People Centered Suppol Services, ]nc FinancialStatem ents For The Y earended June 30,2001. Underprovisions ofstate law,this repertis a public

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1 go#?j4~l-2 PI112 :0 7 /EGISI/~ R~C,T;VFD ;[ge~lf#i'ior People Centered Suppol Services, ]nc FinancialStatem ents For The Y earended June 30,2001 Underprovisions ofstate law,this repertis a public docum ent.a copy ofthe rei,'or~i,~ bt~m ~,'.~b.m it~.~lto the entity and otl:erappr<-'i,ri~!e ;~C;i!~:of:ici,~Is.The reportis available forpt~l,'lic i]5;~:.~-i.i~m g4:ihc Batorl Rouge office ofthe Legis!ai:,ve,',:~:l;Lm"or:c!,w here appropriate,atthe office ofthe parish clerk ofcourt. ReleaseDate@.~.O~. W ILLIA M D.ED W A R D S,C PA A C O RPO RATIO N 206 REYNOLOE D RIVE,SUITE O -2 R USTO N.LO UISIANA 7 1;270

2 People Centered SupporlServices,Inc ForTim Y earended June 30,2001 TA BLE O F CO N TEN TS Slatelnenl IndependentA udilors'r epo l B alancc Shccl Stalem enlof Incom e and R etained Earn ings Slalem enlof Cash Flow s N olesio FinancialStalem ents O TH ER SU PPLEM EN TA R Y D A TA Schedule Page Reporto 1Com pliance and o lintern alcontrolo ver FinancialR eporting B ased on an A udilof Financial Slalem enlsperformed in A ccordance w ith Governm entauditing Standards Schedule offindingsand Questioned Cosls Sum m ary of PriorY earfindings Corrective A ction Plan

3 W IL L IA M D. E D W A R D S Certified Public A ccountant A ProfessionalAccounting Corporation M ember:a1cpa /Society of LCPA'S IN D EPEN D EN T A U D ITO R S'R EPO RT To lhc Board of D irectors of People Centered SupporlServices,lnc Ruston,Louisiana Ihave audilcd to balance sheetof People Centered SupportServices,lnc.,an S corporation,asof June ,and lhc rclaled statem entsof incom e and retained earningsand cash flow sforthe yearthen ended These financialslalem ents are the responsibility of People C entered SupportServices,lnc.'sm anagem enl M y responsibilily isto expressan opinion on lhese financialstatem entsbased on ouraudit. Iconducted nay auditin accordance w ilh generally accepted auditing standardsaccepted in the U niled Slates of A m erica.those standards require that1plan and perform lhe audillo obtain reasonable assurance aboul w hclherthe financialstatem entsare free of m aterialm isslalem ent.a n auditincludesexam ining,on a lesl basis,evidence supporting the am ountsand disclosuresin the financialstatem ents.a n auditalso includes assessing the accounling principles used and significant estim ates m ade by m anagem ent,as w ellas evaluating the overallfinancialstalem cnlpresentation.ibelieve thainay auditprovides a reasonable basis fornay opinion. In nay opinion,the financialstatem entsrefen'ed to above resentfairly,in allm aterialrespects,the financial posilion of People Centered SupportServices,Inc.,as of June 30,2001,and the results of its operalion and cash flow sforthe yearthen ended in confonnily w ith accounting principlesgenerally accepted in the U niled Slatesof A m erica. Ruslon,Louisiana 1)ccem bcr 17, ReynoldsDrive ~ Suite (3-2 Ruston,Louisiana ~ FAX: AntaresDrive Bastrop,Louisiana ~ FAX :

4 People Centered SupportServices,lnc B alance Sheet A s of June 30,2001 Statem enta A SSETS Cash and cash equivalents ]nvcsti~[icuts Accountsreceivable -trade A ccountsreceivable -officcr D uc from relaied party O therassets Fixed assets TOTA L A SSETS LIABILITIES AND STOCK HOLDERS'EQUITY C unentliabilities: A ccounts payable A ccrued liabilities I)ue to related patly Totalliabilities Stockholders'Equity: Com m on stock,no parvalue,5,000 sharesauthorized 100 sharesissued and outstanding in 2000 Retained earn ings Totalstockholders'equity $81,233 92, ,893 73, , $16,33 105,92 66,38 188,63 5, , TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY See accom panying auditor's reportand notesto financialstatem ents

5 RF.V I,2N U lv.s Follow along M obile crew Voealional M edicaid Personalcare altendanl Supported independentliving -O CD D Self-generated incom e O therrevenues TOTA l.rev EN UES F.X PEN SES Adverlising Bank charges I)~ms Licenses and perm its O ffice supplies A uto expenses Postage Professionalserviccs Telephone In-service training Travel& sem inar M iscellaneousexpense M aintenance-building & grounds Repairs-furniture & equipm ent Supplies Utililies Building lease I.ease expense-furn iture & equipm ent Y ard expenses O ulside services Consm nerw ages Consum ersupplies C onsultants l)epreciation Salaries& w ages 1lealth benefits Payrolltaxes Poslretirem enlexpenses People Cenlered SupportServices,Inc. Slalem e~llof Incom e and R elaincd Earn ings Forthe Y earended June 30,2001 Stalem cnt11 $72, , , ,570 40,458 15, ,836 7, ,207 19,619 1,037 13,959 12,697 1,495 19,411 11, ,140 10,516 19,714 19,357 4,200 3,723 4,800 72,043 53,482 6,655 1, ,216 94,133 69,616 3,043 See accom panying auditor's reportand notes1o financialslalem ents

6 People Cenlered SupportServices,Inc. Statem entoflncom c and R etained Earnings EXPENSES (Continued) Insurance -other M anagem entfee allocation N on-allow able expenses TOTA l.ex PEN SES Operaling Incom e NON-OPERATING INCO M E (Expense) lnlercstincom e lnlereslexpense TOTAL NON-OPERATIN G INCOM E (Expense) N ET IN CO M E Retained earningsasof beginning of year Retained earn ingsasof end of year $32,366 (140,023) , ,598 8,849 (3,757) ,690 91,834 $374,524 See accom panying auditor's reportand notesto financials atem ents

7 People Centered SupportServices,]nc Statem entof Cash Flow s For the Y earended June 30,2001 Slalcm cnic O perating activities N etincom e Adjustmentsto reconcilenelincometo net cash provided (used)by operating activities D epreciation Increase in accounlsreceivable Increase in due from related party Increase in accou lls receivable -oficer Increase in olherassets Increase in accounlspayable Increase in accrued liabilities Increase in due to related party N etcash provided by operating activities Investing activities Purchase of inveslm ents Interestincom e A dditionsto property and equipm enl N etcash provided by investing activities Financing activities Interestexpense Netincrease(decrease)in cash and'cash equivalents C ash and cash equivalents as of beginning of year $277,598 1,705 (41,197) 3,757 (73,057) (423) 6,483 50,512 (156,331) 69,047 (92,204) 8,849 0,805) (85,160) (3,757) (19,870) C ash and cash equivalents as of end of year Taxes -cash basis Interest-cash basis $69,773 $ -0 - SU M M ARY Cash in bank See accom panying auditor's reportand notesto financialstatem ents

8 People Centered SupportServices,lnc N otesto The FinancialStatem ents For The Y ear Ended June 30,2001 SU M M ARY O F SIG N IFICAN T A CCOU N TING POLICIES N ature of Business People Centered SupportServices,Inc.'s(an S corporation)primary businessactivity isto provide servicesby qualified staf to the targeted orw aiverpopulation to assistfllem in gaining accessto the fullrange of needed servicesincluding m edical,social,em otional,and othersupportservices. Thc Com pany'sprim ary locationsarc in Ruston,Louisiana;M onroe, Louisiana;and A lexandria,louisiana. The Com pany isa corporation w hich incorporated on M arch 17,1999. M ethod of A ccounting Tile books and records are accounted for using lhe accrualbasis of accounling. R cvcnucs are recognized w hen they are earned,and expensesare recognized w hen they are incurred. C ash Equivalents Cash equivalentsconsistof short-term,highly liquid investm entsw hich arc readily convertible into cash w ith an initialm aturity oflbrce m onthsorless. Receivables The Com pany uses the directw rileof m ethod of recognizing bad. M anagem ent considered all accounts receivable atjune 30,2001 to be fully collectible, therefore no allow ancc for doubtfid accountsw asrecorded. A lthough the directwrite-off m ethod isnotin accordance w ith generally accepted accounting principles(gaap),itapproximates GAAP ifallmaterialdoubtfulaccountshave been w ritten of and the Com pany doesnotanticipate a significantincrease ilbad debts. Fixed A ssets Fixed assetsare stated atcost.d epreciation isprovided on the straightline m ethod overthe estim ated usefullives of the assets. U se of Estim ates The preparation of financialstatem entsin conformity w ith generally accepted accounting principles requires m anagem entto m ake estim alesand assum ptions thalaffectthe reported anlountsof assets and liabilitiesand disclosure of contingentassetsand liabilitiesattile date ofthe financialstatcm cntsand reported am ountsof revenuesand expensesduring the reporting period. Accordingly,actualresults could differfi-om those estim ales.

9 People Centered SupportServices, lnc N otesto the FinancialStatem ents Forthe Y earended June 30, PROPERTY AND EQUIPM ENT The follow ing isa schedule of additionsand deletionsforthe yearended June 30, 2001 Fxluipm ent V ehicle Less accum ulated depreciation Tolal Balance B alance 6/30/00 A dditions D eletions 6/30/01 $7,222 1,472 ~ (775) $7,919 $1,804 ~ (1,705) $99 $9,026 1,472. (2,480) $8, CO M PEN SA TED A B SEN CES A ccrued com pensated absencesconsistof unpaid sick leave and personalleave asfollow s Sick leave l)ersonalleave Total $5, LEA SES Forthe yearended June 30,2001, the Com pany did nothave any capitalleases 5. PRO G RA M S The organization's principalprogram sand prim ary funding sourcesare Supported W ork Contracts -this program 's incom e is derived fiom services by clients w hich include janitorialaridothercontracts.

10 People Centered SupportServices, lnc N otesto the FinancialStatem ents Forthe Y earended June 30, 2001 Supj)orted/lnd and H ospilals. and training in of JJealth g supporl R~esj)ite-thisprogram 'sincom e isderived fi'om the Louisiana Departm entof Health and Hospitals. program providestem porary care w ithin the client'shom e. The PersonalCare A ttendant-tifsprogram 'sincom e isderived from the Louisiana D cpartm cnlof llealth and ]]ospitals.thisprogram providessupportand training forindividualsin satisfying theirown personalneeds. 7. REI,ATEI) PA RTY TRA N SA CTION S The follow ing isa sum m ary of the due from related party lransaction forthe yearended June 30, 2001: B alance,june 30,2000 Investm enlin A.G.Edw ards M anagem entfee allocation hnputed inlerest@ 6% B alance,june 30,2001 $0 7, , The follow ing is a sum naary of the due to related party transaction forthe yearended J une 30,2001 Balance,June 30,2000 Imputed interest@ 6% B alance,june 30,2001 $62,624 3,757. $66, STOCKHOLDERS'EQUITY July l,1999 A dditions: N etincom e June 30,2000 Total Com m on Paid-in R etained Stockholders' Stock Capital Earnings Equity $5,000 $0 $91,834 $96, ,690 ~ $374, ,690 $379,52 ~ 9. CO N TIN G EN C IES A!June 30,2001,the Com pany had fundsin one bank in excessoflhe$100, 000 FDIC insurance coverage The Com pany isatrisk for thaiexcess.

11 People Centered SupportServices,lnc N otesto the FinancialStatem ents Forthe Y ear Ended June 30, SCIIEDU LE O F STA TE GRAN T FIN AN CIA L A SSISTA N CE G ranl/progranl Title Louisiana l)epm tm enl of llealth and ]tospitals Ofi ce forcitizenswilh D evelopm entald isabilities Suppm led laving Vocationaland ltabilitative Services Total Granl I.D.num ber Award A m ount Revcnue recognized CFM S $16,615 $15,431 CFM S , Unawarded $1, SCttEDU LE O F REV EN UE A dultservices P,espite Residentialservices PersonalCare O ther Total Federal State $187,931 15,431 Fees for Services $466,259 96, , , Tola $654,190 96, , , $0 $203,362,$1,120,376,$1,323, CH AN G E IN BU SIN ESS TYPE 13. M ARK ETA BLE SEC U RITIES U nrecognizcd Cost FairM arketvalue Gain (l,oss) $92,204 $75,978 ($16,226) _

12 SU PPLEM EN TA L IN FORM ATIO N SCH EDU I.E$

13 W IL L IA M D. E D W A R D S Certified Public A ccountant A ProfessionalAccounting Corporation M em ber: AICPA /Society of LCPA 'S R EPO R T O N C O M PLIA NCE A N D O N IN T ERN A l,c O NTR O l.o V ER FIN AN C IAL R EPO R TING BA SED O N AN AU DIT O F FIN A N CIAL STATEM EN T S PER FO RM ED IN A C C O RD A N CE W ITH GO VER N M EN T A UD ITIN G STAN DA RD S 3"o the Board of D irectm 's People Centered SupportServices,lnc Ruslon,Louisiana Ihave audited file financialstatem entsof People Centered SupportServices,Inc.,an S corporation,asof and fortile yearended June 30,2001,and have issued m y reportthereon dated D ecem ber 17, conducted m y auditin accordance w ith generally accepted auditing standardsand the standardsapplicable to financialauditscontained in Governm entauditing Standards.,issued by the Com ptrollerg eneralof the U nited States. Compliance A s pro1 of obtaining reasonable assurance aboutw hetherpeople C entered SupportServices,lnc.'s financial statem entsare fi'ee of m aterialm isstatem ent,1perform ed tests of itscom pliance w flb certain provisionsof law s,regulations,contracts and grants,noncom pliance w ith w hich could have a directand m aterialefect on tile determ ination of financialstatem entam ounts.h ow ever,providing an opinion on com pliance w ith those provisionswasnotan objective of my auditand,accordingly,ido notexpresssuch an opinion.the results of m y tests disclosed no instances of noncom pliance that are required to be reported under G overnm enta uditing Standards. ternalcontrolo verfinancialr enortin~ In planning and perfanning m y audit,iconsidered People Centered SupportServices,lnc.'sinternalcontrol overfinancialreporting in orderto determ ine m y auditing procedures forthe puq)ose of expressing m y opinion on the financialstatem ents and notto provide assurance on file intern alconlrolover financial reporting.o urconsideration of the intern alcontroloverfinancialreporting w ould notnecessarily disclose allm atters in the intern alcontroloverfinancialreporting thatm ightbe m aterialw eaknesses. A m aterial w eaknessiscondition in w hich the design oroperation of one orm ore of the internalcontrolcom ponents doesnotreduce to a relatively low levelthe risk thatm isstatem entsin am ountsthatw ould be m aterialin relation to the financialstatem ents being audited m ay occurand notbe detected w ithin a tim ely period by em ployeesin tile norm alcourse of perfora ting theirassigned functions, lnoted no m attersinvolving the intern alcontroloverfinancialreporting and itsoperation that1considerto be m aterialw eaknesses. 206 ReynoldsDrive ~ Suite (3-2 Ruston,Louisiana ~ FAX: Antarels~O rive Bastrop,Lc,)uisiana ~ FAX :

14 D ecem ber17,2001 inform ation and use of the Com pany and any interested stale agencies notbe used by anyone otherthan lhese specified parties.

15 People Centered SupportServices,lnc. ScheduleofFiudingsAnd QuestionedCosts Forthe Y earended June 30,2001 Schedule 1 Ihave audited the financialstatem entsof People Cenlered SupportServices,Inc.asof and forthe year"ended June 30,2001,and have issued m y reportthereon dated D ecem ber 17,2001. Iconducted m y auditin accordance w ith generally accepted auditing standards and the standards applicable to financialaudits contained in Govern m enta uditing Standards,issued by the Com ptrollerg eneralof the United Stales.M y audilof the financialstatem entsasof D ecem ber 17,2001,resulted iraan unqualified opinion. A. Snm m ary of A uditr esults 1. Repofl on InternalC ontrolaud Com pliance M ateriallo the FinancialStalem cnts InternalC ontrol M atcrialw eaknesses I Y es X N o R eportable _ Y es X N o Com pliance Com pliance M aterialto FinancialStalem ents _ Y es X N o 2. FederalA w ards InternalC ontrol M aterialw eaknesses _ Y es X N o R eportable _ Y es X N o Typ e of OpinioJ~O n Com pliance U nqualified _ ForM ajorprogram s Disclaimer _ Qualified _ A dverse Are their"findingsrequired to be reported in accordance with CircularA-133,Section.510(a)? Y es X N o 3. Identification ofm ajorprograms CFDA Number(s) Nameof FederalProgram (orcluster) N /A 1)ollarthreshold used to distinguish between TypeA and Typ eb Program s: ~;~300,000 Isthe audited a "low -risk" audited,asdefined by O M B C irculara -133? _ Y es X. X N o

16 IL FinancialStatem ents Findings ]',lone C.FederalAward Findingsand Questioned Costs N onc

17 People Centered SupportServices,Inc Sununary of PriorY earfindings Forthe Y earended June 30,2001 Schedule 2 A. IN T E RN A L C O N T R O L A N D C O M PL IA N C E M A T ER IA l, T O T H E FIN A N C IA L STA T EM EN TS Finding:People Centered Support Services,Inc.began perform ing servicespreviously provided by People U nlim ited,inc.,a related com pany. A fter contracts w ere signed w flh People Centered SupportServices,lnc.the contractorssentsom e directdepositsto People U nlim ited, lnc.by m istake. These transactionsw ere treated asreceiptsof receivableson People Centered SupportServices, Inc. ratherthan m oney due to a related com pany.atthe sam e tim e som e vendorssentoutbillsto the old com pany as w ell. B oth of these situations increased the risk of posting errors and, therefore, inaccurate accounting records. Recom m endation:ensure thattransactionsare posted to the properactivity and thatallclientsand vendorsprepare docum entsto the correctprogram. Conclusion:Resolved Finding: I)uring the year,som e accounting transactions w ere nolposted currently, preventing the preparation of tim ely,accurate financialstatem ents. Recom m endation: Postaccounting Iransactionscun'ently and printm onthly financialstalem enls Conclusion:Resolved Finding:The costreports do notagree w ith the financialstatem ents. The costreportsw ere prepared forthe entire year even though the functionsw ere perfornaed by lw o different, though related, com panies,and based on tw o separate contracts. Recom m endation:prepare costreportson the basisof a contract, orservice,w ithin each com pany Conclusion: Resolved IL IN 'I'E R N A I~C O N T R O L A N D C O M PLIA N C E M A T E R IA l,t O FED ER A L A W A R D S N onc C. M A N A G E M E N T L F T T E R N one

18 PEO PLE C EN TER ED SU PPO R T SER V IC ES,IN C 1201A TK IN S R O A D RU STO N,LA (318) CO RR ECTIV E A CTIO N PLA N For the Y earended June 30,2001 People Cenlered Suppm l Services,Inc.hasno findingsforthe yearended June 30,

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