Ok, so I found out the found_posts filter runs 3 times on the homepage and the third echo within the innermost element says $found_posts equals to 38 which is accounting for an unpublished post. I only noticed the first echo that was printing 37 at the top of the page. So if I set the $offset to 4 in the filter it works fine. Not sure if this will produce errors later on, but this answers the initial question.
