Certified Public Accountant

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1 i2~ 1"~ VF 0~,J#.~;-6 PP+ - C O M M U N ITY IN D E PEN D E N T L IV IN G SY ST E M S,IN C. B aton R ouge,l ouisiana FIN A N C IA L STA T E M EN T S A N D A T T E STA T IO N June 30,2003 Certified Public Accountant

2 CO M M UNITY INDEPEND ENT LIVIN G SYSTEM S,IN C Baton Rouge,Louisiana TA BLE O F CO N TEN TS June PaRe N o. ACCOUN TANT'S REPORT 1 FIN AN CIAL STATEM EN TS Balan ce Sheet Statem entof Incom e Statem entof Cash Flow s N otesto Fin an cial Statem ents ATTESTATION Report SUPPLEM EN TAL IN FO RM A TION A testation Questionnaire

3 CURTIS MICHAEL JOHNSTON,C.P.A. 2491OakManorCourt~ BatonRouge,LA ~ (504) To the Board of D irectors Community IndependentLiving Systems,Inc.(CILS) Ihave com piled the accom panying balan ce sheetof CILS as of June 30,2003,an d the related statem ents of revenue,expenses,an d changes in stockholders'equity,and cash flow s for th e year th en ended,in accordan ce w ith Statem ents on Standardsfor A ccounting an d Review Services issued by the A m erican In stitute of Certified Public A ccountants. A com pilation islim ited to presenting in the form of financial statem ents inform ation th atis th e representation of m anagem ent. Ihave notaudited or review ed th e accom panying financial statem ents an d,accordingly,do notexpress an opinion or an y other form of as surance on th em. In accordan ce w ith th e Loui siana Governm entala uditguide an d th e provisionsof state law,i ha ve issued a report,dated Decem ber 23,on th e results of ouragreed-upon procedures. ('4 "~ ' '~00%

4 COM M UNITY INDEPENDENT LIVING SYSTEMS,INC. BALANCE SHEET URRENT ASSETS Cash Investm ents Prepaid rent Accounts receivable Miscelaneous receivable $131, ,050 13,025 77, Totalcurrentassets LO NG TERM ASSETS Accounts receivable--other PROPERTY AND EQUIPMENT Equipm ent Vehicles Less:Accum ulated Depreciation Totalproperty & equipm ent $47,249 $40,254 (38,556) $698,073 $33,577 $48,947 LIA BILm EB AND STOCKHOLDERS' EQ UITY CurrentLiabflitts s Accounts payable Tax payable federal Deferred incom e ta x State incom e tax payabfe Tota lcurrentliabilities Long Term Liablitles Deferred incom e tax Stockholders'Equity R~ ained earnings Aecum u[ats d othercom prehensive incom e $780,597 $7,850 6,523 3,121 1,289 $18,783 $385 $799,108 ($37,679) $761,429 TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $780,597 See accom panying notes and accounta nt's report

5 CO M M UNITY INDEPENDENT LIVING SYSTEM S,INC STATEM ENT O F REVENUE,EXPENSES,A ND FO R THE YEAR ENDED JUNE 30,2003 REVENUES Clientservices Realized loss on sale ofinvestments Dividends Otherincome Interestincome $917,103 (27,019) 2, TOTAL REVENUE6 $897,791 EXPENSES Salaries and related benef~s Professionalservices Transportation alowances Clientclothing alowances O perating alowances Postage O fice supplies Housing rentals Furniture rent Ofice equipmentrent Infantneeds Repairs Taxes T~pa expenses fostercare Dam ages to apartments Travel/meals Utilities Assetm anagem entfee Interest Loss on disposal Dues and subscriptions Conference and training Depreciation Expense accounts reim bursed OCS M iscelaneous Licenses and perm its Payroltaxes Insurance Telephone $443,450 9,938 15,323 10,579 42,055 1,582 7, ,819 13,165 8,441 2,043 3, ,730 5,513 3,397 23,162 2, ,822 1, ,915 5,678 1, ,858 8,760 20,245 TOTALEXPENSES NETINCOME(LOSS)BEFORETAXES Incom e tax expense Netincom e 31,978 I8r347 $13,631 OTHER COM PREHENSIVE INCOME Unrealized gain on investm ents $50,967 COMPREHENSIVE INCOME STOCKHO LDERS'EQ UITY Beginning ofyear STOCKHOLDERS'EQUITY AT END OF YEAR 696,831 $761,429 See accom panying notes and accountant's report

6 O PERATING ACTIVITIES CO M M UNITY INDEPENDENT LIVING SYSTEM S,INC STATEM ENT O F CASH FLO W S JULY 1,2002-JUNE 30,2003 Netincom e Adjustments to reconcile netincome to netcash provided by operations: Accounts receivable Accounts receivable-other 2000 Prepaid taxes 2001 Prepaid tax es DepositrentFC Depositutility FC Due from/to em ployee Legg Mason(Portfolio) Legg M ason Value Trust Prepaid rent Stock valuation a low ance VT Stock value alowance (Portfolio) Accounts payable 2001 Incom e tax payable Deferred inco m e tax payable Fed W /H taxes payable FICA taxes payable FUTA payable LA W /H tax es payable Payro lliabilities SUTA payable W ages payable W orker's com p payable Netca sh provided by O perating Activities $64,598 77O 7,460 3,976 12,032 (1,300) (550) 3,560 27,516 (3,584) (481) (31,363) (19,642) 107 (41,426) 17,232 2,846 (140) 131 1,886 (283) 2,179 (2,818) 568 $43,274 INVESTING ACTIVITIES Accum ulated depreciation Equipm ent Vehicle accum,depreciation Vehicle Netcash provided by Investing Activities Netca sh increase forperiod Cash atbeginning ofperiod Cash atend ofperiod (55,697) 72,061 2,354 (40,254) ($21r536) 21, $1~ 364 See ac om panying notes and accountant's report

7 CO M M UNITY INDEPENDENT LIVIN G SYSTEM S,IN C Baton Rouge,Louisiana NO TES TO FINAN CIAL STATEM EN TS June 30,2003 NOTE I-SUM M ARY OF SIGN IFICANT ACCOUNTIN G POLICIES A. N ature of A ctivities COM M UNITY IN DEPEND ENT LIVING SYSTEM S,IN C.isa human service providercorp oration. The company providescase n~anagem ent,independentliving skillsan d counseling to in dividualsin the comm unity in cluding,but not lim ited to the fo low in g: develop job skils, develop personaland work adjustment, provide,develop an d prom ote employm entopportunity prom ote independentlearning skills B. Basisof A ccountin g The accompanying financialstatem entsofcom M UN ITY IN DEPENDENT LIVIN G SY STEM S,IN C.have been prepared on the accrual basisof accounting. Accordi ngly,revenuesare recognmed when earn ed an d expenses are recognized when incurred. C. Incom e Tax Status COM M UN ITY IN DEPEN DEN T LIVIN G SY STEM S,IN C.operatesasa for-profitcorporation,therefore, itm ustpay federaland sta te income taxeson an y profits realized by the organization.the provision forincom e tax expenseforth e period ended June 30,2003 was$18,347.th e deferred tax liability atjune 30,2003 was $3,121forcurrentperiod an d $ 385 forfuture years.these amountsrepresent fu ture tax liabilitiesto th e organiza tion caused by timing diferencesbetween income and expensesreported fortax purp oses an d in com e an d expensesreported undergenerally accepted accoun ting principles.thisisa reduction of $ 20,259 in the de ferred ta x liability accoun tfrom th e prioryear.

8 D. Investm ents CILS classifiesitsinvestm entsasm arketable securities"available forsale".these are carried in the financial statementsatfairvalue.realized gainsan d losses,determined using thefirst-in,first-out(fifo)method,are included in earnings;unrealized holding gainsan d lossesare reported in other com prehensive incom e. Other investm ents included are assetbacked securities,lim ited parm erships,and cash. Investm entsatfairvalue Equities A ssetbacked Securities M utualfunds Lim ited Partnerships Cash Balan ce Total Investm entincom e Interestand dividends Realized gain san d losses on sal e of securities N etappreciation in fairvalue of investm ents $ 164,374 54, ,890 18,770 40,159 $ 475,050 $ 6,041 $ (27,019) $ 50,967 E. Accountsreceivable Accoun ts receivable representam ounts due from th e Louisiana Departm entof SocialServices forserv ices rendered by COM M UN ITY IND EPEN DENT LIVIN G SY STEM S,IN C.underfee forservice contra ctsan d cost-reim bursem entcontracts. F. A ccountsreceivable -oth er A ccountsreceivable oth errepresents am ountsdue from a form erem ployee of COM M UN ITY IN DEPEN DEN T LIV IN G SY STEM S,IN C. G. Estim ates The preparation of finan cialstatem entsin conform ity with general ly accepted accounting principlesrequires m anagem ent to m ake estim ates an d assum ptions that affect certain reported am ounts an d di sclosures. Accordi ngly,actual resultscould diferfrom th ose estim ates. N OTE 2-CON CEN TRA TION S OF CRED IT RISK CILS m aim am s its cas h bal an ces in one fin an cial re stitution in Baton Rouge,Louisian a. Th e bal an ces are insured by th e FederalDepositInsuran ce Corporation up to $ 100,000.Asof June 30,2003,CILS 'suninsured balancesw ere $ 19,846.

9 NOTE 3-PROPERTY AND EQUIPM ENT Property and equipm ent,related service lives,and accum ulated depreciation atjune 30,2003,are as follows Estim ated Service Lives Furniture and equipm ent Vehicles Total Less:accum ulated depreciation TotalProperty and equipm ent 5-8 yrs 5 yrs $ 47,249 40,254 87,503 (38,556) Depreciation expense was $3,915 forthe yearended Jun e 30,2003 NOTE 4 -ECON OM IC DEPENDEN CY During th e yearended June 30,2003,th e com pan y received a significan tportion of itsrevenuesthrough th e State of Louisiana. The am ountsapplicable to th e year ended Jun e 30,2003 are asfollow s: Receivable,beginning of year Revenuesearned an d invoiced Collections Receivable,end of year $ 77, ,103 (917,873) $77,058 NOTE 5 -BOARD OF DIRECTORS COM M UNITY INDEPENDENT LIVING SYSTEM S,INC.'sboard of directorsconsistsof two (2)members. One of th e currentboard m embersisalso a full-tim e em ployee of COM M UN ITY IN DEPEN DEN T LIVIN G SY STE M S,IN C.

10 N OTE 6 - OPERATIN G LEA SES COM M UN ITY INDEPEN DEN T LIV ING SY STEM S, IN C. had no operating leases with rem aining noncancellable lease term sm excessof one yearasof June 30,2003. N OTE 8-CA SH FLOW IN FORM A TION COM M UN ITY IN DEPEN DEN T LIV IN G SY STEM S,IN C.considers allshort-term investm entswith an origin alm aturity of three m onthsorlessto be cash equivalents. Cash paid forincom e taxesfor2003 w as as follow s Income taxes $ 13,260

11 Com m unity IndependentLiving System s,inc (CILS) IndependentAccountant's Report on Applying Agreed-Upon Procedures To the Board ofdirectors Com m unity IndependentLiving System s,inc. Ihave perform ed the procedures included in the Louisiana G overnm entalauditguide and enum erated below,w hich w ere agreed to by the m anagem entofcils,the Legislative A uditor, State oflouisiana,and applicable state grantoragency solely to assistthe users in evaluating m anagem ent's assertions about CILS's com pliance with certain laws and regulations during July 1,2002-June 30,2003,included in the accom panying Louisiana Attestation Questionnaire. This agreed-upon procedures engagem entw as perform ed in accordance with standards established by the Am erican Institute ofcertified Public Accountants and applicable standards ofgovernm ent Auditing Standards.The sufi ciency ofthese procedures is solely the responsibility ofthe specified users ofthe report. Consequently,Im ake no representation regarding the suficiency of the 9rocedures described below eitherforthe purpose forw hich this report has been requested orforany otherpurpose. Federal,State,and LocalA w ards 1. Determ ine the am ountoffederal,state and localaward expenditures forthe fiscalyear,by grantand grantyear. CILS's Federalaward expenditures foralfederalprogram s forthe fiscalyearfo low : Find W ork Program 7/1/02-6/30/ $ 268,280 TotalExpenditures $ 268,280 Foreach Federal,state,and localaward,irandom ly selected 6 disbursem ents from each aw ard adm inistered during the period underexam ination. Forthe item s selected in procedure 2,Itraced the six disburs em ents to supporting docum entation as to properam ountand payee.

12 Iexam ined supporting docum entation foreach ofthe six selected disbursem ents and found thatpaym entwas forthe properam ountand m ade to the correctpayee, 4. Forthe item s selected in procedure 2,Ideterm ined ifthe six disburs em ents were properly coded to the correct generalledgeraccount. Itraced the paym ents to the generalledgerand determ ined thatthe correct accountwas coded. 5. Forthe item s selected in procedure 2,Ideterm ined w hetherthe six disburs em ents received approvalfrom properauthorities. I exam ined supportdocum entation forthe 6 disburs em ents and determ ined thatthe disbursem ents received approvalfrom the properauthorities. 6. Forthe item s select ed in procedure 2: Forfederalawards,Ideterm ined w hetherthe disbursem ents com plied with the applicable specific program com pliance requirem ents contained in the grantagreem ent,relating to: Activities a lowed oruna lowed Ireviewed the previously listed disbursem ents fortypes ofservices a lowed ornota lowed and determ ined thatthe disburs em ents were in com pliance with the grantagreem ent. 7. Foralgrants exceeding five thousand do lars,ideterm ined thateach applicable federal, state,orlocalgrantoragency/agency was provided w ith a com prehensive budgetofthose grants thatincluded the purpose and duration. Iexam ined the com prehensive budgets prepared by CILS,which were subm ited,to the Departm entofsocialserv ices,w hich serves as a basis ofreim burs em entto C ILS.

13 LO UISIANA ATTESTATIO N QUESTIO NNAIRE (ForAttestation Engagements ofquasi-public Entities) Decem ber Curtis M ichaeljohnston.cpa Baton Rouae.lA In connection with yourcom pilation ofourfinancialstatem ents as of June 30,2003 and forthe period then ended,and as required by Louisiana Revised Statute 24:513 and the Louisiana Govem m entalauditguide,we make the fo lowing representations to you. W e acceptfu l responsibility forourcom pliance with the fo lowing laws and regulation and the internalcontrols overcom pliance with such laws and regulations. W e have evaluated ourcom pliance with the following laws and regulations priorto m aking these representations. These representations are based on the inform ation available to us as ofdecem ber15,2003 Federal,State,and LocalAw ards W e have detailed foryou the am ountoffederal,state and localaward expenditures forthe fiscal year,by grantand grantyear. Yes[~~"~,4, o[] A ltransactions relating to federal,state,and localgrants have been properly recorded w ithin our accounting records and repodted to the appropriate state,federal,and grantor~fi Ci,=o L'~ va~=~ rlv/'n o [] The reports filed with federal,state,and localagencies are properly supported by books oforiginal entry and supporting docum entation Yes[/~No[] W e have com plied with a lapplicable specific requirem ents ofa lfederal,state,and localprogram s we adm inister,to include m atters contained in the Com pliance Supplement,m atters conta ined in the grant awards,eligibility requirem ents,activities a lowed and una lowed, and reporting and budgetrequirem ents. Yes[b~No[] O pen M eetings Ourm eetings,as they relate to public funds,have been posted as an open meeting as required by LSA-RS 42:1through42:12 (the open meetingslaw) jz:~]//,~ Yes[]No[] Budget Foreach federal,state,and localgrantwe have filed with the appropriate grantoragency a com prehensive budgetforthose grants thatincluded the purpose and duration,and forstate grants included specific goals and objectives and measures ofperformance Yes [~ No[]

14 W e have disclosed to you a lknown noncom pliance ofthe foregoing taws and regulations,as we l as any contradictions to the foregoing representations. W e have m ade available to you docum entation relating to the federal,state,and localgrants,to include the applicable laws and regulations. W e have provided you with any com m unications from regulatory agencies or other sources concerning any possible noncom pliance with the foregoing laws and regulations,including any com m unications received between the end ofthe period underexam ination and the issuance of this report, W e wilalso disclose to you,the Legislative Auditor,and the applicable state grantor agency/agencies any know n noncom pliance w hich m ay occurup to the date ofyourreport. Secretary Treasurer Pres i2 ~2-.2.~~ '~., ~ Date Date Date

FINANCIAL STATEM ENTS AND ACCO UNTANT'S REPO RT NSHO RE FISHING ASSO CIATIO N,INC DECEM BER 31,2003

'-) FINANCIAL STATEM ENTS AND ACCO UNTANT'S REPO RT NSHO RE FISHING ASSO CIATIO N,INC DECEM BER 31,2003 Underprovisions ofstpte law,this reportis a public documenta copy ofthe reporthas been submited to