Audit 7517

Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of North Texas Area Community Health Centers Inc. (a Texas nonprofit corporation) (the "Center") under programs of the federal government for the year ended December 31, 2022. The information in this 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 Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Center. 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, wherein certain types of expenditures are not allowable or limited as to reimbursement. Passthrough entity identifying numbers are presented where available and applicable. Of the federal and state expenditures presented in the schedules, North Texas Area Community Health Centers, Inc. provided no federal awards to subrecipients. In May 2016, the City of Fort Worth provided a $300,000 forgivable deferred payment loan pursuant to grant monies from the United States Department of Housing and Urban Development ("HUD") in connection with the Community Development Block Grant ("CDBG") Program for the construction of the new Northside facility. The note is secured by a Deed of Trust in the property, accrues no interest and payment will only be required if the Center does not comply with the terms of the agreement which principally comprise the following CDBG requirements: 1) build the Health Center on the property, 2) at least 51% of the patients served must be CDBG eligible clients, 3) collect client documentation from all clients provided health services in the Health Center during the performance period, 4) comply with all applicable provisions of the CDBG regulations. In addition, the Center must fulfill the following City requirements: 1) begin serving patients in the Health Center by December 31, 2018, 2) Operate the Health Center continuously during the performance period, 3) serve at least 8,000 unduplicated clients in each year of the performance period, 4) use best efforts to create at least 15 new jobs by the end of the fifth year of operation. The proceeds were subordinated under the note agreements described in Note 7. Management believes that all conditions on the above award were met in 2021, has notified the City of such, and is awaiting formal release of the liens. 37 De Minimis Rate Used: N Rate Explanation: North Texas Area Community Health Centers, Inc. has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.