Audit 394139

Southwest Research Institute (SwRI) is an independent and nonprofit research and development organization benefiting government, industry and the public through innovative science and technology. Founded in 1947, SwRI provides contract research and development services to industrial and government clients in the United States and abroad. SwRI's headquarters are in San Antonio, Texas and it has supporting offices throughout the United States.

The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity for SwRI under programs of the federal government for the year ended September 26, 2025. The information in the Schedule is presented in accordance with the requirements of Title 2 U. S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the accounting practices prescribed in Part 31 of the Federal Acquisitions Regulation (FAR). Because the Schedule presents only a selected portion of the operations of SwRI, it is not intended to and does not present the financial position, changes in net assets, or cash flows of SwRI. SwRI utilizes the 52/53-week fiscal year. The fiscal year ended on September 26, 2025, was composed of 52 weeks.

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Expenditures are recorded when the liability is incurred and include only costs incurred during fiscal year 2025. Allowable costs meet the definition of a federal expenditure in accordance with Uniform Guidance section 200.502(a) and Part 31 of the FAR. Negative amounts shown on the Schedule represent adjustment or credits made in the normal course of business to amounts reported as expenditures in prior years.

SwRI has negotiated and uses approved indirect cost rates; thus, SwRI does not use the de minimis indirect cost rate allowed under the Uniform Guidance.

Amounts reported in the accompanying Schedule may not agree with the amounts reported in the related federal financial reports filed with the grantor agencies because of accruals made in the Schedule, which will be included in future reports filed with those agencies.

Federal direct programs are presented by the federal agency and, where applicable, the major subdivisions within that agency. Federal pass-through programs are presented by the entity through which SwRI received the federal awards.