BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC, ALEXANDRIA, LOUISIANA

Transcription

1 BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC, ALEXANDRIA, LOUISIANA -Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. Release Date _ Roy K. Derbonne, Jr., LLC A Professional Accounting Corporation 1101-A Bolton Avenue Alexandria, Louisiana 71301

2 TABLE OF CONTENTS PAGE Independent Auditor's Report 1-2 Statement of Financial Position 3 Statement of Activities 4 Statement of Cash Flows 5 Statement of Functional Expenses 6 Notes to Financial Statements 7-11 Supplemental Information Schedule of Reimbursable Grant Expenses 13 Compliance and Internal Control Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Summary of Prior Year Findings 18

3 ., LLC A Professional Accounting Corporation A Bolton Avenue Alexandria, Louisiana Roy K. Derbonne, Jr. Tel: Certified Public Accountant Fax: Member Society of Louisiana C.P.A.'s INDEPENDENT AUDITOR'S REPORT To the Boards of Directors The Boys and Girls Club of Central Louisiana, Inc. Alexandria, Louisiana I have audited the accompanying statement of financial position of The Boys and Girls Club of Central Louisiana, Inc. (a non-profit organization) as of December 31, 2006, and the related statement of activity, cash flows and functional expenses for the year then ended. These financial statements are the responsibility of The Boys and Girls Club of Central Louisiana, Inc.'s management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial, statements referred to above present fairly, in all material respects, the financial position of The Boys and Girls Club of Central Louisiana, Inc., as of December 31, 2006, and results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, I have also issued my report dated October 22, 2007, on my consideration of The Boys and Girls Club of Central Louisiana, Inc., internal control over financial reporting and my tests of it 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 my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of my audit. My audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The schedule of grant expenses is presented for purposes of additional analysis and is not a required part of the basic

4 financial statements. Such information has been subj ected to the auditing procedures applied in the audit of the basic financial statements and, in my opinion, is fairly presented in all material respects in relation to the basic financial statements taken as a whole. Certified Public Acarc/untant Alexandria, Louisiana December 3, 2007

5 BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC. STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2006 ASSETS Current Assets, Cash $ 22,299 Investment, at Fair Value 1, 508 Total Current Assets 29,807 Property, Plant and Equipment, net of 55,427 Land held for Investment, at Fair Val 15,000 TOTAL ASSETS $100,234 LIABILITIES AND NET ASSETS Current Liabilities Accounts Payable $ 15,335 Payroll Taxes and Other Withholdings 111,078 Total Current Liabilities 126,413 Net Assets Unrestricted (26,179} $100,234 The accompanying notes are an integral part of this statement. 3

6 Revenues Program Service Fees Grants Direct and Indirect Support Fund Raising Other Income Investment Income Realized and Unrealized Gain on Investments Total Revenues Expenses Program Expenses Management and General Fund Raising Total Expense Change in Net Assets BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC. Net Assets at Beginning of Year Net Assets at End of Year STATEMENT OF ACTIVITY FOR THE YEAR ENDED DECEMBER 31, Unrestricted $ 10,208 55, ,151 8,185 22, , , ,753 7, ,981 (16,165) (10,014) (26,179) $ 2006 Temporarily Restricted Total $ 10,208 55, ,151 8,185 22, , , ,753 7, ,981 (16,165) (10,014) $ (26,179) The accompanying notes are an integral part of this statement. 4

7 BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2006 Cash Flows From Operating Activities Change in Net Assets $(16,165) Adjustments to. Reconcile Change in Net Assets to Net Cash Provided by Operating Activities: Depreciation 4,459 Realized and Unrealized Gain on Investments (1,112) Decrease in Accounts Receivable 21,453 Decrease in Accounts Payable (23,692) Increase in Payroll Taxes and Other Withholdings 27,553 Net Cash Provided/(Used) by Operating Activities 12,496 Cash Flows From Financing Activities: Proceeds From Sale of Investments Cash Flows From Capital Activities Purchase of Ecjuipment (5,012) Proceeds From Sale of Asset 800 Cash Flows Provided by Capital Activities (4,212) Net Increase/(Decrease) in Cash and Cash Equivalents 8,534 Cash and Cash Equivalents at Beginning of Year 13,765 Cash and Cash Equivalents at End of Year $. 22,299 The accompanying notes are.an integral part of this statement. 5

8 BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC. EXPENSES Salaries Employee Benefits and Taxes Accounting Awards Background Checks Bank and Credit Card Charges Contributions Copy Machine Lease Depreciation : - Drug Screening Dues and Subscriptions Equipment Leasing Food Supplies Gifts Insurance Interest Janitorial Lawn Service Meals Office Supplies Pest Control Postage Professional Development Program Supplies Recreation and Vocational Supplies Repairs and Maintencance Security Telephone Theft by Credit Card Travel. Utilities Vehicle Total Expenses Program Services S 88,655 14, , , , , , , ,669 3,705 $ 149,510 Management and General $ 72,880 13, ,115-1, , , , ,494 2, $ 105,753 Total $161, , , , , , , , , , , , 728 4, 631 $255, 263 The accompanying notes are an integral part of this statement. 6

9 The Boys and Girls Club of Central Louisiana, Inc. Notes to the Financial Statements December 31, 2006 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Boys and Girls Club of Central Louisiana, Inc., (Club) a not-for-profit corporation chartered in The Mission of the Club is "To inspire and enable all young people especially those from disadvantaged circumstances to realize their full potential as productive, responsible and caring citizens". To fulfill their Mission, the Club provides various activities for the children to participate in through after school and summer programs. The Boys and Girls Club of Central Louisiana, Inc. is a member of the United Way of Central Louisiana. The Club qualifies as a tax-exempt organization -(an "other than private foundation") under Section 501 (c) of the Internal Revenue Code. Basis of Accounting The Club maintains its accounting records on the accrual basis. The Club, in conformity with generally accepted accounting principles, adopted the following Statements of the Financial Accounting Standards Board (SFAS); Statement Number 116, "Accounting for Contributions Received and Contributions Made"; Statement Number 117, "Financial Statements of Not-for-Profit Organizations"; and Statement Number 124, "Accounting for Certain Investments Held by Not-For- Profit Organizations". Contributions Contributions received are recorded as unrestricted, temporarily restricted, or" permanently restricted support depending on the existence and/or nature of any donor restrictions. Temporarily restricted net assets are reclassified to unrestricted net assets upon satisfaction of the time or purpose restrictions. Contributions, including unconditional promises to give, are recorded as made. All contributions are available for unrestricted use unless specifically restricted by the donor. Financial Statement Presentation The Club reports information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. In addition, the Club is required to present a statement of cash flows.

10 The Boys and Girls Club of Central -Louisiana, Inc. Notes to the Financial Statements December 31, 2006 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investments Investments in marketable securities with readily determinable fair values and all investments in debt securities are valued at their fair values, in the statement of financial position. Unrealized gains and losses are included in the changes in net assets. The cost basis of marketable securities is reflected in Note 2. There are no known material unrecorded permanent market value declines in marketable securities. Public Support and Revenue Membership dues and general contributions are generally available for unrestricted use in the related campaign year unless specifically restricted by the donor. Grants and other contributions of cash or other assets are reported as temporarily restricted support if they are received with stipulations that limit the use of the grant or donated assets. When donor restrictions expire, that is f when a stipulated time restricted ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. There were no permanently restricted contributions during Cash and Cash Equivalents The Club considers cash in checking accounts, certificates of deposit and money market funds as cash and cash equivalents. Property, Equipment and Depreciation Purchased property and equipment is recorded at acquisition cost; donated property and.equipment is recorded at its fair value as of the date of donation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Repairs, maintenance and minor replacements are charged to operations as incurred. Major replacements and improvements are capitalized at cost. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

11 NOTE 2 - INVESTMENTS The Boys and Girls Club of Central Louisiana, Inc. Notes to the Financial Statements December 31, 2006 Investments consist of equity mutual funds which are presented in the financial statements at fair value. The investments earned $404 in dividends during the year and had a cost basis of $8,160 at December 31, The Club also owns a tract of unimproved real estate that is being held for investment. The land had a value of $15,000 when donated to the Club, which is its approximate current value. NOTE 3 - PLANT, PROPERTY, EQUIPMENT AND DEPRECIATION The following schedule summarizes estimated useful life, cost and accumulated depreciation as of December 31, 2006: Buildings and Improvements Office Furniture and Equipment Other Equipment and Vehicles Recreational Equipment Vocational Equipment Total Less Accumulated Depreciation Net Plant, Property and Equipment Depreciation expense for the year was $4,459. NOTE 4 - CONTRIBUTED SERVICES Life 5-35 Years 3-5 Years 5 Years 5-7 Years 5-7 Years Cost $ 87,379 19,331 39,267 15,118 28, ,810 (134,383) $ 55,427 A substantial.number of unpaid volunteers have made significant contributions of their time to develop the Club and raise funds for its operations. No amounts have been recognized in the statement of activities because the criteria of recognition under SFAS No. 116 have not been satisfied. The value of donated fund raising items is not recorded as contributions because there is no fair basis -for valuing them. NOTE 5 - RETIREMENT PLAN The Boys and Girls Club of Central Louisiana, Inc., is a participant in the Merrill Lynch Section 403 (b) (7) Plan, a matching contribution plan. However in 2006 the Club did not have any employees as participants in the plan. NOTE 6 - GRANTS At December 31, 2006, the Club received funds from four grants which are presented in the Supplemental Section of this report.

12 The Boys and Girls Club of Central Louisiana, Inc. Notes to the Financial Statements December 31, 2006 NOTE 7 - COMPENSATED ABSENCES The Club provides compensated time off for all full time employees after six months of employment with the Club. The amount of compensated time that maybe carried over from one year to the next must be approved by the Club' Executive Director. The Club's Executive Director did not approve any compensated time off to be carried over to NOTE 8 - CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Club to credit risk include investments in mutual funds. Future changes in economic conditions may make the investment less valuable. The Boys and Girls Club of Central Louisiana, Inc., receives a substantial portion of its support from the United Way of Central Louisiana. During 2006, support received through the United Way amounted to $124,593. The continuation of this support is dependent on the United Way having a successful campaign and the United Way's continued support of the Club. Unfavorable changes in the economic conditions of Central Louisiana could reduce the funds available for United Way member agencies. NOTE 9 - CONTINGENCIES As of December 31, 2006, the Club had $111, 078 in unpaid payroll tax liabilities. This amount includes amounts due on federal quarterly Forms 941, unemployment and state income taxes withheld from employees salaries. During the current year the Club made payments of $12,013 the various taxing agencies. The above amount does not include any penalties and interest, which will likely be assessed by the appropriate agencies. NOTE 10 - LEASES In January of 2003 the Club donated the Alexandria Club building to the City of Alexandria in exchange for a tree year lease with lease payments of $1 per year for the first two years and $1,000 per year thereafter. The lease has never been approved or activated. The Club and the City of Alexandria at the end of 2006 are in negotiations on a new lease. On July l f 2006 the Club entered into a lease agreement with Great America Leasing Corporation. The lease covers a Canon Copier and accessories. The lease is for 60 months and requires a monthly payment of $ The lease payments for future years is as follows; Year Lease Payment 2007 $1, ' 1, , ,

13 The Boys and Girls Club of Central Louisiana, Inc. Notes to the Financial Statements December 31, 2006 NOTE TEMPORARILY RESTRICTED NET ASSETS As of December 31, 2006, the Club did not have any restricted assets. NOTE 11 - GOING CONCERN The Club has experienced losses in the years 2003, 2004, 2005 and 2006 which have decreased net assets. The largest of these losses occurred in 2003 in the amount of $172,579. This loss was primarily the result of the Boys and Girls Club donating their building, in Alexandria, to the City of Alexandria. The value of the donated building was $173,073. In 2004 the Club lost $62,113, in 2005 the loss was $37,815 and in 2006 the loss amounted to $26,179. The losses are a result of a decrease in grants funds and direct and indirect support. The Club over the past four years has worked at reversing this trend by reducing its operating expenses and increasing its revenues. The Club management seems to be accomplishing this, as the last four years show a trend in a reduction in the losses sustained by the Club. The Organization is also trying to find other sources of funding and revenue through additional grants and fund raising activities. However, if the Club cannot increase its revenues along with control of its operating expenses, the Club may not.be able to continue operations in the future. 11

14 Supplemental Information

15 THE BOYS AND GIRLS CLUB OF CENTRAL LOUISIANA, INC. SCHEDULE OF REIMBURSABLE GRANT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2006 City of Alexandria - CDBG Reimbursement Salaries ' $ 23,233 Payroll Taxes 2,213 Contract Services 288 Supplies 845 Telephone 519 Total Expenses $ 27,098 Community Services Red River Delta Salaries $ 16,890 Benefits 1,200 Supplies ' 500 Total Expenses $ 18,590 LFRC Grant Salaries. $ 3,670 Benefits 370 Total Expenses $ 4,040 TTP Salaries & Benefits $ 3,677 Insurance 1,036 Utilities 809 Telephone 29 ~$ 5,551 13

16 Compliance and Internal Control

17 %. (DerBonne, Jr., LLC A Professional Accounting Corporation A Bolton Avenue Alexandria, Louisiana RoyK. Derbonne, Jr. Tel: Certified Public Accountant Fax: Member Society of Louisiana C.P.A. 's INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors The Boys and Girls Club of Central Louisiana, Inc. Alexandria, Louisiana I have audited the financial statements of The Boys and Girls Club of Central Louisiana, Inc. (a nonprofit organization) as of and for the year ended December 31, 2006, and have issued my report thereon dated October 22, I conducted my 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. Internal Control Over Financial Reporting In planning and performing my audit, I considered Boys and Girls Club of Central Louisiana, Inc.'s internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Boys and Girls Club of Central Louisiana, Inc.' s internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Boys and Girls Club of Central Louisiana, Inc.'s internal control over financial reporting. My report of internal control over financial reporting was for 'the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, I identified certain deficiencies in internal control over financial reporting that I consider to be a significant deficiency. A control deficiency 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 misstaternents on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. I consider the deficiencies described as follows, to be

18 significant deficiencies in internal control over financial reporting Documentation.over fundraiser revenues and expenses - Although there was some documentation for fund raising revenues collected or expenses incurred, the documentation was not complete. Therefore, there is incomplete support for fundraising revenues and expenses. Management's Response: The organization's fund raising had already taken place before the finding in the 2005 audit was received, and, therefore, implementation of better procedures were not able to be place for the 2006 audit. In the future better documentation and tighter controls will be implemented to assure that documentation regarding fundraising will be complete Grant files and reimbursement requests - Grant files and reimbursement requests are not being adequately maintained. Management's Response: In 2006 an employee who did not perform her duties properly maintained grant files. The Boys and Girls Club of Central Louisiana, Inc no longer employ that employee. The entire filing system has been restructured, and the grant file duties have been clearly defined to a current staff member Missing Invoices - During the 2006 audit there were missing invoices which management was not able to find. Management's Response: In 2006 several invoices could not be located at the time of the audit. The employee responsible for maintaining and filing invoices during the time period performed her duties very poorly. Her records and files were not kept in -an orderly manner. This situation has been rectified. The Boys and Girls Club of Central Louisiana, Inc. no longer employs this person. Our filing system has been restructured and the clerical duties relating to invoices has been clearly defined to current staff. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. My consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. "However, I believe that none of the significant deficiencies described above is a material weakness. Compliance and Other Matters As a part of obtaining reasonable assurance about the Boys and Girls Club of

19 Central Louisiana, Inc.'s financial statements are free of material misstatement, I performed tests of it 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 my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed one instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and is as follows: Theft of Funds by Use of a Credit Card - During the year a member of the Boys and Girls Club obtained a Club credit card and made unauthorized withdrawals. Management's Response: Tighter control over credit cards has been implemented and the safe in which the cards are kept has been moved so that it is less accessible to employees and club members. The credit card in question has been destroyed. The person who misused the card has taken responsibility for the theft and is making restitution payments to the club Audit not Completed Timely - The 2006 Audit was not completed within the six months of the close of the Boys and Girls of Central Louisiana, Inc.'s calendar year. Management's Response: In the future an auditor will be engaged in a timely manner that will allow the completion the Club's audit on a timely basis. I noted certain matters that I reported to management of the Boys and Girls Club of Central Louisiana, Inc., in a separate letter dated October 22, Boys and Girls Club of Central Louisiana, Inc.'s response to the findings identified in my audit is described above. I did not audit the Boys and Girls Club of Central Louisiana, Inc.'s response and, accordingly, I express no opinion on it. This report is intended for the information and information of the finance committee, of management and others within the organization and is not intended to be andkshoulolnot be-'tised by anyone other than the specified parties. Certified Publi ccountant Alexandria, Louisiana December 3, 2007

20 The Boys and Girls Club of Central Louisiana, Inc. Summary of Prior Year Findings Instances of internal control over financial reporting: 1. Documentation over program service fees - Proper documentation in any form for program service fees collected were not retained by management. Consequently, there is no support for program service fees collected. This finding has been corrected. 2. Documentation over fundraiser revenues and expenses - Proper documentation for fund raising revenues collected or expenses incurred was not maintained by management. Consequently, there is no support for fundraising revenues and expenses. Management's Response: 2005 audit report was received to late to implement the proper changes/ however, they have been implemented for the 2007 year. 3. Grant reimbursement requests - Grant reimbursement requests are not being filed in a timely manner. The Club is in need of funds and these requests could improve cash flow. This finding has been corrected. 4. Documentation over grant files - Proper documentation of grants received, their requirements, and accompanying expenditures were not kept on file for all grants. The Club had to obtain copies of grants from the grantor on some of the grants. Management's Response: The entire filing system has been restructured, and the grant file duties have been clearly defined to a current staff member. This has been corrected for the year

21 tifyy K- (Derfonne, J%, LLC A Professional Accounting Corporation 1101-A Bolton Avenue Alexandria, Louisiana Roy K. Derbonne, Jr. Tel: Certified Public Accountant Fax: Member Society of Louisiana C.P.A.'s December 1, 2007 Ms. Kim Dural, Executive Director And the Board of Directors Boys and Girls Club of Central La., Inc. Alexandria, Louisiana Ms. Kim Dural: In planning and performing my audit of the financial statements of the Boys and Girls Club of Central Louisiana, Inc. as of and for the year ended December 31, 2006, in accordance with auditing standards generally accepted in the United States of America, I considered the Club's internal control over financial reporting (internal control) as a basis for designing my audit procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, I do not express an opinion on the effectiveness of the Club's internal control. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Club's financial statements that is more than inconsequential will no be prevented or detected by the Club's internal control. A material weakness is significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Club's internal control. My consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control that I considered to be material weaknesses, as defined above. However, I did

22 identify some instances of weaknesses in internal control as described below: Documentation over fundraiser revenues and expenses - Although there was some documentation for fund raising revenues collected or expenses incurred, the documentation was not complete. Therefore, there is incomplete support for fundraising revenues and expenses Grant files and reimbursement requests - Grant files and reimbursement requests are not being adequately maintained Missing Invoices - During the 2006 audit there were missing invoices which management was not able to find. As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, I 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 my audit and, accordingly, I do not express such an opinion. The results of my tests disclosed one instance of noncompliance or other matter that is required to be reported under Government Auditing Standards. The other matter is as follows: Theft of Funds by Use of a Credit Card - During the year a member of the Boys and Girls Club obtained a Club credit card and made unauthorized withdrawals Audit not Completed Timely - The 2006 Audit was not completed within the six months of the close of the Boys and Girls of Central Louisiana, Inc.' s calendar year as required by LSA-RS 24:513. This letter is intended to notify you of findings during your audit and allow you the opportunity to respond to these findings. This communication is intended solely for the information and use of management of the Boys and Girls Club of Central Louisiana, Inc. and others within the Club, and is not intended to be and should not be used by anyone other than the specified parties. Roy K. Derbonne, Jr. Certified Public Accoun a

23 BOYS & GIRLS CLUBS OF CENTRAL LOUISIANA, INC. December 5, 2007 P.O. BOX 5247 ALEXANDRIA, LA PHONE (318) Mr. Roy K. Derbonne, Jr. Certified Public Accountant 1101-A Bolton Avenue Alexandria, LA Dear Mr. Derbonne: In your letter dated December 1, 2007, you sited five concerns of our internal control and compliance with certain provisions of laws, regulations, contracts, and grant agreements. This letter serves as our official answer to these concerns Documentation over fundraiser revenues and expenses - Although there was some documentation for fund raising revenues collected or expenses incurred, the documentation was not complete. Therefore, there is incomplete support for fundraising revenues and expenses. The organization's fund raising had already taken place before the finding in the 2005 audit was received, and, therefore, implementation of better procedures were not able to be place for the 2006 audit. In the future better documentation and tighter controls will be implemented to assure that documentation regarding fundraising will be complete Grant files and reimbursement requests - Grant files and reimbursement requests are not being adequately maintained. In 2006 an employee who did not perform her duties properly maintained grant files. The Boys and Girls Club of Central Louisiana, Inc no longer employ that employee. The entire filing system has been restructured, and the grant file duties have been clearly defined to a current staff member Missing Invoices - During the 2006 audit there were missing invoices which management was not able to find. In 2006 several invoices could not be located at the time of the audit. The employee responsible for maintaining and filing invoices during the time A UNITED WAY AGENCY

24 period performed her duties very poorly. Her records and files were not kept in an orderly manner. This situation has been rectified. The Boys and Girls Club of Central Louisiana, Inc. no longer employs this person. Our filing system has been restructured and the clerical duties relating to invoices has been clearly defined to current staff Theft of Funds by Use of a Credit Card - During the year a member of the Boys and Girls Club obtained a Club credit card and made unauthorized withdrawals. Tighter control over credit cards has been implemented and the safe in which the cards are kept has been moved so that it is less accessible to employees and club members. The credit card in question has been destroyed. The person who misused the card has taken responsibility for the theft and is making restitution payments to the club Audit not Completed Timely - The 2006 Audit was not completed within the six months of the close of the Boys and Girls of Central Louisiana, Inc.'s calendar year as required by LSA-RS 24:513. In the future an auditor will be engaged in a timely manner that will allow the completion the Club's audit on a timely basis. Should you have any questions please contact me at our administrative office, phone number is (318) Sincerely, Kimbejrly 0. Dural Executive Director