Notes to SEFA
The accompanying schedule of expenditures of federal awards (the “SEFA”) includes federal grant activities of the Institute Capital (the “Organization”) under programs of the federal government and the State of North Carolina for the year ended December 31, 2025. The information in the SEFA 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). Because the SEFA presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization.
The accompanying SEFA is presented on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Subpart E of the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
The Organization has elected not to use the 15% de minimis indirect cost rate allowed under the Uniform Guidance.
Federal expenditures of $1,968,598 reported in the SEFA are presented as a program liability in the financial statements as of December 31, 2025. The liability includes NSP loans receivable of $839,609, net of loan losses of $75,565, and related accrued interest of $321,016 due from various community development corporations. Although the loans, as modified in 2022, mature on December 31, 2026, repayment of principal and accrued interest is expected as the underlying collateral properties are sold. The remaining program liability of $883,538 represents program income required to be remitted to the State of North Carolina. Refer to Note 8 to the financial statements for additional information about this award.