Notes to SEFA
Accounting Policies: 1. For all Federal programs, the District uses the fund types specified in Texas Education Agency'sFinancial Accountability System Resource Guide. Special revenue funds are used to account forresources restricted to, or designated for, specific purposes by a grantor. Federal and state financialassistance generally is accounted for in a Special Revenue Fund.2. The accounting and financial reporting treatment applied to a fund is determined by its measurementfocus. The Governmental Fund types are accounted for using a current financial resourcesmeasurement focus. All federal grant funds were accounted for in a Special Revenue Fund which is aGovernmental Fund type. With this measurement focus, only current assets and current liabilities andthe fund balance are included on the balance sheet. Operating statements of these funds presentincreases and decreases in current assets and current liabilities. The modified accrual basis ofaccounting is used for the Governmental Fund types. This basis of accounting recognizes revenues inthe accounting period in which they become susceptible to accrual, i.e., both measurable andavailable, and expenditures in the accounting period in which the fund liability is incurred, ifmeasurable, except for unmatured interest on long-term debt, which is recognized when due, andcertain compensated absences and claims and judgments, which are recognized when the obligationsare expected to be liquidated with expendable available financial resources.Federal grant funds are considered to be earned to the extent of expenditures made under theprovisions of the grant, and, accordingly, when such funds are received, they are recorded asunearned revenues until earned.3. According to the Resource Guide, funds received from the School Health and Related Services(SHARS) program represent reimbursements to the District for school health-based services whichare not already provided to special education students enrolled in the Medicaid Program, andconsequently these revenues in the amount of $536,648 are not to be considered federal financialassistance for inclusion in the SEFA. These revenues are reported on the Statement of Revenues,Expenditures and Changes in Fund Balances-Governmental Funds in the General Fund column.4. $19,897 of indirect costs are reported in the Statement of Revenues, Expenditures, and Changes inFund Balance Governmental Funds in the General Fund column.5. The District has not elected to use the 10% de-minimis indirect cost rate.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.