BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. FINANCIAL STATEMENT AUDIT AND SUPPLEMENTAL INFORMATION DECEMBER31, 2017

Transcription

1 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. FINANCIAL STATEMENT AUDIT AND SUPPLEMENTAL INFORMATION DECEMBER31, 2017

2 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. TABLE OF CONTENTS DECEMBER 31,2017 Cover Page Table of Contents Independent Auditor's Report Statement of Net Assets Statement of Activities Statement of Cash Flows Notes to Financial Statements SUPPLEMENTARY INFORMATION Statement of Functional Expenses Report on Compliance and on Internal Control and other matters over financial reporting based on an audit of financial statements performed in accordance with Government Auditing Standards Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance Schedule of expenditures of Federal awards (SEF A) 21 Schedule of Findings and Questioned Costs Prior years Findings and Questioned Costs 23 2

3 DUANE BILLEDEAUX CERTIFIED PUBLIC ACCOUNTANT INDEPENDENT AUDITOR'S REPORT To the Board of Directors; Bakersfield American Indian Health Project, Inc. Bakersfield, California Report on Financial Statements I have audited the accompanying financial statements of the activities of Bakersfield American Indian Health Project, Inc. for the period ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the Bakersfield American Indian Health Project, Inc.'s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards, generally accepted in the United States of America and standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the 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 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, I express no such opinion. 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 financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Auditor's Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the activities of the Bakersfield American Indian Health Project, Inc., as of December 31, 2017, and the respective changes in financial position, and cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. 3

4 Report on Schedule ofexpenditnres of Federal Awards Required by the Uniform Guidance I have audited the financial statements of the, business-type activities, and the aggregate remaining fund information of Bakersfield American Indian Health Project, Inc. as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise Bakersfield American Indian Health Project, Inc.'s basis financial statements. I issued my report thereon dated May 14, 2018, which contained an unmodified opinion on those financial statements. My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basis financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Uniform Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and related directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated May 14, 2018 on my consideration of the Bakersfield American Indian Health Project, Inc.'s internal control over fmancial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audit. This report is intended solely for the information and use by Bakersfield American Indian Health Project, Inc.'s governing body and management, Federal awarding agencies and passes through entities and is not intended to be and should not be used by anyone other than these specified parties. Corona, California May 14,2018 P.O. Box Corona, CA Ph Fax

5 BAKERFIELD AMERICAN INDIAN HEALTH PROJECT, INC. STATEMENT OF NET ASSETS DECEMBER 31, 2017 Current Assets Cash and cash equivalents $ 232,173 $ 121,213 Accounts receivable 1,725 Grant receivable 89,624 Total Current Assets 233, ,837 Long-Term Assets Total Long-Term Assets Property and Equipment Property and equipment net of depreciation (note 2) Other Assets Total Other Assets Total Assets $ 233,898 $ 210,837 Current Liabilities Accounts payable-trade $ 31,694 $ 73,607 Deferred revenue (note 1) 62,529 Accrued payroll/vacation/sick pay (note 7) 5,733 5,100 Total Current Liabilities 99,956 78,707 Total Liabilities 99,956 78,707 Net Assets Unrestricted 133, ,130 Temporary Restricted (note 9) Permanently Restricted *For comparative purposes only Total Net Assets 133, ,130 Total Liabilities and Net Assets $ 233,898 $ 210,837 The accompanying notes are an integral part of these financial statements 5

6 BAKERFIELD AMERICAN INDIAN HEALTH PROJECT, INC. STATEMENT OF ACTIVITIES FOR THE PERIOD ENDED DECEMBER 31,2017 Unrestricted Revenue Contract revenue $ 967,273 $1,038,235 Other income 7,664 Donations 2,248 2,890 Total unrestricted revenue 977,185 1,041,125 Expenses Salary and wages 524, ,498 Fringe benefits 99, ,073 Client services 88, ,622 Outside services 25,257 14,205 Supplies 46,980 48,889 Facilities 127, ,802 Training and development 1,910 3,474 Operations (1,997) 1,340 Travel 11,147 7,887 Auto expenses 12,430 14,278 Equipment 26,450 22,360 Insurance 12,777 15,066 License, permits & fees 282 3,914 Other expenses 323 Total Expenses 975, ,408 Increase (decrease) in unrestricted net assets 1,812 42,717 Temporarily restricted net assets Increase (decrease) in temporarily restricted net assets Change in permanently restricted net assets Increase (decrease) in net assets 1,812 42,717 Net assets at the beginning of year 132,130 89,413 Net assets end of year $ 133,942 $ 132,130 *For comparative purposes only The accompanying notes are an integral part of these financial statements 6

7 BAKERFIELD AMERICfu""f INDIAN HEALTH PROJECT, INC. STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED DECEMBER 31, 2017 Cash flows From OQerating activities Revenue $ 1,812 Grants and contracts 152,152 Suppliers and others ~43,004) Net Cash provided (used) by operating activities 110,960 Cash flows from investing activities Net cash provided (used by) investing activities Cash flows from financing activities Net cash provided (used by) financing activities Net Increase (decrease) in cash and cash Equivalents 110,960 Cash and cash equivalents, beginning of year 121,213 Cash and cash equivalents, end of year $ 232,173 The accompanying notes are an integral part of these financial statements 7

8 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. (A NON-PROFIT CORPORATION) NOTES TO FINANCIAL STATMENTS DECEMBER 31, 2017 Note 1: Organization and Nature of Activities: Bakersfield American Indian Health Project, Inc. (BAIHP) was incorporated on April 16, 2012 under the laws ofthe State of California. BAIHP provides comprehensive health care services including medical, dental and, mental health to the Native-American population located primarily in Kern County, California. Summary of Significant Accounting Policies Basis of Accounting-Scope The financial statements are prepared on the accrual basis of accounting and accordingly reflect all significant receivable, payables, and other liabilities. These financial statements include all the activity ofbaihp that are under control of the BAIHP's Board of Directors. Cash and Cash Equivalents For purposes of the statement of cash flows, BAIHP considers all unrestricted highly liquid investments with an initial maturity of six months or less to be cash equivalents. Basis ofpresentation Financial Statement presentation follows the recommendations of the Financial Accounting Standards Board's (F ASB) Accounting Standards Codification (ASC) 958. Under ASC 958 the organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. In addition the organization is required to present a Statement of Cash Flows. Use ofestimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Contributions Under ASC 958, Accounting for Contributions Received and Contributions Made, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted net assets depending on the absence or existence and nature of any donor restrictions. 8

9 Income Taxes The organization is a not-for-profit organization exempt from Federal and State income taxes. Accordingly no allowance for income taxes has been made. Contingent Liabilities BAIHP participates in several contract and grant programs. These programs are subject to financial and compliance audits by the grantors or their representatives. Accordingly, until final approval of the operation of the contract or grant by the grantor, BAIHP has contingent liability to return contract or grant funds not used in accordance with the contract or grant terms. The amount, if any, of expenses which may be disallowed in the future, in the opinion ofbaihp would be immaterial. Revenue Recognition Unrestricted funds received for BAIHP's programs are recognized as support when received. Revenues are recorded at the gross amount of the billing. Amounts not collected from third party payers are written off to revenue adjustment accounts. Depending on the absence or existence and nature of any donor restrictions, restricted donor funds received in excess of expenses incurred, are reported as temporarily restricted or permanently restricted until the restriction is removed. Deferred Revenues Deferred revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources (money) are received before the agency has legal claim to them as when contract monies are received prior to the occurrence of qualifying expenditures. In subsequent periods, when the revenue recognition criteria are met or when the agency has a legal claim to the resources, the deferred revenue is recognized. Expenses Expenses charged to the various contracts must meet the specific criteria as set for by the funding sources in order to be classified as allowable costs. Basically, to be allowable, the costs must be: Provided for in the approved budget Adequately supported Incurred during the period authorized Not specifically defined as unallowable 9

10 Functional Expenses During the period, the agency allocated shared expenses based on budgets submitted to at the time of application, grant or contract agreement. The budgets were based on management's estimates oftime, material, joint costs and duties of each employee that worked on different projects and funding sources during the period. All shared costs were allocated between program and supporting services using indirect costing methods. Note 2: Equipment and Office Furniture Buildings, leasehold improvements, furniture, and equipment (over $5,000) are capitalized at cost and depreciated over estimated useful lives of five to seven years using straight line method, with half year's depreciation recognized in the years of acquisition and disposal. Depreciation for the year ended December 31,2017 is$ 0. BAIHP has no depreciable property. Note 3: Investments Under ASC 958, Accounting for Certain Investments by not-for-profit organizations investments in marketable securities with readily determinable fair market values and all investments in debt securities are reported at the fair market values in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in restricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. Note 4: Significant Concentrations of Credit Risk The agency maintains several bank accounts (demand and certificate) that may exceed Federal Deposit Insurance Corporation maximum amount of $250,000 per depositor at each institution. Collateral letters issued by the banks are maintained on all public funds covering the full amount of deposits held by the bank when exceeding the $250,000 FDIC limits. Note 5: Deposits BAIHP has no deposits. Note 6: Lease Commitments BAIHP currently has the following long-term lease obligation. Toshiba lease dated August 5, 2017 lease term 63 months. The minimum payments are$ per month plus tax. Minimum lease payments: / / / / / / / /31/2018 1,921. 1,921. 1,921. 1,921. 1,

11 Note 7: Accrued Payroll/Vacation/Sick Pay BAIHP employees are eligible for vacation every year. The amount of vacation is determined by the length of employment. A liability has been accrued for all employee vacation time and compensated time off which has been earned but not paid. Note 8: Lines of Credit The organization does not maintain any lines of credit. Note 9: Temporary Restricted Net Assets Temporary restricted net assets are donations and grants received by BAIHP that have time or use restrictions on the expensing of the funds. Temporary restricted net assets are recognized as unrestricted net assets when the time or use restrictions have been met. Note 10: Employee Benefit Programs BAIHP provides its employees with a benefit cash amount so the employee can obtain medical, dental benefits, and life insurance. BAIHP maintains a 403(b) program for its employees. There are currently no matching benefits available to the employees. Note 11: Accounts Receivable Receivables are stated at net of any allowances for doubtful accounts. The allowance for doubtful accounts at December 31, 2017 is $ 0. BAIHP expects to collect all of its Accounts Receivable. Note 12: Risk Management The agency is insured against losses related to general, property, auto liabilities and, workers' compensation claims. Note 13: Subsequent Events Events subsequent to December 31, 2107 have been evaluated through the date of the audit report, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading. Management found no subsequent events to be disclosed. 11

12 SUPPLEMENTAL INFORMATION (Page intentionally left blank) 12

13 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. STATEMENT OF FUCTIONAL EXPENSES FOR THE PERIOD ENDED DECEMBER31, 2017 Indian Health Sub Ab MH RPMSH HPDP Irnm SDPI MSPI Cal Works Acorns GenFund Total CEO $ 41,440 $ 10,231 $ 4,189 $ - $ 2,335 $ 2,197 $ 18,542 $ 961 $ 2,472 $ 34 $ - $ 82,401 Administrative/Site Manager 41,709 2,440 2,073 2,707 1, ,333 1, ,234 Bookkeeper/Human Resource 26,632 1, ,936 1, ,343 Admin Support Clerk 1, ,929 9,320 Domestic Vo/Peer Specialist 2,371 1, ,658 7, ,706 Substance Abuse Counselor 9,075 14,182 2, ,960 15,301 2, ,475 ACSW 1,975 5,462 1,214-2,765. 3,187 39, ,305 Public Health Nurse 13, , , ,934 Admin Support Clerk III 9, , , ,515 Behavioral Health Director 26,254 5,513 9, ,800 6,777 13,923 1,133-70,769 Diabetes Coordinator 2, ,068 3,829 1,992 1,145-58,638 Admin Support Clerk II 20,252 1, , ,012 Payroll Taxes 17,111 3,532 1, , ,947 6,771 3, ,231 Worker's Compensation 4, ,333 1, ,012 Health Insurance 17,028 3,185 1, , ,328 5,828 3, ,136 Medical Services 15, (126) 15,807 Pharmacy 30, ,375 Outside Laboratories 3, ,730 Dental Services 21, ,879 Vision/Eye Care 2, ,430 Podiatry Nutrition Fitness ,713 1,861 RD Counseling , ,500 RPMSD Related Cost lis Client transportation

14 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. STATEMENT OF FUCTIONAL EXPENSES FOR THE PERIOD ENDED DECEMBER 31,2016 Indian Health Sub Ab MH RPMSH HPDP Imm SDPI SDPI Cal Works Acorns GenFund Total Events ,176 Event Clubhouse Event Sobriety Event Cancer 1, ,101 Psychiatrist (126) 158 Other Client Services 2, ,123 Payroll Service 1, ,346 Background Checks ,052 Marketing 13, ,433 Computer Software I Lie Fee Consultant - Other 6, ,617 Office Supplies 4,044 1, ,437 Dues and Subscriptions ,348 1,569 Bank Charges ,250 1,250 Postage & Delivery ,510 Supplies- Medical Supplies- Non Medical 13, (4) 1,036 3,900 1,905 13, (6) 34,961 Supplies-NCCC Rent 58,9ll 20, ,682 10, ,116 Storage 1, ,911 Communications 4,365 1, , ,080 Insurance Other Bldg Maint & Janitorial Professional Development ,910 14

15 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. STATEMENT OF FUCTIONAL EXPENSES FOR THE PERIOD ENDED DECEMBER 31, 2016 Indian Health SubAb MH RPMSH HPDP Imm SDPI SDPI Cal Works Acorns Donations Total Registration Supplies Client or Employee Expenses (2,288) (2,288) Other Costs Staff Travel- Per Diem 829 (296) ,767 Staff Travel- Lodging 1,697 (437) 828-1, ,606 5,713 StaffTravel- Transpiration , ,148 Mileage & Parking - (327) Auto Expense Auto Rental & Leasing 4,132 4, , ,246 Equipment Purchase< $ ,789 1, , ,653 Equip. Rental & Maintenance 2, ,797 Finance Charges Insurance - Auto 3, , ,042 Insurance - Professional 4, , ,735 License, Permits & Fees Recreation Fees Other Expenses Total Expense L4iQ,~61 t~l4,j88!_ 31J57_ $ ~146 $_~4,497 $ 9,490 $181,673 $116,437 $51,947 $ 8,413 $ 10,765 $975,374 The accompanying notes are an integral part of these financial statements 15

16 DUANE BILLEDEAUX CERTIFIED PUBLIC ACCOUNTANT 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 To Board ofdirectors: Bakersfield American Indian Health Project, Inc. Bakersfield, California I have audited in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the activities, the business-type activities, and the aggregate remaining information of Bakersfield American Indian Health Project, Inc., as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise Bakersfield American Indian Health Project, Inc.'s basic financial statements, and have issued my report dated May 14,2018. Internal Control over Financial Reporting In planning and performing my audit, I considered Bakersfield American Indian Health Project, Inc.'s internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Bakersfield American Indian Health Project, Inc.'s internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of Bakersfield American Indian Health Project, Inc.'s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less than a material weakness, yet important enough to merit attention by those charged with governance. My consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal 16

17 control that might be material weaknesses or significant deficiencies. Given these limitations, during my audit I did not identify any significant deficiencies in internal control that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Bakersfield American Indian Health Project, Inc.'s financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness ofthe entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. LJ&r Corona, California May 14,2018 P.O. Box 79473, Corona, CA Phone Fax

18 DUANE BILLEDEAUX CERTIFIED PUBLIC ACCOUNTANT REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To Board of Directors: INDEPENDENT AUDITOR'S REPORT Bakersfield American Indian Health Project, Inc. Bakersfield, California Report on Compliance for Each Major Federal Program I have audited the compliance of Bakersfield American Indian Health Project, Inc. with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of Bakersfield American Indian Health Project, Inc.'s major federal programs for the year ended December 31, Bakersfield American Indian Health Project, Inc.'s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility My responsibility is to express an opinion on compliance for each of Bakersfield American Indian Health Project, Inc.'s major federal programs based on my audit of the types of compliance requirements referred to above. I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 US. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that I plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Bakersfield American Indian Health Project, Inc.'s compliance with those requirements and performing such other procedures as I considered necessary in the circumstances. 18

19 I believe that my audit provides a reasonable basis for my opinion on compliance for each major federal program. However my audit does not provide a legal determination of Bakersfield American Indian Health Project, Inc.'s compliance with those requirements. Opinion on Each Major Federal Program In my opinion, Bakersfield American Indian Health Project, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31,2017. Internal Control over Compliance The management of Bakersfield American Indian Health Project, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of requirements referred to above. In planning and performing my audit of compliance, I considered Bakersfield American Indian Health Project, Inc.'s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of Bakersfield American Indian Health Project, Inc.'s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with the type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those in charged with governance. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. I did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 19

20 The purpose of this report on internal control over compliance is solely to describe the scope of my testing of internal control over compliance and the results ofthat testing on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Corona, California May 14, 2018 PO. Box 79473, Corona, CA Phone Fax

21 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS DECEMBER 31, 2017 Federal Programs U.S. Department of Health and Human Services *Contracted Tribal Health Diabetes Program Methamphetamine and Suicide Prevention (MSPI) Four in one service programs Total Department of Health and Human Services CFDA $ Grant Expenditures Current Year 450, , , , ,248 Total Federal Financial Assistance $ 904,248 * major program NOTE-BASIS OF PRESENTATION SCHEDULE OF EXPENDITURES FEDERAL AWARDS The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of Bakersfield American Indian Health Project, Inc. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Guidance Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The amounts presented in the schedule agree to the amounts presented in or used in preparation ofthe basic financial statements. The schedule is presented using the accrual basis of accounting, which is described in the Summary of Significant Accounting Policies to the Housing Authorities basis financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited to the reimbursement. Bakersfield American Indian Health Project, Inc. has elected not to use the 10% de minimis cost rate as covered in Uniform Guidance. See accompany accountant's notes to these financial statements 21

22 BAKERSFIELD AMERICAN INDIAN HEALTH PROJECT, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD ENDED DECEMBER 31, 2017 Summary of Auditor's Results 1. The auditor's report expresses an unmodified opinion on the financial statements of the Bakersfield American Indian Health Project, Inc. 2. Internal control over financial reporting: Material weakness( es) in internal control identified? yes _x_ no Significant deficiency(ies) in internal control? yes _A_ none reported. Noncompliance material to financial statements noted? yes X no 3. Federal Awards: Internal control over major programs: Material weakness(es) in internal control over major programs identified? yes X no Significant deficiency(ies)in internal control over major programs?_ yes none reported X 4. Type of auditor's report issued on compliance for major programs is unmodified. 5. Any audit findings disclosed that are required to be reported as required by the Uniform Guidance? yes X no 7. The program tested as a major program: CFDA The threshold used for distinguishing between Type A and B programs was $750, Bakersfield American Indian Health Project, Inc. qualified as a low-risk auditee. 22

23 BAKERSFIELD AMERIAN INDAIN HEALTH PROJECT, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2017 CURRENT YEAR FINDINGS None BAKERSFIELD AMERIAN INDAIN HEALTH PROJECT, INC. PRIOR YEARS FINDINGS AND QUESTIONED COSTS DECEMBER31, 2017 None END OF REPORT 23