FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT CAPITAL POST-CONVICTION PROJECT OF LOUISIANA DECEMBER 31, 2007 AND 2006

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1 7/73 FINANCIAL STATEMENTS AND INDEPENDENT AUDITR'S REPRT CAPITAL PST-NVICTIN PRJECT F LUISIANA DECEMBER 31, 2007 AND 2006 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

2 CAPITAL PST-NVICTIN PRJECT F LUISIANA TABLE F NTENTS PAGE INDEPENDENT AUDITR'S REPRT 3 FINANCIAL STATEMENTS: STATEMENTS F FINANCIAL PSITIN 4 STATEMENTS F ACTIVITIES 5 STATEMENTS F FUNCTINAL EXPENSES 6 STATEMENTS F CASH FLWS 7 NTES T FINANCIAL STATEMENTS 8 REPRT N INTERNAL NTRL VER FINANCIAL REPRTING AND N MPLIANCE AND THER MATTERS BASED N AN AUDIT F FINANCIAL STATEMENTS PERFRMED IN ACRDANCE WITH GVERNMENT AUDITING STANDARDS 15

3 PAIL6T, meunier mi UBLAIIC, L.L.P. Certified Public Accountants [flanaqement Consultants INDEPENDENT AUDITR'S REPRT To the Board of Directors of Capital Post-Conviction Project of Louisiana We have audited the accompanying statements of financial position of Capital Post-Conviction Project of Louisiana (a non-profit organization) as of December 31, 2007 and 2006, and the related statements of activities, functional expenses, and cash flows for the years then ended. These financial statements are the responsibility of the rganization's management. ur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in ail material respects, the financial position of Capital Post-Conviction Project of Louisiana as of December 31, 2007 and 2006, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated June 10, 2008, on our consideration of Capital Post-Conviction Project of Louisiana's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. 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 our audit. Metairie, Louisiana June 10, 2008 Q 3421 N. Causeway Blvd., Suite 701 Metairie, LA Telephone (504) Fax (504) Member of Member Firms fn Principal Cities PCAB - Public Company Accounting versiebl Board AICPA: Center for Public Company Audit Firms (SEC) - Governmental Audil Quality Center Private Companies Practice Section (PCPS)

4 CAPITAL PST-NVICTIN PRJECT F LUISIANA STATEMENTS F FINANCIAL PSITIN DECEMBER 31, ASSETS Current Assets Cash and Cash Equivalents Grants Receivable Prepaid Expenses Total Current Assets $ 1,783,573 $ 1,643,535 5,312 3,432, ,352 1,412,465 4,412 2, Property and Equipment Equipment and Furniture Less: Accumulated Depreciation Total Property and Equipment 162,676 ( ) 45, ,221 (106,358) ther Assets Security Deposits Total ther Assets Total Assets $ 1, S , LIABILITIES AND NET ASSETS Current Liabilities Grants Payable Payroll Taxes Payable Total Current Liabilities Contingencies Net Assets Unrestricted Total Liabilities and Net Assets $ 100,106 $ 8, , $ 75,000 6,938 81, See accountant's report and notes to financial statements. 4

5 CAPITAL PST-NVICTIN PRJECT F LUISIANA STATEMENTS F ACTIVITIES For the Years Ended December 31, UNRESTRICTED NET ASSETS Unrestricted Revenues Government Grants $ $ Total Unrestricted Revenues QQ Expenses Program Services 1,561,759 1,194,615 Supporting Services Total Expenses Increase in Unrestricted Net Assets Before ther Income ther Income Interest Income 12,167 5,087 Katrina Revenue : (1.025) Total ther Income Increase in Unrestricted Net Assets $ $ Increase in Net Assets $ 1,015,239 $ 1,445,398 Net Assets at Beginning of Year Net Assets at End of Year $ $ QQ6 See accountant's report and notes to financial statements. 5

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7 CAPITAL PST-NVICTIN PRJECT F LUISIANA STATEMENTS F CASH FLWS For the Years Ended December 31, CASH FLWS FRM PERATING ACTIVITIES: Increase in Net Assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation and amortization (Increase) decrease in operating assets: Grants Receivable Increase (decrease) in operating liabilities: Prepaid Expenses Grants Payable Payroll Taxes Payable Total adjustments Net cash provided by operating activities $ 1.015,239 $ 11,142 (231,070) (900) 25,106 1,159 ( ) ,445,398 9,977 (852,465) 35, (807,393) CASH FLWS FRM INVESTING ACTIVITIES: Cash payments for the purchase of property Net cash provided by investing activities Net increase in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year (29.455) (29.455) 791, ,352 $ $ 638, See accountant's report and notes to financial statements. 7

8 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31, 2007 and 2006 NTE A - NATURE F ACTIVITIES AND SIGNIFICANT ACUNTING PLICIES Nature of Activities Capital Post-Conviction Project of Louisiana (the rganization) is a non-profit corporation organized exclusively for charitable, scientific and educational purposes, including, but not limited to, providing legal representation to indigent persons in Louisiana under the sentence of death, and to providing consultation services, educational materials, and seminars to lawyers who represent indigent persons facing or under a sentence of death. The rganization is supported primarily through government contracts and private grants and does not engage in fundraising activities. Promises to Give Contributions are recognized when the donor makes a promise to give to the rganization 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. Any 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. At December 31, 2007 and 2006, the rganization has no temporarily or permanently restricted net assets. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Property and Equipment It is the rganization's policy to capitalize property and equipment with an expected life of three or more years and a cost of $500 or more. Property and equipment are depreciated using the straight-line method over a five to ten year depreciable life.

9 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31, 2007 and 2006 NTE A - NATURE F ACTIVITIES AND SIGNIFICANT ACUNTING PLICIES (NTINUED) Financial Statement Presentation The rganization has adopted Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit rganizations. Under SFAS No. 117, the rganization is required to report information regarding the financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. As permitted by the statement, the rganization does not use fund accounting, Contributions The rganization has adopted SFAS No. 116, Accounting for Contributions Received and Contributions Made. Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. Income Taxes The rganization is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than a private foundation. Cash and Cash Equivalents For purposes of the statement of cash flows, the rganization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. Concentration of Credit Risk The rganization occasionally maintains deposits in excess of federally insured limits. Statement of Financial Accounting Standards No. 105 identifies these items as a concentration of credit risk requiring disclosure, regardless of the degree of risk. The risk is mitigated by maintaining all deposits in high quality financial institutions. In 2003 the rganization entered into a security agreement with Hibernia National Bank for the collateralization of public funds in excess of federally insured limits.

10 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December and 2006 NTE B - FINANCIAL ASSISTANCE State of Louisiana Contracts The rganization has been awarded grants from the Louisiana Indigent Defense Assistance Board (LIDAB) to be used exclusively to defray the expenses of establishing and maintaining a capital postconviction office, including contract amounts for attorneys, staff, office expenses, overhead and out-ofpocket expenses. The Funds from these grants are not intended to defray, in whole or in part, the expenses associated with any trial or appeal as of right filed by or on behalf of a defendant sentenced to death. The scope of the contracts does not include litigation or proceedings arising out of or involving tort or worker's compensation. For the year ended December 31, 2007, the following LIDAB agreements are reflected in the financial statements: Contract Period July through June Capital Post-Conviction Project of Louisiana received a grant in the amount of $1,924,930. During the year ended December 31, 2006, the entire contract amount was recorded as income. The grant was paid in monthly installments from July through December, 2006, and the remaining balance of $962,465 was received in monthly installments from January through June, Contract Period July through June Capital Post-Conviction Project of Louisiana received a grant in the amount of $2,306,000. During the year ended December 31, 2007, the entire contract amount was recorded as income. The grant was paid in monthly installments from July through December, 2007, and the remaining contract amount, or $1,343,535, is shown on the Statement of Financial Position as Grants Receivable. 10

11 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31, 2007 and 2006 NTE B - FINANCIAL ASSISTANCE (NTINUED) State of Louisiana Contracts (Continued) Contract Period July through June Pro Bono Grant Capital Post-Conviction Project of Louisiana received a grant in the amount of $600,000 for post-conviction services on behalf of indigents in Louisiana. An initial payment of $150,000 was made in The remaining balance of $450,000 was paid in monthly installments from January through June, Contract Period July through June Pro Bono Grant Capital Post-Conviction Project of Louisiana received a grant in the amount of $600,000 for post-conviction services on behalf of indigents in Louisiana. Incremental payments were received from July through December, 2007 of $300,000. The remaining balance of $300,000 is shown on the Statement of Financial Position as Grants Receivable. The Pro Bono Grants of $300,000 and $600,000 shall be used exclusively by the Capital Post- Conviction Project of Louisiana (CPCPL) to: a) Review and take action upon applications to the LIDAB by indigents not represented by Capital Post-Conviction Project of Louisiana for funding of reasonably necessary ancillary services associated with legal representation of indigents seeking post-conviction relief of a capital conviction in Louisiana. The CPCPL, using the ABA Guidelines for the Appointment and Performance of Defense Counsel in Death Penalty Cases (2003) for evaluation, shall take action upon an application for funding within 30 days of receipt of the application either by approval of the application, denial of the application, or by the request of additional information regarding the application. Should the CPCPL request additional information from the applicant, the CPCPL shall take action by approval or denial of the application within 30 days of the receipt of the additional information requested; and b) Provide funding of reasonably necessary services of expert witnesses, costs of specialized scientific testing, and/or other ancillary services associated with legal representation of indigents not represented by the CPCPL seeking post-conviction relief of a capital conviction in Louisiana upon approval of hereinablve mentioned applications. The scope of these Pro Bono grants does not include litigation or proceedings arising out of or involving tort or worker's compensation. 11

12 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31, 2007 and 2006 NTE C - GRANTS T THERS For the year ended December 31, 2007, the following agreements are reflected in the financial statements: Center for Equal Justice - General Contract ( to ) Capital Post-Conviction Project of Louisiana entered into a contract agreement with the Center for Equal Justice to provide $100,000 for legal representation in state postconviction proceedings for indigent death-sentenced individuals in Louisiana. This contract is for the period July 1, 2006 through June 30, The entire contract amount was recorded in 2006, and the unpaid balance of $75,000 was paid in Center for Equal Justice - General Contract ( to ) Capital Post-Conviction Project of Louisiana entered into a contract agreement with the Center for Equal Justice to provide $106,666 for legal representation in state postconviction proceedings for indigent death-sentenced individuals in Louisiana. This contract is for the period July 1, 2007 through June 30, The entire contract amount was recorded in 2007, and the unpaid balance of $100,106 is reflected on the Statements of Financial Position as Grants Payable. NTE D - NTINGENCIES During the year ended December 31, 2007, the organization was a party to the following agreements for legal representation payable as invoiced; Denise LeBouef Capital Post-Conviction Project of Louisiana entered into an agreement with Denise LeBouef to provide $24,000 for legal representation of a specific Louisiana state post-conviction case at a rate of $100 per attorney hour and reimbursement for case expenses. As of December 31, 2007, a balance of $14,323 remains on this agreement. 12

13 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTE D - NTINGENCIES (NTINUED) Danalvnn Recer NTES T FINANCIAL STATEMENTS For the Years Ended December 31, 2007 and 2006 During 2006, Capital Post-Conviction Project of Louisiana entered into an agreement with Danalynn Recer to provide resource assistance on one specified case at a rate of $75 per attorney hour and reimbursement of case expenses, up to a maximum of $15,000. The remaining balance of $14,949 was paid in A new agreement was entered into during 2007 to provide resource assistance on one specified case at a rate of $80 per attorney hour and reimbursement of case expenses, up to a maximum of $16,000. As of December 31, 2007, a balance of $14,365 remains on this agreement. Jimmy Lohman During 2002, Capital Post-Conviction Project of Louisiana entered into an agreement with Jimmy Lohman to provide resource assistance to appointed counsel in the Louisiana state postconviction proceedings of a specified individual at a rate of $75 per attorney hour and reimbursement for case expenses, up to a maximum of $15,000. The remaining balance of $1,391 was paid in A new agreement was entered into during 2007 to provide resource assistance on one specified case at a rate of $75 per attorney hour and reimbursement of case expenses, up to a maximum of $15,000. As of December 31, 2007, there was no remaining balance. Paula Montonve During 2006, Capital Post-Conviction Project of Louisiana amended their agreement with Paula Montonye to provide resource assistance on three specific Louisiana state post-conviction case, up to a maximum amount of $60,000. As of December 31, 2007, a balance of $900 remains under this agreement. An additional agreement was entered into during 2007 to provide resource assistance on specified cases at a rate of $80 per attorney hour and reimbursement of case expenses, up to a maximum of $21,333. As of December 31, 2007, a balance of $8,594 remains on this agreement. NTE E - DESCRIPTIN F LEASING ARRANGEMENTS UCI Communications The rganization is a party to an agreement with UCI Communications Formerly New South Communications) for network services. The term of the lease is for two years, expiring in February, Upon expiration of the minimum term commitment, the agreement will automatically renew on a month-to-month basis until 30-day notice of termination by either party is given. 13

14 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31,2007 and 2006 NTE E - DESCRIPTIN F LEASING ARRANGEMENTS Gulf Coast ffice Products An agreement was amended with Gulf Coast ffice Products, amended September 20, 2007, for the lease of a digital copier/scanner. The term of the lease is for five years, expiring September 19, Upon expiration of the minimum term commitment, Capital Post-Conviction Project of Louisiana will have the option to purchase the equipment at its then fair market value. Minimum lease payments are as follows; Dovie Consulting 2008 $ 7, , , , Total $ An agreement was entered into with Dovie Consulting, on July 01, 2007, for computer consulting services. This is a twelve month lease in which Dovie Consulting will provide 34 hours of computer service per month at a rate of $2,550 per month. All additional hours will be billed at a flat fee of $125 per hour. A Fighting Chance An agreement was entered into with A Fighting Chance, on April 01, 2007, for ongoing training for Mitigations Investigators. There is no term to the contract, and Ms. Jennifer Vitry, Director, will be compensated at an hourly rate of $75.00 per hour. Nuvox Communications An agreement was entered into with Nuvox Communications, on January 05, 2007, for phone services. This is a three year agreement expiring on December 31, Minimum lease payments are as follows: 2008 $ 7, Total $ 15,972 14

15 CAPITAL PST-NVICTIN PRJECT F LUISIANA NTES T FINANCIAL STATEMENTS For the Years Ended December 31,2007 and 2006 NTE E - DESCRIPTIN F LEASING ARRANGEMENTS (NTINUED) Lease with Continental REGIS Property Management, LLC The rganization amended their lease with REGIS Property Management, LLC in Febuary of 2007 for office space when they moved to a different floor. The term of the lease is for a term of five years, ending on January 31, The monthly rent is $8,782. Minimum payments under the lease are as follows: 2008 $ 105, , , , Total S NTE F-401 (K) PLAN The rganization became a participant in the ABA Members Retirement Program with an effective date of January 1, 2003, Eligible employees were allowed to make deferred compensation contributions to the plan beginning in 2003, and there were no employer contributions made during the year. AH employees who have attained the age of 21 are allowed to participate. The ABA conducted discrimination testing on the plan, and reported full compliance for the years ended December and

16 meunier j UBIAIIC, L.L.P. Certified Public Accountants management Consultants REPRT N INTERNAL NTRL VER FINANCIAL REPRTING AND N MPLIANCE AND THER MATTERS BASED N AN AUDIT F FINANCIAL STATEMENTS PERFRMED IN ACRDANCE WITH GVERNMENT AUDITING STANDARDS To the Partner Capital Post-Conviction Project of Louisiana We have audited the financial statements of Capital Post-Conviction Project of Louisiana as of and for the year ended December 31, 2007, and have issued our report thereon dated June 10, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control ver Financial Reporting In planning and performing our audit, we considered Capital Post-Conviction Project of Louisiana's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the entity's internal control over financial reporting. 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 entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the following deficiencies to be significant deficiencies in internal control: The client does not have sufficient, capable, expertise to prepare the financial statements and related footnote disclosures. 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. ur consideration of 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 internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above N. Causeway Blvd., Suite 701 * Metairie, LA Telephone (504) Fax (504) Member of Q Member Firms in Principal Cities PCAB - Public Company Accounting versight Bo«rd AlCPA: Center for Public Company Audit Firms (SEC) Governmental Audit Quality Center Private Companies Practice Section (PCPS)

17 Compliance and ther Matters As part of obtaining reasonable assurance about whether Capital Post-Conviction Project of Louisiana's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Legislative Auditor, audit committee, management, others within the organization and grant awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. Metairie, Louisiana June 10, 2008