INTERAGENCY. Hope Help Caring SOCIAL SERVICES ]NTERAGENCY COUNCIL OF LAKE HAVASU CITY FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2016

Transcription

1 INTERAGENCY Hope Help Caring SOCIAL SERVICES ]NTERAGENCY COUNCIL OF LAKE HAVASU CITY FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2016

2 TABLE OF CONTENTS Independent Auditors Report Financial Statements Statement of Financial Position Statement of Activities Statement of Functional Expenses Statements of Cash Flows Notes to Financial Statements Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards Independent Auditors 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 Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance Schedule of Findings and Questioned Costs Summary Schedule of Prior Year Audit Findings

3 P KONG INDEPENDENT AUDITOR S REPORT To the Board of Directors of Social Services Interagency Council of Lake Havasu City Report on the Financial Statements We have audited the accompanying financial statements of Social Services Interagency Council o flake Havasu City (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, 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 accounting principles generally accepted in the United States of America; 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 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 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 entity 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 entity 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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Social Services Interagency Council of Lake Havasu City as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America N. CENTK~L AVENUE #200 PHOENIX, ARIZONA FAX:

4 Report on Summarized Comparative Information The financial statements referred to above as of June 30, 2015 were audited by another auditor whose report dated February 5, 2016 expressed an unmodified opinion on those statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2015, is consistent, in all material respects, with the audited financial statements from which it has been derived. 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 Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 auditing standards generally accepted in the United States of America. 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 March 30, 2017, on our consideration of Social Services Interagency Council of Lake Havasu City 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 Social Services Interagency Council of Lake Havasu City s internal control over financial reporting and compliance. Phoenix, Arizona March 30, 2017

5 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, INC Statement of Financial Position June 30, 2016 (with comparative information for the year ended June 30, 2015) ASSETS Current Assets Cash and cash equivalents Contracts receivable Food bank inventory Prepaid expenses Total current assets Non-Current Assets Property and equipment, net of accumulated depreciation Other assets Total non-current assets Total assets 74,795 $ 142, , ,216 31,686 29,843 33,451 29, , ,875 1,438,547 1,525,589 17,900 6,160 1,456,447 1,531,749 $ 1,754,479 $ 1,875,624 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable Accrued payroll and related liabilities Line of credit Current portion of long-term debt Total current liabilities Non-Current Liabilities Notes payable, less current maturities Total non-current liabilities Total liabilities Net Assets Unrestricted Total net assets 66,522 $ 7,217 77,004 41, ,117 70, ,415 51, , , , , , ,779 1,033, , ,626 1,175, ,626 1,175,943 Total liabilities and net assets $ 1,754,479 $ 1,875,624 The accompanying notes are an integral part of these financial statements. 3

6 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, INC Statement of Activities Year Ended June 30, 2016 (with comparative information for the year ended June 30, 2015) Revenues, gains and other support: Contracts and grants Contributions Program fees Rental income Special events Miscellaneous Interest and other income Total revenues, gains and other support Expenses: Program services Genera/and administrative Total expenses Change in net assets Net assets, beginning of year, as restated Net assets, end of year ,478,332 $ 1,182,629 1,908,808 2,261,719 60,087 60,254 44,291 41,312 31,766 73, , ,523,489 3,623,119 3,335,106 3,102, , ,598 3,978,806 3,733,145 (455,317) (110,026) 1,175,943 1,285,969 $ 720,626 $ 1,175,943 The accompanying notes are an integral part of these financial statements. 4

7 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, INC Statement of Functional Expenses Year Ended June 30, 2016 (with comparative information for the year ended June 30, 2015) Client assistance Salaries and wages Employee benefits Payroll taxes and related expenses Depreciation Utilities and telephone Rent Insurance Travel and training Interest expense Repairs and maintenance Office expense Supplies Other Professional fees Advertising Taxes and licenses 2016 Program Management Services and General Total 1,764,841 $ $ 1,764,841 1,023, ,307 1,325, ,096 14, ,568 89,858 40, ,374 74,726 24,552 99,278 61,079 33,419 94,498 69,569 16,848 86,417 5,781 50,129 55,910 38,056 17,142 55,198 7,762 40,329 48,091 27,043 20,196 47,239 22,761 18,479 41,240 15,954 16,767 32,721 3,562 24,I09 27,671 22,476 22,476 1,500 1,443 2,943 2, ,660 Toml 2015 $ 1,861,535 1,105, , ,907 80,827 68,595 49,661 27,357 61,022 29,686 78,295 51,203 26,337 6,001 15,648 1,335 1,491 Total expenses $ 3,335,106 $ 643,700 $ 3,978,806 $ 3,733,145 The accompanying notes are an integral part of these financial statements. 5

8 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, INC Statement of Cash Flows Year Ended June 30, 2016 (with comparative information for the year ended June 30, 2015) Cash Flows from Operating Activities Decrease in net assets Adjustments to reconcile net income to net cash used for operating activities: Depreciation (Increase) decrease in operating assets Contracts receivable Inventory Prepaid expenses Other assets Increase (decrease) in operating liabilities Accounts payable Accrued payroll and related liabilities Net cash used for operating activities Cash Flows from Investing Activities Additions to property and equipment Net cash used for investing activities Cash Flows from Financing Activities Draws on line of credits Payment on fine of credits Principal payments on long-term debt Loan proceeds Net cash provided by financing activities Net Decrease in Cash Cash - Beginning of Year Cash - End of Year Supplemental disclosure: Interest paid $ (455,317) $ (110,026) 99,278 80,827 (15,884) 35,753 (1,843) (65,149) (4,376) (17,10i) (11,740) (563) 59,305 (14,195) 35,154 (20,444) (295,423) (110,898) (12,236) (166,700) (12,236) (166,700) 372, ,500 (80,000) (60,000) (52,904) (49,068) 150, , ,892 (67,946) (105,706) 142, ,447 $ 74,795 $ 142,741 $ 47,239 $ 78,295 The accompanying notes are an integral part of these financial statements. 6

9 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Organization and Operations Social Services Interagency Council of Lake Havasu City, Inc. ("the Organization") is a not-forprofit corporation organized in 1982 under the Arizona nonprofit public benefits law for charitable and public purposes. The Organization s primary purpose is to assist disadvantaged citizens of the local community by promoting and developing various resources. The Organization is primarily funded through government contracts and grants, donations and amounts received as a participating United Way agency. A description of the Organization s significant program services is as follows: LegalAdvocacy - Domestic violence victims can call the Organization to request an advocate to appear in court on behalf of the victim, provide assistance in obtaining an order of protection, and locate a proper referral for legal sources. Rural Domestic Violence Safe Home Network - is an alliance of businesses, agencies and individuals in the community who have come together to break the cycle of abuse. Programs include offender treatment, substance abuse counseling, community education, parenting classes and financial fitness classes. Emergency Food and Shelter Program - This program provides food and shelter on a limited basis for individuals or families that are homeless. Coordinated Homeless Program - This transitional housing program allows residents to stay up to one year until they are ready to transition into independent living both financially and emotionally. Healthy Families Arizona - Parents of newborns and expectant mothers are provided services designed to help families relieve some of the stress related to pregnancy or having a new baby. Services are extended to the first five years of the new born baby in the form of weekly home visits and education. Victims of Crime Act - Certified professionals provide counseling to victims of sexual abuse, domestic/family violence, and some acts of other crime, to both adults and children. A women s support group is provided once a week. A crisis intervention team responds when requested to any victim of crime on a 24 hour 7 day a week basis. Community Food Bank - Provides food on a limited basis for low-income individuals and families.

10 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Basis of Accountin~ and Use of Estimates The financial statements of the Organization have been prepared on the accrual basis of accounting. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (US GAAP) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Basis of Presentation The financial statements are presented in accordance with U.S. GAAP which require that information regarding its financial position and activities be classified into three net asset categories as described below: Unrestricted net assets" - includes amounts not restricted by donors, whether or not designated for specific purposes by the board of directors. Temporarily restricted net assets includes amounts whose use by the Organization is restricted by donor imposed stipulations that either expire by passage of time or other specified future events, or can be fulfilled and removed by actions of the Organization pursuant to those stipulations. For the years ended June 30, 2016 and 2015, the Organization has not recognized any temporarily restricted net assets. Permanently restricted net assets - includes amounts which require, by donor restrictions, that the basis in the asset donated be used in accordance with donor stipulations. For the years ended June 30, 2016 and 2015, the Organization has not recognized any permanently restricted net assets. Revenue Generally the Organization recognizes contract revenue from its contracts to the extent of services rendered or reimbursable expenses incurred. Reimbursements for expenses and services under the contracts are subject to examination by the contracting agency for noncompliance. Concentrations of Risk Financial instruments, which potentially subject the Organization to concentrations of credit risk, consist primarily of contract receivables. The Organization relies principally on a small number of government contracts. Consequently the loss of a contract funding agency agreement could have a material impact on revenues and the operations of the Organization unless such revenues were replaced with additional contracts or grants. Cash For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. The Organization maintains its available cash in cash deposit accounts. 8

11 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Prior Year Summarized Information The financial statements include certain prior-year summarized comparative information. Such intbrmation does not include sufficient detail to constitute a presentation in conformity with U.S. GAAP. Accordingly, such information should be read in conjunction with the Organization s financial statements for the year ended June 30, 2015, from which the smnmarized information was derived. Property and Equipment Fixed assets owned and used in operations are unrestricted and are recorded at cost. Contributed property and eqnipment is recorded at fair value at the date of donation and is recorded as unrestricted support. Depreciation expense is recorded by using the straight-line method over the estimated useful lives of the assets which is 5 to 40 years. Property and equipment with a unit acquisition cost of $5,000 and life exceeding one year is capitalized. The cost of assets sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the accounts and the resulting gain or loss is refiected in income. Expenditures for maintenance and repairs are charged to income as incurred; replacements and betterments that extend the useful lives are capitalized. Contributed Services No amounts have been refiected in the financial statements for donated services. The Organization pays for substantially all services requiring specific expertise. However, many individuals volunteer their time and perform a variety of tasks that assist the Organization in its fund-raising campaigns and other activities, but these services do not meet the criteria for recognition as contributed services. Income Taxes The Organization has taken the following income tax positions with respect to preparing its exempt organization tax returns and financial statements: The Organization continues to qualify as exempt from federal income taxes. There is no taxable unrelated business income. The Organization has not engaged in prohibited transactions subject to penalties. In the opinion of management, these positions are reasonable and comply with income tax rule and regulations. All of these positions are subject to review by Federal, state, and local tax authorities. Tax years 2013 through 2015 are open to examination by taxing authorities. Tax year 2016 is in process.

12 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized inlbrmation for the year ended June 30, 2015) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contributions Contributions received are recorded as unrestricted, temporarily restricted or permanently restricted depending on the existence or nature of any donor restrictions. If a restriction is fulfilled in the same time period in which the contribution is received, the Organization reports the support as unrestricted. Compensated Absences Employees of the Organization are entitled to paid leave time depending on the length of service and the leave time is allowed to carryover up to a maximum of five days. The balance of compensated absences, recorded in accrued payroll and related liabilities, for the years ended June 30, 2016 and 2015 was $18,880 and $17,301, respectively. Functional Allocation of Expenses The cost of providing the Organization s programs and supporting activities have been summarized in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting activities. These costs are allocated by the actual cost incurred, by estimated costs based on per hour rate of the employee who performed the service, or by estimates of benefits derived. Fundraising Costs The Organization expenses all fundraising costs as they are incurred. Advertising The Organization expenses all advertising costs are they are incurred. Defined Contribution Plan 1"he Organization sponsors a defined contribution plan (the "Plan") for eligible employees to contribution a portion of their earnings up to the maximum amount allowed under guidance provided by the Internal Revenue Service. The board of directors of the Organization can at their discretion provide a matching amount, but has not provided contributions to the Plan on behalf of the employees for the years ended June 30, 2016 and Food Bank Inventory (donated goods) Food Bank inventory was valued at the national standard of $1.70 average wholesale value of one pound of product for years ended June 30, 2016 and 2015, respectively. This rate approximates the fair value of the donated food. Subsequent Events Subsequent events have been evaluated through March 30, 2017, which is the date the financial statements were available to be issued. Except as disclosed in Notes 4 & 5, there are no events management has deemed as requiring disclosure. 10

13 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 2 - GRANTS RECEIVABLE Grants receivable represent the balance due to the Organization for services provided under specific grants and yet to be reimbursed by the grantor. These receivable are deemed to be fully collectible by management and therefore no allowance has been recognized. The receivables segregated by programs as of June 30, 2016 and 2015 follows: Healthy Families Arizona $ 64,620 Counseling Services 51,442 Educational, Advocacy and Other Services 42,038 Total $ 158,100 $ 68,728 21,311 52,177 $ 142,216 NOTE 3 - FIXED ASSETS Fixed assets as of June 30, 2016 and 2015 follows: Buildings and improvements Furniture, fixtures and equipment Vehicles Less: Accumulated deprecation Total property and equipment, net Land Total fixed assets ,416,812 $ 1,416, , , , ,437 (657,981) (558,703) 1,118,352 1,275, , ,195 1,438,547 $ 1,525,589 Depreciation expense tbr the years ended June 30, 2016 and 2015 were $99,278 and $80,827, respectively. NOTE 4 - LINES OF CREDIT The Organizations has the following revolving line of credits as of June 30, 2016: Line with maximum borrowing of $250,000 with a rate of 5.5% maturing in December 2016 ("Line A"). The line is secured by a first deed of trust on one of the Organization s rental property. The an~ount outstanding on the line was $243,117 and $70,500 for the years ended June 30, 2016 and 2015, respectively. Unsecured line of credit obtained in May of 2016 with maximum borrowing of $100,000 with a rate of 5% maturing in May of 2017 ("Line B") with outstanding balance of $100,000 at June 30,

14 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 4 - BANK LINE OF CREDIT (continued) Unsecured line of credit obtained in August of 2015 with maximum borrowing of $20,000 with a rate of 5.5% maturing in August of 2016 ("Line C") with outstanding balance of $20,000 at June 30, In December 2016 the Organization refinanced Line A and Line C in the aggregate of $249,917 under a fifteen year variable interest mortgage. The initial interest rate for the first five years is fixed at 5.5%, with interest rates resetting for each successive five year periods at 3.5% over the weekly average yield on United States Treasury securities adjusted to a constant five year maturity. The mortgage is secured by the Organization rental property. The initial monthly payments of principal and interest for the first five years is $2,050, with monthly payment adjusted to $2,054 starting with the January 2022 payment. The following is the expected future minimum payments under this note: NOTE5-LONG-TERMDEBT Year Ended June 30, 2017 $ 5, , , , ,511 Thereafter 194,310 Total $ 249,917 Note payable to bank, commencing in August 2011, due in monthly installments of $2,500 including interest at 5.25% per annum with the remaining balance due August 2016; secured by first deed of trust on the main building in which the Organization operates. Note payable to private individuals, commencing in June 2013, due in monthly installments of $797, including interest at 6% per annum, maturing in May 2043; secured by first deed of trust on the shelter which the Organization operates. Vehicle loan fi om various financing companies due in aggregate monthly installments of $3,366 including interest at rates ranging from 1.9% to 6.74% per annum. Total debt Less: Current maturities Total long-term portion $ 310,303 $ 324, , ,684 89, , , ,114 (349,415) (51,335) 177,795 $ 528,779

15 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 5 - LONG-TERM DEBT (continued) The future minimum principal payments of the notes payable at June 30, 2016 follows: Year Ended June 30, 2017 $ 349, , , , ,266 Thereafter 116,651 Total $ 527,210 Subsequent to year-end the Organization refinanced their mortgage on the administration building with another financial institution and Line B as disclosed in note 4. The Organization secured a first mortgage in the amount of $320,000, with interest only payments at a fixed rate of 4.75%. The balance remaining on the mortgage is due in September The Organization also acquired an operating line of credit secured by the remaining interest in the administrative building at variable interest rate of 1.5% over prime rate as defined by the Wall Street Journal. The line of credit matures in September of NOTE 6 - OPERATING LEASES The Organization has the following non-cancelable leases that meet the definition of operating leases: A twenty-year lease for land at the food bank storage facility from the City of Lake Havasu with monthly lease payment of $695, commencing in September, The lease has an option to renew for three consecutive terms of 5 years each. A five year lease for their telephone system from a leasing company with monthly payments of $1,395 commencing in October A two year lease for its food distribution facility from a private company, commencing in June 2014, with monthly lease payment of $931. Two vehicles for varying lengths of time with aggregate monthly installments of $737. A two year lease for office space lbr administrative activities commencing December 2014 with monthly lease payments of $1,400. A three year lease for office space in Bullhead City in monthly amount of $1,400 commencing in January,

16 SOCIAL SERVICES INTERAGENCY COUNCIL OF LAKE HAVASU CITY, LLC Notes to the Consolidated Financial Statements June 30, 2016 (with summarized information for the year ended June 30, 2015) NOTE 6 - OPERATING LEASES (continued) The Organization total rental expense for the non-cancelable leases for the years ended June 30, 2016 and 2015 was $86,417 and $49,661, respectively. The future minimum lease payments of the operating leases at June 30, 2016 follows: Year Ended June 30, 2017 $ 59, , , , ,340 Thereafter 52,125 Total $ 190,734 NOTE 7 - RESTATEMENT OF BEGINNING NET ASSETS After issuance of the financial statements for the year ending June 30, 2015, management noted that the value of food bank inventory was overstated based upon the amount of weight of food actually retained at June 30, 2015, resulting in a reduction of inventory and unrestricted net assets of $113,321. The following schedule provides a reconciliation to amounts originally recorded at June 30, Balance at June 30, 2015 Change in inventory value Balance at June 30, 2015, as restated Food Bank Unrestricted Inventory Net Assets $ 143,164 $ 1,399,290 (113,321) (113,321) $ 29,843 $ 1,285,969 14

17 REQUIRED SUPPLEMENTARY INFORMATION

18 Social Services Interagency Council of Lake Havasu City, Inc. Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 Federal agency/cfda number Federal program name Department of Housing and Urban Development Passed through Mohave County Community Development Block Grant Total Department of Housing and Urban Development Department of J ustice Passed through Arizona Department of Public Safety Crime Victim Assistance - Child Crime Victim Assistance - Domestic Violence / Sexual Abuse Total Department ofjustice Department of Health and Human Services Passed through Arizona Foundation for Legal Services and Education Temporary Assistance tbr Needy Families Passed through Arizona Department of Economic Security Affordable Care Act - Maternal, Infant, and Early Childhood Home Visiting Program Formula, Expansion, and Development Grants to States Temporary Assistance for Needy Families Passed through Arizona Department of Health Services Family Violence Preventions and Services / Domestic Violence Shelter and Supportive Services Total Department of Ilealth and Human Services Total Expenditures of Federal Awards Pass-through grantor s number Program expenditures $ 96,762 96, , , ,825 AZDES ,707 HF-MIECHV 152,173 DESI ,342 ADHS , ,081 $ 803,668 The accompanying notes are an integral part of this schedule 15

19 Note 1 - Basis of accounting Social Services Interagency Council of Lake Havasu City, Inc. Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 The accompanying schedule of expenditures of federal awards includes Social Services Interagency Council of Lake Havasu City, Inc. s federal grant activity for the year ended June 30, The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Un!form Administrative Requirements, Cost Principles, and Audit Requirements Jbr Federal Awards (Uniform Guidance). Note 2 - Summary of significant accounting policies Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniforua Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Note 3 - Catalog of Federal Domestic Assistance (CFDA) Number The program titles and CFDA numbers were obtained from the federal or pass-through grantor or the 2016 Catalog of Federal Domestic Assistance. Note 4 - Indirect cost rate Social Services Interagency Council of Lake Havasu City, Inc. did not elect to use the 10 percent de minimis indirect cost rate as covered in 2 CFR

20 PRICE KONG C P A s * CONSULTANTS INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ONAN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS To the Board of Directors of Social Services Interagency Council of Lake Havasu City We have audited, in accordance with the 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, the financial statements of Social Services Interagency Council of Lake Havasu City (a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 30, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Social Services Interagency Council of Lake Havasu City s internal control over financial reporting (internal control) to detemaine 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 Social Services Interagency Council of Lake Havasu City s internal control. Accordingly, we do not express an opinion on the effectiveness of Social Services Interagency Council of Lake blavasu City 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 thai there is a reasonable possibility that a material misstatement of the entity 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. 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 N. CENTRAL AVENUE ~200 PHO[NIX, ARIZONA " FAX:

21 Compliance and Other Matters As part of obtaining reasonable assurance about whether Social Services Interagency Council of Lake Havasu City s financial statements are free from material misstatement, we perlbrmed 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. Phoenix, Arizona March 30,

22 PRICE KONG INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors of Social Services Interagency Council of Lake Havasu City Report on Compliance for Each Major Federal Program We have audited Social Services lnteragency Council of Lake Havasu City s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Social Services lnteragency Council of Lake Havasu City s major federal programs for the year ended June 30, 20 l 6. Social Services Interagency Council of Lake Havasu City 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. A uditor s Responsibility Our responsibility is to express an opinion on compliance for each of Social Services lnteragency Council of Lake Havasu City 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 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements" for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 Social Services Interagency Council of Lake Havasu City 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 Social Services Interagency Council of Lake Havasu City s compliance. Opinion on Each Major Federal Program In our opinion, Social Services Interagency Council of Lake Havasu City 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 June 30, N. CENTRAL AVENUE ~200 PIIOENIX, ARIZONA FAX:

23 Report on Internal Control Over Compliance Management of Social Services Interagency Council of Lake ttavasu City 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 Social Services Interagency Council of Lake Havasu City 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 the Uniform Guidance, 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 Social Services Interagency Council of Lake Havasu City 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. Itowever, material weaknesses may exist that have not been identified. 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 the Uniforn~ Guidance. Accordingly, this report is not suitable [br any other purpose. Phoenix, Arizona March 30,

24 Social Services Interagency Council of Lake Havasu City, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2016 Summary of auditors results Type of auditors report issued on whether the financial statements audited were prepared in accordance with generally accepted accounting principles Unmodified Financial statements Internal control over financial reporting Material weaknesses identified? Significant deficiencies identified? Noncompliance material to the financial statement noted? Federal awards Internal control over major programs Material weaknesses identified? Significant deficiencies identified? Type of auditors report issued on compliance for major programs Any audit finding disclosed that are required to be reported in accordance with 2 CFR (a)? No None reported No No None reported Unmodified No Identification of major programs CFDA Number Name of federal program Temporary Assistance for Needy Families Crime Victim Assistance Dollar threshold used to distinguish between Type A and Type B programs Auditee qualified as low-risk auditee? Other Matters Auditee s Summary Schedule of Prior Audit Findings required to be reported in accordance with 2 CFR (b)? $750,000 No Yes 21

25 Social Services Interagency Council of Lake Havasu City, Inc. Summary Schedule of Prior Audit Finding Year Ended June 30, 2016 Status of federal award findings Finding no.: The Organization should submit the single audit submission within nine months after the Organization s fiscal year-end or 30 days after receipt of the audit from the auditors. For the fiscal year ending June 30, 2014 the submission was made during June Management response: The submission was timely for the last fiscal year with submission expected to be timely for the year ended June 30,