Notes to SEFA
Basis of presentation – The schedule of expenditures of federal awards is prepared on the accrual basis of accounting. The information in this schedule 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). Federal expenditures include allowable costs funded by federal grants. Allowable costs are subject to the cost principles of the Uniform Guidance and include both costs that are capitalized and costs that are recognized as expenses in HARC’s financial statements in conformity with generally accepted accounting principles. HARC does not utilize the 10% de minimus indirect rate, but uses a rate equal to or less than the indirect rate approved by the U. S. Department of Energy. Because the schedule presents only a selected portion of the operations of HARC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of HARC. Major program – All of HARC’s programs fall within the Research and Development Cluster, which as a result, is the major program.
During the year ended December 31, 2025, HARC recognized $1,407,242 in federal pass-through grant revenue and expenditures under the EPA’s Solar For All program (ALN 66.959) via Harris County, Texas. As of December 31, 2025, a grant receivable of $184,853 remains outstanding. The EPA Solar For All award previously held by HARC remains subject to ongoing litigation (Harris County vs. EPA) regarding the award's administrative termination. As of the date these financial statements were available to be issued, the matter remains unresolved. No additional project activity, expenditures, or reimbursements are occurring under the award pending resolution of the litigation. While the ultimate collection of the remaining receivable or potential claw-back of funds is dependent on the litigation outcome, management believes all recorded expenditures are fully allowable and that no loss allocation is necessary at this time. HARC has approximately $45.8 million in conditional contributions at December 31, 2025 arising from the EPA Solar For All award.
Based on guidance and approval of the grantor, expenditures reported in the schedule of $140,545 are expenditures incurred during the fiscal year ended December 31, 2024. The expenditures are included in balances reported as: Assistance listing #66.460, Nonpoint Source Implementation Grants, Contract Number 582-21-10148.