Title: Organization and Business
Accounting Policies: Expenditures on the Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Childrens 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 Childrens include numerous entities; those entities which received federal and state grant awards are described below. Texas Childrens Hospital (TCH) primarily provides direct patient care and conducts educational and research activities within Houston and its surrounding communities. It is comprised of a 618 licensed-bed comprehensive tertiary care pediatric facility and a 119 licensed-bed facility, providing obstetrics and gynecological care, both located in Houstons 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. Texas Childrens Pediatrics (TCP) is a group of pediatric practices that provide primary care services and conduct educational activities. It acquires, manages, and affiliates with pediatric practices primarily in Houston and Austin and their surrounding counties. Texas Childrens Urgent Care (TCUC) is a group of clinics that provides pediatric urgent care primarily in Houston and Austin. Texas Childrens 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 Childrens Physician Group (TCPG) provides services in support of Texas Childrens for Baylor College of Medicine (Baylor) faculty and other affiliated health care professionals who provide services at Texas Childrens or participate in Texas Childrens programs. Texas Childrens is the sole corporate member of TCH, TCP, TCHP and TCPG. TCP is the sole corporate member of TCUC. All Texas Childrens 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 Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Childrens 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 Childrens were audited by Ernst & Young, LLP (E&Y), whose report dated December 15, 2022, except for the schedule of expenditures of federal and state awards (Schedules) for which the date is June 16, 2023, was furnished to McConnell & Jones LLP. Such report indicated that the Schedules were subjected to the auditing procedures applied in E&Ys audit of the basic financial statements, and that the Schedules are 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 Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Schedules include the federal and state grant expenditures of Texas Childrens under programs of the federal and state governments for the year ended September 30, 2022. The information in these Schedules 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), the State of Texas Uniform Grant Management Standards), and Texas Grant Management Standards (collectively, State of Texas UGMS), as applicable. Because the Schedules present only a selected portion of the operations of Texas Childrens, they are not intended to and do not present the financial position, changes in net assets, or cash flows of Texas Childrens.
Title: Relationship to Financial Reports Submitted to Grantor Agencies
Accounting Policies: Expenditures on the Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Schedules 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 Organizations
Accounting Policies: Expenditures on the Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Childrens has an affiliation agreement with Baylor. Under the terms of this agreement, Baylor conducts research and educational activities, and its physicians provide patient care services while utilizing the Texas Childrens facilities in the practical application of the teaching process. Mutual commitments include sharing of operational and research costs, including residents and physicians salaries. The following summarizes expenses included in the Schedules 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) $15,434 Immunization Research, Demonstration, Public Information and Education Training and Clinical Skills Improvement Projects (ALN 93.185) $70,453 Total payments made to Baylor included in the Schedule of Expenditures of Federal and State Awards $85,887.
Title: Contingencies
Accounting Policies: Expenditures on the Schedules 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 and the State of Texas UGMS, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Per the guidance provided under April 2022 U.S. Office of Management and Budget (OMB) Compliance Supplement for the Provider Relief Fund (PRF) (ALN 93.498), the amount reported on the schedule of expenditures of federal awards was based on the PRF reporting that was submitted to the Health Resources and Services Administration reporting portal for the time period January 1, 2022 to March 31, 2022, for PRF funding received between July 1, 2020 through December 31, 2020 and for the time period July 1, 2022 to September 30, 2022, for PRF funding received between January 1, 2021 through June 30, 2021.
De Minimis Rate Used: N
Rate Explanation: Texas Childrens did not elect to use the 10% de minimis indirect cost rate for the year ended September 30, 2022, 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 Childrens federal and state programs are subject to review and audit by grantor agencies. Consequently, Texas Childrens may become liable to refund money to funding agencies where it fails to comply with contract provisions. In addition, Texas Childrens may not fully collect federal or state grant receivables as at September 30, 2022, related to the reported federal or state grant expenditures as these receivables may be subject to the grantors compliance approval process. Texas Childrens management believes that the results of these reviews and audits will not have a material effect on the amounts reported in the Schedules.