreciation on fixed assets is provided using the straight-line method over estimated useful lives of the respective assets, ranging from 3 to 10 years. Maintenance and repairs are charged to expense and expenditures for improvements that extend the useful life of the assets are capitalized.
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers consists of special events revenue. iACT recognizes revenue from ticket sales, auction sales and sponsorships for its special events. Special event revenues are typically due and paid at the time of purchase, at or before the event. Sponsorships comprise an exchange element based on the fair value of the direct benefit to donors for food and beverages received at the event, and a contribution element for the difference between the total amount paid and the value received. Special event revenue is recognized at a point in time when the event is held. In general, revenue recognized does not have a significant financing component because payments are generally received at the time of or prior to the event.
SUBSEQUENT EVENTS
iACT has evaluated subsequent events for disclosure through the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
RECEIVABLES
iACT has not recorded an allowance for uncollectible accounts because the receivables are considered to be 100% collectible. All receivables on the statement of financial position are due within the next fiscal year. iACT estimates allowances for uncollectible accounts by evaluating the creditworthiness, the historical collections, and the aging of the accounts. Once an account is deemed uncollectible, it is written off. Receivables are considered delinquent based on how recently payments have been received.
GOVERNMENT AWARDS
A significant portion of iACT’s revenue is derived from cost-reimbursable federal, state, and local awards, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. Amounts received are recognized as revenue when iACT has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as unearned revenue in the statement of financial position. iACT has contracts for cost reimbursable grants of $1,732,256 for which qualifying expenditures have not been incurred and accordingly have not been recognized at 31 December 2023, with advance payments totaling $31,158 included in unearned revenue.
CONTRIBUTIONS
iACT recognizes contributions when cash, securities or other assets, an unconditional promise to give, or a notification of a beneficial interest is received. Conditional promises to give, those with measurable performance requirements or other barrier, and a right of return, are recognized when the conditions on which they depend have been met.
FUNCTIONAL ALLOCATION OF EXPENSES
The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, some expenses require allocation on a reasonable basis that is consistently applied. Payroll and related, fundraising, supplies, professional fees, depreciation, dues and subscriptions, and other expenses are allocated based on management’s knowledge and review of individual transactions.
LEASES
iACT determines if an arrangement is or contains a lease at inception. Leases with a term of more than 12 months are required to be classified as either finance or operating leases. Leases are classified as finance leases when iACT expects to consume a major part of the economic benefits of the leased assets over the remaining lease term. Conversely, iACT is not expected to consume a major part of the economic benefits of assets classified as operating leases.
Leases are included in right of use (ROU) assets and lease obligations 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. For financing leases, total lease cost is recorded on an accelerated basis whereby interest expense is recorded using the effective interest method, and ROU assets are amortized on a straight-line basis over the remaining lease term. iACT 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.
Title: NOTE 3: CONCENTRATIONS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
Funding from three grantors accounted for 68% of iACT’s total revenue and one grantor accounted for 94% of total receivables for the year ended 31 December 2023.
Title: NOTE 4: CONTINGENCY
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
iACT 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. iACT’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 iACT.
Title: NOTE 5: RECEIVABLES
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
See the Notes to the SEFA for chart/table
Title: NOTE 6: FIXED ASSETS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
See the Notes to the SEFA for chart/table
Title: NOTE 7: VOLUNTEER HOURS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
iACT received 14,479 hours of volunteer services, with an estimated fair value of $484,902, during the year in support of its program activities. The value of these services has not been recorded in the financial statements because they did not meet the criteria for recognition.
Title: NOTE 8: REVENUE FROM CONTRACTS WITH CUSTOMERS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
iACT’s revenue based on the timing of satisfaction of performance obligations for the year consists of the exchange portion of special event revenues, totaling $251,954, satisfied at a point in time. At year end there were no contract assets, contract receivables or contract liabilities.
Title: NOTE 9: LEASES
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
iACT evaluated current contracts to determine which met the criteria of a lease. The Right of Use (ROU) assets represent iACT’s right to use underlying assets for the lease term, and the lease obligations represent iACT’s obligation to make lease payments arising from these leases. The ROU assets and lease obligations were calculated based on the present value of future lease payments over the lease terms.
iACT’s leases consist of an operating lease for office space and a finance lease for equipment. As of 31 December 2023, the remaining lease term for iACT’s operating and finance leases were 16 and 33 months, respectively. The discount rates applied to calculate the operating and finance lease obligation as of 31 December 2023 were 8.5% and 3.25%, respectively, based on the estimated incremental borrowing rate at the date of each lease’s inception.
In addition to the operating lease, iACT has a month to month lease for office space.
See the Notes to the SEFA for chart/table
Title: NOTE 10: RELATED PARTY TRANSACTIONS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
During the year ended 31 December 2023, iACT’s board and staff contributed $32,645.
Title: NOTE 11: LIQUIDITY AND AVAILABILITY
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year from the statement of financial position date, comprise the following:
See the Notes to the SEFA for chart/table
As a part of iACT’s liquidity management, it has a policy to structure its financial assets to be available as its 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 iACT’s operating account.
See Note 12 for details regarding the nature of donor imposed restrictions on net assets.
iACT has an existing line of credit totaling $20,000 with Mastercard, which can be drawn upon in the event of an unanticipated liquidity need. iACT made no draws on the line of credit during the year, and there was no balance outstanding at year end.
iACT had a line of credit for $100,000 that matured in August 2023. iACT renewed the line of credit on 5 July 2024. The line can be drawn upon in the event of an unanticipated liquidity need. iACT made no draws on the line of credit during the year, and there was no balance outstanding at year end.
Title: 12: NET ASSETS WITH DONOR RESTRICTIONS
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
See the Notes to the SEFA for chart/table
Title: NOTE 13: FUNCTIONAL EXPENSES
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
See the Notes to the SEFA for chart/table
Title: NOTE 14: PRIOR PERIOD ADJUSTMENT
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
As of 31 December 2022, net assets without donor restrictions were overstated, as a result of several errors. A prior period adjustment has been recorded to restate beginning net assets. The change in net assets decreased by $11,564 for the year ended 31 December 2023 as a result of this adjustment.
See the Notes to the SEFA for chart/table
Title: NOTE 15: SUBSEQUENT EVENT
Accounting Policies: The Schedule of Expenditures of Federal Awards (SEFA) is prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. See the reporting package for additional accounting policies used in preparing the SEFA.
De Minimis Rate Used: Both
Rate Explanation: iACT elected to use the 10% de minimis cost rate for contract ARHP-2023-iACT-AustinTX-01. iACT did not use the 10% de minimis indirect cost rate for other contracts.
Subsequent to year end, iACT entered into a three year office lease commencing 1 May 2025 with monthly payments of $10,484.