Title: Organization and Business
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
Texas Children’s is a not-for-profit organization with a mission to create a healthier future for children and women throughout its global community by leading in patient care, education, and research. The consolidated financial statements of Texas Children’s include numerous entities; those entities which received federal and state grant awards are described below.
Texas Children’s Hospital (TCH) primarily provides direct patient care and conducts educational and research activities within Houston and its surrounding communities. It is comprised of a 626 licensed-bed comprehensive tertiary care pediatric facility and a 119 licensed-bed facility, providing obstetrics and gynecological care, both located in Houston’s Texas Medical Center, an 86 licensed-bed full-service pediatric facility located in west Houston, and a 74 licensed-bed full service pediatric facility located in The Woodlands, Texas. Beginning in February 2024, TCH opened and began services of a 52 licensed-bed comprehensive pediatric, obstetric, and gynecological care facility located in the North Austin area.
Texas Children’s Health Plan, Inc. (TCHP) operates a health maintenance organization, the first of its kind for pediatrics in the nation, and has a Certificate of Authority from the Texas Department of Insurance. It improves the quality, cost, and access of pediatric and obstetrical services delivered to health plan members in its service area.
Texas Children’s is the sole corporate member of TCH and TCHP. All Texas Children’s entities described above are exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code.
Title: Basic Financial Statements
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
The consolidated financial statements of Texas Children’s include the entities described above as well as other entities. Intercompany balances and transactions have been eliminated in consolidation. The consolidated basic financial statements of Texas Children’s were audited by Ernst & Young, LLP (E&Y), whose report dated December 12, 2024, except for the schedule of expenditures of federal awards for which the date is June 11, 2025, was furnished to McConnell & Jones LLP. Such report indicated that the Schedules were subjected to the auditing procedures applied in E&Y’s audit of the basic financial statements, and that the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the consolidated basic financial statements as a whole.
Title: Basis of Presentation
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
The accompanying schedule of expenditures of federal awards include the federal grant expenditures of Texas Children’s under programs of the federal government for the year ended September 30, 2024. The information in schedule of expenditures of federal awards 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 (Uniform Guidance). Because the schedule of expenditures of federal awards present only a selected portion of the operations of Texas Children’s, it is not intended to and do not present the financial position, changes in net assets, or cash flows of Texas Children’s.
Title: Relationship to Financial Reports Submitted to Grantor Agencies
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
Amounts reflected in the financial reports submitted to grantor agencies for the programs and the schedule of expenditures of federal awards may not agree because of accruals which would be included in the next reports filed with grantor agencies and because of the different program year-ends.
Title: Associated Organization
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
Texas Children’s has an affiliation agreement with Baylor College of Medicine ("Baylor"). Under the terms of this agreement, Baylor conducts research and educational activities, and its physicians provide patient care services while utilizing the Texas Children’s facilities in the practical application of the teaching process. Mutual commitments include sharing operational and research costs, including residents’ and physicians’ salaries.
The following summarizes expenses included in the schedule of expenditures of federal awards that represent payments made to Baylor for reimbursement of professional fees for physicians’ time under this affiliation agreement:
Coordinated Services and Access to Research for Women, Infants, Children and Youth (ALN 93.153) $ 10,017
Total payments made to Baylor included in the Schedule
of Expenditures of Federal Awards $ 10,017
Title: Contingencies
Accounting Policies: Expenditures on the schedule of expenditures of federal awards are generally reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: Texas Children’s did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2024, since it either charge indirect cost specifically approved in a grant award document or, when allowed, charges indirect cost rate previously approved from U.S. Department of Health and Human Services, its oversight agency
Texas Children’s federal programs are subject to review and audit by grantor agencies. Consequently, Texas Children’s may become liable to refund money to funding agencies where it fails to comply with contract provisions. In addition, Texas Children’s may not fully collect federal grant receivables as at September 30, 2024, related to the reported federal grant expenditures as these receivables may be subject to the grantors’ compliance approval process. Texas Children’s management believes that the results of these reviews and audits will not have a material effect on the amounts reported in the schedule of expenditures of federal awards.