Title: NOTE 1: ORGANIZATION
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
Hays County Food Bank, Inc. (HCFB) is passionately committed to improving lives through food
programs, nutrition education and advocacy. Since its incorporation in 1984, food has been collected
from donations and supplemental purchases and distributed to people through a network of charitable
organizations and direct distributions. HCFB is primarily funded by donations and grants.
The organization prepares its financial statements in accordance with generally accepted accounting
principles promulgated in the United States of America for not-for-profits. The significant accounting
and reporting policies used by the organization are described subsequently to enhance the usefulness
and understandability of the financial statements.
Title: NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB 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: CONCENTRATION
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
As of year-end, HCFB has cash balances of approximately $1,108,000 in excess of FDIC coverage.
All of the federal awards receivable was due from one grantor.
Title: NOTE 4: INVESTMENTS
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
Mutual funds $166,185
Stocks 8,377
$174,562
Title: NOTE 5: FAIR VALUE DISCLOSURES
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
Amount
Quoted Prices in
Active Markets
for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments $174,562 $174,562 $0 $0
Contributed food inventory $26,880 $0 $26,880 $0
The value of contributed food inventory on hand at year-end is based on the estimated fair value of
the average price per pound of food as reported by Feeding America.
Title: NOTE 6: FIXED ASSETS
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
Land $2,462,632
Buildings and improvements 2,208,557
Furniture and fixtures 121,384
Vehicles 101,683
Accumulated depreciation (306,949)
$4,587,307
Title: NOTE 7: CONTRIBUTED FOOD
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
HCFB recognized $3,014,853 within revenue for donations of food. Contributed nonfinancial assets
did not have donor-imposed restrictions. The contributed food was distributed to people through a
network of fifty or more churches and other agencies. The contributed food is valued and reported at
the estimated fair value in the financial statements based on the Feeding America 2024 annual report.
At year-end, HCFB had contributed food inventory on hand of $26,880, which is reflected on the
statement of financial position.
HCFB received 16,659 hours of volunteer services during the year in support of its program, with an
estimated value of $559,576. However, these volunteer services do not meet the criteria for recognition
in the financial statements and are therefore not included in the financial statements.
Title: NOTE 8: USE OF PROPERTY
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
HCFB leases land held in trust by the City of San Marcos, Hays County and the San Marcos
Independent School District for $1.00 a year. The fair value of the use of this property cannot be
reasonably determined; therefore, no amounts have been recognized for contributed land in the
statement of activities.
Title: NOTE 9: LIQUIDITY AND AVAILABILITY
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
As part of HCFB’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
organization’s operating accounts.
Financial assets available for general expenditure, that is, without donor restrictions limiting their use,
within one year of the statement of financial position date, comprise the following:
Cash $2,121,178
Investments 174,562
Federal awards receivable 685,972
Donations receivable 89,997
$3,071,709
Title: NOTE 10: LONG-TERM DEBT
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
In May 2024, HCFB purchased a building and executed a note payable of $3,600,000 as part of the
purchase. The loan matures in November 2049, is interest only for the first six months, and thereafter
requires monthly payments of principal and interest of $25,668. The loan has an adjustable interest
rate initially at 7%. The interest rate is adjustable every five years, based on the bank’s base rate minus
.50 percent. The loan is collateralized by the building.
Future maturities of long-term debt at year-end are:
2025 $58,186
2026 62,392
2027 66,903
2028 71,739
2029 76,925
Thereafter 3,259,187
$3,595,332
Title: NOTE 11: CONTINGENCY
Accounting Policies: FINANCIAL STATEMENT PRESENTATION
Net assets, revenue, gains and losses 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.
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, which includes when the stipulated time has elapsed, when
the stipulated purpose for which the restricted resource has been fulfilled, or both.
BASIS OF ACCOUNTING
HCFB uses the accrual basis of accounting. Revenue is recorded when earned and expenses are
recognized when incurred.
INVESTMENTS
Investments consist of mutual funds and stocks with readily determinable fair values reported at
their fair values in the statement of financial position. Unrealized gains and losses are included in
the change in net assets. Investment earnings are reported as an increase in unrestricted net assets
in the reporting period in which the income is recognized.
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
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. Accordingly, actual results could differ from those estimates.
8
HAYS COUNTY FOOD BANK, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Contributions are recognized as revenue is received or when the donor makes an unconditional
promise to give to HCFB. Conditional promises to give are not recognized until all conditions upon
which they depend are substantially met. Cost-reimbursement grants are recorded when the related
costs are incurred. HCFB had contracts for cost reimbursable grants of $513,037 for which
qualifying expenditures have not been incurred and accordingly have not been recognized at year
end. HCFB considers all receivables to be fully collectible; accordingly, no allowance for doubtful
accounts has been recorded.
CONTRIBUTED GOODS AND SERVICES
Contributed food inventory is reflected in the accompanying statements at the estimated fair market
value at date of receipt. Contributions of services are recognized if the services received create or
enhance non-financial assets or require specialized skills, are provided by individuals possessing
those skills, and would typically need to be purchased if not provided by donations. Other volunteer
services that do not meet these criteria are not recognized in the financial statements.
FIXED ASSETS
Fixed assets are carried at cost or, if donated, at the estimated fair value at the date of donation.
HCFB has a policy of capitalizing, at cost, all expenditures for fixed assets in excess of $2,500.
Before 1 January 2021, expenditures for fixed assets in excess of $500 were capitalized.
Depreciation is calculated on a straight-line over the estimated useful lives of the assets ranging from
3 to 30 years.
FUNCTIONAL ALLOCATION OF EXPENSES
HCFB incurs some expenses that are applicable to more than one program or supporting function.
Therefore, HCFB allocates common expenses between program, administrative, and fundraising.
The expense categories that are allocated are payroll and related, which are allocated based on
estimates of time spent by staff; depreciation, interest, utilities and repairs and maintenance, which
are allocated based on estimates of space usage; and contractual services and other, which are
allocated based on knowledge of specific accounts and transactions.
FEDERAL INCOME TAX STATUS
HCFB is a nonprofit organization exempt from Federal income taxes under Internal Revenue Code
Section 501(c)(3), except to the extent it has unrelated business activities. Therefore, no provision
has been made for Federal income tax in the accompanying financial statements.
SUBSEQUENT EVENTS
HCFB has evaluated subsequent events as of the date of the Independent Auditor’s Report,
the date the financial statements were available to be issued.
De Minimis Rate Used: N
Rate Explanation: HCFB did not elect to use the 10% de minimis indirect cost rate.
HCFB 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. HCFB’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 HCFB.