Teed & Associates, PLLC 3624 MacCorkle Avenue SE Charleston, West Virginia

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1 Independent Auditors Report and Related Financial Statements For the Year Ended June 30, 2011 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Teed & Associates, PLLC 3624 MacCorkle Avenue SE Charleston, West Virginia

2 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Table of Contents For the Year Ended June 30, 2011 Management s Discussion and Analysis Independent Auditors Report 1-2 Basic Financial Statements: Page Statement of Net Assets 3 Statement of Activities 4 Statement of Cash Flows - Proprietary Fund 5 Notes to Financial Statements 6-14 Required Supplementary Information 15 Budgetary Comparison Schedule Governmental Fund 16 Supplementary Information 17 Schedule of Program Revenues and Expenditures Schedule of Program Revenues and Expenditures - Component Unit 23 Schedule of Revenues and Expenditures for Programs with Program Years Differing from the Fiscal Year Schedule of Indirect Costs Charged to Programs 27 Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards 30

3 Reports on Internal Control, on Compliance and other Matters: Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs 33-37

4 Mid Ohio Valley Regional Planning and Development Council Management Discussion and Analysis Unaudited June 30, 2011 Mid-Ohio Valley Regional Planning and Development Council (MOVRC) provides this Management Discussion and Analysis of its financial statements. This narrative overview and analysis of the financial activities is for the fiscal year ended June 30, We encourage readers to consider this information in conjunction with the Agency s financial statements which follow Financial Highlights 16 loans closed for $741,195, $133,002 amount leveraged, 69 jobs created/retained 57 SCSEP employees and annual payroll $393,832 Appropriations Act awarded SCSEP program $114,729 creating 10 jobs during FY10 and maintained those jobs into FY Retired Senior Volunteers serving 62,195 hours 95 Foster Grandparents serving 93,974 hours 42 Senior Companions serving 41,287 hours 4 Fee for Service Administration Projects started, overseeing $9.5 million total project costs serving 3,200 customers. Fee for service projects were mostly water system, sewer system and hazard mitigation projects 13 ARRA Energy Efficiency and Conservation Block Grant Projects were completed, saving local governmental unit of government 15-30% in utility costs. One (1) project was still under construction six (6) projects in the pre-award stage. Most projects involve HVAC, windows or lighting. Using this Annual Report The annual report consists of a series of financial statements and other information, as follows: Management s Discussion and Analysis introduces the basic financial statements and provides an analytical overview of the Agency s financial activities. The Basic Financial Statements consist of a Statement of Net Assets and a Statement of Activities for both the Governmental and Business Type Activities and a Statement of Cash Flows for the Business Type Activities. The governmental activities are the MOVRC programs for community and economic development, transportation, senior program and business

5 programs. The business type activities are the MOVADC operations of rentals and a loan program. Notes to the Financial Statements provide additional information essential to a full understanding of the data provided in the basic financial statements. Required Supplementary Information further explains and supports the financial statements with a comparison of the Agency s budget for the year. Other Supplementary Information provides detailed information about the governmental funds. The MOVRC has several grant programs that operate on a difference grant cycle than the agency s fiscal year so those grant periods are reported in a separate schedule. In addition, the Schedule of Expenditures of Federal Awards provides details of the various federal programs managed through the agency. Reporting the Agency s Financial Activities The Statement of Net Assets and Statement of Activities present the Agency s net assets. Over time, increases or decreases in the Agency s net assets may serve as a useful indicator of whether the financial position of the Agency is improving or deteriorating. The Statement of Net Assets and Statement of Activities are divided into two kinds of activities: Governmental Activities include social services (senior programs), community and economic development, transportation, and business programs. Business Type Activities include commercial rentals and loan program. Comparing Governmental Special Revenue in FY11 of $2,906,713 and FY10 $2,487,134, Governmental Special Revenue increased $419,579 due to awarding of Energy Efficiency Community Block Grant (EECBG). Comparing the expenditures for the Governmental Special Revenue funds for FY11 indicates an increase in expenditures of $526,458 from FY10. The majority of the increase was due to EECBG fund expenditures. The Business Type Activities saw a reduction in revenues for FY11 of $19,391 from FY10. The reduction was due to a $13,199 reduction in rental revenue due to a tenant change and increases of $6,192 from interest revenue and loan fees. The Business Type Activities expenditures were higher in FY11 by $24,672 due to decrease in the provision for loan losses and lower maintenance and repair costs. The pie charts on the following page show, in percentages, MOVRC s receipts by source and MOVRC s expenditures by function.

6 Miscellaneous revenue 7% MOVRC Receipts by Source Interest income 2% State 2% Local 11% Federal 78% MOVRC Expenditures by Function Travel/Conferences 4% Stipends 12% Enrollees: Personnel 18% Personnel Benefits 6% Personnel 21% Other and In-Kind 29% Indirect Costs 10% Individual Major Governmental Fund Analysis Several grant programs were impacted by the Federal Budget with the Retired Senior Volunteer Program and, Foster Grandparent taking a cut in funding. The Senior Community Service Employment Program was informed that the grant was not being renewed as of July 1, 2011 due to budget cuts by the grantor NCOA who receives the grant from USDOL. The program participants are still being served through the funder NCOA s office in Wheeling, West Virginia.

7 Economic Factors and Budget Impact Many factors impact the Agency s budget as the revenues are largely derived from direct and sub-grantee grant awards. A direct impact from the local economic conditions was noticed in early FY09 with the decrease in loan program activity. During FY11 new loan application activity was sporadic but sixteen 16 loans were closed. Loan volume has historically been volatile but our loan pools have performed very well. The Fee for Service (FFS) projects are directly tied to the availability of funding from state, federal and local sources for infrastructure development. With the completion of the ARRA grants and projects the new FFS projects showed a decline as normal funding became more competitive. The FY11 budget was modified once throughout the year for changes in grant activities as grants are awarded throughout the year for changes in grant activities as grants are awarded throughout the year depending on the various federal agencies funding cycles. Contacting the Agency s Financial Management This financial report is designed to provide our grantors, creditors, member government and citizens with a general overview of the Agency s finances and to show the Agency s accountability for the money it receives and manages. If you have any questions regarding this report or need additional financial information contact: Comptroller, PO Box 247, Parkersburg, WV

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10 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Statement of Net Assets June 30, 2011 MOVRC MOVADC Governmental Business Type Total ASSETS: Cash and cash equivalents $ 73,496 $ 337,133 $ 410,629 Restricted cash 695,725 $748, ,444,027 Receivables, federal and state 141, ,700 Receivables, local, interest, and other 105,632 53, ,144 Due (to) from other funds 7,497 (1,262) 6,235 Notes receivable, net of allowance for loan losses 1,465,512 2,101,678 3,567,189 Other 7,374-7,374 Capital assets not being depreciated - 291, ,897 Capital assets being depreciated, net - 539, ,726 Total assets 2,496,936 4,070,984 6,567,920 LIABILITIES: Accounts payable and accrued expenses 64,294 7,759 72,053 Accrued payroll and employee benefits 30,592-30,592 Deferred revenue and grant awards 315, ,460 Noncurrent liabilities: Due within one year - 126, ,345 Due in more than one year - 1,818,963 1,818,963 Total liabilities 410,346 1,953,068 2,363,413 NET ASSETS: Invested in capital assets, net of related debt - 831, ,623 Restricted for loan programs 1,954, ,403 2,771,766 Unrestricted 132, , ,118 Total net assets $ 2,086,590 $ 2,117,917 $ 4,204,507 The notes to the financial statements are an integral part of this statement. 3

11 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Statement of Activities For the Year Ended June 30, 2011 MOVRC MOVADC Governmental Business Type Total REVENUES: Federal $ 2,267,128 $ - $ 2,267,128 State 54,616-54,616 Local 321, ,751 Interest income 59,775 90, ,434 Rental income - 82,745 82,745 Miscellaneous revenue 203,443 7, ,649 Total revenues 2,906, ,609 3,087,322 EXPENDITURES: Advertising and marketing 14,706-14,706 Allocation to component unit (36,691) - (36,691) Contract services 3,442 9,200 12,642 Dues, fees and memberships 4,311-4,311 Enrollees - personnel 499, ,801 Equipment rental and repair - 1,978 1,978 Indirect costs 294, ,801 Insurance 3,926 9,324 13,250 Interest - 22,395 22,395 Consumables and printing 19,020-19,020 Other and in-kind 839,860 81, ,314 Personnel 608, ,077 Personnel benefits 153, ,433 Postage 3,808-3,808 Provision for loan losses 85,941 30, ,879 Stipends 350, ,810 Telephone 2,184-2,184 Training/conference/workshops 26,109-26,109 Travel 111, ,915 Depreciation - 29,098 29,098 Total expenditures 2,985, ,376 3,170,841 Operating income (78,752) (4,767) (83,519) Fund balances at beginning of year 2,165,342 2,122,684 4,288,026 Fund balances at end of year $ 2,086,590 $ 2,117,917 $ 4,204,507 The notes to the financial statements are an integral part of this statement. 4

12 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Statement of Cash Flow For the Year ended June 30, 2011 MOVADC Cash flows from operating activities: Cash received from customers and users $ 61,549 Cash paid to suppliers and employees (149,933) Net cash used by operating activities (88,384) Cash flows from financing activities: Proceeds from grant loan 150,000 Payments on long-term debt (103,762) Increase in restricted assets (11,033) Net cash provided by financing activities 35,205 Cash flows from investing activities: Purchase of property and equipment (39,598) Net cash used by investing activities (39,598) Decrease in cash and cash equivalents (92,776) Cash and cash equivalents, beginning of year 429,909 Cash and cash equivalents, end of year $ 337,133 Reconciliation of operating income to net cash provided by operating activities: Operating (loss) $ (4,767) Depreciation and amortization 29,098 Changes in operating assets and liabilities: (Increase) decrease in grant receivables (4,658) (Increase) decrease in due from other funds 987 Increase (decrease) in notes receivable (124,713) (Increase) decrease in other assets 9,324 Increase (decrease) in accounts payable 6,345 Net cash used by operating activities $ (88,384) The notes to the financial statements are an integral part of this statement. 5

13 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Notes to the Financial Statements For the Year ended June 30, 2011 NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mid-Ohio Valley Regional Planning and Development Council (MOVRC) was established in 1971 as a political subdivision of the State of West Virginia under Chapter 8, Article 25, of the Code of West Virginia, to promote regional planning and economic development in Region V, which consists of Calhoun, Jackson, Pleasants, Ritchie, Roane, Tyler, Wirt and Wood Counties in the State of West Virginia. On July 1, 1981, Mid-Ohio Valley Area Development Corporation (MOVADC) was incorporated as a 501(c)4 exempt organization and an affiliate of MOVRC. MOVADC owns property currently rented for economic development purposes in Region V. MOVADC shares offices, facilities, and support staff with MOVRC. Shared indirect costs are allocated between the entities based on direct labor plus benefit costs or negotiated amounts for specific services. A. Government-wide and fund financial statements The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Government activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. B. Measurement focus, basis of accounting, and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenues when all eligibility requirements imposed by the provider have been met. Governmental fund financial 6

14 statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. Within the governmental fund financial statements, local member government dues and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. MOVRC reports the following major governmental fund: The Special Revenue Fund is the government s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. MOVRC reports the following major proprietary fund: The MOVADC accounts for the activities of the Mid-Ohio Valley Area Development Corporation. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. The effect of interfund activity has been eliminated from the government-wide financial statements. Amounts reported as program revenues included 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) and capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. When both restricted and unrestricted resources are available for use, it is the government s policy to use restricted resources first, then unrestricted resources as they are needed. C. Budgetary compliance and accountability MOVRC is required to legally adopt and submit an annual budget, in accordance with its bylaws and the laws of the State of West Virginia, to the governmental units which contribute to the financing of MOVRC. The special revenue fund is generally comprised of individual grant programs included in the work plan and is controlled through the use of individual grant budgets. All budgets are prepared in accordance with accounting principles generally accepted in the United States of America. 7

15 D. Reporting Entity As required by accounting principles generally accepted in the United States of America, these financial statements present MOVRC, the primary government, with its component unit MOVADC. As discussed below, this component unit is included in the MOVRC reporting entity due to the significance of its operational and financial relationship with MOVRC. E. Component Unit MOVADC and MOVRC are governed by an identical board of directors and commonly controlled through a single administration. Although it is legally separate from MOVRC, MOVADC is reported as a blended component unit as if it were part of the primary government. F. Cash and Cash Equivalents Cash and cash equivalents include deposits with original maturities of less than three months and consist of interest and non-interest earning deposits with local financial institutions. G. Use of Estimates The preparation of basic financial statements in conformance with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amounts reported in the basic financial statements and accompanying notes. Actual results may differ from those estimates. A significant estimate that is particularly susceptible to change in the near term is the determination of the allowance for loan losses. H. Loans Receivable and Allowance for Loan Losses Interest income on loans is accrued based on the principal amount outstanding. The accrual of interest on loans is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to meet payments as they become due. Any interest previously accrued on a loan placed on nonaccrual status is reversed and charged against current earnings. Interest on such loans is thereafter included in earnings to the extent actually received. MOVADC uses the allowance method to provide for loan losses. The provision for loan losses charged to operating expense is based on loan loss experience and other factors which, in management's judgment, deserve current recognition in estimating possible losses. Other factors considered by management include specific loan evaluations, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans, trends in delinquencies, and economic conditions. Assets acquired in loan foreclosure transactions are recorded at the lower of cost or estimated net realizable value, with any writedowns charged to the allowance for loan losses. 8

16 I. Capital Assets Capital assets are reported in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the lives of individual assets are not capitalized. Capital assets of the government are depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings 31.5 or 40 Office equipment 3 or 5 J. Compensated Absences Employees earn annual leave based on years of service which, up to specific limits, is fully vested when earned. An employee, upon termination of employment from MOVRC or MOVADC, is paid for any unused annual leave. Annual leave balances can be carried over for one year up to 35 hours. The liability associated with accrued and vested annual leave has been reported in the accompanying financial statements. Sick leave policy permits the accumulation of eighteen sick days per year at the rate of one and one-half days per month. Sick leave may not be carried over from year to year nor are employees compensated for unused sick leave. Therefore, no provision has been made in the financial statements for unused sick leave. K. Fiscal Agency MOVRC serves as the fiscal agent for the Mid-Ohio Valley Workforce Investment Corporation, an independently governed non-profit organization. L. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. 9

17 M. Income Taxes MOVRC operates as a governmental agency and is exempt from federal and state income taxes. MOVADC is exempt from federal and state income taxes under Internal Revenue Code Section 501(c)4. NOTE 2. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH At June 30, 2011, MOVRC s and MOVADC s unrestricted cash and cash equivalents and restricted cash were as follows: Unrestricted cash and cash equivalents: MOVRC $ 73,496 MOVADC 337,133 Total cash and cash equivalents $ 410,629 Restricted cash: MOVRC Cash - federal grant and loan programs $ 695,725 MOVADC Cash and Note Receivable less Note Payable Intermediary Relending Program 748,302 Total restricted assets $1,444,027 At June 30, 2011, MOVRC s and MOVADC s unrestricted cash and cash equivalents and restricted cash were deposited in financial institutions and insured by federal depository insurance and collateralized obligations. In accordance with individual grant agreements, each grant program maintains a separate account with a financial institution. 10

18 NOTE 3. NOTES RECEIVABLE MOVRC and MOVADC administer loan programs for Federal and State agencies. MOVRC s notes receivable consists of receivables for loans made under the following agencies loan programs: United States Department of Commerce, Economic Development Administration Revolving Loan Fund Program (EDA-RLF); Appalachian Regional Commission Revolving Loan Fund (ARC-RLF); and the West Virginia Development Office Micro Loan Program (MLF). MOVRC s notes receivable by loan program at June 30, 2011, was as follows: EDA-RLF ARC-RLF MLF RBEG TOTAL Notes receivable $ 320,060 $ 1,069,131 $ 384,785 $ 42,229 $ 1,816,205 Less Allowance 30,504 95, , ,693 Notes Receivable, net $ 289,556 $ 973,729 $ 159,998 $ 42,229 $ 1,465,512 MOVADC s notes receivable consists of receivables for loans made under the United States Department of Agriculture, Rural Business Cooperative Service Intermediary Relending Program (IRP). MOVADC s notes receivable at June 30, 2011, was as follows: IRP Notes receivable $ 2,285,714 Less Allowance 195,036 Notes Receivable, net $ 2,090,678 The allowances for loan losses reflects the adjustments made by management regarding their estimate of the allowance for loan losses based on a historical experience rate as a percentage of total loans receivable and expected losses based on loan status and collateral position. The allowances for loan losses for the various loam programs are as follows: EDA-RLF ARC-RLF MLF IRP Balance at July 1, 2010 $ 21,089 $ 43,900 $ 199,764 $ 164,098 Provision for loan losses 9,415 51,502 25,023 30,938 Balance at July 1, 2011 $ 30,504 $ 95,402 $ 224,787 $ 195,036 11

19 NOTE 4. CREDIT RISK Financial instruments which potentially expose the financial reporting entity to significant concentrations of credit risk consist principally of cash and cash equivalents and loans receivable under the U.S. Department of Agriculture, Rural Business - Cooperative Service Intermediary Relending Program, the U.S. Department of Commerce, Economic Development Administration Revolving Loan Fund, Appalachian Regional Commission Revolving Loan Fund, and the West Virginia Development Office Micro Loan Program. MOVRC and MOVADC make IRP, EDA- RLF, ARC-RLF, and MLF loans to qualified businesses in the west central part of West Virginia known as Region V. Collateral is required and on-going credit evaluations and account monitoring activities are utilized to minimize the risk of loss. NOTE 5. CAPITAL ASSETS MOVADC owns land it purchased for $4,300,000 in 2003 which is not included on the Statement of Net Assets. The land was purchased with grant funds and leased for $1 per year to the Polymer Alliance Zone who assumed responsibility for creating an Electronic Recycling Center which was the purpose of the grant. The grant agreement stipulates MOVADC is to retain title to the land until the bonds sold to raise the money for the project are repaid. MOVADC and the Polymer Alliance Zone decided to account for the lease on the books of the Polymer Alliance Zone. MOVADC s capital asset activity for the year ended June 30, 2011, was as follows: Totals Totals June 30, 2010 Additions Deletions June 30, 2011 Capital assets not being depreciated: Land $ 291,897 $ - $ - $ 291,897 Capital assets being depreciated: Buildings 1,022,932 31,825-1,054,757 Office equipment 50,646 7,773-58,419 Total capital assets being depreciated 1,073,578 39,598-1,113,176 Less accumulated depreciation for: Buildings 493,706 28, ,674 Office equipment 50, ,776 Total accumulated depreciation 544,352 29, ,450 Total capital assets being depreciated, net 529,226 10, ,726 Total business-type activities capital assets, net $ 821,123 $ 10,500 $ - $ 831,623 12

20 NOTE 6. LONG-TERM DEBT MOVADC s long-term debt at June 30, 2011, was as follows: Note payable to U.S. Department of Agriculture, Rural Business administration (RBA), payable in annual installments of $84,900, including interest at 1%, final payment due May 19, 2019, secured by all proceeds and products of the Intermediary Relending Program $ 626,223 Note payable to U.S. Department of Agriculture, RBA, payable in annual installments of $31,900 including interest at 1%, final payment due January 25, 2031, secured by all proceeds and products of the Intermediary Relending Program 569,101 Note Payable to U.S. Department of Agriculture, RBA, payable in 27 annual installments of $33,833 including interest at 1%, interest only due the first three years, final payment due June 18, 2039, secured by all proceeds and products of the Intermediary Relending Program. 749,984 $ 1,945,308 MOVADC s long-term debt activity for the year ended June 30, 2011, was as follows: Balance Balance Due Within July 1, 2010 Additions Reductions June 30, 2011 One Year Business-type activities: Note payable $ 1,899,070 $ 150,000 $ 103,762 $ 1,945,308 $ 102,439 Total business-type activity long-term liabilities $ 1,899,070 $ 150,000 $ 103,762 $ 1,945,308 $ 102,439 Maturities of notes payable for each of the next five years and thereafter are as follows: June 30 Principal Interest Total ,842 19, , ,226 18, , ,530 17, , ,847 16, , ,178 14, , ,604 53, , ,506 35, , ,718 20, , ,958 9, , , ,841 Total $ 1,945,308 $ 205,396 $ 2,150,704 13

21 NOTE 7. LEASES MOVRC leases its administrative office space from MOVADC under a lease agreement subject to annual renewal. Total rent and lease expense for the year ended June 30, 2011, was $47,244. NOTE 8. RETIREMENT PLAN MOVRC has a defined contribution plan which provides retirement benefits for all eligible employees. During the year ended June 30, 2011, 2010, and 2009, MOVRC contributed $53,816, $49,647, and $52,523, respectively, to the plan which is equal to five and one-half percent of eligible employees' qualified compensation. NOTE 9. RISK MANAGEMENT MOVRC is exposed to various risks of loss related to torts; theft; damage to and destruction of assets; errors and omissions; injuries to employees; employee health and life coverage; and natural disasters. The State of West Virginia established the Board of Risk and Insurance Management (BRIM), the Public Employees Insurance Agency (PEIA), and Brickstreet Mutual Insurance Company (BI) to account for and finance uninsured risks of losses for state agencies and local governments within the State. BRIM is a public entity risk pool that provides coverage for general, property, medical malpractice, and automobile liability. MOVRC has obtained better coverage and at a better rate from Travelers and Cincinnati Insurance during FY11. PEIA is also a public entity risk pool that provides coverage for employee and dependent health, life and prescription drug insurance. BI provides coverage for work related accidents and is considered an insurance enterprise fund. Through its participation in the PEIA and BI, MOVRC has obtained health coverage and coverage for job related injuries for its employees. In exchange for payment of premiums to PEIA MOVRC has transferred its risks related to health coverage and job related injuries of employees. 14

22 REQUIRED SUPPLEMENTARY INFORMATION 15

23 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Budgetary Comparison Schedule Governmental Fund For the Year ended June 30, 2011 Original Final Budget Budget Actual Revenues: Federal $ 1,692,812 $ 2,574,344 $ 2,267,128 State 76,352 75,696 54,616 Local 374, , ,751 Interest income 62,160 63,150 59,775 Other 139, , ,443 Total revenues 2,346,023 3,195,972 2,906,713 Expenditures: Advertising and marketing - 1,500 14,706 Allocation to component unit - - (36,691) Consumable and printing expense 13,167 8,700 19,020 Contract services 1,025 26,325 3,442 Dues, fees and memberships 4,300 4,100 4,311 Enrollees: personnel and fringes 512, , ,801 Indirect costs 269, , ,495 Insurance 3,396 3,840 3,926 Other and in-kind 381,047 1,102, ,860 Personnel 509, , ,500 Personnel benefits 180, , ,325 Postage ,808 Provision for loan losses ,941 Stipends 362, , ,810 Telephone ,184 Training 27,268 19,467 26,109 Travel 80, , ,915 Total expenditures 2,346,023 3,195,972 2,985,465 Excess of revenues over expenditures - - (78,752) Fund balance at beginning of year - - 2,165,342 Fund balance at end of year $ - $ - $ 2,086,590 16

24 SUPPLEMENTARY INFORMATION 17

25 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures For the Year ended June 30, 2011 Appalachian Regional Commission Appalachian Regional Commission Flex E Grant Energy Efficiency Conservation Block Grant Economic Dev. Admin. REVENUES: Federal $ 97,020 $ - $ 600,852 $ 67,564 State 23, Local ,000-29,659 Interest Other Total revenues 121,472 10, ,852 97,258 EXPENDITURES: Advertising and marketing 1,234-6, Allocation to Component Unit Contract services Dues, fees and memberships Enrollees: personnel Equipment rental and repair Indirect costs 29,921-8,413 25,013 Insurance Consumables and printing 3, Other and in-kind 1,020 10, ,535 - Personnel 56,455-15,874 47,194 Personnel benefits 16,318-4,089 12,851 Postage $ $ $ Provision for loan losses Stipends Telephone Training/conference/workshops 1, Travel 11,146-2,826 10,670 Total expenditures 121,472 10, ,852 97,258 Excess (deficiency) of revenues over (under) expenditures Program balances at beginning of year Program balances at end of year $ - $ - $ - $ 1 The notes to the financial statements are an integral part of this statement. 18

26 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures -- continued For the Year ended June 30, 2011 Fee For Service Foster Grandparents ARC - Revolving Loan Fund EDA- Revolving Loan Fund REVENUES: Federal $ - $ 389,038 $ (42,486) $ - State Local 141,226 10, Interest ,153 15,380 Other - 26,395 1, Total revenues 141, ,891 (5,024) 16,264 EXPENDITURES: Advertising and marketing 1, Allocation to Component Unit ,867 6,451 Contract services Dues, fees and memberships Enrollees: personnel Equipment rental and repair Indirect costs 37,838 19, Insurance Consumables and printing $ , Other and in-kind - 39, Personnel 71,393 65, Personnel benefits 23,189 11, Postage Provision for loan losses ,502 9,415 Stipends - 241, Telephone 1, Training/conference/workshops Travel 5,336 42, Total expenditures 141, ,891 67,085 15,900 Excess (deficiency) of revenues over (under) expenditures (750) - (72,109) 364 Program balances at beginning of year (227) - 1,376, ,303 Program balances at end of year $ (977) $ - $ 1,304,213 $ 299,667 The notes to the financial statements are an integral part of this statement. 19

27 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures -- continued For the Year ended June 30, 2011 Micro loan RLF Loan Pool Admin. Local Retired Senior Volunteer Program REVENUES: Federal $ - $ - $ - $ 64,057 State Local ,488 16,209 Interest 6, Other ,405 Total revenues 6,376-39, ,676 EXPENDITURES: Advertising and marketing Allocation to Component Unit 3,228 (61,237) - - Contract services Dues, fees and memberships - - 4,000 - Enrollees: personnel Equipment rental and repair Indirect costs - 16, ,569 Insurance ,377 Consumables and printing ,922 Other and in-kind (0) 2,038 33,798 42,890 Personnel - 31, ,276 Personnel benefits - 9, ,525 Postage Provision for loan losses 25, Stipends Telephone Training/conference/workshops Travel ,457 Total expenditures 28,251-39, ,676 Excess (deficiency) of revenues over (under) expenditures (21,875) Program balances at beginning of year 364, ,849 - Program balances at end of year $ 342,760 $ - $ 109,849 $ - The notes to the financial statements are an integral part of this statement. 20

28 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures -- continued For the Year ended June 30, 2011 Ritchie RBEG Senior Community Service Employment Senior Companion Program REVENUES: Federal $ 15,000 $ 612,415 $ 193,625 State - - Local - 30,255 14,229 Interest Other - 119,268 18,008 Total revenues 15, , ,867 EXPENDITURES: Advertising and marketing - 1,549 - Allocation to Component Unit Contract services Dues, fees and memberships Enrollees: personnel - 499,801 - Equipment rental and repair Indirect costs - 33,095 19,610 Insurance Consumables and printing 0 2, Other and in-kind - 119,268 24,341 Personnel - 66,154 37,000 Personnel benefits - 13,769 9,692 Postage - 1,235 - Provision for loan losses Stipends ,407 Telephone Training/conference/workshops - 19,221 - Travel - 4,511 24,910 Total expenditures 0 762, ,867 Excess (deficiency) of revenues over (under) expenditures 15, Program balances at beginning of year 15, Program balances at end of year $ 31,075 $ - $ - The notes to the financial statements are an integral part of this statement. 21

29 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures -- continued For the Year ended June 30, 2011 WV Assoc. Reg. Plan & Dev. WWW Interstate Planning Commission Combined Total Special Revenue REVENUES: Federal $ - $ 270,044 $ 2,267,128 State - 31,069 54,616 Local (3,093) 33, ,751 Interest ,775 Other 3, ,443 Total revenues ,781 2,906,713 EXPENDITURES: Advertising and marketing - 2,842 14,706 Allocation to Component Unit - - (36,691) Contract services (2,500) 4,332 3,442 Dues, fees and memberships - 4,311 Enrollees: personnel ,801 Equipment rental and repair Indirect costs - 92, ,495 Insurance - - 3,926 Consumables and printing 2 4,754 19,020 Other and in-kind 25 4, ,860 Personnel - 173, ,500 Personnel benefits - 44, ,325 Postage ,808 Provision for loan losses ,941 Stipends ,810 Telephone - - 2,184 Training/conference/workshops 2,611 2,535 26,109 Travel - 4, ,915 Total expenditures ,781 2,985,465 Excess (deficiency) of revenues over (under) expenditures 0 - (78,752) Program balances at beginning of year - - 2,165,342 Program balances at end of year $ 0 $ - $ 2,086,590 The notes to the financial statements are an integral part of this statement. 22

30 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures Component Unit For the Year ended June 30, 2011 Economic Development Intermediary and Relending Administrative Program Facility Rental Totals REVENUES: Interest $ 89,583 $ 1,075 $ 90,659 Rental income - 82,745 82,745 Other 7,206-7,206 Total revenues 96,789 83, ,609 EXPENDITURES: Personnel Personnel benefits Equipment rental and repair - 1,978 1,978 Postage Utilities Insurance - 9,324 9,324 Interest 22,395-22,395 Indirect costs Contract services - 9,200 9,200 Other 36,796 44,657 81,454 Provision for loan losses 30,938-30,938 Depreciation - 29,098 29,098 Total expenditures 90,129 95, ,376 Changes in net assets 6,660 (11,426) (4,767) Net assets at beginning of year 914,882 1,207,802 2,122,684 Net assets at end of year $ 921,542 $ 1,196,376 $ 2,117,917 The notes to the financial statements are an integral part of this statement. 23

31 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures for Programs with Program Years differing from the Fiscal Year For the Year ended June 30, 2011 Appalachian Regional Commission Economic Development Administration Six Months Six Months Nine Months Three Months Ended 12/31/10 Ended 6/30/11 Ended 3/31/11 Ended 6/30/11 REVENUES: Federal $ 38,808 $ 58,212 $ 52,500 $ 15,064 State 25,940 (2,393) - - Local ,659 - Interest Other Total revenues 65,628 55,844 82,192 15,065 EXPENDITURES: Advertising and marketing Allocation to Component Unit Contract services Dues, fees and memberships Enrollees: personnel Equipment rental and repair Indirect costs 16,657 13,264 21,439 3,574 Insurance Consumables and printing 2, Other and in-kind Personnel 31,429 25,026 40,451 6,743 Personnel benefits 8,264 8,054 10,983 1,868 Postage Provision for loan losses Stipends Telephone Training, conference and workshops Travel 4,087 7,059 8,059 2,610 Total expenditures 65,628 55,844 82,192 15,065 Excess (deficiency) of revenues over (under) expenditures $ - $ - $ - $ (0) The notes to the financial statements are an integral part of this statement. 24

32 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures for Programs with Program Years differing from the Fiscal Year -- continued For the Year ended June 30, 2011 Foster Grandparents Retired Senior Volunteer Program Nine M onths Three M onths Nine M onths Three M onths Ended 3/31/11 Ended 6/30/11 Ended 3/31/11 Ended 6/30/11 REVENUES: Federal $ 286,729 $ 102,309 $ 44,057 $ 20,000 State Local 8,059 2,386 14,391 1,818 Interest Other 19,994 6,401 34,405 - Total revenues 314, ,103 92,857 21,819 EXPENDITURES: Advertising and marketing Allocation to Component Unit Contract services Dues, fees and memberships Enrollees: personnel Equipment rental and repair Indirect costs 14,465 5,265 8,533 3,036 Insurance ,377 Consumables and printing 4, ,918 4 Other and in-kind 30,164 9,508 40,832 2,058 Personnel 48,562 16,864 32,996 10,280 Personnel benefits 8,629 2,896 5,722 1,803 Postage Provision for loan losses Stipends 178,293 63, Telephone Training, conference and workshops Travel 30,020 12,529 2,856 1,601 Total expenditures 314, ,103 92,857 21,819 Excess (deficiency) of revenues over (under) expenditures $ - $ - $ - $ 0 The notes to the financial statements are an integral part of this statement. 25

33 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Program Revenues and Expenditures for Programs with Program Years differing from the Fiscal Year -- continued For the Year ended June 30, 2011 Senior Companion Program Six Months Six Months Ended 12/31/10 Ended 6/30/11 REVENUES: Federal $ 87,375 $ 106,250 State - - Local 16,199 1,809 Interest 3 2 Other 11,867 2,362 Total revenues 115, ,423 EXPENDITURES: Advertising and marketing - - Allocation to Component Unit - - Contract services - - Dues, fees and memberships - - Enrollees: personnel - - Equipment rental and repair - - Indirect costs 9,805 9,805 Insurance Consumables and printing Other and in-kind 18,669 5,672 Personnel 18,500 18,500 Personnel benefits 4,610 5,082 Postage - - Provision for loan losses - - Stipends 52,106 57,301 Telephone - - Training, conference and workshops - - Travel 11,384 13,526 Total expenditures 115, ,423 Excess (deficiency) of revenues over (under) expenditures $ - $ - The notes to the financial statements are an integral part of this statement. 26

34 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Indirect Cost Charged to Programs For the Year ended June 30, 2011 Indirect Costs Variance Budget Actual Inc. (Dec.) Indirect costs: Salaries and personnel $ 155,879 $ 154,707 $ (1,172) Personnel benefits 34,440 34,342 (98) Audit costs 22,200 41,583 19,383 Meals and meeting costs 1, (568) Consultants 1, (750) Dues 3,000 - (3,000) Service and miscellaneous 1, (1,301) Parking 10,080 10, Travel 15,000 11,115 (3,885) Insurance 7,648 7,648 (0) Office rental 58,236 58,236 - Office equipment 4,254 1,687 (2,567) Computer expense 16,000 22,330 6,330 Consumable supplies and printing 14,013 9,618 (4,395) Postage expense 2,500 2, Telephone expense 13,000 12,816 (184) Trash expense 1,536 1,536 - Cleaning and janitorial 1, (913) Advertising (300) Utilities 12,000 9,822 (2,178) Board of directors 1,675 1,255 (420) Training and education 5,000 4,560 (440) Total indirect before income offsets 382, ,655 4,294 Less: Contractual income 14,223 16,718 2,495 M&A charge to MOVWIC 75,197 75,051 (146) MOVADC indirect Interest income Total income offsets 89,420 92,159 2,739 Total indirect costs $ 292,941 $ 294,495 $ 1,554 The notes to the financial statements are an integral part of this statement. 27

35 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Expenditures of Federal Awards For the Year ended June 30, 2011 Federal Grantor Pass-through Grant Total Pass-through Grantor CFDA Grantor's Grant Federal Program Title Number Number End Expenditures U.S Department of Labor Pass-through the National Council on Aging, Inc Senior Community Service Employment Program AD BR /30/11 $ 519,798 Appropriation Act Senior Community Service Employment Program AD A /30/11 92,617 Total U.S Department of Labor 612,415 Corporation for National and Community Services Pass-through the Office of Economic Opportunity (OEO) SCSWV001 12/31/10 87,375 Senior Companion Program SC /31/11 106,250 ACTION: Foster Grandparent SFSWV002 3/31/11 286,729 ACTION: Foster Grandparent SF /31/12 102,309 Retired Senior Volunteer Program SFSWV006 3/31/10 44,057 Retired Senior Volunteer Program SR /31/11 20,000 Total Corporation for National and Community S ervices 646,720 Appalachian Regional Commission Revolving Loan Fund ,169,867 Appalachian Local Development District Assistance WV C37 12/31/10 38, WV-2284-C38 12/31/11 58,212 Total Appalachian Regional Commission 1,266,887 U.S. Department of Commerce, Economic Development Administration Revolving Loan Fund ,056 Support for Planning Organizations /31/11 52,500 Support for Planning Organizations /31/12 15,064 Total U.S. Department of Commerce, Economic Development Administration 406,620 Expenditures of Federal Awards $ 2,932,642 The notes to the financial statements are an integral part of this statement. 28

36 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Expenditures of Federal Awards (continued) For the Year ended June 30, 2011 Federal Grantor Pass-through Grant Total Pass-through Grantor CFDA Grantor's Grant Federal Program Title Number Number End Expenditures U.S. Department of Agriculture, Rural Business Cooperative S ervice Intermediary Relenting Program $ 891,668 Rural Business Enterprise Grant--RLF Program ,000 Total U.S. Department of Agriculture, Rural Business Cooperative S ervices 906,668 U.S. Department of Energy Pass-through the WV Division of Energy ARRA Energy Efficiency and Conservation Block Grant /180 10/25/12 600,852 U. S. Department of Transportation Passed through West Virginia DOT and Ohio DOT WV AU-18 6/30/10 OHIO DOTC /30/10 270,044 1,777,564 Total Expenditures of Federal Awards $ 4,710,206 The notes to the financial statements are an integral part of this statement. 29

37 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Notes to the Schedule of Expenditures of Federal Awards For the Year ended June 30, 2011 NOTE 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Mid-Ohio Valley Regional Planning and Development Council and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non- Profit Organizations. NOTE 2. LOANS RECEIVABLE OUTSTANDING MOVRC had the following balances of loans receivable outstanding at June 30, 2011, under federal loan programs. Federal Amount Program Title: CFDA Number Outstanding USEDA Revolving Loan Fund $ 289,556 Appalachian Regional Commission-RLF $ 973,729 Intermediary Relending Program $ 2,090,678 The notes to the financial statements are an integral part of this statement. 30

38 REPORTS ON INTERNAL CONTROL AND ON COMPLIANCE 31

39

40

41

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43 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Findings and Questioned Costs For the Year Ended June 30, 2011 Financial Statements Type of auditors report issued: Unqualified Internal control over financial reporting: Section I Summary of Auditors Results Material weakness(es) identified? Yes x No Significant deficiency(ies) identified that are not considered to be material weakness(es)? Yes x No Noncompliance material to the financial statements noted. Yes x No Federal Awards Internal control over major programs: Material weakness(es) identified? Yes x No Significant deficiency(ies) identified that are not considered to be material weakness(es)? Yes x No Type of auditor s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133 Yes x No Identification of major programs: Name of Federal Program or Cluster CFDA Number(s) ARRA Energy Efficiency and Conservation Block Grant Foster Grandparent Program Senior Companion Program Dollar threshold used to distinguish between Type A and Type B Programs: $ 300,000 Auditee qualified as a low-risk auditee? x Yes No 36

44 MID-OHIO VALLEY REGIONAL PLANNING AND DEVELOPMENT COUNCIL Schedule of Findings and Questioned Costs -- continued For the Year Ended June 30, 2011 Section II Financial Statement Findings There are no findings reported. Section III Federal Award Findings and Questioned Costs There are no findings or questioned costs reported. Section IV Corrective Action Plan A corrective action plan is not required since there are no findings of questioned costs. Section V Summary Schedule of Prior Audit Findings There were no findings or questioned costs reported. 37