BAY AREA WOMEN S CENTER BAY CITY, MICHIGAN FINANCIAL STATEMENTS DECEMBER 31, 2013

Transcription

1 BAY AREA WOMEN S CENTER BAY CITY, MICHIGAN FINANCIAL STATEMENTS DECEMBER 31, 2013

2 INDEX PAGE INDEPENDENT AUDITOR S REPORT 1-2 STATEMENT OF ACTIVITIES 3 STATEMENT OF FUNCTIONAL EXPENSES 4 STATEMENT OF FINANCIAL POSITION 5 STATEMENT OF CASH FLOWS 6 NOTES TO FINANCIAL STATEMENTS 7-14 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 22 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 23 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 24

3 Independent Auditor's Report April 8, 2014 Board of Directors Bay Area Women's Center Bay City, Michigan Report on the Financial Statements We have audited the accompanying financial statements of Bay Area Women's Center (Organization), which comprise the statement of financial position as of December 31, 2013 and the related statements of activities, functional expenses and cash flows for the year then ended and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Board of Directors Bay Area Women's Center April 8, 2014 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bay Area Women's Center as of December 31, 2013 and the changes in its net assets and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves and other additional procedures in accordance with U.S. generally accepted auditing standards. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 8, 2014, on our consideration of Bay Area Women's Center's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Bay Area Women's Center's internal control over financial reporting and compliance. Weinlander Fitzhugh

5 BAY AREA WOMEN'S CENTER Statement of Activities Temporarily Permanently Unrestricted Restricted Restricted Total Support Contributions $ 154,787 $ 23,610 $ 0 $ 178,397 Donated material and services 133, ,131 Special events: Gross special events revenue 113, ,275 Less direct expenses (58,687) 0 0 (58,687) Net special events 54, ,588 Total support 342,506 23, ,116 Other revenue United Way allocations 0 91, ,756 Grant revenue 776, ,338 SAFE exam reimbursements 24, ,310 Interest and dividends 2, ,360 Miscellaneous 5, ,413 Endowment earnings 3, ,955 Net unrealized gain on investments 1, ,640 Total other revenue 813,887 91, ,772 Net assets released from restrictionsatisfaction of program restrictions 438,015 (438,015) 0 0 Total support and revenue 1,594,408 (322,649) 129 1,271,888 Expenses Program services: Domestic Violence 817, ,022 Community Service 144, ,595 Sexual Assault 222, ,945 Total program services 1,184, ,184,561 Support services: Management and general 198, ,864 Fund development 61, ,941 Total support services 260, ,805 Total expenses 1,445, ,445,366 Change in net assets 149,042 (322,649) 129 (173,478) Net assets - beginning of year 1,714, ,375 23,906 2,144,830 Net assets - end of year $ 1,863,591 $ 83,726 $ 24,035 $ 1,971,352 See accompanying notes to financial statements. -3-

6 BAY AREA WOMEN'S CENTER Statement of Functional Expenses Program Services Supporting Services Total Management Total Domestic Community Sexual Program and Fund Supporting Total Violence Service Assault Services General Development Services Salaries and wages $ 668,000 $ 394,205 $ 44,374 $ 89,365 $ 527,944 $ 90,056 $ 50,000 $ 140,056 Employee benefits 62,785 35,854 2,726 9,722 48,302 10,344 4,139 14,483 Payroll taxes 80,233 48,154 5,206 10,278 63,638 11,507 5,088 16,595 Staff fees and contracts 39, ,811 22,303 25,114 14, ,069 Payroll preparation fees 4,093 2, , Workers' compensation 3,187 1, , Work study wages 1, , ,131 Total salaries and related expenses 858, ,788 55, , , ,039 59, ,464 Specific assistance to individuals 245, ,349 78,170 43, , Donated supplies 40,537 28,376 4,054 4,054 36,483 4, ,054 Donated services 85,007 59, ,751 72,256 12, ,751 Maintenance 25,480 22, ,092 23,314 2, ,166 Utilities 24,649 18, ,326 20,296 4, ,353 Travel and meals 16,920 5, ,831 15,787 1, ,133 Insurance 12,212 6,327 1,031 2,071 9,429 2, ,783 Professional fees 12, , ,000 Office supplies 11,552 6, ,291 8,576 2, ,976 Telephone and answering service 8,696 4,996 1,612 1,062 7, ,026 Other costs 6, , ,370 Computer costs 5,665 1, ,636 2,958 1,071 4,029 Dues and subscriptions 4, , ,880 Conferences and education 4, ,135 4, Advertising and publicity 3,623 3, , Bank charges 2, , ,610 Equipment rent and maintenance 2,016 1, , Rent 1, , , Postage 1, Total before depreciation 1,373, , , ,354 1,124, ,331 61, ,069 Depreciation 71,542 49, ,591 59,806 11, ,736 Total functional expenses $ 1,445,366 $ 817,022 $ 144,595 $ 222,945 $ 1,184,561 $ 198,864 $ 61,941 $ 260,805 See accompanying notes to financial statements. -4-

7 ASSETS Land, Current Building and Operations Equipment Endowment Total Current Assets Cash and cash equivalents $ 97,010 $ 0 $ 0 $ 97,010 Investments 249, , ,854 Grants receivable 112, ,344 Accounts receivable 33, ,750 Prepaid expense 7, ,585 Total current assets 500, , ,543 Property and Equipment Building 0 2,182, ,182,195 Land improvements 0 89, ,093 Furniture and fixtures 0 119, ,240 Computer equipment and software 0 64, ,654 Office equipment 0 93, , ,548, ,548,647 Accumulated depreciation 0 (1,014,869) 0 (1,014,869) 0 1,533, ,533,778 Land 0 9, ,039 Total property and equipment 0 1,542, ,542,817 Other Assets Beneficial interest in assets held by Community Foundation 1, ,090 Total Assets $ 501,598 $ 1,542,817 $ 24,035 $ 2,068,450 LIABILITIES AND NET ASSETS BAY AREA WOMEN'S CENTER Statement of Financial Position December 31, 2013 Current Liabilities Deferred revenue $ 16,305 $ 0 $ 0 $ 16,305 Accounts payable 14, ,432 Accrued payroll and payroll taxes 59, ,485 Other liabilities 6, ,876 Total current liabilities 97, ,098 Net Assets Unrestricted and undesignated 320,774 1,542, ,863,591 Temporarily restricted 83, ,726 Permanently restricted ,035 24,035 Total net assets 404,500 1,542,817 24,035 1,971,352 Total Liabilities and Net Assets $ 501,598 $ 1,542,817 $ 24,035 $ 2,068,450 See accompanying notes to financial statements. -5-

8 BAY AREA WOMEN'S CENTER Statement of Cash Flows Cash Flows From Operating Activities Change in net assets $ (173,478) Adjustments to reconcile change in net assets to net cash flows from operating activities: Net unrealized gain on investments (1,640) Depreciation 71,542 Changes in operating assets and liabilities: Grants receivable 54,882 Accounts receivable 42,450 Prepaid expense 1,118 Accounts payable (3,793) Deferred revenue 9,050 Accrued payroll and payroll taxes 11,637 Other liabilities 972 Net cash flows from operating activities 12,740 Cash Flows From Investing Activities Purchase of equipment (28,889) Proceeds from investments 4,855 Net cash flows from investing activities (24,034) Net change in cash (11,294) Cash and cash equivalents - beginning of year 108,304 Cash and cash equivalents - end of year $ 97,010 See accompanying notes to financial statements. -6-

9 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Bay Area Women s Center (Organization) is a nonprofit organization established to provide counseling and shelter for domestic violence and sexual assault victims in Bay and Arenac Counties. The primary funding source is federal, state and local grants, along with allocations from the United Way of Bay County. Basis of Accounting The financial statements are prepared on the accrual basis of accounting. That is, revenue is recognized when earned and expenses when incurred. Estimates The process of preparing financial statements in conformity with U.S. generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. Statement of Cash Flows For purposes of the statement of cash flows, cash equivalents include time deposits and certificates of deposit with original maturities of three months or less. Interest paid for the year was $0. There were no non-cash activities during the year, except for donated services and goods described later. Investments Investments are recorded at fair market value as follows: Cash and short-term investments - the carrying amount approximates fair value because of the short maturity of those instruments. Long-term investments - the fair value of investments are generally based on quoted market prices. Promises to Give Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. The Organization uses the allowance method to determine uncollectible unconditional promises receivable. The allowance is based on prior years' experience and management's analysis of specific promises made. No allowance is necessary for

10 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contributed Services The Organization receives a significant amount of donated services from unpaid volunteers who assist in daily operations and program services. Contributed services are reflected in the financial statements at the fair value of the services received. The contributions of services are recognized if the services received, (a) create or enhance non-financial assets or, (b) require a specialized skill that is provided by individuals possessing those skills and would typically need to be purchased if not provided by donation. The value of donated services included as contributions in the financial statements and the corresponding program expenses was $85,007 for the year. Donated Goods The Organization receives a significant amount of donated materials. These materials are recorded as contributions at their estimated fair value at the date of donation. Total value of the donated materials was $48,125 for the year. Fixed Assets and Depreciation The Organization capitalizes major expenditures for land, building and equipment at cost. Donations of land, buildings and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted support. The Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. Depreciation is provided on a straight line basis over the estimated useful lives of the assets. Building Land improvements Equipment years years 3-10 years -8-

11 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Program Services The Organization s program services are segregated into three categories, as follows: Domestic Violence - This program is focused on providing temporary counseling, emergency shelter and on-going support groups for victims of domestic violence and their families. No fees are charged to users. The program consists of two types, Domestic Violence Residential and Non-Residential. The first provides overnight support while the other is for single day services. Community Service This program provides financial and material assistance for the very low income families in Bay and Arenac counties. Sexual Assault and the Sexual Assault Nurse Examiners Programs The sexual assault program provide temporary counseling, emergency shelter and support groups to victims of sexual assault. No fees are charged to users. The Sexual Assault Nurse Examiners Program is a team composed of trained forensic nurses, law enforcement and advocates that respond to sexual assault victims seeking treatment after an assault, including pediatric victims of sexual abuse. Subsequent Events Management evaluates events occurring subsequent to the date of the financial statements in determining the accounting for and disclosure of transactions and events that affect the financial statements. Subsequent events have been evaluated through the date of the accompanying independent auditor s report, which is the date the financial statements were available to be issued. NOTE 2 - INVESTMENTS AND FAIR VALUE MEASUREMENTS Investments are stated at fair value and are summarized as follows as of December 31, 2013: Market Value Certificate of deposits $ 203,225 Split interest agreement 25,756 Money market funds 44,718 Stock and equities 155 Totals $ 273,854-9-

12 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 2 - INVESTMENTS AND FAIR VALUE MEASUREMENTS (CONTINUED) Professional standards establish a framework for measuring value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under professional standards are described as follows: Level 1 Level 2 Level 3 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Quoted prices in markets that are not considered to be active or financial statements for which all significant inputs are observable, either directly or indirectly. Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table presents assets at fair value on a recurring basis during the period by level within the fair value hierarchy, as of December 31, Level 1 Level 2 Level 3 Total Certificate of deposits $ 203,225 $ 0 $ 0 $ 203,225 Split interest agreement ,756 25,756 Money market funds 44, ,718 Stock and equities $ 248,098 $ 0 $ 25,756 $ 273,854 The following methods and assumptions were used to estimate the fair value of assets and liabilities in the table above: The fair value of the Organization s split interest agreement is based on the net assets value of shares held by the Organization at year end. The fair value of the Organization s stocks and equities is based on quoted market prices. Split interest agreement assets categorized as a Level 3 asset consist of a beneficial interest in a charitable remainder trust. The Organization estimates the fair value of these split interest agreement assets based upon the fair value of these split interest agreement assets based upon the fair value of the asset in the trust unless the facts and circumstances indicate that the fair value would be different from the present value of estimated future distributions. -10-

13 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 3 - RETIREMENT PLAN The Organization has a 403(b) deferred annuity plan (Plan) covering all employees upon completion of one year of service. The Organization s contributions are equal to 2% of the monthly compensation of the participating employees. Total expenses related to the Plan for the year ended December 31, 2013 were $8,017. NOTE 4 - RESTRICTIONS ON ASSETS Temporarily restricted net assets of $83,726 consist of $25,000 in pledges receivable for capital improvements, $35,786 in funds held for prevention education and $22,940 for United Way contributions to be used for the domestic violence program. Net assets were released from restriction by the Board due to an absence of donor imposed restrictions, by incurring expenses satisfying the purpose or time restrictions specified by donors as follows: Board release of restrictions $ 257,799 United Way Campaign 101,429 Pledges receivable 50,000 Special projects 28,787 Total restrictions released $ 438,015 Permanently restricted net assets of $24,035 consist of endowment fund assets to be held indefinitely. The income from the assets can be used to support the Organization s general activities. NOTE 5 - LINE OF CREDIT The Organization has a $100,000 line of credit with First State Bank. The interest rate will be equal to the Bank s index rate, not to exceed 9.0% per annum or the maximum rate allowed by applicable law. As of December 31, 2013, the balance of the line of credit is $0. NOTE 6 - INCOME TAXES The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization evaluates all significant tax positions under a more likely than not threshold as required by U.S. generally accepted accounting principles. As of December 31, 2013, the Organization does not believe that it has taken any tax positions, that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. The Organization s income tax returns are subject to examination by the appropriate taxing jurisdictions. As of December 31, 2013, the Organization s federal and various state tax returns generally remain open for the last three years. -11-

14 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 7 - ENDOWMENT FUND WITH BAY AREA COMMUNITY FOUNDATION The Organization is the beneficiary under an endowment fund agreement with the Bay Area Community Foundation (Foundation). A portion of the assets, $1,090 is included in the statement of financial position of the Organization. The remaining portion, $98,030, is included on the statement of financial position of the Foundation. The Organization does not exercise any control over the principal of the fund but, based on a formula, certain amounts of the fund may be distributed to and expended by the Organization. Variance power has been granted to the Foundation for the assets in the endowment fund. If the Organization ceases to exist or no longer performs its functions under the provisions of the agreement, the Foundation shall continue to administer and disburse fund assets in a manner deemed appropriate. The endowment fund includes funds designated by the Organization. As required by U.S. GAAP, net assets associated with endowment funds, including funds designated by the Organization to function as endowments, are classified and reported based on the existence or absence of donor-imposed restriction. Investment and spending policies are determined by the Foundation, in accordance with established guidelines adopted by the Foundation s governing board. Income available for spending is determined by a total return system. The amount to be spent in the coming year is calculated each September 30th and is reviewed and approved by the Finance Committee annually. The calculation formula is as follows: a) Each year at September 30 th a 12 quarter rolling average of the market value of each Fund is determined; b) The annual amount available to be spent is 5% of the market value calculated in a above. The income that may be spent, as determined in this paragraph, may be drawn from both ordinary earned income (i.e., dividends, interest, rents, royalties, etc.) and earned and unearned appreciation. -12-

15 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 7 - ENDOWMENT FUND WITH BAY AREA COMMUNITY FOUNDATION (CONTINUED) Endowment Net Asset Composition by Type of Fund as of December 31, 2013 Unrestricted Board designated endowment funds $ 1,090 Changes in Endowment Net Assets for the Year Ended December 31, 2013 Unrestricted Endowment net assets, beginning of the year $ 950 Investment return: Investment income 49 Net depreciation (realized and unrealized) 140 Total investment return 189 Appropriation of endowment assets for expenditure (43) Administrative and investment fees (6) Endowment net assets, end of the year $ 1,

16 BAY AREA WOMEN S CENTER Notes to Financial Statements NOTE 8 - GRANT REVENUE Grant revenue for the year consists of: Supportive Housing Program (HUD) $ 160,391 Victims of Crime Act 146,870 Michigan Domestic and Sexual Violence Protection and Treatment 136,624 Transitional Supportive Housing Program 98,104 MSHDA 79,204 SACS 55,964 STOP Violence Against Women 45,312 SANE 31,543 Child and Adult Care Food Program 13,956 Bay County Safe Haven 8,370 $ 776,

17 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditor's Report Board of Directors Bay Area Women's Center Bay City, Michigan April 8, 2014 We have audited, in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Bay Area Women's Center (Organization), which comprise the statement of financial position as of December 31, 2013 and the related statements of activities, functional expenses and cash flows for the year then ended and the related notes to the financial statements and have issued our report thereon dated April 8, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Bay Area Women's Center's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of Bay Area Women's Center's internal control. Accordingly, we do not express an opinion on the effectiveness of Bay Area Women's Center's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis. A material weakness is a deficiency or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Organization's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. -15-

18 Board of Directors Bay Area Women's Center April 8, 2014 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether Bay Area Women's Center's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Weinlander Fitzhugh -16-

19 REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Board of Directors Bay Area Women's Center Bay City, Michigan Independent Auditor's Report April 8, 2014 Report on Compliance for Each Major Federal Program We have audited Bay Area Women's Center's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Bay Area Women's Center's major federal programs for the year ended December 31, Bay Area Women's Center's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Bay Area Women's Center's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with U.S. generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Bay Area Women's Center's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Bay Area Women's Center's compliance. -17-

20 Board of Directors Bay Area Women's Center April 8, 2014 Opinion on Each Major Federal Program In our opinion, Bay Area Women's Center complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, Report on Internal Control Over Compliance Management of Bay Area Women's Center, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Bay Area Women's Center's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133 but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Bay Area Women's Center's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. -18-

21 Board of Directors Bay Area Women's Center April 8, 2014 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Weinlander Fitzhugh -19-

22 Federal Pass-through Federal Grantor/Pass-Through CFDA Entity Identifying Federal Grantor/Program or Cluster Title Number Number Expenditures U.S. Department of Health and Human Services: Department of Human Services: Temporary Assistance for Needy Families Temporary Assistance for Needy Families DV $ 77,289 Transitional Supportive Housing Program TSH ,104 Total expenditures for Temporary Assistance for Needy Families 175,393 Temporary Violence Protection and Services/Grants for Battered Women's Shelters DV ,391 Total U.S. Department of Health and Human Services 209,784 U.S. Department of Justice: Office of Justice Programs Crime Victim Services Commission: Victims of Crime Assistance VA-GX , VA-GX ,591 Total passed through Crime Victim Services Commission 146,870 Department of Human Services: BAY AREA WOMEN'S CENTER Schedule of Expenditures of Federal Awards Violence Against Women Formula DV ,818 STOP Violence Against Women Formula STOP ,312 Total passed through Department of Human Services 65,130 Total U.S. Department of Justice 212,000 U.S. Department of Housing and Urban Development: Supportive Housing Program MI0004B5F ,659 MI0004L5F ,514 MI0022B5F ,023 MI0004L5F ,195 Total U.S. Department of Housing and Urban Development 160,391 See accompanying notes to schedule of expenditures of federal awards. -20-

23 Federal Pass-through Federal Grantor/Pass-Through CFDA Entity Identifying Federal Grantor/Program or Cluster Title Number Number Expenditures U.S. Department of Agriculture Michigan Department of Education: BAY AREA WOMEN'S CENTER Schedule of Expenditures of Federal Awards Child and Adult Care Food Program $ 13,956 Total Expenditures of Federal Awards $ 596,131 See accompanying notes to schedule of expenditures of federal awards. -21-

24 BAY AREA WOMEN'S CENTER Schedule of Findings and Questioned Costs SECTION 1 - Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unmodified opinion Internal control over financial reporting: Material weakness(es) identified? [ ] YES [x] NO Significant deficiency(ies) identified? [ ] YES [x] NONE REPORTED Noncompliance material to financial statements noted? [ ] YES [x] NO Federal Awards Internal Control over major programs: Material weakness(es) identified? [ ] YES [x] NO Significant deficiency(ies) identified? [ ] YES [x] NONE REPORTED Type of auditor's report issued on compliance of major programs: Any audit findings disclosed that are required to be reported in accordance with Section 510 (a) of Circular A-133? Unmodified opinion [ ] YES [x] NO Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster Temporary Assistance for Needy Families Victims of Crime Assistance Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? [x] YES [ ] NO SECTION II - Financial Statement Findings There are no matters reported. SECTION III - Federal Award Findings and Questioned Costs There are no matters reported. -22-

25 BAY AREA WOMEN'S CENTER Notes to the Schedule of Expenditures of Federal Awards NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of Bay Area Women's Center under programs of the federal government for the year ended December 31, The information in this Schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Because the schedule presents only a selected portion of the operations of Bay Area Women's Center, it is not intended to and does not present the financial position or changes in net position of Bay Area Women's Center. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for States, Local and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts (if any) shown on the Schedule represent adjustments or credit made in the normal course of business to amounts reported as expenditures. NOTE 2 - RECONCILIATION OF REVENUE REPORTED IN THE FINANCIAL STATEMENTS Total federal expenditures per Schedule of Expenditures of Federal Awards $ 596,131 Add: Bay County Safe Haven 8,370 MSHDA 79,204 State Funds 92,633 Total revenues from grants per audit report $ 776,

26 BAY AREA WOMEN S CENTER Summary Schedule of Prior Audit Finding FEDERAL AWARD FINDING Noncompliance Procurement and Suspension and Debarment Program Information: Criteria: Condition: Context: Cause/Effect: Current Year Status: Victims of Crime Assistance, CFDA NO: , Federal Award No.s: 2011-VA-GX-0056, 2012-VA-GX-0020 The Grant agreement states that Bay Area Women s Center as the contractor, must comply with Federal Regulation, 2 CFR part 180 and certify to the best of it s knowledge and belief that it, its employees and its subcontractors are not presently disbarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or contractor. Suspension and debarment requirement were not confirmed for subcontractors and employees used. Program coordinator was unaware of requirement. Because the program coordinator was unaware of the requirement, no verification was done of subcontractors and employees to ascertain they were allowable. The program coordinator now checks and retains documentation verifying contractors and employees were not suspended or debarred through or obtains a certificate from the contractor indicating that it was not suspended or debarred. -24-