NATIONAL DISABILITY RIGHTS NETWORK, INC.

Transcription

1 NATIONAL DISABILITY RIGHTS NETWORK, INC. Financial Statements, Schedule of Expenditures Of Federal Awards, Supplemental Material, and Reports Required by Government Auditing Standards and OMB Circular A-133 September 30, 2010 and 2009

2 TABLE OF CONTENTS September 30, 2010 and 2009 Independent Auditors' Report... I Statements of Financial Position... 2 Statements of Activities Statements of Cash Flows... 5 Notes to Financial Statements Independent Auditors' Report on Supplemental Information Schedules of Functional Expenses Schedule of Expenditures of Federal Awards 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 with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs

3 .McQuade.BrenDaD.LLp. Certified Public Accountants and Consultants 1730 Rhode Island Avenue, NW Suite 800 Washington, DC To the Board of Directors National Disability Rights Network, Inc. Washington, D.C. Independent Auditors' Report We have audited the accompanying statements offmancial position of National Disability Rights Network, Inc. (the Organization), a nonprofit organization, as of September 30, 2010 and 2009, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. Our 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the fmancial statements referred to above present fairly, in all material respects, the financial position of National Disability Rights Network, Inc. as of September 30,2010 and 2009, 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 reports dated February 9, 2011 on our consideration of the Organization's internal control over fmancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. These reports are 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. Our audit was performed for the purpose of forming an opinion on the basic financial statements of the Organization taken as a whole. The accompanying statements of functional expenses are presented for additional analysis and are not a required part of the basic fmancial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit OrganizatiOns, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic fmancial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Washington, DC February 9,2011 Telephone (202) Fax (202) Member, Enterpris&jWorldwide An International Association of Mcountants and Advisors

4 STATEMENTS OF FINANCIAL POSITION September 30, ASSETS CURRENT ASSETS Cash and cash equivalents Grants and contracts receivable Other receivables Prepaid expenses TOTAL CURRENT ASSETS NET PROPERTY AND EQUIPMENT RENTAL DEPOSITS TOTAL ASSETS $545,103 $168, , ,146 20,474 12,672 6,947 12,034 1,265, , , ,732 21,002 21,002 $1,732,776 $978,167 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Deferred revenue Accrued expenses Capital lease obligation, current portion Line of credit payable TOTAL CURRENT LIABILITIES CAPITAL LEASE OBLIGATION, LONG TERM TOTAL LIABILITIES NET ASSETS Unrestricted Unrestricted - Board Designated TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS $782,538 $160, , ,109 57,877 48,965 32,367 38,792 75,000 1,131, ,725 77,152 84,522 1,208, , , ,417 26,502 26, , ,919 $1,732,776 $978,167 The accompanying notes are an integral part of these financial statements. 2

5 STATEMENTS OF ACTIVITIES For the Year Ended September 30, 2010 Temporarily Unrestricted Restricted Total REVENUE Membership dues $716,735 $716,735 Grants and contracts $4,501,733 4,501,733 Contributions 3,500 3,500 Conference registrations 300, ,793 Subscriptions 458, ,750 Fundraising 32,142 32,142 Other income 21,362 21,362 mterest income Net assets released from restrictions 4,528,235 (4,528,235) TOTAL REVENUE 6,061,531 (26,502) 6,035,029 EXPENSES Program 5,225,813 5,225,813 General and administrative 573, ,210 Fundraising 22,418 22,418 TOTAL EXPENSES 5,821,441 5,821,441 CHANGE IN NET ASSETS 240,090 (26,502) 213,588 NET ASSETS AT BEGINNING OF YEAR 284,417 26, ,919 NET ASSETS AT END OF YEAR $524,507 $0 $524,507 The accompanying notes are an integral part of these financial statements. 3

6 STATEMENTS OF ACTIVITIES (Continued) Forthe Year Ended September 30,2009 Temporarily Unrestricted Restricted Total REVENUE Membership dues $703,782 $703,782 Gran ts and contracts $2,690,266 2,690,266 Contri butions Conf~encer~strations 222, ,708 Subscriptions 428, ,151 Fundraising 37,642 37,642 Other income 51,905 51,905 Interest income Net assets released from restrictions 2,690,266 (2,690,266) rotal REVENUE 4,134,612 4,134,612 EXPENSES Program 4,072,939 4,072,939 General and administrative 31,675 31,675 Fundraising 18,844 18,844 rot AL EXPENSES 4,123,458 4,123,458 CHANGE IN NET ASSETS 11,154 11,154 NEf ASSETS AT BEGINNING OF YEAR 273,263 26, ,765 NEf ASSETS AT END OF YEAR $284,417 $26,502 $310,919 The accompanying notes are an integral part of these financial statements. 4

7 STATEMENTS OF CASH FLOWS For Ole Year Elided September 30, CASH FLOWS FROM OPERATING ACfIVITIES Change in net assets $213,588 $11,154 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 228, ,679 (Increase) decrease in: Grants and contracts receivable (487,128) 86,927 Other receivables (7,802) Prepaid expenses 5,087 (2,098) Increase (decrease) in: Accounts payab Ie 621,678 (113,416) Deferred revenue (774) 36,946 Accrued expenses 8,912 (16,603) NET CASH PROVIDED BY OPERATING ACTIVITIES 581, ,589 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (116,637) (92,414) NET CASH USED IN INVESTING ACfIVITIES (116,637) (92,414) CASH FLOWS FROM FINANCING ACTIVITIES Borrowings (payments) on capital lease obligations (13,795) (50,546) Payment of line of credit (75,000) (75,000) NET CASH USED IN FINANCING ACTIVITIES (88,795) (125,546) NET INCREASE IN CASH AND CASH EQUIVALENTS 376,522 6,629 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 168, ,952 CASH AND CASH EQUIVALENTS, END OF YEAR $545,103 $168,581 The accompanying notes are an integral part of these financial statements 5

8 NOTES TO FINANCIAL STATEMENTS September 30, 2010 and 2009 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business Basis of Presentation Cash and Cash Equivalents Property and Equipment The National Association for Protection and Advocacy Systems, Inc. changed its name in 2005 to National Disability Rights Network, Inc. (the Organization). The Organization was established on March 2, 1983 and incorporated under the laws of Florida as a nonprofit organization. The Organization was established to promote the human, civil and legal rights of disabled persons to enhance the ability of its members to provide services to such individuals. The Organization receives revenue from the federal government directly and indirectly through grants and contracts, membership dues, and conferences. The accompanying financial statements were prepared using the accrual basis of accounting in accordance with the generally accepted accounting principles in the United States of America. Cash and cash equivalents includes all monies in the bank, petty cash and shorttenn investments. The Organization considers all highly liquid short-tenn investments which have an original maturity of three months or less to be cash equivalents. Property and equipment consists of furniture, equipment, leasehold improvements and capital leases. The Organization capitalizes all expenditures for property and equipment in excess of $500. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to ten years. Leasehold improvements are amortized over the tenn of the lease or useful life, whichever is shorter. Maintenance and repairs are expensed as incurred. Deferred Revenue Functional Allocation of Expenses Deferred revenue represents funds received in advance for conferences and training and on-line Westlaw subscriptions. The costs of providing programs and services have been summarized on a functional basis on the Schedules of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 6

9 NOTES TO FINANCIAL STATEMENTS (Continued) September 30,2010 and 2009 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes NDRN has been granted exemption by the Internal Revenue Service (IRS) from Federal income taxes under Section 501(c)(3) of the Internal Revenue Code. The IRS has also determined that NDRN is not a private foundation. NDRN is required to report unrelated business income to the IRS and the District of Columbia taxing authority. NDRN did not have any unrelated business income for the year ended September 30,2010. NDRN has adopted the accounting of uncertainty in income taxes as required by the Income Taxes topic (Topic 740) of the FASB Accounting Standards Codification. Topic 740 requires NDRN to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is more than fifty percent likely of being realized upon ultimate settlement which could result in NDRN's recording a tax liability that would reduce NDRN's capital. NDRN has analyzed its tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years ( ), or expected to be taken in its 2009 tax return. NDRN is not aware of any tax positions for which it believes that there is a reasonable possibility that the total amounts of unrecognized tax benefits will change materially in the next twelve months. Unrestricted Net Assets Temporarily Restricted Net Assets Unrestricted net assets consist of amounts which are currently available to support the Organization's daily operations. The Organization reports grants and contracts as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or a 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. NOTE B - CASH AND CASH EQUIVALENTS The Organization maintains cash and cash equivalent balances in financial institutions, which are insured up to $250,000 each by the Federal Deposit Insurance Corporation. As of September 30,2010 and 2009, there were no amounts in excess of the insured limits. 7

10 NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2010 and 2009 NOTE C - GRANTS AND CONTRACTS RECEIVABLE The Organization is primarily funded through grants and contracts from the federal government and other organizations. The Organization had grants and contracts receivable at September 30, 2010 and 2009 as follows: Description Receivable in less than one year $693,274 $206,146 Total $693,274 $206,146 NOTE D - TEMPORARILY RESTRICTED NET ASSETS The Organization receives support that is restricted in nature. Net assets are released from temporary restriction when the restricted purpose or time restriction is satisfied. Temporarily restricted net assets as of September 30,2010 and 2009 are as follows: Description Expert Witness Scholarship Contribution 2010 $0 o 2009 $8,910 17,592 Total $0 $26,502 NOTE E - RETIREMENT PLAN The Organization contributes to a simplified employee pension plan, which is administered by an independent insurance company. All employees who are employed by the Organization for greater than one year are eligible to participate in the plan. The Organization contributes 6% of each eligible employees' gross salary to the plan. The Organization's contributions to the plan totaled $95,532 and $92,959 for the years ended September 30,2010 and 2009, respectively. 8

11 NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2010 and 2009 NOTE F - LEASES The Organization leases office space in 11 adjacent suites under one lease agreement. During October 2008, the Organization signed an amendment to extend the lease on these suites through December 31, The future minimum rental commitment under the operating lease is as follows: For the Years Ending September 30, Amount , ,501 64,299 Total $568,571 NOTE G - PROPERTY AND EQUIPMENT Property and equipment at September 30, 2010 and 2009 consist of the following: Description Furniture and equipment Capital leases Leasehold improvements Less accumulated depreciation $1,068, ,156 1,617 1,410,821 (964,845) $1,098, ,385 1,617 1,413,011 (855,279) Total $445,976 $557,732 Depreciation and amortization expense for the years ended September 30, 2010 and 2009 totaled $228,393 and $221,679, respectively. NOTE H - LINE OF CREDIT The Organization has a $150,000 unsecured line of credit with a fmancial institution. The unpaid principal balance accrues interest at prime rate plus one percent. As of September 30, 2010, the interest rate was 4.25%. The amount payable on the line of credit as of September 30, 2009 was $75,000. There was no outstanding amount on the line of credit as of September 30,2010. Total interest paid during the fiscal year was $1,169. The outstanding balance on the line of credit is due March 20,

12 NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2010 and 2009 NOTE 1- CAPITAL LEASES The Organization has several equipment capital leases. Minimum future lease payments under the capital leases are as follows: For the Years Ending September 30, Less amount representing interest Total Amount 43,049 43,049 29,105 7,495 3, ,821 (16,302) $109,519 NOTE J-SUBSEQUENT EVENTS As required by the Subsequent Events topic (Topic 855) of the FASB Accounting Standards Codification, NDRN has evaluated the impact on its financial statements and disclosures of certain transactions occurring subsequent to its fiscal year end through February 9,2011, which is the date NDRN's fmancial statements are available to be issued. NDRN has determined that there are no subsequent events that require disclosure pursuant to Topic 855. NOTE K - FAIR VALUE MEASUREMENTS In accordance with the Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification (FASB ASC through 50-3; ), the Organization has categorized its financial instruments, based on the priority of the inputs to the valuations technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Levell) and the lowest priority to unobservable inputs (Level 3). lfthe inputs used to measure the fmanciai instruments fall within different levels of hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Investments recorded in the Statements of Financial Position are categorized based on the inputs to valuation technique as follows: Levell. These are instruments where values are based on unadjusted quoted prices for identical assets in an active market the Organization has ability to access. Level 2. These are investments where values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investments. 10

13 NOTES TO FINANCIAL STATEMENTS (Continued) September 30, 2010 and 2009 Level 3. These are investments where values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect certain assumptions by management about the assumptions market participants would use in pricing the investments. These investments include non-readily marketable securities that do not have an active market. Financial assets recorded on the Statements of Financial Position are categorized based on the inputs to the valuation technique as follows for the year ended September 30,2010: Asset Category - Cash and cash equivalents: Quoted Prices in Significant Active Markets other Significant for Identical Observable Unobservable Assets Inputs Inputs (Levell) (Level 2) (Level 3) Total Mutual funds $30,277 $30,277 Total $30,277 $30,277 11

14 To the Board of Directors National Disability Rights Network, Inc. Washington, D.C. Our audit was performed for the purpose of forming an opinion on the basic financial statements of National Disability Rights Network, Inc. as a whole. The accompanying Schedules of Functional Expenses for the years ended September 30, 2010 and 2009 are presented for purposes of additional analysis and are not a required part of the basic fmancial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic fmancial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Washington, DC February 9,

15 SCHEDULE OF FUNCTIONAL EXPENSES For the Year Ended September 30,2010 General and Program Administrative Fund raising Total EXPENSES Compensation Payroll taxes and fringe benefits Membership services expense Consulting Occupancy Meetings Depreciation and amortization Travel Miscellaneous Telephone Office suppl ies Utilities Professional fees Board of Directors expenses Printing and reproduction Interest expense Dues and subscriptions Postage Maintenance Pass-through funds Total Expenses Allocated G&A Ex~nses Total Allocated Expenses $1,466,494 $287,261 $1,753, , , , , , , , ,922 58, , , , ,870 83, , ,168 5, ,749 14, ,805 $22, ,378 67,835 13,360 81,195 37,669 8~14 46,583 27,362 7,649 35,011 23,289 23,289 46,010 46,010 30,332 30,332 10,982 10,982 14,568 1,492 16,060 14,548 1,097 15,645 5,197 5,197 1,289,530 1,289,530 4~83, ,053 22,418 5,821, ,843 (241,843~ $5,225,813 $573,210 $22,418 $5,821,441 13

16 SCHEDULE OF FUNCTIONAL EXPENSES For the Year Ended September 30, 2009 General and Program Administrative Fundraising Total EXPENSES Compens atio n Payroll taxes and fringe benefits Membership services expense Consulting Occupancy Meetings Depreciation and amortization Travel Miscellaneous Telephone Office supplies Utilities Professional fees Board of Directors expenses Printing and reproduction Interest expense Dues and subscriptions Postage Maintenance Pass-through funds Total Expenses Allocated G&A Expenses Total Allocated Expenses $1,381,778 $262,777 $1,644, ,180 88, , , , , , ,450 54, , , , ,700 70, , ,251 3, ,434 56,736 32,403 $18, ,983 51,207 13,490 64,697 42,633 11,268 53,901 26,170 6,914 33,084 26,445 26,445 25,419 25,419 18,125 18,125 17,522 17,522 10,256 2,074 12,330 8,979 2,037 11,016 7,065 7,065 3,495, ,660 18,844 4,123, ,985 (576,985) $4,072,939 $31,675 $18,844 $4,123,458 14

17 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended September 30, 2010 Federal GrantorlPass Through GrantorlProgram Federal CFDAI Federal Project Award Number Expenditures U.S. Department of Education Pass Throughfrom Neighborhood Legal Services, Inc. National Assistive Technology Advocacy Project Total Neighorhood Legal Services, Inc. Short Term Training Total U.S. Department of Education U.S. Department of Health and Human Services Pass Through from NASMHP D Technical Assistance Total NASMHPD Training and Technical Assistance to Improve Voting Access for Individuals with Disabilities Technical Assistance for Protection and Advocacy Agencies NORC Total U.S. Department of Health and Human Services U.S. Social Security Administration Technical Assistance to State Protection and Advocacy Agencies Total U.S. Social Security Administration ,720 22, , ,102 94,169 94, ,701 1,672,016 59,604 1,963,490 1,847,586 1,847,586 Total Expenditures of FederalAwards $4,069,178 NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of National Disability Rights Network, Inc. (the Organization) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic fmancial statements. 15

18 .McQuBde.BreOOBO.LLP. Certified Public Accountants and Consultants 1730 Rhode Island Avenue, NW Suite 800 Washington, DC 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 Board of Directors National Disability Rights Network, Inc. Washington, DC We have audited the financial statements of National Disability Rights Network, Inc. (the Organization) as of and for the year ended September 30, 2010 and have issued our report thereon dated February 9, 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 Over Financial Reporting In planning and performing our audit, we considered the Organization's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the fmancial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control over fmancial 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 affect the Organization'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 Organization's fmancial statements that is more than inconsequential will not be prevented or detected by the Organization's internal control. 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 Organization's internal control. Telephone (202) Fax (202) Member, Enterpri~81orldwide An Intemational Association of Accountants and AdVisors

19 Our consideration of internal control over fmancial 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 defmed above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization's fmancial statements are free of material misstatements, 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 test disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, the Board of Directors, others within the Organization and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Washington, DC February 9,

20 .McQuBde.8rennBn.LLp. Certified Public Accountants and Consultants 1730 Rhode Island Avenue, NW Suite 800 Washington, DC REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Board of Directors National Disability Rights Network, Inc. Washington, DC Compliance We have audited the compliance of National Disability Rights Network, Inc. (the Organization) with the types of compliance requirements described in the us. Office of Management and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30,2010. The Organization's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Organization'S management. Our responsibility is to express an opinion on the Organization's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; 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 the Organization'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. Our audit does not provide a legal determination on the Organization's compliance with those requirements. In our opinion, the Organization complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30,2010. Telephone (202) Fax (202) Member, Enterpri, Q\'oridwide An International Association of~ntants and Advisors

21 Internal Control Over Compliance The management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Organization's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance 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 the Organization's internal control over compliance. A control deficiency in an organization's internal control over compliance 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 noncompliance with a type of compliance of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the organization's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the organization's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the organization's internal control. Our consideration of internal control over compliance 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 compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the Board of Directors, others within the Organization, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Washington, DC February 9,

22 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30, 2010 Financial Statements 1). Type of auditors' report issued: 2). Internal control over financial reporting Material weakness(es) identified? Significant deficiency(ies) identified that are not considered to be material weakness(es)? Unqualified Yes Yes X No LNone Reported 3). Noncompliance material to financial statements noted? Yes X No Federal Awards 4). Internal control over major programs: Material weakness( es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weakness(es)? 5). Type of auditor's report issued on compliance for major programs: Yes Unqualified ~ None Reported 6). Any audit findings disclosed that are required to be reported in accordance with Section 510(a) or Circular A-I33? Yes X No 7). Identification of major programs: Federal Pro2ram Title Pass Thru Entity CFDA or Award Number(s) Expenditures Technical Assistance for P&A Agencies N/A $ 1,672,016 Technical Assistance to State Protection and Advocacy Agencies N/A $ 1,847,586 8). Dollar threshold used to distinguish between Type A and Type B programs: 9). Auditee qualified as a low-risk auditee? X Yes $ 300,000 No 20

23 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) For the Year Ended September 30,2010 Section IT - Financial Statements Findings There were no findings related to the financials statements which are required to be reported in accordance with generally accepted government auditing standards (GAGAS). Section ITI - Federal Awards Findings and Questioned Costs There were no fmdings and questioned costs for Federal awards (as defined in Section S10(a) of the Circular) which are required to be reported. Section IV - Status of Prior Audit Findings None 21