August16,1996. C harlesf.w ebb C ertified Public A ccountant

Transcription

1 A m aterialw eakness is a reportable condition in w hich the design or operation of one or m ore of the internalcontrolstructure elem entsdoesnotreduce to a relatively low levelthe risk lhat errors or irregularities in am ounts that w ould be m aterial in relation to the financialstatem entbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployeesin the norm alcourse of perform ing theirassigned functions M y consideration of the internal control structure w ould not necessarily disclose all m atters in the internal control structure that m ight be reportable conditions and, accordingly, w ould not necessarily disclose all reportable condition that are also considered to be m aterialw eaknessasdefined above. This report is intended for the inform ation of the audit com m ittee, m anagem ent, and othersw ithin the organization and appropriate state and federalagencies. H ow ever,this reportisa lnatterof public record and itsdistribution isnotlimited C harlesf.w ebb C ertified Public A ccountant August16,1996

2 C HARLES F.W EBB CERTIFIED PUBLIC ACCOUNTANT REPOR T ON IN TERN AL CON TROL STRU CTURE U SE[) IN AD M IN ISTERIN G FED ERA L AW ARD S To the Board of D irectors D r.m urphy W.M ccaleb EducationalFund, Inc B Erato Street N ew O rleans,la I have audited the basic financial statem ents of D r. M urp hy W.M ccaleb Educational Fund,Inc.,as of and forthe years ended D ecem ber31, 1994 and D ecem ber31,1995,and have issued m y reportthereon dated August16,1996. I conducted my audit in accordance with generally accepted auditing standards, G overnm entauditing Standards,issued by the Com ptrollerg eneralof the U nited States, and Office of M anagementand Budget(OM B)CircularA-133,AuditsofInstitutionsof H ighereducation and O thern on-profitinstitutions. Those standardsand O M B Circular A -133 require that I plan and perform the audit to obtain reasonable assurance about w hether D r. M urphy W. M ccaleb Educational Fund. Inc. com plied w ilh law s and regulations,noncompliancewithwhich would bematerialto amajorfederalprogram. In planning and perform ing m y auditforthe yearsended D ecem ber3 l, 1995,Iconsidered D r.m urphy W.M ccaleb EducationalFund,Inc.controlstructure in orderto determ ine m y auditing procedures for the purpose of expressing m y opinion on D r. M urphy W. M ccaleb Educational Fund, Inc. financial statem ents and on its com pliance w ith requirementsapplicableto majorprogramsand to reporton theinternalcontrolstructure in accordance w ith OM B Circular A-133. This report addresses m y consideration of internal control structure policies and procedures relevant to com pliance w ith requirem ents applicable to federalprogram s. I have addressed policies and procedures relevant to m y audit of the financialstatem ents in a separate report dated A ugust 16, The m anagem ent of D r,m urp hy W.M ccaleb EducationalFund, Inc.is responsible for establishi ng and m aintaining an internalcontrolstru cture. In fulfilling this responsible, estimatesand judgmentsby managementare required to assessthe expected benefitsand related costs of intern alcontrolstructure policies and procedures. Theobjectivesof an internalcontrolstru cture are to provide m anagem entw ith reasonable, but not absolute, assurance thatassets are safegu arded againstloss fiom unauthorized use or disposition, that transactions are executed in accordance w ith m anagem ent's authorization and recorded properly to perm it the preparation of financialstatem ents in accordance w ith generally accepted accounting principles,and that federalaw ards program s are m anaged in com pliance w ith applicable law sand regulations, Because of inherentlim itationsin any internalcontrolstructure,errors,irregularities, or instancesof noncom pliance m ay BARONNE ST.,SUITE 203 ~NEW O RLEANS,LOUISIANA ~ (504) ~FAX (504)

3 neverthelessoccurand notbedetected.also,projection ofany cvalualionofthestructure to future periodsissubjectto the risk thztproceduresmay become inadequate because of changes in conditions orthatthe efectivenessof the design and operation of policiesand proceduresm ay deteriorate. Forthe purpose of this report,i have classified the significantinternalcontrolstructure policies and procedures used in adm inistering federal program s in the follow ing categories: A ccounting A pplications Bilings(in regardsto reimbursementrequest) Cash Receipts Cash D isbursem ents Revenuesand Receivable Purchasing Payroll Property and Equipm ent Controlsused in A dm inistering FederalProgram s G eneralr equirem ents PoliticalA ctivity C ivilr ights Cash M anagem ent FederalFinancialR eports D rug Free W orkplace Specific R equirem ents Types of Services Eligibility of Cost C osta llocation CostIncurred in Approved Period G rantbudgetsand R evisions For all of the internal control stru cture categories listed above, I obtained an understanding of the design of relevantpolicies and procedures and w hether they have been place in operation,and 3[assessed controlrisk. D uring the years ended D ecem ber 31,1995,D r.m urp hy W.M ccaleb EducationalFund, Inc.,expended 100% of itstotalfederalawardsundernon-majorprograms. 30

4 1 perlbm led tests of control as required by O M B Circula~ A -133 to evaluate the effectiveness of the design and operation of internal control structure policies and procedures thati considered relevantto preventing ordetecting m aterialnonco m pliance w ith specific requirem ents,generalrequirem ents,and requirem ents governing claim s for advances and reim bursem ents and am ounts claim ed or used for m atching that are applicable to each of the majorfederalfinancialassistance programs,which are identified in the accom panying schedule of federalfinancialassistance. I noted certain m atters involving the internal control structure and its operation that 1 considerto be reportable conditionsunderstandardsestablished by the A m erican Institute of Certified Public A ccountants. R eportable conditions involve m atters com ing to m y attention relating to significant deficiencies in the design or operation of the internal controlstructurethat,in my judgment,couldadversely affecttheorganization'sability to record,process,sum m arize,and report financialdata in a m annerthatisconsistentw ith the assertions of m anagem entin the financialstatem ents. Cash M anagem ent REPO RTA BLE CON D ITIO N The organization m aintained cash checking accounts for seven and tw o savings accounts of the contracts w hich it adm inistered, during the year ending D ecem ber 31, Furt her, during the year ending D ecem ber 31, 1995, the organization m aintained eight checking accountsand three savingsaccountsforitsprogram s. The contractsrequired thatallreim bursem entsbe deposited into the appropriate accounts foraccountability.there w ere three occurrences noted during the year ending D ecem ber 31,1994 in w hich depositsw ere m ade directly to the organization generalfund checking or savings account,and notinto the appropriate program account.a lso,during the year ending D ecem ber31,1995,there w ere tw o occurrencesin w hich reim bursenaentdeposits w ere m ade to accountsotherthan the appropriate checking account. Further,the organization m aintained a ledgerw hich w asused to recorded allchecks and receiptsreceived forreim bursem ents,donations,refu nds,etc..the ledgerisused aspart of the organizations internalcontrolprocedures,and contains a log of allreceipts,the date received,a copy of the check orotherdocum entand the source of the receipts.the ledger is to be m aintained by the person responsible for recording allincom ing receipts. A n exam ination of the ledgerindicated thatthe ledgerw asnotproperly m aintained during the yearsending D ecem ber31,1994 and

5 R eporting The organization requested reimbursem entforcostin the operationsof tile program svia a cost control report or approved invoicing. A com parison of the cost report s to the cognizant agencies and the generalledger reflected that on occasion the generalledger balancesw ere notin agreem entw ith the requestsforreim bursem ent.furtherexam ination indicated thatnecessary adjustmentswhich should have been made to the generalledger due to various posting errors had notbeen m ade as of the end of the accounting cycle. C ostreport ed w asin agreem entw ith actualexpenditures. Fixed A ssets The organization did not have a fully detailed listing of the fixed assets.further, the organization did notperform an annualinventory of fixed assets on hand for any of the yearsunderaudit. Interest Interest earned on program accounts are to be reported on the m onthly report s for program scontracted. The organization received intereston tw o program in the am ountof $3255 for the year ended D ecember, 1994 and $2070 for year ended D ecem ber, The interestw asnotreported during the regularreporting period. A m aterialw eakness is a report able condition in w hich the design or operation of one or m ore of the internalcontrolstructure elem entsdoesnotreduce to a relatively low levelthe risk that errors or irregularities in am ounts that w ould be m aterial in relation to the financialstatem entbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployeesin the norm alcourse of perform ing theirassigned functions M y consideration of the internal control structure w ould not necessarily disclose all m atters in the internal control stru cture that m ight be reportable conditions and, accordingly, w ould not necessarily disclose all reportable condition that are also considered to be m aterialw eaknessasdefined above. This report is intended for the inform ation of the audit com m ittee, m anagem ent, and others w ithin the organization and appropriate state and federalagencies. H ow ever,this report isa m atterof public record and itsdistribution isnotlim ited. CharlesF.W ebb C ertified Public A ccountant A ugust 16,

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7 C HARLES F',W EBB CERTIFIED PUBLIC ACCOUNTANT REPOR T ON COM PLIAN CE W ITH LAW S,RE GUL ATION S,CON TRA CTS AN D GRA N TS B A SED ON AN AUD IT OF BA SIC FIN AN CIAL STA TEM EN TS PERFO RM ED IN A CCO RD AN CE W ITH GO VERN M EN T A UD ITIN G STAN D ARD S To the Board of D irectors D r.m urphy W.M ccal eb EducationalFund,Inc B Erato Street N ew O rleans,la I have audited the basic financial statem ents of D r.m urphy W.M ccaleb Educational Fund,Inc.,asof and forthe yearsended D ecember31,1995,and have issued m y report thereon dated A ugust16, conducted my auditin accordance with generaly accepted auditing standards and G overnm entauditing Standards,issued by the Com ptrollerg eneralof the U nited States. Those standardsrequire thatiplan and perform the auditto obtain reasonable assurance aboutw hetherthe financialstatem entsare free & m aterial m isstatem ents, C om pliance w ith law s,regulations, contracts, and grants applicable to D r.m urphy W. M ccaleb Educational Fund, Inc.'s is the responsibility of D r. M urphy W. M ccaleb EducationalFund,Inc.m anagem ent. A s part of obtaining reasonable assurance about w hetherthe financialstatem entsare free of m aterialm isstatem ent,iperform ed testsof D r. M urphy W.M ccaleb EducationalFund,Inc.'scom pliance w ith certain provisionsof law s, regulations,contractsand grants. However,my objective wasnotto provide an opinion on overall com pliance w ith such provisions. A ccordingly, I do not express such.an opinion. M aterialinstances of noncom pliance are failuresto follow requirem ents, orviolations of prohibitions,contained in law s,regulations,contracts,on grantsthatcause us to conclude that the aggregation of the m isstatem ent resulting from those failures on violations is m aterialto the financialstatem ents. The resultsof ourtestof com pliance disclosed the follow ing m aterialinstances of noncom pliance. R eporting The audit report for D r.m urphy W.M ccaleb Educational Fund, lnc.for the period ending D ecem ber31,1994 and D ecem ber31,1995 w asnotsubm itted w ithin six m onths of the close of the entity'sfiscalyearsasrequired by Louisiana Revised Statue 24:513. Interest Interestearned on program accountsare to be reported on the m onthly reportsfor BARONNE ST.,SUITE 203 ~NEW ORLEANS,LOUISIANA ~(504) ~FAX (504)

8 program scontracted. The organization received intereston tw o program in the am ountof $3255 forthe yearended D ecem ber,1994 and $2070 foryearended D ecem ber,1995. The interestw asnotreported during the regularreporting period. Thisreport isintended forthe inform ation of the Board of D irectors,m anagem entand the State of Louisiana. This restriction isnotintended to lim itthe distribution of thisreport, w hich isa m atterof public record. CharlesF.W ebb Certified Public A ccountant August16,

9 C HARLES F.W EBB CERTIFIED PUBUC ACCOUN'[ANT REPORT ON COM PLIANCE W ITH SPECIFIC REQUIREM ENT APPLICABLE TO N O N -M AJO R PR O G RA M TRA N SA CTIO N To the Board of D irectors D r.m urphy W.M ccaleb EducationalFund,Inc B E rato Street N ew O rleans,la I have audited the basic financial statem ents of D r.m urphy W.M ccaleb Educational Fund,Inc.,asof and forthe yearsended D ecem ber31,1995,and have issued m y report thereon dated August16,1996. In connection w ith m y auditof the D ecem ber31,1995 financialstatem entsof D r.m urphy W.M ccaleb EducationalFund,Inc.and w ith m y study and evaluation of the agencies internalcontrolstructure used to adm inisterfederalprogram s,as required by O fi ce of M anagem entand BudgetCircularA -133,"Auditsof Institutionsof H ighereducation and O thern on-profito rganizations,"iselected certain transactionsapplicable to certain nonmajorfederalfinancialassistance programsfortheyearsended December31,1995. As required by circular A -133,1have perform ed auditing proceduresto testcom pliance w ith the requirem entsgoverning types of services allow ed orunallow ed and eligibility thatare applicable to those transactions. M y proceduresw ere substantially lessin scope than an audit,the objective of which isthe expression of an opinion on the Agency'scompliance w ith these requirem ents. A ccordingly,ido notexpresssuch an opinion. W ith respect to the item s tested,the results of those procedures disclosed no m aterial instances of noncom pliance w ith requirem ents listed in the preceding paragraph. W ith respectto item s nottested,nothing cam e to m y attention that caused m e to believe that D r. M urphy W. M ce aleb E ducational Fund, Inc. had not com plied, in all m aterial respects,w ith those requirem ents. Thisreport isintended forthe inform ation of the Board of D irectors,m anagem entand the State of Louisiana. This restriction isnotintended to lim itthe distribution of this report, w hich is a m atterof public record. C harles F.W ebb Certified Public A ccountant A ugust 16, BARONNE ST.,SUITE 203.NEW ORLEANS,LOUISIANA "(504) FAX (504)

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11 M urphy W.M cc aleb Education Fund Inc. Schedule offederalaw ards Forthe YearEnded D ecem ber31,1994 FederalG rantor/pass-through G rantor/program Title Federal C FDA N um ber Agency orpass through N um ber Federa Exp U.S Departm entofhealth and H um an Services Pass-through From State oflouisiana Departm entofsocialservices ProjectIndependence TargetC ities Subtotal $49, Departm entofeducation ReferralC enter U.S.Departm entofhousing and Urban Developm ent Pass- through From C ity ofnew O rleans O fice ofeducation and Training Developm ent, C om unity Developm entblock G rant M cc aleb Education Program R.O.C.K.Sum m erprogram Subtotal C D CD (92) 25, U.S.Departm entofeducation Pass-through From State oflouisiana Departm entofeducation CarlD Perkins Fund N/A Subtotal Total 12,300 12,300 $226,058

12 I:E COP ; DO,'0'1,f~ l,:d 0~!! D R.M U RPH Y W.M ccaleb EDU CATION AL FUN D,IN C

13 D R.M U R PH Y W. M cca LEB ED U CA TIO N AL FU ND,IN C N EW O RLEAN S,LA TABLE O F CON TEN TS IndependentA uditors'r eport FIN AN CIA l,sta TEM E N TS B alance Sheet Statem entof R evenue,expenditure and Changes in Fund Balance Statem entof FunctionalExpenses Statem entof Cash Flow s N otes to the FinancialStatem ents ' IN TERN AL CON TROL REPORT Reporton the InternalControlStructure Based on an Audit& FinancialStatem entperform ed in A ccordance w ith G A S Reporton InternalControlStructure U sed in A dm inistering FederalA w ards CO M PLIAN CE REPORTS R eporton Com pliance w ith Law s,r egulations,contracts and G rantsb ased on an Auditof B asic Financial Statem ents Perform ed in A ccordance w ith G overnm ent A uditing Standards R eport on Com pliance w ith Specific R equirem ent Applicable to Non-M ajorprogram Transaction

14 SU PPLEM EN TAR Y IN FO R M A TIO N Schedule of FederalA w ards Schedule of Findingsand Questioned Costs Statusof PriorA uditfindings M anagement'sresponse to Finding and Questioned Cost

15 C HARLES F.W EBB CERTIFIED PUBLIC ACCOUNTANT REPO RT ON BA SIC FIN AN CIAL STATEM EN TS AND SCH ED U LE OF FED ERA L AW ARD S To the Board & D irector D r.m urphy W.M ccaleb EducationalFund,Inc B Erato Street N ew O rleans,la Ihave audited the accom panying balance sheetof D r.m urp hy W.M ccaleb Educational Fund,Inc.asof D ecem ber31,1994 and D ecember31,1995,and the related statem entsof activities and cash flow s for the years then ended. These financial statem ents are the responsibility of D r. M urphy W. M ccaleb Educational Fund, lnc. m anagem ent. M y responsibility isto expressan opinion on these financialstatem entsbased on m y audit. The organization has not properly recorded property and equipm ent in a fixed asset ledger.b ecause of the inadequacy of accounting records forthe years ending D ecem ber 31,1994 and D ecem ber31,1995,iw asunable to form an opinion regarding the am ounts at w hich property and equipm ent and accum ulated depreciation are recorded in the accompanying balance sheetatdecember31,1994 (stated at $38,148 and $15,262, respectively)and December31,1995 (stated at$39,877 and $23,237 respectively),and the amount of depreciation expense forthe years then ended (stated at $ 7,630 and $7,975). In my opinion,exceptforthe effectsof such adjustments,if any,asmighthave been determ ined to be necessary had the records concerning property and equipm ent and related accumulated depreciation been adequate,the financialstatem entsreferred to in the first paragraph present fairly the financial position of the D r. M urphy W. M ccaleb Educational Fund, Inc. as of D ecem ber 31, 1994 and 1995, and the results of its operations and the change in fund balance forthe years then ended in conform ity w ith generally accepted accounting principals applied on a basis consistent w ith that of the preceding year. In accordance w ith G overnm enta uditing Standards,lhave issued a reportdated A pril30, 1996 on m y consideration of D r.m urphy W.M ccaleb EducationalFund,Inc.'s internal controlstructure and reportdated A pril30,1996 on com pliance w ith law sand regulation. 616 BARO N NE ST.,SU ITE 203 ~ NEW O RLEANS,LO UISIANA ~ (504) ~ FAX (504)

16 M y auditw as m ade forthe purpose of form ing an opinion on the basic financialstatem ent of D r.m urphy W.M ccaleb EducationalFund,Inc.taken asa w hole. The accom panying Schedule of FederalAw ards forthe years ended D ecem ber 31,1994 and D ecem ber 31, 1995 ispresented forpurposesof additionalanalysisand isnota required partof the basic financialstatements. The information in thatschedulehasbeen subjected to theauditing proceduresapplied in the auditof the basic financialstatem entand,in m y opinion,isfairly stated in allm aterialrespectsin relation to the basic financialstatem entstaken asa w hole. CharlesF.W ebb C erlified Public A ccountant A ugust 16,1996

17 FIN AN CIAL STATEM EN TS

18 D r.m urphy W.M cc aleb Ed ucationalfund,inc. Balance S heet D ecem ber A ssets C urrentassets C ash G rants Receivable C ontracts Receivable Due From O ther Program s TotalC urrentassets $163,365 24,600 71, $313,945 Property & Equipm ent Buildings O fice Equipm ent Less:Accum ulated Depreciation TotalProperty & Equipm ent O therassets Deposits TotalO therexpenses TotalAssets 83,149 38,148 (15,262) $ Liabilities and Fund Balance Liabilities C urentliabilities Accounts Payable Payro ltaxes Payable W ages Payable Due To G eneralfund Deferred Revenue TotalC urrentliabilities Fund Balance Fund Balance Restricted Fund Balance U nrestricted Fund Balance Property TotalFund Balance TotalLiabilities and Fund Balance $4,522 5,469 7,920 54, ,571 44, $233, $

19 D r.m urphy W.M cc aleb Ed ucationalfund,inc. Balance S heet D ecem ber Assets C urrentassets Cash C ontracts Receivable Due From O ther Program s TotalC urrentassets $33, , $240,427 Property & Equipm ent Buildings O fice Equipm ent Less:Accum ulated Depreciation TotalProperty & Equipm ent O theras sets Deposits TotalO therexpenses TotalAssets 176,273 39,877 (23, , $433,690 Liabilities and Fund B alance Liabilities C urentliabilities Accounts Payable Payro ltaxes Payable Due To G eneralfund Notes Payable Deferred Revenue TotalC urrentliabilities Fund Balance Fund Balance Restricted Fund Balance U nrestricted Fund Balance Property TotalFund Balance $260 1,557 93,636 18, ,919 54, $148, ,398 Tota~Liabilities and Fund Balance $4~,690

20 Excess Revenue over Expenses 13,164 36, Fund Balance.Jan 1, , ,267 A dd:property & Equipm ent Less:Depreciation 36,915 (7,63~ 0 36,915 (7,630) Fund Balance,Dec $150,716 $36,571 $187,287

21 Dr.M urphy W.M cc aleb EducationalFund Statem entofrevenues and Expenses Decem ber Revenue G rants C ontracts C ontributions InterestIncom e Revenue TotalRevenue Expenses: Adm inistrative and G eneral Program Services TotalExpenses Excess Revenue over Expenses Fund Balance.Jan U nrestricted Restricted Total $ ,692 $21,197 $11,312 $18, , ,069 0 $511,967 $18, ,265 14o 2,434 20,692 $533,164 $o $11, o o o Add:Property and Equipm ent Less:D epreciation 94,853 0 (7,97~ 94,853 (7,97~ Fund Balance.Dec $247,479 $37,919 $285,398

22 D r.m urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber G eneral Fund C DBG RO C K C D BG AfterSchoo G rants C ontracts C ontributions InterestIncom e Revenue $ ,705 $28,637 $ $ $ $25,000 EXPEN SES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local T ravel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotCapital Repairs & M aintenance Bank Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C ellularserv ice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses O O 2, , , ,108 1, , , , Surplus(bificient) $13,164 $0 $0 7

23 Dr.M urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber 31,1994 Project ndependence Referral C enter N H IF G rants C ontracts C ontributions InterestIncom e Revenue $o 49, $49~354 $o $99,759 $ $54739 EXPEN SES Salaries & W ages Fringe Benefits Accounting ContractualServices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotC apita Repairs & M aintenance Bank Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & Ce lularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses 30,0O0 4, , , ,328 62, , ,600 1,635 4, , ,642 9, Surplus(Dificient) $26 ($5) $3,638

24 Dr.M urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded D ecem ber SESG 007 C arl Perkins State RO C K G rants C ontracts C ontributions InterestIncom e R evenue $0 875 $875 $ $ $~ 006 $14,702 _ EXPEN SES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars 875 6, , , Property & Equipm ent Property & Equip,NotC apital Repairs & M aintenance Bank Fees D ues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C e lularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses Surplus(Dificient) ($1) $0 9

25 Dr.M urphy W.M ccaleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber W isner Fund Target C ities R yan W hite G rants C ontracts C ontributions InterestIncom e Revenue $ $56,000 $1~335 $ $ EXPENSES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases U tilities Building M aintenance O fice Supplies Program S upplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotC apita Repairs & M aintenance Bank Fees Dues & Subscriptions insurance Printing & Photography Postage & Freight Telephone Pagers & C ellularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses ,708 7, , ,892 1, , , , , ,376 Surplus(Dificient) $32,912 $0 $0 10

26 Dr.M urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber Fam ily Preservation Lupin Tota G rants Contracts C ontributions InterestIncom e Revenue (Univ ofmaine) $5,967 $25,000 $5,967 _ $25,000 $30, , , $423,. 081 _ EXPEN SES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases Utilities Building M aintenance O fice Supplies Program S upplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotC apital Repairs & M aintenance Bank Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & Ce lularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses ,302 22,328 3,740 37,048 19,685 75O 38 3,474 12, ,178 5,706 3,676 8,499 17, , ,176 2, , , ,200 3, ,347 Surplus(Dificient) $0 $0 $49,734

27 Dr.M urphy W.M ccaleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded D ecem ber G rants C ontracts C ontributions InterestIncom e M iscellaneous Incom e G eneral Fund $ ,692 $21,197 C D BG RO C K $ $24~64 0 EXPEN SES Salaries & W ages Fringe Benefits Accounting ContractualServices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local T ravel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,N otc apital Repairs & M aintenance Ban k Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C ellularserv ice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses Surplus(Dificient) ,900 1,63 0 2, ,751 7OO 39O 1, $9,

28 Dr.M urphy W.M ccaleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber G rants C ontracts C ontributions InterestIncom e M iscellaneous Incom e C D BG AferSchoo $ $2~043 Pr~ect ndependence $o Referral C enter $o $4~284 $184,447 EXPEN SES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases U tilities Building M aintenance O fice Supplies Program S upplies Facility Supplies Food Supplies Travel- Local T ravel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotCapita Repairs & M aintenance Bank Fees D ues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C e lularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses Surplus(Dificient) 17,370 2, ,901 4,193 2,700 8,025 1, ,899 10, , ,447 $0 $25 $0 13

29 Dr.M urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded D ecem ber 31,1995 G rants Contracts C ontributions InterestIncom e M isce laneous Incom e EXPENSES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases U tilities Building M aintenance O ffice Supplies Program S upplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotCapita Repairs & M aintenance Bank Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C e lularserv ice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses Surplus(Dificient) N H IF $ ,04 6 SESG 007 $ $88,612 $9, $2,046 $0 14

30 Dr.M urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe Y earended Decem ber G rants C ontracts C ontributions InterestIncom e M iscellaneous Incom e EXPEN SES Salaries & W ages Fringe Benefits Accounting ContractualServices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local T ravel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,N otc apital Repairs & M aintenance Bank Fees D ues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C ellularserv ice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses SESG 008 $0 7,535 C arl Perkins $ $7,535 $11~ b67 7, , State RO C K $ $12,169 3, Surplus(Dificient) $0 $0 15

31 D r.m urphy W.M cc aleb EducationalFund,Inc Statem entofrevenue and Support ForThe YearEnded Decem ber G rants C ontracts C ontributions InterestIncom e M isce laneous Incom e EXPEN SES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases Utilities Building M aintenance O fice Supplies Program Supplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,N otc apital Repairs & M aintenance Bank Fees Dues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C e lularserv ice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses Shelter Plus $0 $ Target C ities $ $58,730 22,139 3,651 1,226 1,800 11, Surplus(Dificient) ($6,558) $0 16

32 Dr.M urphy W.M ccaleb EducationalFund,Inc Statem entofrevenue and Support ForThe Y earended D ecem ber G rants C ontracts C ontributions InterestIncom e M isce laneous Incom e Fam ily Preserv ation $18,633 $18,633 - Ryan W hite $ _ $27,762 Total $18, , , $533,164 EXPEN S ES Salaries & W ages Fringe Benefits Accounting C ontractualservices Rents & Leases Utilities Building M aintenance O fice Supplies Program S upplies Facility Supplies Food Supplies Travel- Local Travel- O ther C onferences & Sem inars Property & Equipm ent Property & Equip,NotCapital Repairs & M aintenance Bank Fees D ues & Subscriptions Insurance Printing & Photography Postage & Freight Telephone Pagers & C ellularservice ParticipantIncentives Stipends Board M eetings IndirectC osts StudentActivities Training TotalExpenses , ,797 11,277 1,882 2,500 3,400 2, , ,160 27,991 11, ,089 31,368 2, ,452 32,631 3OO 1,739 4, , , , , ,693 2, Surplus(Dificient) $5,836 $0 $11,234 17

33 D r.m urphy W.M cc aleb EducationalFund,Inc. S tatem entofc ash Flow s Forthe Y earended D ecem ber C ash Flow s from O perating Activities NetIncom e Adjustem ents to reconcile netincom e to net cash provided by operating activities: D epreciation C hange in receivables C hange in accounts payables C hange in othercurrentliabilities $15,262 (115,302) 4, $49,735 TotalAdjustments NetCash Provided by O perating Activities C ash Flow from Investm entactivities Investm entin Fixed Assets Investm entin O therasset N etc ash Provided by Investm entactivities C ash Flow from Financing Activities D eferred Revenues Property Addition NetC ash Provided by Financing Activities NetIncrease(Decrease)in Cash C ash atbeginning ofperiod C ash atend ofperiod (44,546) (350) 160, (66,254) _ (16,519) (44,896) , $163,365 18

34 Dr.M urphy W.M cc aleb EducationalFund,Inc. Statem entofc ash Flow s Fo rthe Y ear Ended D ecem ber Cash Flow s from O perating Activities N etincom e Adjustem ents to reconcile netincom e to net cash provided by operating activities: Depreciation C hange in receivables Change in accounts payables Change in othercurrentliabilities $7,975 (55,921) (4, $11,234 TotalAdjustm ents N etc ash Provided by O perating Activities C ash Flow from Investm entactivities Investm entin Fixed Assets N etc ash Provided by Investm entactivities C ash Flow from Financing Activities Deferred Revenues Property Addition Note Principle Paym ent NetC ash Provided by Financing Activities (94,853) (126,001) 86, (24,897) (13,663) (94,853) _ (20,923) NetIncrease(Decrease)in Cash C ash atbeginning ofperiod C ash atend ofperiod (129,439) 163,365 19

35 Property D r.m urphy W.M cc aleb E ducationalfund N O T E S T O FIN A N C IA L STA T EM E N T S The purchase of furniture and equipm entisrecorded a!cost. D epreciation is com puted on the straight-line basis overthe estim ated usefullife of the assets. All assets are estim ated to have a useful life of 3 years. The O rganization follow s the practice of capitalizing all expenditures for property and equipm entin excessof $ N O TE B -PRO PERTY AND D EPRECIATION D epreciation of furniture and equipm ent is calculated on the straight-line basisoverthe estim ated usefu llivesof the assets. The costof such assetsat D ecem ber31,1994 and 1995 isasfollow s: 00~; 1004 Land and Building $ 83,149 Furniture & Equipm ent 38, 148 Less:A ccum ulated D epreciation._ ls.z62 S $ 106,035 $ 176,273 39, $ 192,913 N O TE C -C A SH D epreciation hasnotbeen recognized forthe yearsending D ecem ber31,1994 and 1995.Property w aspurchased in N ovem ber 1994 forrenovation and eventualoccupancy forthe organization'sshelterprogram.r enovationson thisproperty w as notcom pleted until1996,and accordingly, the property has not been depreciated because itw as notplaced into service during years underaudit. D onated property located at1216 M agnolia Streetw asrazed and isto be replaced w ith a new ly constructed facility. Atthe end of the yearsd ecem ber31,1994 and 1995,the property w asonly vacant lots. A t year end, the carrying am ount of the D r. EducationalFund,Inc.'s deposits w ere asfollow s: M urphy W. M ccaleb

36 D r.m urphy W.M cc aleb EducationalFund N O T E S T O FIN A N C IA L STA T E M E N T S D ecem ber 31,1994 and Properly llm d checking G eneral fund checking G eneral fund saving Program fund saving $ 15,o5 ~ 7,180 16, ,596 $.'18q(~ Total $163,365 $33,926 N O TE D -AN D CON TRACTS RECEIVABLE T he O rganization received funding from certain costrcim bujselnents contractw ith the State of Louisiana and the City of N ew O rleansduring the yearended D ecem ber31,1994 and 1995.Further,atthe end of the yearended D ecem ber31,1994,the O rganization received a grantfrom the U niversity of M aine in the am ountof $24, The balance of costsexpended and notreim bursed atd ecem ber31,1994 and 1995 are as follow s: ProjectIndependence CD B G R O CK Program CD BG AfterSchoolProgram N O R eferralc enter TargetC ities R yan W hite SE SG007 SESG 008 $12,472 II,893 6,506 28,404 4,929 6, $ 7,203 18, ,328 25,038 18,900 9,791 10, TO TA L $71,487 $112,865

37 D r.m urphy W.M cc aleb E ducationalfund N O TES TO FINA N C IA L STA TEM EN TS D ecem ber 31,1994 and 1995 N O TE E -D ON ATED PROPERTY The O rganization received funding loan from the City of N ew O rleans through Com m unity D evelopm entblock GrantFundsto purchase property located at 1216 M agnolia Streetduring A pril1993 Tile costof the purcbase w as $54, The term s of the agreem en!indicated thatthe funding isin the form of a loan w hich doesnothave to be repaid underthe condition thatthe property isused asa neighborhood based com munity service facility fora period of no lessthan 5 years. Based on the conditionsof the funding,a liability accountfora m ortgage payable hasnotbeen established.the property islisted asa donated asset and a part of the property fund balance. N O TE E -D U E TO G EN ERA L FUN D Fundsexpended from the generalfund of the O rganization and used for the purpose of adm inistering the costreim bursem entcontractsw hich had not been reim bursed asof D ecem ber31,1994 and 1995 are asfollow s: ProjectIndependence CD BG R O CK Program CD B G EducationalProgram N O ReferralCenter SESG 007 SESG 008 Fam ily Preserv ation TargetCities Ryan W hite ShelterPlus $18,405 8,950 14,861 5, , $22,684 10,076 16,897 1,014 9,920 7, ,865 3,087 6,558 Total $54,493 $93,636 23

38 D r.m urphy W.M cc aleb E ducalionalfund N O TES TO FIN A N CIA L STA TEM EN TS D ecem ber 31,1994 and 1995 N O TE F -N otespayable N otespayable atd ecem ber31,1995 consisted of the follow ing N ote Payable to D ryadessavingsbank w ith interestat8.25 %,secured by vacantlotslocated on M agnolia Street,in N ew O rleans,louisiana N O TE G -D eferred R evenue G rantorcontractaw ardsreceived during the yearsending D ecem ber31,1994 and 1995 butnotearned asof the end of the yearw ere deferred to the lbllow ing year asfollow s: N H IF 006 Fam ily Preservation W isner $124,491 $34,638 19, $160,639 $34,638

39 C HARLES F.W EBB CERTIFIED PUBLIC ACCOUNTANT REPO RT O N TH E IN TERN AL CON TROL STRU CTURE BA SED O N AN AU D IT O F FIN AN CIAL STA TEM EN TS PERFORM ED IN A CCORD AN CE W ITH G A S To the Board of D irectors D r.m urphy W.M ccaleb EducationalFund,Inc B E rato Street N ew O rleans,la Ihave audited the financialstatem entsof D r.m urphy W.M cc aleb EducationalFund,Inc. asof and forthe yearsended D ecem ber31,1994 and D ecember 1995,and have issued m y reportthereon dated August16,1996. I conducted m y audit in accordance w ith generally accepted auditing standards and G overnm entauditing Standards,issued by the Com ptrollerg eneralof the U nited States. Those standardsrequire thatiplan and perform the auditto obtain reasonable assurance aboutw hetherthe financialstatem entsare free of m aterialm isstatem ent. The m anagem ent of D r.m urp hy W.M ccaleb EducationalFund,Inc.is responsible for establishing and m aintaining an internalcontrolstructure. In fulfilling this responsibility, estimatesand judgmentsby managementarerequired to assessthe expected benefitsand related costs of internalcontrolstructure policies and procedures. The objectives of internalcontrolstructure are to provide m anagem entw ith reasonable,but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance w ith m anagem ent's authorization and recorded properly to perm itthe preparation of basic financial statem ents in accordance w ith generally accepted accounting principles. B ecause of inherent lim itations in any internal control structure, errors or iregularities m ay nevertheless occur and not be detected.also,projection ofany evaluation of thestructure to future periodsissubjectto the risk that procedures m ay becom e inadequate because of changes in conditions or that the efectivenessof the design and operation of policiesand proceduresm ay deteriorate. In planning and perform ing m y audit of the financial statem ents of D r. M urphy W. M ccaleb EducationalFund,Inc.forthe years ended D ecem ber 31, 1994 and D ecem ber 1995, I considered its internal control stru cture in order to determ ine m y auditing proceduresforthe purpose of expressing m y opinion on the basic financialstatem entsand notto provide assurance on the internalcontrolstructure. Forthe purpose of this report,i have classified the significantinternalcontrolstru cture policiesand proceduresin the follow ing categories: BARONNE ST.,SUITE 203 ~NEW ORLEANS,LOUISIANA ~(504) ~FAX (504)

40 A ccounting Applications 1. Billings(in regardsto reimbursementrequest) 2 ('~tm II~,~CCJl)l.~ 3. Cash D isbursem ents 4. R evenuesand Receivable 5. Purchasing 6. Payroll 7. Property and Equipm ent C ontrolsused in A dm inistering FederalProgram s G eneralr equirem ents PoliticalA ctivity C ivilr ights C ash M anagem ent FederalFinancialR eports Specific R equirem ents ~ Typesof Services Eligibility of C ost ~ C osta llocation CostIncurred in Approved Period G rantb udgetsand Revisions For allof the internalcontrolcategories listed above,1 obtained an understanding of the design of relevantpoliciesand procedure and w hetherthey have been place in operation and Iassessed controlrisk. I noted certain m atters involving the internal control structure and its operation that I considerto be reportable conditionsunderstandardsestablished by the A m erican lnstitule of Certified Public A ccountants~ Reportable conditions involve m atters com ing to m y attention relating to significant deficiencies in the design or operation of the internal controlstru cture that,in my judgment,could adversely afecttheorganization'sability to record,process,sum m arize,and reportfinancialdata in a m annerthat is consistentw ith the assertions of m anagem entin the financialslatem ents. REPORTABLE COND ITION C ash M anagem ent The organization m aintained seven cash checking accounts and tw o savings accounts for its program s w hich itadm inistered,during the yearending D ecem ber31,

41 Further, during the year ending D ecem ber 31, 1995, the organizalion m aintained eight checking accountsand three savingsaccountsforitsprogram s. The contractsrequired thatallreim bursem entsbe deposited into the appropriate accounts foraccountability.there w ere three occurrences noted during the yea~ending D ecem ber 31,1994 in w hich depositsw ere m ade directly to the organization generalfund checking or savings account,and notinto the appropriate program account.a lso,during the year ending D ecem ber31,1995,there w ere tw o occurrencesin w hich reim bursem entdeposits w ere m ade to accounts otherthan the appropriate checking accounl. Further,the organization m aintained a ledgerw hich w as used to recorded allchecks and receipts received for reim bursem ents,donations,refunds,etc..the ledger is used as pact of the organizations internalcontrolprocedures,and contains a log of allreceipts,the date received,a copy of tile check orotherdocum entand tile source of the receipts.the ledger is to be m aintained by the person responsible for recording allincom ing receipts. An exam ination of the ledgerindicated thatthe ledgerw asnotproperly m aintained during the yearsending D ecem ber31,1994 and R eporting The organization requested reim bursem entforcostin the operationsof the program svia a cost control report or approved invoicing. A com parison of the cost reports to the cognizant agencies and the generalledger reflected that on occasion the generalledger balancesw ere notin agreem entw ith the requestsforreimbursem ent.furtherexam ination indicated thatnecessary adjuslmentswhich should havebeen m~lde Io the gencealledgcl due to various posting errors had notbeen m ade as of the end of the accounting cycle. C ostreport ed w asin agreem entw ith actualexpenditures. Fixed A ssets The organization did not have a fully detailed listing of the fixed assets.further, the organization did not perform an annualinventory of fixed assets on hand for any of the yearsunderaudit. Interest Interest earned on program accounts are to be reported on the m onthly report s for program scontracted. The organization received intereston tw o program in the am ountof $3,255 forthe yearended D ecember,1994 and $2,070 foryear ended D ecem ber, The interestw asnotreported during the regularreporting period. 27

42

43 M CCALEB ED U CATION AL FU ND, IN C SCHEDULE OF FINDINGS AND QUESTIONED COSTS D ECEM BER 31,1994 AN D D ECEM B ER 31, 1995 G eneralfinding State of Condition Under the term s and conditions of the reim bursem ent contracts adm in istered by the Organization,the Organization w as to have m aintained a designated com m ercialbank account as the depository of funds account as the depository of funds received from contract. Allreceiptsfrom the reim bursem ent& costunderthe contractw asto have been deposited into the designated com m ercialbank account. Itw as noted that on tw o occasion during the year ending D ecem ber 31, 1994,deposits w ere not m ade into the appropriate com m ercialbank account. O n one occasion, the depositw as m ade directly to the generalfund accountand on anoh~er, ~he deposit w as erroneously m ade to anotherprogram account. This depositw as latertransferred to the appropriate to the appropriate account. Criteria The term s and conditions of the contracts required that all funds received under the contracts be deposited into a designated com m ercialbank account. Efectof Condition The O rganization by m aking depositsinto accountsotherthan those designated underthe term sof the contractsw asin noncom pliance of the term sand conditionsoflhe conlracl Statem entof Condition The O rganization did notm aintain a detailed listing of property and equipm ent The O rganization has not m aintained a detailed property ledger for its property and equipm ent. Further, property and equipm entpurchased during the yearsending D ecem ber 31,1994 and 1995 have notbeen properly tagged, asw ellas,identified to the contractto w hich the property w asacquired. 38

44 Criteria U nderthe term s and conditionsof the contracts, the O rganization isto m aintain a record of property and equipm entw hich has a usefullife of one yearor m ore. The record is to include a description of the property, including m odel num ber and serial num ber, if applicable,date of acquisition,and the acquisition costof assigned value to the property. Efectof Condition The O rganization is not in com pliance w ith the term s of the contracts. Further, the O rganization isnotm aintaining adequate internalcontroloverthe safeguarding of assets. Program Findings ProjectIndependence -December31,1994 State of Louisiana D epartm entof SocialServices O ffice of Fam ily Support State of Condition D uring the program year,rentw as overstated on January's costreportin the am ount of $ and m aterial and supplies w ere disallow ed due to lack of supporting docum entation in lhe am ountof $ G eneral requirem ents of the contract required that disbursem ent should have proper supporting docum entation to supportthe costclaim ed forreim bursem ent. Efectof C ondition The costw as subsequently disallow ed by the cognizantagency State of Condition Program incom e w as notproperly reported during the program year. Interestearned in the am ountof $25.00,from program receiptsw asnotreported on the costreim bursem ent reports during the year. 39

45 Criteria Program receipts are to be reported and refunded to cognizanl organization unless and w ritten approval is obtained to expended the program receipts for the benefit of the program. Efectof Condition The O rganization could be required to refund the Interestearned on the program account. ProjectIndependence -December31,1995 Statem entof C ondition D uring the program year, the organization deposited June's cosl reim bursem ent of $ into the w rong program account. Criteria Contractrequirem entstate thata separate com m ercialbank accountshould be m aintained Fundsare to be deposited into the designated account. Efectof Condition The O rganization w as not in com pliance w ith the term s of the contract. Further errors could be m ade in the properrecording and reporting of financialtransaction. Statem entof Condition Program incom e w asnotproperly reported during the program year. lnterestearned in the am ountof $24.00,from program receiptsw asnotreported on the costreim bursem ent reportsduring the year. Criteria Program receipts are to be reported and refu nded to cognizant organization unless and w ritten approval is obtained to expended the program receipts for the benefit of the program. Efectof C ondition The O rganization could be required to refu nd the Interestearned on the program account. 40