Audit 55223

Title: Provider Relief Fund Accounting Policies: This summary of significant accounting policies of Paso del Norte Children's Development Center is presented to assist in understanding Paso del Norte Children's Development Center's Schedule of Expenditures of Federal and State Awards. The Schedule of Expenditures of Federal and State Awards and notes are representations of Paso del Norte Children's Development Center 's management, who is responsible for their integrity and objectivity. Basis of Accounting and Presentation - The Schedule of Expenditures of Federal and State Awards is prepared using the accrual basis of accounting. The information in this schedule is presented in accordance with the Uniform Guidance, UGMS and the State of Texas Single Audit Circular. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. Indirect Cost - The Schedule of Expenditures of Federal and State Awards includes a portion of costs associated with general and administrative activities, which is allocated to federal and state assistance programs under negotiated formulas commonly referred to as a negotiated indirect cost rate. Currently, the Center allocates indirect expenses in accordance with an indirect cost rate approved by the Texas Health and Human Services Commission. The Organization has not negotiated an indirect cost rate with any Federal cognizant agency and has not declined to use the de minimis rate of 10% of modified total direct cost as an indirect cost allocation factor, as allowed under 2C.F.R. ?200.414, for any Federal awards not otherwise overseen by the Texas Health and Human Services Commission. Subrecipients - There were no subrecipients of the Federal or State Awards received by Paso del Norte Children's Development Center for the year ended August 31, 2022. Affiliate - Paso del Norte Children's Development Center's Affiliate, Paso del Norte Children's Development Center Foundation, did not receive any federal or state awards for the year ended August 31, 2022. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. In August 2020, the Center received $71,327 from the Provider Relief Fund (PRF). A second distribution of PRF funds totaling $224,554 was received in December 2020. The Center was required to submit reports detailing healthcare related expenses attributable to Coronavirus, net of other reimbursed sources for such disbursements before March 31, 2022. Management received additional PRF fund distributions of $543 and $10,403 in November 2021 and January 2022, respectively. At August 31, 2022, both distributions were recorded as deferred revenue attributable to unused PRF funds. The distribution received in November 2021 corresponds to the Period 4 of PRF distributions and was due for expenditure on December 31, 2022. The distribution received in January 2022 corresponds to the Period 5 of PRF distributions and is due for expenditure on June 30, 2023. The Center is required to report expenditures of Period 2 PRF in the schedule of expenditures of federal and state awards for the year ended August 31, 2022. Expenditures for Period 4 and Period 5 PRF are required to be reported in the schedule of expenditures of federal and state awards for the years ending August 31, 2023 and 2024, respectively. A reconciliation of total federal grant expenditures reported in the schedule of expenditures of federal awards to total federal grant income reported in the consolidated statement of activities for the year ended August 31, 2022 is as follows: Federal grant expenditures per SEFA, $2,444,334. Less: Period 2 PRF expenditures $(295,881). Add: PRF revenue recognized in the statement of activities, $240,802. Total federal grant income per the consolidated statement of activities, $2,389,255.