The Galveston County Health District (the “District”) receives federal and state grants to provide community health and related services to low-income families throughout the Galveston County, pursuant to the public health administration component of the District’s charter.
The accompanying schedule of expenditures of state and federal awards (the “Schedule”) includes the financial award activities of the District under programs of the federal government and of the State of Texas for the fiscal year ended September 30, 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 (the “Uniform Guidance”) and the State of Texas Single Audit Circular. Because the Schedule presents only a selected portion of the District’s operations, it is not intended to and does not present the net position or changes in net position of the District.
In accordance with U.S. generally accepted accounting principles, the District accounts for all awards under federal and state programs on an accrual basis of accounting. Accordingly, expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and the State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement by the federal and/or state funding agencies. Federal and state grant funds are considered to be earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to the District, they are recorded as deferred revenues until earned. Otherwise, federal and state grant funds are received on a reimbursement basis from the respective federal and state program agencies or pass-through entities.
The District did not elect to use the de minimis indirect cost rate permitted under the Uniform Guidance. Certain federal programs, including the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, utilized an approved indirect cost allocation plan issued by the Texas Health and Human Services Commission. For fiscal year 2025, the approved indirect cost rate applicable to the WIC program was 21.51%. Indirect costs were charged to applicable grants in accordance with the approved indirect cost rate agreement.
The District did not generate program income. Accordingly, no program income was used to reduce the amount of federal or state funds expended in providing the programs. Similarly, any program expenditures funded in cash or kind to meet the District’s matching contributions, where applicable, to grant budgets have not been included in the amounts reported on the Schedule.
Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to grant awarding agencies and pass-through entities because of the following reasons: 1. Expenses accrued at the end of the District’s fiscal year may not have been included in the financial reports submitted to grant awarding agencies until after fiscal year-end. 2. Program matching costs that are reported, where applicable, in the financial reports submitted to grant awarding agencies are not included in the amounts reported on the Schedule; and 3. Differences may exist between grant periods and the District’s accounting period.
Federal and state grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. Management believes that the District is in substantial compliance with grant provisions and requirements and that disallowed costs, if any, will not be significant to affect the amounts and disclosures in the Schedule or the District’s basic financial statements.
The District did not provide any federal awards to subrecipients during the year ended September 30, 2025.