Harris County Housing Finance Corporation (the "Corporation") receives a federal grant to provide community services for multi-family housing projects, both relating to low and moderate-income owners/residents.
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activities of the Corporation, under programs of the federal government for the year ended December 31, 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"). Because the Schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the financial position, changes in net position or cash flows of the Corporation.
In accordance with U.S. generally accepted accounting principles, the Corporation accounts for the award under federal program 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 grant funds are considered to be earned to the extent of qualifying expenditures made under the provisions of the grant. When such funds are advanced to the Corporation, they are recorded as unearned revenues until earned. Otherwise, federal grant funds are received on a reimbursement basis from the respective federal program agencies or pass-through entities.
The Corporation did not elect to use the de minimis indirect cost rate as allowed by Uniform Guidance.
Note 5 - Program income The Corporation did not generate program income. Accordingly, no program income was used to reduce the amount of federal funds expended in providing the programs. Similarly, any program expenditures funded in cash or kind to meet the Corporation'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: Expenses accrued at the end of the Corporation's fiscal year may not have been included in the financial reports submitted to grant awarding agencies until after fiscal year-end. 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 Differences may exist between grant periods and the Corporation's accounting period.
Federal 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 Corporation 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 Corporation's basic financial statements.