MANAGED ACCESS TO CHILD HEALTH, INC. (A Nonprofit Organization) JACKSONVILLE, FLORIDA FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

Transcription

1 (A Nonprofit Organization) JACKSONVILLE, FLORIDA FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

2 JACKSONVILLE, FLORIDA TABLE OF CONTENTS INDEPENDENT AUDITORS REPORT 1-2 Page FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Statements of Functional Expenses 6 Notes to Financial Statements 7-13 SUPPLEMENTAL SCHEDULES Schedule of Expenditures of Federal Awards by Grant Schedule of Findings and Questioned Costs 16 Schedules of Source and Expenditures of City of Jacksonville ( City ) Grant Funds - JCC Per Ordinance Code Chapter (e) REPORT ON INTERNAL CONTROL AND COMPLIANCE REPORT ON MAJOR PROGRAM AND PROJECT COMPLIANCE REQUIREMENTS 22-23

3 STEVENS, POWELL & COMPANY, P.A. A Professional Association of Certified Public Accountants mail@stevens-powell-cpa.com Toll-free Telephone: Baymeadows Road, Suite 2 Tel: Jacksonville, Florida Fax: INDEPENDENT AUDITORS REPORT To the Audit Committee Managed Access to Child Health, Inc. Jacksonville, Florida Report on the Financial Statements We have audited the accompanying financial statements of Managed Access to Child Health, Inc., a nonprofit organization (the Organization ), which comprise the statements of financial position as of June 30, 2016 and 2015, and the related statements of activities, cash flows, and functional expenses for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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. Those standards require that we plan and perform the audits 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 Organization 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 Organization s internal control. Accordingly, we 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. Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants AICPA Private Companies Practice Section AICPA Employee Benefit Plan Audit Quality Center

4 To the Audit Committee Managed Access to Child Health, Inc. 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 financial statements referred to above present fairly, in all material respects, the financial position of Managed Access to Child Health, Inc., as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplemental schedules of source and expenditures of the City of Jacksonville Grant Funds - JCC are presented for purposes of additional analysis as required by the City of Jacksonville grants, and are not a required part of the 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 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 our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 26, 2016, on our consideration of Managed Access to Child Health, Inc. s internal control over financial reporting and on our 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 our 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 in considering Managed Access to Child Health, Inc. s internal control over financial reporting and compliance. Stevens, Powell & Company, P.A. Jacksonville, Florida October 26,

5 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2016 AND 2015 ASSETS CURRENT ASSETS Cash and cash equivalents $ 657,957 $ 642,722 Grants and contracts receivable 450, ,389 Prepaid expenses 32,113 30,552 Total current assets 1,140,181 1,294,663 Property and equipment: Office equipment 31,101 31,101 Furniture and fixtures 6,617 6,617 37,718 37,718 Less: accumulated depreciation (37,718) (37,718) Total property and equipment, net - - TOTAL ASSETS $ 1,140,181 $ 1,294,663 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 181,592 $ 195,959 Accrued expenses 21,312 44,482 Total current liabilities 202, ,441 LONG-TERM LIABILITIES - - CONTINGENCIES - - Total liabilities 202, ,441 NET ASSETS Unrestricted net assets 253, ,946 Temporarily restricted 683, ,276 Total net assets 937,277 1,054,222 TOTAL LIABILITIES AND NET ASSETS $ 1,140,181 $ 1,294,663 The accompanying notes are an integral part of these financial statements

6 STATEMENTS OF ACTIVITIES FOR THE FISCAL YEARS ENDED JUNE 30, 2016 AND Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total SUPPORT AND REVENUE Florida Department of Health contract $ - $ 124,967 $ 124,967 $ - $ 548,225 $ 548,225 CMS reimbursed pass-through 239, , , ,182 Programs and fiscal sponsor projects: JCC contract (SAMHSA pass-through grant) - 1,519,449 1,519,449-2,185,893 2,185,893 Cleft Lip and Palate program - 656, , , ,410 Criminal Justice Reinvestment - 145, , AWARE - 59,494 59, Other - 101, ,581-88,705 88,705 Third party income: Family Support Services of North Florida - 199, , , ,003 Other ,230-36,230 Administrative fees 121, ,428 14,621-14,621 Interest income Subtotal 363,002 2,805,658 3,168, ,423 3,528,236 3,975,659 Net assets released from restrictions 3,030,217 (3,030,217) - 3,567,016 (3,567,016) - TOTAL SUPPORT AND REVENUE 3,393,219 (224,559) 3,168,660 4,014,439 (38,780) 3,975,659 EXPENSES Program services 2,891,291-2,891,291 3,624,512-3,624,512 Management and general 394, , , ,004 TOTAL EXPENSES 3,285,605-3,285,605 3,929,516-3,929,516 CHANGE IN NET ASSETS 107,614 (224,559) (116,945) 84,923 (38,780) 46,143 NET ASSETS, BEGINNING OF YEAR 145, ,276 1,054,222 61, ,056 1,008,079 NET ASSETS, END OF YEAR $ 253,560 $ 683,717 $ 937,277 $ 145,946 $ 908,276 $ 1,054,222 The accompanying notes are an integral part of these financial statements

7 STATEMENTS OF CASH FLOWS FOR THE FISCAL YEARS ENDED JUNE 30, 2016 AND CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ (116,945) $ 46,143 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation - 5,300 Write-down of fixed assets - 5,497 (Increase) decrease in: Grants receivable 171,278 98,697 Prepaid expenses (1,561) (21,378) Increase (decrease) in: Accounts payable (14,367) (139,427) Accrued expenses (23,170) 23,001 Net cash provided by operating activities 15,235 17,833 NET INCREASE IN CASH AND CASH EQUIVALENTS 15,235 17,833 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 642, ,889 CASH AND CASH EQUIVALENTS, END OF YEAR $ 657,957 $ 642,722 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest received during the year $ 950 $ 390 The accompanying notes are an integral part of these financial statements

8 STATEMENTS OF FUNCTIONAL EXPENSES FOR THE FISCAL YEARS ENDED JUNE 30, 2016 AND Program Management Program Management Services and General Total Services and General Total Salaries and program administration $ 840,142 $ 298,752 $ 1,138,894 $ 1,263,443 $ 214,487 $ 1,477,930 Payroll taxes, benefits, and insurance 168,514 59, , ,158 42, ,826 Total salaries and related expenses 1,008, ,675 1,367,331 1,469, ,155 1,726,756 Medical home care coordination 577, , , ,951 Grants and projects: JCC 996, ,001 1,525,899-1,525,899 Other 179, ,944 67,197-67,197 Office and postage expenses 5,146 4,187 9,333 6,949 10,372 17,321 Professional fees 7,503 13,760 21,263-8,494 8,494 Insurance 8,961 9,356 18,317-6,367 6,367 Travel and training 99, ,792 5,898 3,705 9,603 Depreciation ,300 5,300 Miscellaneous 8,044 7,882 15,926 9,017 13,611 22,628 Total $ 2,891,291 $ 394,314 $ 3,285,605 $ 3,624,512 $ 305,004 $ 3,929,516 The accompanying notes are an integral part of these financial statements

9 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 1 - ORGANIZATION Nature of Activities - Managed Access to Child Health, Inc. (the Organization ), was established in 1993 as a Florida nonprofit corporation that operates and maintains a case management program in Northeast Florida for the purpose of ensuring that children have available to them and receive primary medical care. During fiscal year 2011, the Organization entered into an agreement with the Jacksonville Children s Commission ( JCC ) to provide administrative infrastructure for the Substance Abuse and Mental Health Services Administration ( SAMHSA ) System of Care Initiative grant that JCC was awarded. Under this agreement, the Organization is required to furnish JCC with an audit report in accordance with generally accepted auditing standards. Furthermore, the Organization is required to submit an audit report in accordance with procedures under the Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) in the event the Organization expends more than $750,000 of federal funds ($500,000 threshold for fiscal year ended June 30, 2015). During fiscal year 2016, the Organization expended $1,210,047 of federal funds related to the SAMHSA grant. In addition, federal funds of $482,961 were expended for various programs for the Department of Health and Human Services Direct Programs (which included $64,850 of American Recovery and Reinvestment Act programs). During fiscal year 2015, the Organization expended $2,476,783 of federal funds related to the SAMHSA grant. In addition, federal funds of $365,342 were expended for various programs for the Department of Health and Human Services Direct Programs (which included $63,659 of American Recovery and Reinvestment Act programs). Accordingly, the Organization was subject to the Single Audit requirements for the fiscal years 2016 and NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The accompanying financial statements have been prepared in accordance with guidelines of Accounting for Nonprofit Organizations published by the American Institute of Certified Public Accountants. These guidelines require use of the accrual method of accounting, the objective of which is to give recognition to all substantive amounts of receivables and payables, revenues earned, and costs incurred even though cash may not have been received or disbursed. The guidelines also permit the use of fund accounting, which emphasizes reporting on the stewardship responsibility for the assets entrusted to the care of the Organization and the observance of limitations and restrictions placed on their use. Use of Estimates - 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. Fair Value of Financial Instruments - Financial instruments of the Organization consist of cash and cash equivalents, grants and contracts receivable, prepaid insurance, accounts payable, and accrued expenses. The carrying amount of financial instruments approximates fair value because of the short maturities of those financial instruments (see Note 8)

10 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial Reporting - Derivatives - The Organization does not engage in hedging activities or have any material amounts of derivatives. Concentrations of Credit Risk - The Organization maintains its cash balances at federally-insured financial institutions. At times during the fiscal years ended June 30, 2016 and 2015, the Organization s cash balances exceeded the federally-insured limit. The Organization has not experienced any losses, and management believes it is not exposed to any significant credit risk on its cash and cash equivalents. Cash and Cash Equivalents - Cash and cash equivalents consist of operating cash held in interestbearing and noninterest-bearing balances. Interest-bearing deposits at June 30, 2016 and 2015, totaled $26,156 and $25,207, respectively. The Organization maintains separate cash accounts and/or accounting, as required by certain grants. Public Support and Revenue - The Organization receives its grant and contract support primarily from JCC, the State of Florida Department of Health, and Children s Medical Services ( CMS ) (see Note 3 - Grants and Contracts Receivable). Support received from those grants and contracts covers program costs incurred. The Organization also receives administrative and third-party fees and Medicaid dental income for billable client services and recognizes these fees as income when received. Revenues earned but not accrued from other sources (such as administrative and third party fees and Medicaid dental income) are not material to the Organization s financial position, changes in net assets, or cash flows. Grants and other contributions of cash and other assets are reported as temporarily 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 to unrestricted net assets and reported in the Statements of Activities as net assets released from restrictions. Contributions received with donor-imposed restrictions that are met in the same year in which the contributions are received are classified as unrestricted contributions. Functional Allocation of Expenses - The costs of providing the various programs and other activities have been summarized on a functional basis in the Statements of Activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Contributed Materials and Services - The Organization records the value of donated goods or services when there is an objective basis available to measure their value. Donated materials and equipment are reflected as contributions in the accompanying financial statements at their estimated values at date of receipt. Donated services are recorded in the financial statements whenever an objective basis is available to measure the value of such services. In-kind services for 2016 and 2015 totaled $-0- and $-0-, respectively. No donated goods, materials, or equipment were recorded in 2016 or

11 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment - Property and equipment with a purchase price exceeding $1,000 are recorded at cost. Maintenance and repairs are expensed as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation is provided using the straight-line method over the estimated useful lives of 5 years. Depreciation expense totaled $-0- and $5,300 for 2016 and 2015, respectively. Income Taxes - The Organization qualifies as a charitable organization as defined by the Internal Revenue Code 501(c)(3), and accordingly, it is exempt from federal income taxes under Internal Revenue Code 501(a). In addition, the Organization has been determined by the Internal Revenue Service not to be a private foundation within the meaning of Section 509(a) of the Code. The Organization is also exempt from Florida state income taxes and other local taxes. No uncertain tax positions are known to exist at June 30, 2016 or The Organization evaluates its uncertain tax positions, if any, using the provisions of Statement of Financial Accounting Standards No. 5 (ASC Topic 450), Accounting for Contingencies. Accordingly, a loss contingency is recognized when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonable estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. Accordingly, no provision for income taxes has been provided in the Organization s financial statements. Although the Organization is tax-exempt, the Organization may be subject to examination by the Internal Revenue Service and other taxing authorities. Management of the Organization believes the open years for examination includes previously filed Forms 990 for the fiscal years 2013, 2014, and 2015, and the current fiscal year 2016, which will be filed on or about November 15, 2016, unless extended. Advertising - Advertising costs are expensed as incurred and totaled $1,865 and $6,186 in 2016 and 2015, respectively. Reclassifications and Presentation of Financial Statements - Management periodically revises its classification of certain items within the financial statements in order to provide a more meaningful presentation of the Organization s financial position, changes in net assets, and cash flows. In those cases where the revisions in presentation have been adopted in the 2016 financial statements, the corresponding 2015 balances have also been reclassified to enhance comparability between periods. Subsequent Events - The Organization has adopted ASC 855, Subsequent Events, which addresses events which occur after the balance sheet date but before the issuance of financial statements. Under ASC 855, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events that provide evidence about conditions that did not exist at the balance sheet date. The Organization s date for evaluating the existence of subsequent events that would affect the financial statements for the year - 9 -

12 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ended June 30, 2016, was October 26, 2016, which was the date the financial statements were available to be issued. Recent Accounting Pronouncements - Management does not anticipate that any of the recent accounting pronouncements, when effective and implemented if necessary, would have a material impact on the financial condition, results of operations, or liquidity of the Organization. NOTE 3 - GRANTS AND CONTRACTS RECEIVABLE Amounts earned but unpaid at June 30, 2016 and 2015, under various grants and contracts with the JCC, the State of Florida Department of Health, CMS, and third-party providers, have been recorded as grants and contracts receivable. The Organization believes that the grants and contracts receivable are fully collectible. As of June 30, 2016 and 2015, the following grants and contracts receivable were outstanding: JCC contract $ 353,277 $ 506,305 Care Coordination Services 48,845 23,754 Department of Health - 42,225 Family Support Services of North Florida 16,584 16,584 Other 31,405 32,521 $ 450,111 $ 621,389 NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets include cash held for others under agency agreements available for the following purposes and other net assets: JCC contract $ 298,692 $ 395,184 Cleft Lip and Palate Program 83,340 32,395 Third-party case management - 78,547 Grants and projects 38,303 14,890 Other assets (net of liabilities) 263, ,260 $ 683,717 $ 908,

13 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS (Continued) Net assets were released from donor restrictions by incurring expenses satisfying the purpose specified by donors as follows: CMS Primary Care Contract $ 340,705 $ 396,182 JCC contract 1,792,432 2,302,446 Cleft Lip and Palate Program 522, ,024 Family Support Services of North Florida 248, ,049 Third-party case management, grants, and programs 126,099 68,315 $3,030,217 $3,567,016 NOTE 5 - PENSION PLAN The Organization has a pension plan covering substantially all employees over the age of 21 who have at least 1,000 hours of service during the plan year. Annual contributions of 9% of eligible compensation have been approved by the Board of Directors. Pension expense for the years ended June 30, 2016 and 2015, totaled $91,906 and $106,645, respectively. NOTE 6 - RELATED PARTY TRANSACTIONS The Organization has an agreement with CMS whereby the Organization will provide payroll service administration for CMS personnel and in turn is reimbursed for salary expense, related benefits, and medical home care coordination. CMS reimbursed pass-through expenses are included in the Statements of Functional Expenses for fiscal years 2016 and 2015 as follows: Salaries and program administration $ 237,477 $ 315,233 Payroll taxes, benefits, and insurance 52,948 81,688 Insurance and other 3, $ 293,888 $ 397,

14 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 7 - COMMITMENTS AND CONTINGENCIES Operating Lease. The Organization conducts its operations from office space owned by the State of Florida, Department of Health, Division of Children s Medical Services ( CMS ). For fiscal years 2016 and 2015, the State of Florida has agreed to allow the Organization use of the office space in return for the Organization s payment of certain building expenses such as pest control and termite bond, which were considered immaterial. While, the CMS Primary Care contract has been terminated as of September 30, 2015, the State of Florida has agreed to continue the office space arrangement for now. Litigation. The Organization may become a party to claims and legal actions arising in the ordinary course of business, some of which may be offset in part by insurance. In the opinion of management, such amounts would not have a material effect on the financial position of the Organization. During the fiscal years 2016 and 2015, the Organization has not been involved in any litigation. Funding. The Organization is dependent on funding from governmental agencies (SAMHSA) and thirdparty reimbursements (CMS and Medicaid). Income from these sources comprised 59.5% and 78.7% of total support and revenue for 2016 and 2015, respectively. Future amounts of funding from Medicaid reimbursements and fees and grants from governmental agencies will be affected by public policy and may decrease or increase based on political decisions made at the federal or state levels. If current funding levels are reduced, management will be required to reduce the level of services provided to the community or seek other sources of support and revenue. There can be no assurances that other sources of support and revenue will be available in the future, if needed. In fiscal years 2016 and 2015, the CMS Primary Care contract represented 7.6% and 10.0%, respectively, of the Organization s funding, which will affect the level of services until the lost funding can be replaced. NOTE 8 - FAIR VALUE MEASUREMENTS The Organization has adopted ASC Section (formerly known as FASB Statement of Financial Accounting Standard (SFAS) No. 157), Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value, and expands disclosures about the fair value measurements. ASC Section establishes a fair value hierarchy for the inputs used to measure fair value based on the nature of the data input, which generally range from quoted prices for identical instruments in a principal trading market (Level 1) to estimates determined using related market data (Level 3). Multiple inputs may be used to measure fair value; however, the level of fair value of each financial asset or liability presented below is based on the lower significant input level within this fair value hierarchy. Details on the methods and assumptions used to determine the fair values of the financial assets and liabilities are as follows:

15 JACKSONVILLE, FLORIDA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 AND 2015 NOTE 8 - FAIR VALUE MEASUREMENTS (Continued) Fair value measurements based on Level 1 inputs: Measurements that are most observable are based on quoted prices of identical instruments obtained from the principal markets in which they are traded. Closing prices are both readily available and representative of fair value. Market transactions occur with sufficient frequency and volume to ensure liquidity. Fair value measurements based on Level 2 inputs: Measurements derived indirectly from observable inputs or from quoted prices from markets that are less liquid are considered Level 2. Measurements may consider inputs that other market participants would use in valuing a portfolio, quoted market prices for similar securities, interest rates, credit risks, and others. Fair value measurements based on Level 3 inputs: Measurements that are least observable are estimated from related market data, determined from sources with little or no market activity for comparable contracts, or are positions with longer durations. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. At June 30, 2016 and 2015, the Organization had no financial assets subject to the fair value measurement hierarchy described above

16 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY GRANT FOR THE FISCAL YEARS ENDED JUNE 30, 2016 AND 2015 Federal Grantor/Pass-Through Grantor/Program or Cluster Title Federal CFDA Number Pass-Through Entity Grant or Contract Number Federal Federal Expenditures - Expenditures - FY 2016 FY 2015 Direct Programs Department of Health and Human Services Direct Programs American Recovery and Reinvestment (ARRA) Direct Programs ARRA-Adoption Assistance $ 12,395 $ 13,309 ARRA-Foster Care-Title IV-E ,455 50,350 Total ARRA Direct Programs 64,850 63,659 Other Direct Programs Temporary Assistance for Needy Families ,888 32,014 Promoting Safe and Stable Families Stephanie Tubbs Jones Child Welfare Services Program ,843 5,898 Total Other Direct Programs 37,498 38,646 Total Department of Health and Human Services Direct Programs 102, ,305 Pass-Through Programs Maternal and Child Health Services Block Grant to the States Florida Department of Health , ,037 Substance Abuse and Mental Health Services-Projects of Regional and National Significance Jacksonville Children's Commission City of Jacksonville Florida Substance Abuse and Mental Health Services-Projects of Regional and National Significance ,210,047 2,476,783 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) U79SM ,938 - Total Department of Health and Human Services Pass-Through Programs 1,590,660 2,739,820 Total Department of Health and Human Services Programs 1,693,008 2,842,125 Total Expenditures of Federal Awards $ 1,693,008 $ 2,842,125 See accompanying independent auditors' report and notes to Schedule of Expenditures of Federal Awards by Grant

17 JACKSONVILLE, FLORIDA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS BY GRANT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 BASIS OF PRESENTATION The preceding supplemental Schedule of Expenditures of Federal Awards by Grant includes the federal grant activity for Managed Access to Child Health, Inc. (the Organization ) as determined based on the modified cash basis of accounting. The amounts reported on the schedule have been reconciled to and are in material agreement with amounts recorded in the Organization's accounting records from which the basic financial statements have been reported. 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. INSURANCE The Organization maintains the following insurance coverage: Amount of Coverage Nature of Insurance (Occurrence/Aggregate) Term of Policy Directors/Officers $1,000,000/$1,000,000 7/21/ Professional/Sexual $1,000,000/$2,000,000 7/01/ General Liability $1,000,000/$2,000,000 12/01/ Automobile Liability $1,000,000/$1,000,000 12/01/ Umbrella Liability $1,000,000/$1,000,000 12/01/ Workers Compensation and Employers Liability $1,000,000/$1,000,000 12/01/ SUBRECIPIENTS During fiscal years 2016 and 2015, the Organization provided $803,156 and $1,528,550, respectively, to subrecipients under the Department of Health and Human Services pass-through grant from Jacksonville Children s Commission, City of Jacksonville, Florida, Federal CFDA Number Substance Abuse and Mental Health Services - Projects of Regional and National Significance. See accompanying independent auditors report

18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 SUMMARY OF AUDITORS RESULTS 1. The auditor's report expresses an unmodified opinion on the financial statements of the Organization. 2. Reportable conditions in internal controls over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified? No None reported 3. Instances of noncompliance material to financial statements of the Organization: None 4. Reportable conditions on internal control over major federal programs: Material weakness(es) identified? Significant deficiency(ies) identified? No None reported 5. The auditor's report on compliance for major federal programs expressed an unmodified opinion. 6. There were no audit findings relative to major federal programs. 7. Major programs: Federal Substance Abuse and Mental Health Services - Project of Regional and National Significance CFDA Dollar threshold used to distinguish between Type A and Type B programs was $300, Auditee did qualify as a low-risk auditee. 10. As there were no prior year audit findings related to federal programs, no Summary of Prior Audit Findings is required. 11. No Corrective Action Plan is required because there were no findings to be reported. FINDINGS - FINANCIAL STATEMENT AUDIT None. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL PROGRAMS None

19 ("MATCH") SCHEDULE OF SOURCE AND EXPENDITURES OF CITY OF JACKSONVILLE ("CITY") GRANT FUNDS - JCC PER ORDINANCE CODE CHAPTER (e) CITY OF JACKSONVILLE PUBLIC SERVICE GRANT FUNDING FOR MATCH FISCAL YEAR 2015/2016 AUDIT City FY City FY RECEIPT OF CITY (JCC) FUNDS 2015 Grant 2016 Grant Contract No Amount of award (per City budget ordinance) $ 1,600,000 $ 1,100,000 Amount of award allowed by City to be carried over from prior year (1) 890, ,138 Actual funds received from City in last MATCH audit period(s) (1,034,618) (574,010) Billing adjustments during the MATCH audit period(s) - (1,182) Amounts remaining to be distributed at June 30 of MATCH audit period(s) 1,455,391 1,031,946 Amounts received after June 30th of MATCH audit periods (948,253) (203,540) Reconciling balance per table of expenditures below 507, ,406 Advances received during the MATCH audit period(s) (250,000) (165,000) Advances repaid during the MATCH audit period(s) 250,000 - Advances repaid after the MATCH audit period(s) - 55,000 Actual remaining to be distributed before billing adjustments $ 507,138 $ 718,406 EXPENDITURES OF CITY (JCC) FUNDS City FY Contract No Substance Abuse and Mental Health Services Original budget $1,600,000 - amended budget $2,490,009 Actual Actual (Unaudited) 10/1/14 7/1/15 Total Remaining Budget - 6/30/15-9/30/15 Actual Balance Salaries and benefits $ 687,724 $ 504,257 $ 158,623 $ 662,880 $ 24,844 Program consultants and contractual 1,614, , ,319 1,196, ,893 Advertising 1, Training materials 6,000 1, ,174 3,826 Office expenses 8,305 3,284 1,411 4,695 3,610 Insurance 8, ,059 6,942 Capital outlay 2, ,000 Membership fees and subscriptions 3,000 2, , Rent (lease) 3,702 2, , Travel (2) 35,605 17,374 12,268 29,642 5,963 Training events 35,000 8,039 13,943 21,982 13,018 Outside printing/artwork 4, ,366 Other allowable costs (3) 21,003 10,314 3,283 13,597 7,406 Indirect expenses 59,952 31,527 11,799 43,326 16,626 Total expenses $ 2,490,009 $ 1,364,791 $ 618,080 $ 1,982,871 $ 507,138 City FY Contract No Substance Abuse and Mental Health Services Original budget $1,100,000 - amended budget $1,607,138 Actual Actual (Unaudited) 10/1/15 7/1/16 Total Remaining Budget - 6/30/16-9/30/16 Actual Balance Salaries and benefits $ 633,022 $ 471,412 $ - $ 471,412 $ 161,610 Program consultants and contractual 526, , , ,644 Advertising 2, ,774 Training materials 17,000 2,182-2,182 14,818 Office expenses 8,009 2,039-2,039 5,970 Capital outlay 2, ,000 Membership fees and subscriptions 2,000 1,550-1, Rent (lease) 3,746 2,433-2,433 1,313 Travel (2) 34,500 18,990-18,990 15,510 Training events 209,561 45,888-45, ,673 Outside printing/artwork 56, ,000 Other allowable costs (3) 8,000 3,687-3,687 4,313 Indirect expenses 105,058 64,727-64,727 40,331 Total expenses (4) $ 1,607,138 $ 778,732 $ - $ 778,732 $ 828,406 (1) The amounts allowed by the City to be carried over from year-to-year are established at the annual renewal of the grant (2) Includes local mileage reimbursement and staff travel (3) Other allowable costs include Family and Youth participation meal and transportation stipends (4) City's remaining balance as shown in its billing system does not reflect billing adjustments of $1,182 See accompanying independent auditors' report

20 ("MATCH") SCHEDULE OF SOURCE AND EXPENDITURES OF CITY OF JACKSONVILLE ("CITY") GRANT FUNDS - JCC PER ORDINANCE CODE CHAPTER (e) CITY OF JACKSONVILLE PUBLIC SERVICE GRANT FUNDING FOR MATCH FISCAL YEAR AUDIT City FY RECEIPT OF CITY (JCC) FUNDS 2016 Grant Grant No. 1U79SM Amount of award (per City budget ordinance) $ 1,000,000 Actual funds received from City in last MATCH audit period (195,504) Billing adjustments during the MATCH audit period (897) Amounts remaining to be distributed at June 30 of MATCH audit period 803,599 Amounts received after June 30th of MATCH audit period (69,141) Billing adjustments after June 30th of MATCH audit period (1,478) Reconciling balance per table of expenditures below 732,980 Advances received during the MATCH audit period - Advances repaid during the MATCH audit period - Actual remaining to be distributed before billing adjsutments $ 732,980 EXPENDITURES OF CITY (JCC) FUNDS City FY Grant No. 1U79SM Substance Abuse and Mental Health Services Original budget $1,000,000 Actual Actual (Unaudited) 10/1/15 7/1/16 Total Remaining Budget - 6/30/16-9/30/16 Actual Balance Salaries and benefits $ 102,071 $ 27,168 $ - $ 27,168 $ 74,903 Program consultants and contractual 671, , , ,078 Advertising 2, ,375 Training materials 5, ,768 Office expenses 6, ,389 Capital outlay 2, ,650 Membership fees and subscriptions 2, ,000 Rent (lease) 1, ,457 Travel (1) 16,023 2,965-2,965 13,058 Training events 54, ,000 Outside printing/artwork 16, ,500 Other allowable costs (2) 63, ,303 Indirect expenses 56,929 19,430-19,430 37,499 Total expenses (3) $ 1,000,000 $ 267,020 $ - $ 267,020 $ 732,980 (1) Includes local mileage reimbursement and staff travel (2) Other allowable costs include Family and Youth participation meal and transportation stipends (3) City's remaining balance as shown in its billing system does not reflect billing adjustments of $2,375 See accompanying independent auditors' report

21 ("MATCH") SCHEDULE OF SOURCE AND EXPENDITURES OF CITY OF JACKSONVILLE ("CITY") GRANT FUNDS - JCC PER ORDINANCE CODE CHAPTER (e) CITY OF JACKSONVILLE PUBLIC SERVICE GRANT FUNDING FOR MATCH FISCAL YEAR (FY) AUDIT City FY City FY City FY RECEIPT OF CITY (JCC) FUNDS 2015 Grant 2015 Grant 2016 Grant Contract No Amount of award (per City budget ordinance), as amended $ 276,676 $ 279,027 $ 303,740 Actual funds received from City in last MATCH audit period(s) (45,573) (154,138) - Amounts remaining to be distributed at June 30 of MATCH audit period(s) 231, , ,740 Amounts received after June 30th of MATCH audit periods - - (28,444) Reconciling balance per table of expenditures below 231, , ,296 Advances received during the MATCH audit period(s) Advances repaid during the MATCH audit period(s) Actual remaining to be distributed $ 231,103 $ 124,889 $ 275,296 EXPENDITURES OF CITY (JCC) FUNDS City FY Contract No Criminal Justice Mental Health and Substance Abuse - original budget $276,676 Actual Actual (Unaudited) 10/1/14 7/1/15 Total Remaining Budget - 6/30/15-9/30/15 Actual Balance Salaries and benefits $ 63,000 $ 25,873 $ - $ 25,873 $ 37,127 Program consultants and contractual 191,395 8,594-8, ,801 Management and general indirect expenses 18,181 10,606-10,606 7,575 Conferences and staff development 1, ,000 Staff travel 2, ,600 Total expenses $ 276,676 $ 45,573 $ - $ 45,573 $ 231,103 City FY Contract No terminated 4/30/15 and continued under Contract No revised budget $279,027 Actual Actual Actual (Unaudited) 10/1/14 7/1/15 10/1/15 Total Remaining Budget - 6/30/15-9/30/15-6/30/16 Actual Balance Salaries and benefits $ 63,000 $ 10,847 $ 17,312 $ 34,841 $ 63,000 $ - Program consultants and contractual 197,845 3,860 18,055 51,041 72, ,889 Management and general indirect expenses 18,182 3,030 4,546 10,606 18,182 - Total expenses $ 279,027 $ 17,737 $ 39,913 $ 96,488 $ 154,138 $ 124,889 City FY Contract No , as amended - Criminal Justice Mental Health and Substance Abuse - amended budget $303,740 Actual Actual (Unaudited) 10/1/15 07/1/16 Total Remaining Budget - 6/30/16-9/30/16 Actual Balance Salaries and benefits $ 72,407 $ 13,318 $ - $ 13,318 $ 59,089 Program consultants and contractual 202,757 10,409-10, ,348 Management and general indirect expenses 27,612 4,602-4,602 23,010 Lease/rent equipment Staff travel and local mileage Total expenses $ 303,740 $ 28,444 $ - $ 28,444 $ 275,296 See accompanying independent auditors' report

22 STEVENS, POWELL & COMPANY, P.A. A Professional Association of Certified Public Accountants mail@stevens-powell-cpa.com Toll-free Telephone: Baymeadows Road, Suite 2 Tel: Jacksonville, Florida Fax: 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 To the Audit Committee Managed Access to Child Health, Inc. Jacksonville, Florida We have audited, in accordance with the 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 Managed Access to Child Health, Inc. (the Organization ) (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, cash flows, and functional expenses for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 26, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Organization s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization s internal control. 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 Organization 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 severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of the 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 control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we 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 the Organization s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants AICPA Private Companies Practice Section AICPA Employee Benefit Plan Audit Quality Center

23 Managed Access to Child Health, Inc. October 26, 2016 Page 2 of 2 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 our audit, and accordingly, we do not express such an opinion. The results of our 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 of the Organization s internal control on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Stevens, Powell & Company, P.A. Jacksonville, Florida October 26,

24 STEVENS, POWELL & COMPANY, P.A. A Professional Association of Certified Public Accountants mail@stevens-powell-cpa.com Toll-free Telephone: Baymeadows Road, Suite 2 Tel: Jacksonville, Florida Fax: INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY UNIFORM GUIDANCE To the Audit Committee Managed Access to Child Health, Inc. Jacksonville, Florida Report on Compliance for Each Major Federal Program We have audited Managed Access to Child Health, Inc. s (the Organization ) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Organization s major federal programs for the year ended June 30, Managed Access to Child Health, Inc. s major federal programs are identified in the summary of auditors 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 Our responsibility is to express an opinion on compliance for each of Managed Access to Child Health, Inc. s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our 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 U.S. 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 we 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 the Organization s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Organization s compliance. Opinion on Each Major Federal Program In our opinion, Managed Access to Child Health, 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 June 30, Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants AICPA Private Companies Practice Section AICPA Employee Benefit Plan Audit Quality Center