Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa FINANCIAL STATEMENTS June 30, 2016

Transcription

1 Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa FINANCIAL STATEMENTS June 30, 2016 Vance CPA LLC Certified Public Accountants 832 Snow Street, Suite B Oxford, Al Tel. (888) Fax (866)

2 TABLE OF CONTENTS COMMUNITY ACTION COMMITTEE, INC. OF CHAMBERS-TALLAPOOSA-COOSA Independent Auditors Report... 1 Statement of Financial Position... 3 Statement of Activities... 4 Statement of Functional Expenses... 5 Statement of Cash Flows... 6 Notes to the Financial Statements... 7 Supplementary Information Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit Of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor s Report on Compliance for each Major Program and on Internal Control over Compliance Required by the Uniform Guidance Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs... 21

3 Vance CPA LLC Certified Public Accountants 832 Snow Street Suite B Oxford, Alabama Tel. (888) Fax (866) INDEPENDENT AUDITOR S REPORT Board of Directors Community Action Committee, Inc. of Chambers Tallapoosa-Coosa 170 S Broadnax Street Dadeville, Al Report on the Financial Statements We have audited the accompanying financial statements of the Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa (a nonprofit organization) which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Managements 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. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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 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, 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Community Action Committee, Inc., of Chambers-Tallapoosa-Coosa as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for 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 also 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 January 26, 2017, on our consideration of Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa 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 Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s internal control over financial reporting and compliance. Oxford, Alabama January 26, 2017 Vance CPA LLC

5 STATEMENT OF FINANCIAL POSITION As of June 30, 2016 ASSETS Current Assets Cash and cash equivalents $ 128,245 Grants receivable 138,383 Total current assets 266,628 Long-term assets, net of depreciation: Land, Buildings, and Renovations 918,696 Playground Equipment 28,084 Total Long-term Assets 946,780 Total Assets 1,213,408 LIABILITIES Current liabilities: Current portion of mortgages 65,073 Total current liabilities 65,073 Long-term portion of mortgages 327,714 Total Liabilities 392,787 NET ASSETS Unrestricted 820,621 Total net assets 820,621 Total Liabilities and Net Assets $ 1,213,408 See accompanying notes to the basic financial statements. 3

6 STATEMENT OF ACTIVITIES Revenue: Federal Government grants $ 5,287,020 $ 5,626,870 Other Government grants (State) 45, ,841 In-Kind contributions 864, ,641 Donations (non-government) 25,895 16,504 Total Revenue 6,222,897 6,654,856 Expenses: Program services 5,709,317 5,963,915 Supporting services: General administrative 607, ,290 Total supporting services 607, ,290 Total Expenses 6,316,804 6,637,205 Changes in Net Assets (93,907) 17,651 Net Assets at beginning of period 978, ,970 Net Assets as of June 30, 2016 $ 884,510 $ 820,621 See accompanying notes to the basic financial statements. 4

7 STATEMENT OF FUNCTIONAL EXPENSES General & Program Administrative Total Personnel Costs Salaries and Wages $ 2,466,290 $ 396,445 $ 2,862,735 Personnel Costs Employee Benefits 198,143 30, ,424 Personnel Costs Payroll Taxes 216,574 30, ,117 Beneficiary Costs - Energy 978, ,908 Beneficiary Costs Home Providers 246, ,996 Beneficiary Costs Food Purchased 278, ,918 Beneficiary Costs - Other 56,486 56,486 In-Kind Contributions 873, ,641 Depreciation 90,090 90,090 Occupancy 152,998 11, ,877 Utilities 91,496 5,797 97,293 Vehicle Gas and Maintenance 53,761 53,761 Conferences and Training 103,178 14, ,099 Mortgage Payments 22,344 22,344 Insurance 72,742 72,742 Travel 37,214 10,657 47,871 Auditing and Contractual Services 16,151 32,991 49,142 Office Expense 35,961 20,311 56,272 Telephone 33,497 4,850 38,347 Data Processing 25,284 5,164 30,448 Postage 2,906 2,649 5,555 Medical Expenses Miscellaneous 16,712 16,712 Total Expenses $ 5,963,915 $ 673,290 $ 6,637,205 See accompanying notes to the basic financial statements. 5

8 STATEMENT OF CASH FLOWS OPERATING ACTIVITIES Change in net assets... $ 17,651 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 90,090 Receivables (80,235) Accounts payable and accrued liabilities, etc. (5,661) Deferred revenues (47,987) Net cash provided by (used in) operating activities (26,142) FINANCING ACTIVITIES Repayment of note payable (6,585) Net cash provided by (used in) financing activities (6,585) Net increase (decrease) in cash and equivalents (32,727) Cash and equivalents as of beginning period 160,972 Cash and equivalents as of June 30, 2016 $ 128,245 See accompanying notes to the basic financial statements. 6

9 NOTES TO THE FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies Organization: The Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa, was originally incorporated in Tallapoosa County, Alabama in 1967 as Chambers Tallapoosa Community Action Committee, Inc. It was awarded federal tax exempt status under Internal Revenue Code Section 501(c)(3) in The name was changed in 1986 to reflect the expansion of the Agency. Although the agency regularly is referred to as Community Action Agency or CAA, official abbreviations are CAC of C-T-C, CAC or the Agency. Currently, the administrative office and primary location for the agency is 170 S. Broadnax Street, Dadeville, Alabama. The agency receives all of its funding from grants and donations. It solicits funding for the primary purpose of providing social services to children and others with the mission to identify and define the causes and extent of poverty in Chambers, Tallapoosa, and Coosa counties in east-central Alabama, and to coordinate and focus available resources to eliminate the causes and conditions of poverty. This mission has led the Agency to acquire and administer federal and state funds to provide a variety of services to the community including the Head Start Program, various energy assistance programs, and child food reimbursement programs. In addition to the primary location in Dadeville, the Agency also has six locations in the tricounty area which serve as Head Start centers. These centers are located in Alexander City, Lanett, LaFayette, and Tallassee. It also maintains a satellite office for energy services in LaFayette, Alabama. Estimates: The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Functional Expenses: Expenses are accumulated and allocated directly to funding programs in general categories based on specific transactions. Basis of Presentation: Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of the Agency and changes therein are classified and reported as follows: Unrestricted net assets Net assets that are not subject to donor imposed stipulations. Temporarily restricted net assets Net assets subject to donor imposed stipulations that may or will be met either by actions of the Agency, and/or the passage of time. Permanently restricted net assets Net assets subject to donor imposed stipulations that they be maintained permanently by the Agency. Generally the donors of these assets permit the Agency to use all or part of the income earned on related investments for general or specific purposes. There were no permanently restricted assets at June 30,

10 NOTES TO THE FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (continued) Grants, contract funding, and contributions which are restricted to the use of the Agency s programs are reflected as unrestricted revenue when these funds are received and spent during the same year. Contributions: The Agency also elected to adopt SFAS No. 116, Accounting for Contributions Received and Contributions Made, effective September 1, In accordance with SFAS No 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence or nature of any donor restrictions. The Agency receives only in-kind services and rentals and immaterial amounts of in-kind supplies and equipment. The in-kind contributions are recorded annually as unrestricted support due to annual grants requirements of matching or in-kind contributions to total grants for grants compliance. Also, upon completion of the required matching contributions the compliance restriction expires relative to the appropriate amount of grant funds matched. Due to the grantor restrictions and the requirement for matching of any carryover, reprogrammed grant funds, all in-kind contributions and grants are reported as unrestricted support assuming grantee compliance and all restrictions being met in the same year of the grants. Cash and Cash Equivalents: The Agency s cash and equivalent balances are qualified to be covered under the Security for Alabama Funds Enhancement or SAFE Program. This program provides for each Qualified Public depositor (which the Agency is) security for their cash and cash equivalents. This balance is $128,245 as of June 30, Equipment and Improvements: Expenditures for consumable supplies and equipment purchases are charged directly into program operations at the time of purchase, but Fixed Assets are also capitalized and accounted for in the Equipment fund, rather than in the separate funding accounts. Depreciation is computed by the straight-line method at rates based on the following estimated useful lives: Years Renovations and Improvements 7-20 Transportation and Other Equipment 3-5 Depreciation expenses for the year ended June 30, 2016 was $90,090 and is reported as General and Administrative expense in the Unrestricted Net Assets in the Statement of Activities. Depreciation is charged in accordance with SFAS No. 93. All fixed assets were acquired with current and prior grant funds. The assets are the property of the grantee but grantors have reversionary provisions of title in certain circumstances that might occur. The depreciation that is chargeable effective this fiscal period and subsequent fiscal year is not a grantee cost that is reimbursable by the grantors. The depreciation charges are for financial statement purpose only, as required by SFAS no

11 NOTES TO THE FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies (continued) Donations are reported as increases in unrestricted net assets unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the Agency reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Agency reclassifies temporarily restricted net assets to unrestricted net assets at that time. Deferred Revenues: Grant awards accounted for as exchange transactions are recorded as revenue when expenditures have been incurred in compliance with the grant restrictions. Amounts unspent are recorded in the statements of financial position as deferred revenue. Allowance for Doubtful Accounts: No allowance for doubtful accounts is provided at June 30, 2016, as management believes all outstanding receivables are collectible. If collection becomes doubtful, an allowance for doubtful accounts will be established. Recoveries of previously charged off accounts are recorded when received. Note 2 Receivable-Grants and Contracts The Agency as of June 30, 2016 has recorded $115,305 as receivable from the Alabama Department of Economic and Community Affairs and $23,078 from the Alabama Department of Education. These amounts were received in July and August Note 3 Questioned Cost The Uniform Guidance requires the disclosure of questioned costs identified by audit procedures. For the year ended June 30, 2016, the Agency has no material questioned costs. Note 4 Notes Payable Notes Payable consists of two long-term mortgages to renovate two Head Start centers. On December 3, 2007, the Agency entered into a mortgage loan agreement for $400,100 to fund the renovations of a head start center located in Alexander City, Alabama. The note has an interest rate of 5.40% and requires quarterly payments of $11,

12 NOTES TO THE FINANCIAL STATEMENTS Note 4 Notes Payable (continued) On August 28, 2008, the agency entered into a mortgage loan agreement for $330,000 to renovate a head start center located in LaFayette, Alabama. The note has an interest rate of 4.6% and requires monthly payments of $2, The following is a summary of long-term debt transactions for the Agency for the year ended June 30, Debt Debt Outstanding Outstanding 07/01/15 Increases Decreases 06/30/16 Governmental Activities: Alexander City Head Start... $ 223,164 $ $ (35,993) $ 187,171 LaFayette Head Start ,777 (20,161) 205,616 Totals... $ 448,941 $ $ (56,154) $ 392,787 Debt service requirements are as follows: thereafter Totals Principal Alexander City Head Start 42,287 44,097 45,908 54, ,171 LaFayette Head Start 22,786 23,799 24,633 25,790 26,947 81, ,616 Total principal requirements 65,073 67,896 70,541 80,669 26,947 81, ,787 Interest Alexander City Head Start 5,579 3,769 1, ,406 LaFayette Head Start 9,845 6,833 5,999 4,842 3,685 9,227 40,431 Total interest requirements 15,424 10,602 7,957 4,942 3,685 9,227 51,837 Total debt requirements 80,497 78,498 78,498 85,611 30,632 90, ,624 Thereafter Principal LaFayette Head Start 81,661 Total principal requirements 81,661 Interest LaFayette Head Start 9,227 Total interest requirements 9,227 Total debt requirements 90,888 10

13 NOTES TO THE FINANCIAL STATEMENTS Note 5 Employee Benefit Plan The Agency has a defined contribution plan covering full-time employees of the Agency. The plan is a 401(K) plan under which the Agency contributes six percent of each eligible employee s salary and each eligible employee contributes at least two percent of their salary. The Agency contributed $170,722 during year ended June 30, Note 6 Donated Service, Facilities, Materials and Equipment The Agency receives donated services from a variety of unpaid volunteers assisting the Agency in the education program relative to annually funded Head Start grants. Additionally, donated facilities are utilized in the education programs for the Head Start program. Donated materials and equipment are minimal in amount. The amounts recognized for donated facilities are the fair market value of rentals of the donated facilities. Donated services are recognized at the minimum wage hourly rate for hours volunteered. The amounts for donated services have been recognized in the accompanying statement of activities because of criteria for recognition of such volunteer effort under SFAS No. 116 has been satisfied to the extent that the majority of volunteer effort relates to classroom teacher assistance (not professional) that the Agency would likely to have to pay for if not volunteered. Additionally, the donated services, materials, and facilities is recognized due to the materiality of the services which are specifically required for Head Start program annual grants. Therefore, the amount of donated services, facilities, materials, and equipment is recognized in the financial statements as a revenue item termed In-Kind Contributions for $873,641 for June 30, 2016, and subsequently as a functional expense termed In-Kind Contributions for the same amounts. Note 7 Compensated Absences Annual leave and sick leave have not been recorded in the prior years financial statements and are not recorded in the financial statements for the year ended June 30, The Agency s Financial Policies and Procedures Manual states that Grantee personnel policies in accordance with requirements, will establish the rules concerning annual and sick leave. The Agency does not allow annual leave accumulated during one program or fiscal year to be carried over to the next year within the limits set by grantee personnel policy. The Agency has no liability for compensated absences at June 30,

14 NOTES TO THE FINANCIAL STATEMENTS Note 8 Indirect Cost Administrative expenses are funded by a fee charged to each grant or funding source. This Indirect Cost varies based on size of the grant and number of personnel in each area. Primarily it is limited to 15% of the grant plus local In-Kind support. The Agency annually submits an indirect cost allocation plan. Currently, the agency allocates funds for administrative services by charging each program a rate of 21.95% of the programs gross pay. Note 9 Evaluation of Subsequent Events The Agency evaluated subsequent events through January 26, 2017, the date which the financial statements were available to be issued. The Agency did not have any subsequent events requiring disclosure or recording in these financial statements. Note 10 Renovations, Improvements, and Equipment The costs and related accumulated depreciation of Renovations, Improvements, and Equipment as of June 30, 2016 are presented below. Costs Costs Costs of Assets: 06/30/15 Additions 06/30/16 Land, Buildings, and Renovations: LaFayette Head Start Center $ 841,719 $ $ 841,719 Alex City Robinson Head Start Center 752, ,855 Bowen East (Renovations) 152, ,036 Plainview (Renovations) 21,946 21,946 Wall Street (Renovations) 81,463 81,463 Total Land, Buildings, and Renovations 1,850,019 1,850,019 Vehicles 663, ,171 Equipment 196, ,805 Other Fully-Depreciated Equipment 961, ,080 Totals $ 3,671,075 $ $ 3,671,075 12

15 NOTES TO THE FINANCIAL STATEMENTS Note 10 Renovations, Improvements, and Equipment (continued) Accumulated Accumulated Depreciation Depreciation Depreciation Current and Accumulated Depreciation: 06/30/15 Expense 06/30/16 Land, Buildings, and Renovations: LaFayette Head Start Center $ 403,582 $ 31,529 $ 435,111 Alex City Robinson Head Start Center 381,254 29, ,038 Bowen East (Renovations) 48,158 7,168 55,326 Plainview (Renovations) 10, ,520 Wall Street (Renovations) 14,934 3,394 18,328 Total Land, Buildings, and Renovations 858,534 72, ,323 Vehicles 663, ,171 Equipment 151,420 17, ,721 Other Fully-Depreciated Equipment 961, ,080 Totals $ 2,634,205 $ 90,090 $ 2,724,295 Net Book Values $ 1,036,870 $ 946,780 13

16 Supplementary Information

17 Vance CPA LLC Certified Public Accountants 832 Snow Street Suite B Oxford, Alabama Tel. (888) Fax (866) INDEPENDENT AUDITOR S 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 Board of Directors Community Action Committee, Inc. of Chambers Tallapoosa-Coosa 170 S Broadnax Street Dadeville, Al 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 Community Action Agency, Inc. of Chambers-Tallapoosa-Coosa, (a nonprofit organization), which comprise the statement of financial position as June 30, 2016, and the related statements of activities, functional expense, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated January 26, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Community Action Agency, Inc. of Chambers-Tallapoosa-Coosa 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 Community Action Agency, Inc. of Chambers-Tallapoosa-Coosa s internal control. Accordingly, we do not express an opinion on the effectiveness of the Community Action Agency, Inc. of Chambers-Tallapoosa-Coosa 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 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 severe than a material weakness, yet important enough to merit attention by those charged with governance. 15

18 Our 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 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 Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s financial statements are free of material misstatement, we 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 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 or 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. Oxford, Alabama January 26, 2017 Vance CPA LLC 16

19 Vance CPA LLC Certified Public Accountants 832 Snow Street Suite B Oxford, Alabama Tel. (888) Fax (866) INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Board of Directors Community Action Committee, Inc. of Chambers Tallapoosa-Coosa 170 S Broadnax Street Dadeville, Al Report on Compliance for Each Major Federal Program We have audited Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s compliance with the types of compliance requirements described in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, (Uniform Guidance) that could have a direct and material effect on each of Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s major federal programs for the year ended June 30, Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s major federal programs are identified in the summary of auditor s result section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, 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 Community Action Committee, Inc. of Chambers- Tallapoosa-Coosa 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 Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa s compliance. 17

20 Opinion on Each Major Federal Program In our opinion, Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa 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, Report on Internal Control Over Compliance Management of Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Community Action Committee, Inc. of Chambers-Tallapoosa-Coosa 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, we do not express an opinion on the effectiveness of Community Action Committee, Inc. of Chambers- Tallapoosa-Coosa 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, or a combination of deficiencies, in internal control over compliance with a 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 charged with governance. Our 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. We 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. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Oxford Alabama January 26, 2017 Vance CPA LLC 18

21 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Contract/Grant Federal Awards Program CFDA # Number Expenditures U.S. Department Of Health and Human Services Received Directly from HHS Head Start CH ,494,561 Passed through ADECA Community Services Block Grant CS ,098 Community Services Block Grant CS ,824 Low-income Home Energy Assistance LI ,461 Low-income Home Energy Assistance LI ,927 Total U.S. Department of Health and Human Services 4,722,871 U.S. Department of Agriculture Passed through State Department of Education Head Start Food Supplements H31 FY15 97,257 Head Start Food Supplements H31 FY16 337,617 Family Day Care F13 FY15 61,947 Family Day Care F13 FY16 188,137 Total U. S. Department of Agriculture 684,958 U.S. Department Of Energy Passed through ADECA Weatherization Assistance Program DOE ,528 Weatherization Assistance Program LIWAP ,210 Total U. S. Department of Energy 62,738 Total Expenditures of Federal Awards $ 5,470,567 19

22 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note 1 Basis of Accounting The supplementary schedule of expenditures of federal awards includes the federal grant activity of the Agency. Expenditures are presented on the accrual basis of accounting. This method is consistent with the preparation of the Agency s financial statements. Note 2 Pass-Through Awards The Agency received certain federal awards as pass-through awards of the State of Alabama. The total amount of such pass-through awards is included in the schedule of expenditures of federal awards. 20

23 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section 1 Summary of Auditor s Results Financial Statements Type of auditor s report issued Unqualified Internal control over financial reporting Material weakness(es) identified? yes X no Significant deficiency(ies)identified not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted: yes X no Federal Awards and State Financial Assistance Internal control over major programs material weakness(es) identified? yes X no Significant deficiency (ies) identified not considered to be material weaknesses? yes X none Reported Type of auditor s report issued on compliance for major programs Unqualified Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a)? yes X no Identification of major federal awards/state financial assistance projects: CFDA/CSFA Number Head Start Name of Federal Award/State Financial Assistance Project (continued) 21

24 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued) Dollar threshold used to distinguish between Type A and Type B programs $750,000 Auditee qualified as low-risk auditee? yes X no Section II Financial Statement Findings No matters were reported. Section III Findings and Questioned Costs Major Federal Award Programs No matters were reported. 22