EDWIN GOULD SERVICES FOR CHILDREN AND FAMILIES CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR S REPORT JUNE 30, 2015

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1 EDWIN GOULD SERVICES FOR CHILDREN AND FAMILIES CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR S REPORT

2 TABLE OF CONTENTS Independent Auditor s Report Exhibit A - Consolidated Balance Sheet B - Consolidated Statement of Activities C - Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Schedule 1 - Consolidating Schedule of Functional Expenses 2 - Consolidating Balance Sheet 3 - Consolidating Schedule of Activities

3 Independent Auditor s Report Board of Directors Edwin Gould Services for Children and Families Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Edwin Gould Services for Children and Families, which comprise the consolidated balance sheet as of June 30, 2015, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. Auditors Auditors and Consultants and Consultants Serving Serving the Health the Health Care & Care Not for & Not Profit for Sectors Profit Sectors 655 Third 655 Avenue, Third Avenue, 12th Floor, 12th New Floor, York, New NY York, NY (212) (212) / Fax (212) / Fax (212) / /

4 An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Edwin Gould Services for Children and Families as of June 30, 2015, and the changes in their net assets and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter The accompanying financial statements have been prepared assuming that Edwin Gould Services for Children and Families will continue as a going concern. As discussed in Note 13 to the financial statements, Edwin Gould Services for Children and Families has suffered recurring losses and has a net assets deficiency. This condition raises substantial doubt about Edwin Gould Services for Children and Families ability to continue as a going concern. Management s plans in regard to this matter are also described in Note 13. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Opinion on Supplementary Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The information included in Schedules 1 through 3 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole. 2. February 26, 2016

5 EXHIBIT A EDWIN GOULD SERVICES FOR CHILDREN AND FAMILIES CONSOLIDATED BALANCE SHEET ASSETS Current assets Cash and cash equivalents $ 952,112 Accounts receivable - net 5,608,529 Prepaid expenses and other current assets 146,259 Total current assets 6,706,900 Fixed assets Buildings and apartments 2,992,388 Leasehold improvements 920,036 Equipment 586,661 Furniture and fixtures 738,880 Total fixed assets 5,237,965 Accumulated depreciation and amortization (1,780,839) Fixed assets - net 3,457,126 Other Security deposits 305,145 Total assets $ 10,469,171

6 CONSOLIDATED BALANCE SHEET EXHIBIT A -2- LIABILITIES AND NET ASSETS Current liabilities Accounts payable and accrued expenses $ 1,781,368 Accrued compensation 580,068 Due to foster parents 530,916 Advances from government agencies 62,041 Current maturities of long-term debt 1,016,628 Line of credit 1,190,000 Due to New York City Administration for Children's Services (ACS) and other funding sources 1,040,146 Total current liabilities 6,201,167 Long-term liabilities Deferred rent 986,516 Long-term debt, less current maturities 2,084,367 Due to New York City Administration for Children's Services (ACS) 1,354,364 Total long-term liabilities 4,425,247 Total liabilities 10,626,414 Net assets (deficit) (Exhibit B) Unrestricted (232,243) Temporarily restricted 70,000 Permanently restricted 5,000 Total net assets (deficit) (157,243) Total liabilities and net assets $ 10,469,171 See independent auditor's report. The accompanying notes are an integral part of these statements.

7 EXHIBIT B CONSOLIDATED STATEMENT OF ACTIVITIES YEAR ENDED Temporarily Permanently Unrestricted Restricted Restricted Total Revenue Government program services $ 31,931,781 $ 31,931,781 Public support 217,460 $ 70, ,460 Special events revenue $ 214,221 Less direct costs of special events (24,183) 190, ,038 Interest and dividends Miscellaneous 1,904 1,904 Net assets released from restrictions 60,000 (60,000) Total revenue 32,401,420 10,000 32,411,420 Expenses Program services Permanency services 13,071,242 13,071,242 ACS preventive services 4,648,840 4,648,840 Other preventive services 2,515,939 2,515,939 Medical and psychological services 1,353,252 1,353,252 Office for People With Developmental Disabilities (OPWDD) 7,298,308 7,298,308 Other 1,233,213 1,233,213 Kingsland Services Fund, Inc. 2,842 2,842 Total program services 30,123,636 30,123,636

8 CONSOLIDATED STATEMENT OF ACTIVITIES EXHIBIT B -2- YEAR ENDED Temporarily Permanently Unrestricted Restricted Restricted Total Expenses (continued) Supporting services Management and general $ 4,315,438 $ 4,315,438 Fund raising 135, ,035 Total supporting services 4,450,473 4,450,473 Total expenses (including interest expense of $157,135) 34,574,109 34,574,109 Change in net assets (Exhibit C) (2,172,689) $ 10,000 (2,162,689) Net assets - beginning of year 1,940,446 60,000 $ 5,000 2,005,446 Net assets (deficit) - end of year (Exhibit A) $ (232,243) $ 70,000 $ 5,000 $ (157,243) See independent auditor's report. The accompanying notes are an integral part of these statements.

9 EXHIBIT C CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED Cash flows from operating activities Change in net assets (Exhibit B) $ (2,162,689) Adjustments to reconcile change in net assets to net cash used by operating activities Depreciation and amortization 359,721 Decrease (increase) in assets Accounts receivable 407,083 Prepaid expenses and other current assets 229,201 Security deposits 6,739 Increase in liabilities Accounts payable, accrued expenses and compensation and deferred rent 412,453 Due to foster parents 24,205 Advances from governmental agencies and other funding sources 31,965 Due to New York City Administration for Children's Services (ACS) and other funding sources 612,938 Net cash used by operating activities (78,384) Cash flows from investing activities Fixed asset purchases (1,051,085) Cash flows from financing activities Principal payments on long-term debt (298,252) Proceeds from long-term debt 1,481,621 Repayment on line of credit (210,000) Proceeds from line of credit 900,000 Net cash provided by financing activities 1,873,369 Net change in cash and cash equivalents 743,900 Cash and cash equivalents - beginning of year 208,212 Cash and cash equivalents - end of year $ 952,112 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 157,135 See independent auditor's report. The accompanying notes are an integral part of these statements.

10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - NATURE OF ORGANIZATION Edwin Gould Services for Children and Families ( EGSCF ) is a voluntary, not-for-profit agency. EGSCF provides a wide range of programs, including preventive services, educational and vocational training, permanency and adoption services, residential group care, health and medical care, and psychiatric and psychological services in metropolitan New York. The community-based preventive services include counseling services for victims of domestic violence, services to families and children residing in city-owned and managed apartments, and services to incarcerated mothers and their families. EGSCF receives significant support through government contracts in addition to support received from other sources. The operations of EGSCF are dependent upon the continuation of government contracts. EGSCF has full voting interest in Kingsland Services Fund, Inc. ( Kingsland ), a not-for-profit corporation. Kingsland owns shares in two real estate co-op properties that were donated to Kingsland by the Edwin Gould Foundation. EGSCF presently occupies these properties and pays the maintenance fees directly to the property management companies. EGSCF and Kingsland are collectively referred to as the Companies. The Companies were incorporated as separate not-for-profit corporations under the laws of the State of New York and are exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting - The financial statements are prepared on the accrual basis of accounting. Basis of consolidation - All material intercompany balances and transactions have been eliminated in the consolidation. Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

11 2. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and cash equivalents - Cash and cash equivalents include investments in highly liquid securities with maturities, when acquired, of three months or less. Accounts receivable and allowance for doubtful accounts - The Companies record receivables based on established contracts and rates for services provided. Receivables are charged to bad debt expense when they are determined to be uncollectible based upon a periodic review of the accounts by management. Factors used to determine whether an allowance should be recorded include the age of the receivable and a review of payments subsequent to year end. Interest is not charged on outstanding receivables. Accounts receivable are recorded net of allowances for doubtful accounts of $1,000,000 as of June 30, Fixed assets - The Companies capitalize all purchases of property and equipment equal to or in excess of $1,000 with estimated useful lives in excess of one year. Fixed assets are stated at cost. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets which range from 3 to 25 years. Amortization of leasehold improvements has been provided over the lesser of the estimated useful lives of the assets or the related lease term. Due to foster parents - Due to foster parents represents amounts due for services provided in the prior month. Advances from government agencies - Advances from government agencies represent government contract receipts in excess of amounts recognized. Due to New York City Administration for Children s Services (ACS) and other funding sources - Due to ACS represents accrual for audits and draft audits by ACS and other funding sources and roll forward estimates for periods not yet audited. Net assets - Unrestricted net assets are those whose use by the Companies has not been restricted by donors. Temporarily restricted net assets are those whose use by the Companies has been limited by donors to a specific time period or purpose. Permanently restricted net assets have been restricted by donors to be maintained by the Companies in perpetuity. Government program services - Government program services revenue is accounted for at established billing rates for care days/service units rendered. Such reimbursement rates are subject to change and retroactive adjustment on the basis of review by the government agencies responsible for such funding. Provisions for settlements are accrued on an estimated basis in the period in which the related services are rendered. Final determination of reimbursement rates is subject to audit and review. Any differences between estimated reimbursement and any subsequent revisions thereto are included in operations in the year of such review or settlement.

12 3. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contributions - Unconditional contributions, including promises to give cash and other assets, are reported at fair value at the date the contribution is received. The gifts are reported as temporarily restricted or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified as unrestricted net assets and reported in the consolidated statement of activities as net assets released from restrictions. Advertising - Advertising costs are expensed as incurred. Rent expense - Rent is recorded in accordance with generally accepted accounting principles. The impact of reflecting rent on the straight-line basis is recorded when material. Pass-through expenses - Pass-through expenses include payments to foster parents and others for services and goods they provided for foster children. Client-related services - Client-related services include payments to providers for services provided directly to clients. Functional expenses - The costs of providing the Companies programs and other activities have been summarized on a functional basis. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Uncertainty in income taxes - The Companies have determined that there are no material uncertain tax positions that require recognition or disclosure in the consolidated financial statements. Periods ending June 30, 2012 and subsequent remain subject to examination by applicable taxing authorities. Subsequent events - Subsequent events have been evaluated through February 26, 2016, which is the date the consolidated financial statements were available to be issued.

13 4. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 - ACCOUNTS RECEIVABLE - GOVERNMENT PROGRAM SERVICES Accounts receivable from government agencies are as follows: New York City Administration for Children s Services $ 3,912,466 New York City Human Resources Administration 803,918 New York State Office for People With Developmental Disabilities 903,663 Medicaid 363,343 Other 625,139 6,608,529 Less allowance for doubtful accounts (1,000,000) $ 5,608,529 NOTE 4 - LINE OF CREDIT EGSCF had a line of credit that expired on January 31, EGSCF renewed the line of credit and the line expired on January 31, EGSCF is currently working with the financial institution to extend the term. The executed line of credit is for $1,500,000. The agreement requires interest to be charged at a rate equal the bank s prime rate plus 2% (3.50% at June 30, 2015). The line of credit is secured by all the assets of EGSCF. The outstanding balance is $1,190,000 as of June 30, EGSCF is subject to certain covenants which, among other things, maintain a minimum debt service ratio and minimum net worth. In addition, there are reporting requirements as well. EGSCF was not in compliance as of June 30, NOTE 5 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes: Steps to End Family Violence $ 70,000 Temporarily restricted net assets were released from donor restrictions by incurring expenses satisfying the restricted purpose specified by donor as follows: Steps to End Family Violence $ 60,000

14 5. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 - PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets as of June 30, 2015 consist of the following: Endowment funds - general operations $ 5,000 NOTE 7 - GOVERNMENT PROGRAM SERVICES Government program services revenue, including pass-through from the federal government, consists of the following for the year ended June 30, 2015: New York City Administration for Children s Services $ 19,989,913 New York City Human Resources Administration 1,473,747 Office of the Criminal Justice Coordinator 462,991 New York State Office for People With Developmental Disabilities 7,699,535 Medicaid 1,833,153 Office of Children and Family Services 139,266 Other 333,176 $ 31,931,781 NOTE 8 - PENSION PLAN EGSCF has a profit-sharing plan covering substantially all of its employees meeting certain eligibility requirements. Contributions to the plan are discretionary. There was no expense for the year ended June 30, 2015.

15 6. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 - COMMITMENTS AND CONTINGENCIES EGSCF is committed under various noncancelable operating leases for office space and group homes. Total rent expense for the year ended June 30, 2015 amounted to $2,230,810. The leases expire at various dates through August 31, 2025 and provide for minimum annual rentals as follows: Year Ending June $ 1,887, ,569, ,588, ,712, ,764,985 Thereafter 8,689,588 $ 17,212,748 The leases provide that escalations be paid for increases in real estate taxes and operating expenses. Laws and regulations governing Medicaid and other government programs are complex and subject to interpretation. Noncompliance with such laws and regulations could result in fines, penalties and exclusion from the Medicaid and other government agency programs. The Companies are responsible to report to and are regulated by various governmental third parties, among which are the Centers for Medicare and Medicaid Services (CMS), the New York Office for People With Developmental Disabilities (OPWDD), New York City Administration for Children s Services (ACS) and New York City Human Resources Administration (HRA). These agencies, as well as the New York State Office of the Attorney General s Medicaid Fraud Control Unit (MFCU), the Internal Revenue Service, the New York State Office of the Attorney General s Charities Bureau, the New York State Department of Health s Independent Office of Medicaid Inspector General (OMIG), and other agencies have the right to audit fiscal as well as programmatic compliance requirements.

16 7. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 - COMMITMENTS AND CONTINGENCIES (continued) The Companies have entered into a payment plan with ACS for $1,404,364 of recoupments. Payments are due as follows: 2016 $ 50, , , , ,727 Thereafter 451,456 $ 1,404,364 The Companies are involved in various claims and legal actions arising in the ordinary course of business. Management is of the opinion that the ultimate outcome of these matters is not expected to have a material adverse impact on the financial position of the Companies or the results of their operations. EGSCF is currently under litigation with 103 East 125 th Street Realty Corp. against the Company for breach of a lease agreement dated October 10, Damages claimed are $4,150,079. And EGSCF had asserted a counterclaim in the amount of $6,000,000. The result of the litigation is undetermined as of June 30, Future payment for this lease is not included in the rental future payout schedule due to the pending litigation. NOTE 10 - FUNCTIONAL EXPENSES Expenses are functionalized as follows: Program service expenses $ 30,123,636 Management and general 4,315,438 Fund raising 135,035 Direct costs of special events 24,183 Total expenses $ 34,598,292

17 8. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 - MORTGAGES PAYABLE On November 1, 2011, EGSCF borrowed $1,068,606 relating to the purchase and renovation of property in the Bronx, New York. The loan is evidenced by two mortgage notes as following: a) Loan in the amount of $1,033,806 maturing November 1, Principal payments of $5,743 are due monthly plus interest calculated at 5.20% per annum. The balance on this loan at June 30, 2015 was $786,842. b) Loan in the amount of $34,800 which matured November 1, Principal payments of $2,900 were due monthly plus interest calculated at 3.85% per annum. There was no balance on this loan at June 30, The loans are secured by mortgages on the land, building and fixtures of the Bronx property. The loan terms include certain financial reporting adjustments, which were not met as of the date the financial statements were available to be issued. Scheduled future principal payments are as follows: Year Ending June $ 68, , , , ,920 Thereafter 442,242 $ 786,842 In July 2013, EGSCF entered into a 15-year mortgage for the purchase of a Queens property for a new IRA Program. The loan was in the amount of $754,441 and matures July Principal payments of $4,191 are due monthly, plus interest calculated at 4.10% per annum. The balance on this loan at June 30, 2014 was $658,041. The loan is secured by mortgage on the land, building and fixtures of the Queens property.

18 9. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 - MORTGAGES PAYABLE (continued) EGSCF is subject to covenants which requires to maintain a minimum debt service coverage ratio. EGSCF was not in compliance as of June 30, 2015, and this loan was reported as a current liability as of June 30, Scheduled future principal payments based on the loan agreement are as follows: 2016 $ 50, , , , ,296 Thereafter 406,561 $ 658,041 In November 2014, EGSCF entered into a 15-year mortgage for the purchase of a Manhattan property for a new IRA Program. The loan was in the amount of $1,181,621 and matures July Principal payments of $6,565 are due monthly, plus interest calculated at 5.00% per annum. The loan is secured by mortgage on the land, building and fixtures of the Manhattan property. The loan terms include certain financial reporting requirements, which were not met as of the date the financial statements were available to be issued. Scheduled future principal payments are as follows: 2016 $ 78, , , , ,775 Thereafter 741,793 $ 1,135,668

19 10. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 - LOANS PAYABLE In August 2011, June 2013 and April 2015, EGSCF entered into five loans totaling $971,434 for equipment purchases, renovations and capital expenditures on properties. The loans are secured by all the assets of EGSCF, and payable over 5 years with monthly payments of principal plus interest calculated between 3.50% and 4.75%. The loans mature between August 1, 2016 and June 14, The balance due at June 30, 2015 is $520, $ 210, , , , ,371 $ 520,444 NOTE 13 - FINANCIAL CONDITION AND MANAGEMENT S PLAN (UNAUDITED) Over the years, particularly in the period from FY , Edwin Gould has recorded recurring losses on its financial report. In addition, at June 30, 2015, the financial statements reflect a net asset deficit. The management team of Edwin Gould has taken steps to reduce these losses by implementing deficit expense reduction program plan. This plan entails closing of programs incurring significant deficits (Day Hab/Mount Vernon) and where necessary discretionary spending will be reduced on various budgets. In 2016, we will continue our effort to reduce expenses and will concentrate on growing revenues by pursuing and accepting contracts capable of growing revenues at a faster rate than expenses.

20 SCHEDULE 1 CONSOLIDATING SCHEDULE OF FUNCTIONAL EXPENSES YEAR ENDED Program Services Supporting Services ACS Other Medical and Kingsland Management Permanency Preventive Preventive Psychological Services and Fund Services Services Services Services OPWDD Other Fund, Inc. Total General Raising Total Salaries and wages $ 3,483,852 $ 3,171,153 $ 1,604,396 $ 430,785 $ 4,498,136 $ 645,234 $ 13,833,556 $ 1,947,707 $ 15,781,263 Fringe benefits 654, , ,979 78, , ,693 2,666, ,781 3,010,528 Medical services 484,472 2, , ,880 Purchase of services 515,864 89,107 76, , ,714 30,086 1,008, ,838 $ 122,082 1,364,500 Legal and auditing 269,302 7,142 5,937 3,465 16,428 $ 2, , , ,287 Consumable supplies 57,762 68,927 31,606 63, ,287 12, , ,807 2, ,795 Rent 766, , , , , ,601 1,992, ,596 2,230,810 Insurance 122,914 63,697 36,284 10,142 71,472 7, ,504 80, ,120 Repairs and maintenance 145,356 4,706 2, , ,899 35, ,284 Equipment rental 147,723 36,888 14,526 11, ,025 16, ,178 31, ,552 Telephone 161,059 65,038 27,390 19,272 84,181 43, ,585 78, ,127 Travel 45,360 24,918 5, ,194 5,013 91,251 6, ,541 Dues, licenses and subscriptions 5, , ,312 1, ,186 26,208 2,867 73,261 Utilities 65,873 63,672 15,285 10,125 60,736 11, ,052 19, ,135 Staff training 21,120 11,933 28,063 19,306 3,900 84,322 1, ,484 Pass-through expenses 6,145,081 6,145,081 6,145,081 Client related services 285,496 33, , , , , ,633 Advertising 2, , ,915 7,232 3,460 10,692 Printing and postage 14,206 1, ,108 1,269 7,056 25,795 5,845 1,542 33,182 Interest , ,812 43,654 1, ,135 Bad debt 24,579 16,450 41, , ,267 Other 22,083 1,242 1, , ,412 77,939 3, ,831 Total expenses before depreciation and amortization 12,931,540 4,648,840 2,514,067 1,347,873 7,147,126 1,233,213 2,842 29,825,501 4,253, ,035 34,214,388 Depreciation and amortization 139,702 1,872 5, , ,135 61, ,721 Total functional expenses $ 13,071,242 $ 4,648,840 $ 2,515,939 $ 1,353,252 $ 7,298,308 $ 1,233,213 $ 2,842 $ 30,123,636 $ 4,315,438 $ 135,035 $ 34,574,109 See independent auditor's report.

21 SCHEDULE 2 CONSOLIDATING BALANCE SHEET Edwin Gould Services for Kingsland Total Children and Services Before Total Families Fund, Inc. Eliminations Eliminations Consolidated ASSETS Current assets Cash and cash equivalents $ 916,132 $ 35,980 $ 952,112 $ 952,112 Accounts receivable - net 5,608,529 5,608,529 5,608,529 Prepaid expenses and other current assets 139,249 7, , ,259 Due from Edwin Gould Services for Children and Families 624, ,428 $ (624,428) Total current assets 6,663, ,418 7,331,328 (624,428) 6,706,900 Fixed assets Buildings and apartments 2,992,388 2,992,388 2,992,388 Leasehold improvements 920, , ,036 Equipment 586, , ,661 Furniture and fixtures 738, , ,880 Total fixed assets 5,237,965 5,237,965 5,237,965 Accumulated depreciation and amortization (1,780,839) (1,780,839) (1,780,839) Fixed assets - net 3,457,126 3,457,126 3,457,126 Other Security deposits 305, , ,145 Total assets $ 10,426,181 $ 667,418 $ 11,093,599 $ (624,428) $ 10,469,171

22 CONSOLIDATING BALANCE SHEET SCHEDULE 2-2- LIABILITIES AND NET ASSETS Edwin Gould Services for Kingsland Total Children and Services Before Total Families Fund, Inc. Eliminations Eliminations Consolidated Current liabilities Accounts payable and accrued expenses $ 1,781,368 $ 1,781,368 $ 1,781,368 Accrued compensation 580, , ,068 Due to foster parents 530, , ,916 Advances from government agencies 62,041 62,041 62,041 Current maturities of long-term debt 1,016,628 1,016,628 1,016,628 Line of credit 1,190,000 1,190,000 1,190,000 Due to New York City Administration for Children's Services (ACS) and other funding sources 1,040,146 1,040,146 1,040,146 Due to Kingsland Services Fund, Inc. 624, ,428 $ (624,428) Total current liabilities 6,825,595 6,825,595 (624,428) 6,201,167 Long-term liabilities Deferred rent 986, , ,516 Long-term debt, less current maturities 2,084,367 2,084,367 2,084,367 Due to New York City Administration for Children's Services (ACS) 1,354,364 1,354,364 1,354,364 Total long-term liabilities 4,425,247 4,425,247 4,425,247 Total liabilities 11,250,842 11,250,842 (624,428) 10,626,414 Net assets (deficit) Unrestricted (899,661) $ 667,418 (232,243) (232,243) Temporarily restricted 70,000 70,000 70,000 Permanently restricted 5,000 5,000 5,000 Total net assets (deficit) (824,661) 667,418 (157,243) (157,243) Total liabilities and net assets $ 10,426,181 $ 667,418 $ 11,093,599 $ (624,428) $ 10,469,171 See independent auditor's report.

23 SCHEDULE 3 CONSOLIDATING SCHEDULE OF ACTIVITIES YEAR ENDED Edwin Gould Services for Kingsland Total Children and Services Before Total Families Fund, Inc. Eliminations Eliminations Consolidated Revenue Government program services $ 31,931,781 $ 31,931,781 $ 31,931,781 Public support 287, , ,460 Special events revenue $ 214,221 Less direct costs of special events (24,183) 190, , ,038 Interest and dividends 49 $ Miscellaneous 1,904 1,904 1,904 Total revenue 32,411, ,411,420 32,411,420 Expenses Program services Permanency services 13,071,242 13,071,242 13,071,242 ACS preventive services 4,648,840 4,648,840 4,648,840 Other preventive services 2,515,939 2,515,939 2,515,939 Medical and psychological services 1,353,252 1,353,252 1,353,252 Office for People With Developmental Disabilities (OPWDD) 7,298,308 7,298,308 7,298,308 Other 1,233,213 1,233,213 1,233,213 Kingsland Services Fund, Inc. 2,842 2,842 2,842 Total program services 30,120,794 2,842 30,123,636 30,123,636 Supporting services Management and general 4,315,438 4,315,438 4,315,438 Fund raising 135, , ,035 Total supporting services 4,450,473 4,450,473 4,450,473 Total expenses 34,571,267 2,842 34,574,109 34,574,109 Change in net assets (2,160,035) (2,654) (2,162,689) (2,162,689) Net assets - beginning of year 1,335, ,072 2,005,446 2,005,446 Net assets (deficit) - end of year $ (824,661) $ 667,418 $ (157,243) $ (157,243) See independent auditor's report.