Ending Community Homelessness Coalition, Inc. (ECHO) is a nonprofit corporation established in 2010 that is dedicated to planning, prioritizing, and developing strategies to end homelessness in Austin, Texas. Austin has a diverse homeless population that includes individual men and women as well as families with children. ECHO is the U.S. Department of Housing & Urban Development’s Lead Agency for the Austin/Travis County Continuum of Care (CoC) and is funded by government awards and contracts, and contributions. A CoC is a collaborative funding and planning entity that assists the community in providing a full range of outreach, prevention, emergency, transitional, permanent supportive housing and other services to address homelessness. ECHO is the official body representing a community plan that organizes and delivers housing and services to meet the needs of people experiencing homelessness. Tasks of the CoC include: • Establishing roles and responsibilities of the CoC including group processes to govern and conduct business (agendas, meeting facilitation, committees, etc.); • Establishing strategic plans and coordination with other planning efforts; • Maintaining goals, objectives and action steps; • Collaborating with mainstream housing and service programs; • Increasing membership participation of varied stake-holders, including consumers; • Conducting broad project monitoring and rating and review based on CoC priorities; • Approving the final CoC notice of funding availability application submission; and • Ensuring CoC data collections efforts are completed through direct oversight of the Homeless Management Information System (HMIS)
BASIS OF ACCOUNTING ECHO uses the accrual basis method of accounting. Revenues are recorded when earned, rather than when received. Contributions are recognized when the donor makes a promise to give that is, in substance, unconditional. Amounts received before being earned are recorded as deferred revenue. Expenses are recorded when incurred, regardless of when paid. FINANCIAL STATEMENT PRESENTATION Net assets, revenues, gains, and losses are classified based on the existence or absence of donor or grantor 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, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers consists of government fee for service contracts. Costs incurred to obtain a contract are expensed as incurred when the amortization period is less than a year. ECHO considers contracts receivable to be fully collectible. Accordingly, no allowance for doubtful accounts is required. In general, revenue recognized does not have a significant financing component because payments terms are relatively short. ECHO has a contract with a local government to support the Coordinated Entry system, providing ongoing support to community partners by developing and implementing a user guide for the HMIS system, and performing focus groups to assess the effectiveness of the Coordinated Entry system. Revenue from this contract is recognized at a point in time, upon completion of the goals specified in the contract. Services for this contract are invoiced upon completion of each goal and payment is typically received within 30 days of invoicing. RECEIVABLES Trade accounts receivable report amounts earned by ECHO, generally based on ECHO’s performance under contracts. Receivable are recorded when revenue is earned prior to cash being received. All receivables are valued using an allowance for doubtful accounts. The allowance is determined by ECHO’s management review of the outstanding balances, an analysis of historical collections and general knowledge of the organizations for which the receivables are recorded. At year end, all receivables were considered fully collectible, as such no allowance was recorded. CONTRIBUTIONS Contributions received are recorded at fair value as without donor restriction or with donor restriction depending on the existence and/or nature of any donor restrictions. Donor restricted contributions are reported as restricted support when recognized and are then reclassified to net assets without donor restrictions upon meeting the restriction. GOVERNMENT AWARDS A portion of ECHO’s revenue is derived from cost-reimbursable federal, state, and local awards, which are conditioned upon the incurrence of allowable qualifying expenses. Amounts are recognized as revenue when ECHO has incurred expenditures in compliance with specific grant provisions. ECHO received cost-reimbursable grants of $1,705,476 that have not been recognized at 31 December 2024 because qualifying expenditures have not yet been incurred. FEDERAL INCOME TAX STATUS ECHO is 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. ECHO’s policy is to record interest and penalties related to income taxes as interest and other expense, respectively. At year end no interest and penalties have been or are required to be accrued. FUNCTIONAL EXPENSE ALLOCATION The costs of providing the programs and activities have been summarized on a functional basis. Expenses that can be identified with a specific program or that relate to a specific source of revenue are allocated directly to that program. ECHO incurs some expenses that are applicable to more than one program or supporting function. Therefore, expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include personnel, rent, information technology, and other, which are allocated on the basis of estimated personnel time spent on each function; and professional fees, which are allocated based on management’s review and analysis on individual transactions and accounts. LEASES ECHO determines if an arrangement is or contains a lease at inception. Leases are included in right of use (ROU) assets and lease liabilities in the statement of financial position. ROU assets and lease liabilities reflect the present value of the future minimum lease payments over the lease term, and ROU assets also include prepaid or accrued rent. Operating lease expense is recognized on a straight-line basis over the lease term. ECHO 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 over the lease term. Non-lease components, such as parking and common area maintenance charges, are separated from lease components based on the terms of the related lease. Variable lease costs, such as insurance and property taxes, and non-lease components are expensed as incurred within the rent account. 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. Accordingly actual results could differ from those estimates. SUBSEQUENT EVENTS ECHO has evaluated subsequent events as of the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
Revenue from three governmental entities represented 34% of total revenue. Two of those governmental entities represented 37% of total receivables. Contributions from three donor represented 55% of total revenue and contributions due from one donor represented 55% of total receivables. At year end, ECHO had deposits in excess of FDIC coverage of $4,793,877.
ECHO is the recipient of awards and contacts that are subject to review and audit by awarding agencies. Such review could result in noncompliance findings and disallowance of expenditures resulting in requests for reimbursement by the awarding agency. In the opinion of ECHO’s management, such disallowance, if any, will not be significant.
See the Notes to the SEFA for chart/table
During the year, ECHO established a defined contribution 401(k) plan available to employees. Under the plan, ECHO provides an employer matching contribution of 100% of employees’ contribution up to three percent of eligible employees’ salaries. Employees become 100% vested in their accounts after three years. Contribution expense incurred by ECHO during the year was approximately $48,000.
Financial assets available for general expenditure, within one year of the statement of financial position date, comprise the following: See the Notes to the SEFA for chart/table As part of ECHO’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 ECHO’s operating account. See Note 10 for additional details regarding the nature of donor imposed restrictions on cash and receivables that are not available for general expenditures within one year of the statement of financial position date.
See the Notes to the SEFA for chart/table
ECHO evaluated current contracts to determine which met the criteria of a lease. The ROU asset and lease liability, all of which arise from one operating lease, were calculated based on the present value of future lease payments over the lease term. A discount rate of 5% was applied to the lease to calculate the lease obligation based on ECHO’s estimated incremental borrowing rate. ECHO entered into an office lease agreement effective 15 September 2022 through 31 December 2029. This lease includes a right to terminate on or before 30 April 2026 that is not considered in the calculations, because it is not reasonably certain ECHO will exercise this option. If ECHO exercises this option, ECHO would be required to pay the unamortized tenant improvement allowance, abated rent, and commissions. See the Notes to the SEFA for chart/tables
See the Notes to the SEFA for chart/table