CARA (THE CARA PROGRAM AND SUBSIDIARIES DBA CARA) Consolidated Financial Statements and Supplementary Information For the Year Ended June 30, 2017

Transcription

1 (THE CARA PROGRAM AND SUBSIDIARIES DBA CARA) Consolidated Financial Statements and Supplementary Information For the Year Ended June 30, 2017

2 Table of Contents Independent Auditor s Report Consolidated Financial Statements Statement of Financial Position Statement of Activities...5 Statement of Functional Expenses...6 Statement of Cash Flows Notes to Consolidated Financial Statements Supplementary Information Exhibit I Consolidating Financial Statements Exhibit II Segment Financial Statements The Cara Program dba Cara Chicago Exhibit III Segment Financial Statements Cleanslate Chicago, LLC Exhibit IV Segment Financial Statements TCP Staffing, LLC dba Cara Connects

3 Desmond &Ahern, Ltd. CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS To the Board of Directors Cara Chicago, IL Independent Auditor s Report We have audited the accompanying consolidated financial statements of The Cara Program (a nonprofit organization) and Subsidiaries dba Cara (the Organization) which comprise the consolidated statement of financial position as of June 30, 2017, and the related consolidated statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated 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 consolidated financial statements based on our audit. We conducted our audit 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 consolidated financial statements are free of 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 S. WESTERN AVENUE, CHICAGO, IL PHONE FAX

4 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cara as of June 30, 2017, and the changes in their net assets and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplementary information, as listed in the accompanying table of contents, is presented for purposes of additional analysis and is not a required part of the consolidated 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 consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated 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 consolidated financial statements as a whole. October 6, 2017 Chicago, IL -2-

5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Assets Current Assets Cash and cash equivalents $ 3,053,315 Accounts receivable Government 182,543 Other contributions 571,740 Fee for service 511,028 Total accounts receivable 1,265,311 Capacity building campaign pledges receivable, current 319,500 Inventory 20,785 Prepaid expenses 82,425 Total current assets 4,741,336 Property and Equipment (at cost) Building and improvements 7,247,912 Leasehold improvements 26,019 Furniture and equipment 1,424,669 Vehicles 730,033 Total property and equipment 9,428,633 Less accumulated depreciation (2,849,551) Net property and equipment 6,579,082 Other Assets Website in progress 68,980 Capacity building campaign pledges receivable, net of current portion 179,000 Other long-term assets 19,417 Total other assets 267,397 Total Assets $ 11,587,815 See independent auditor's report and notes to consolidated financial statements. -3-

6 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Liabilities and Net Assets Current Liabilities Current portion of long-term debt $ 202,460 Current portion of capital lease obligations 19,616 Accounts payable 393,590 Accrued payroll and related costs 148,001 Refundable advances 62,879 Deferred revenue 4,664 Accrued interest payable 5,308 Total current liabilities 836,518 Long-Term Liabilities Long-term debt, less current maturities 2,899,512 Long-term portion of capital lease obligations 1,612 Total long-term liabilities 2,901,124 Total Liabilities 3,737,642 Net Assets Unrestricted General 1,079,610 Net investment in property and equipment 3,455,882 Operating reserve 1,957,000 Total unrestricted 6,492,492 Temporarily restricted 1,357,681 Total net assets 7,850,173 Total Liabilities and Net Assets $ 11,587,815 See independent auditor's report and notes to consolidated financial statements. -4-

7 CONSOLIDATED STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Public Support and Revenue Special Events Contributions 556,150 Temporarily Unrestricted Restricted Total $ $ - $ 556,150 Ticket revenue 277, ,726 Auction revenue 136, ,017 In-kind contributions - food and drink 16,849-16,849 Less costs of direct benefits to donors (341,367) - (341,367) Net revenues from special events 645, ,375 Government grants 1,128,184-1,128,184 Private contributions 1,916,443 1,537,497 3,453,940 Capacity building campaign contributions 75,000-75,000 Fee for service revenue 4,247,306-4,247,306 Donated services 43,850-43,850 In-kind donations 53,045-53,045 Gain on sale of equipment 4,000-4,000 Miscellaneous 55,870-55,870 Net assets released from restrictions - satisfaction of program restrictions 1,047,427 (1,047,427) - Total Public Support and Revenue 9,216, ,070 9,706,570 Expenses Program Services Traditional Services 1,445,800-1,445,800 Southside Campus 537, ,817 Employment Retention 554, ,839 Cleanslate 1,526,455-1,526,455 TCP Staffing 2,199,416-2,199,416 Total program services 6,264,327-6,264,327 Management and general 1,214,938-1,214,938 Fundraising 957, ,300 Total Expenses 8,436,565-8,436,565 Change in Net Assets 779, ,070 1,270,005 Net assets, beginning of year 5,712, ,611 6,580,168 Net assets, end of year $ 6,492,492 $ 1,357,681 $ 7,850,173 See independent auditor's report and notes to consolidated financial statements. -5-

8 CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2017 Program Management Services and General Fundraising Total Salaries $ 2,056,824 $ 680,017 $ 548,064 $ 3,284,905 Payroll taxes and employee benefits 500, , , ,551 Intern wages and benefits 2,162, ,162,558 Staff training and development 4,955 1,111 1,052 7,118 Pre-admissions screening 21,631 1,840-23,471 Student assistance 223,518 1, ,951 Professional and contractual fees 44,258 78,583 17, ,707 Uniforms 24, ,589 Donated services 22,694 11,630 9,526 43,850 Occupancy 310,029 73,830 58, ,274 Telephone 53,804 7,817 7,411 69,032 Insurance 29,467 5,826 4,801 40,094 Building repairs and maintenance 10,480 11,767 2,943 25,190 Equipment and software purchases 29, ,698 Rental and maintenance of equipment 87,797 24,318 21, ,961 Supplies 61,604 3,830 4,633 70,067 In-kind donations 49, ,985 Marketing and promotion 17,222 2,648 7,992 27,862 Printing and publications 10,388 2,816 3,930 17,134 Postage and shipping 1,021 1,177 6,925 9,123 Dues and memberships 15,156 4,494 5,830 25,480 Fees 47,051 8,922 34,220 90,193 Vehicle costs 112, ,352 Travel and meetings 14,986 4,622 1,872 21,480 Fundraising 1, ,113 32,668 Sales tax Bad debt expense - 42,896-42,896 Miscellaneous 9,231 4,837 8,280 22,348 Total expenses before interest, and depreciation 5,922,617 1,117, ,796 7,919,342 Interest 63,835 27,630 22, ,756 Depreciation 277,875 69,379 56, ,467 Total Expenses $ 6,264,327 $ 1,214,938 $ 957,300 $ 8,436,565 See independent auditor's report and notes to consolidated financial statements. -6-

9 CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended June 30, 2017 Cash Flows from Operating Activities Cash received - contributions $ 4,375,647 Cash received - business contracts 4,137,873 Cash received - special events 628,526 Cash received - other income 55,870 Payments for interest (112,993) Payments for wages and other operating activities (7,681,421) Net cash provided by operating activities 1,403,502 Cash Flows from Investing Activities Acquisition of property and equipment (104,741) Acquisition of website in progress (68,980) Proceeds from sale of property and equipment 4,000 Cash used in investing activities (169,721) Cash Flows from Financing Activities Payments on long-term debt (130,366) Payments on capital leases (21,034) Cash used in financing activities (151,400) Increase in cash and cash equivalents 1,082,381 Cash and cash equivalents, beginning of year 1,970,934 Cash and cash equivalents, end of year $ 3,053,315 See independent auditor's report and notes to consolidated financial statements. -7-

10 CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended June 30, 2017 Reconciliation of Change in Net Assets to Net Cash Provided by Operating Activities Change in net assets $ 1,270,005 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 403,467 Gain on sale of vehicles and equipment (4,000) Change in assets - (increase) decrease Receivables (368,354) Prepaid expenses 31,881 Inventory (2,469) Change in liabilities - increase (decrease) Accounts payable 233,992 Accrued payroll and related costs (145,169) Deferred revenue 58,308 Accrued interest payable (763) Refundable advances (73,396) Net cash provided by operating activities $ 1,403,502 Supplemental Information: Equipment purchased through debt financing $ 322,914 See independent auditor's report and notes to consolidated financial statements. -8-

11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 1 Nature of Operations and Summary of Significant Accounting Policies The Cara Program dba as Cara Chicago was established in 1991 and incorporated as an Illinois notfor-profit corporation on January 5, Cara Chicago with its subsidiaries are collectively dba as Cara. The mission of Cara is to unlock the power and purpose within our communities and ourselves to achieve real and lasting success. This mission is realized through the following five core programs: Traditional Training & Placement Program is Cara s traditional services which includes a comprehensive range of training and support for motivated individuals affected by poverty and homelessness, including life-skills training, specialized job-skills training, and personalized career placement services. Southside Campus (SSC) is Cara s Southside campus and provides services similar to Cara traditional as well as assistance with income supports and financial literacy. The SSC helps residents establish careers, advance professionally, and accumulate assets through structured training, job placement support, and individual coaching. Employment Retention ensures that students of Cara have the tools they need for long-term selfsufficiency. Cara offers "aggressive outreach" throughout each student s first year of employment. These services include: regular one-on-one meetings with employed students about on-the-job successes and challenges; and development of individual long-term goals, including goals related to housing, education, and debt repayment. As a result, over 70% or more of employed Cara students receiving this support remain in their first job placement for at least one year. In addition to employment retention support, Cara s Career Advancement Program supports students who have not only achieved stability in their personal and professional lives, but who also show an exceptional drive to grow in their careers. Once students have been employed for at least six months and are established personally and professionally, they may opt in to career advancement services. Cleanslate Chicago, LLC (Cleanslate), a wholly-owned limited liability company started in 2005, provides exterior maintenance services to customers across Chicago. The program was created as a vehicle for individuals with significant obstacles to employment - particularly individuals with criminal backgrounds to gain on-the-job work experience and intensive support services through transitional jobs. Cleanslate is a complement to Cara and provides additional services and training opportunities for at-risk individuals. For tax purposes, Cleanslate is treated as a disregarded entity and will be included in Cara Chicago s financial statements and tax reporting. Under applicable accounting standards, Cara Chicago is required to prepare consolidated financial statements with Cleanslate. TCP Staffing, LLC (TCP Staffing) dba Cara Connects, a wholly owned limited liability company started in 2011, was created to manage employment of students participating in the transitional jobs aspect of Cara Chicago. Cara Connects employs students that are working transitional jobs -9-

12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 1 Nature of Operations and Summary of Significant Accounting Policies (cont.) for Cleanslate and Cara Chicago as well as select companies outside of the enterprise. In 2013, Cara Connects expanded to be a contract staffing firm dedicated to sourcing quality candidates to fulfill critical entry-level positions within Chicago s growing job market by providing temporary and temporary to permanent opportunities. Through management agreements with Cleanslate and Cara Connects, Cara Chicago provides certain management, administrative and financial services, use of certain personnel employed by Cara Chicago and office space to Cleanslate and Cara Connects. The direct costs of each Organization are kept separate along with an allocation of shared costs based on usage. Management service fees of $385,828 and $210,023 were billed to Cleanslate and Cara Connects, respectively, for the year ended June 30, Consolidated Financial Statements The accompanying financial statements reflect the consolidation of the financial statements of The Cara Program dba Cara Chicago, Cleanslate Chicago, LLC, and TCP Staffing, LLC dba Cara Connects, collectively doing business as (dba) Cara (The Organization). All material interorganization accounts and transactions have been eliminated in consolidation. Basis of Accounting The accounts and consolidated financial statements are maintained on the accrual basis of accounting and, accordingly, reflect all significant accounts receivable, payable, and other liabilities in conformity with accounting principles applicable to non-profit organizations. Basis of Presentation The Organizations report information regarding their financial position and activities according to three classes of net assets: - unrestricted, temporarily restricted, and permanently restricted net assets, as required by Generally Accepted Accounting Principles (GAAP). There are no permanently restricted net assets as of June 30, Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of the revenues, expenses, gains, losses and other changes in net assets during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of bank deposits in federally insured accounts. The accounts may at times exceed the federally insured limit of $250,000. The Organizations have never experienced any such losses in these accounts. -10-

13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 1 Nature of Operations and Summary of Significant Accounting Policies (cont.) For purposes of the Consolidated Statement of Cash Flows, the Organizations consider all highly liquid debt instruments, if any, purchased with an original maturity of one year or less to be cash equivalents. Grants and Pledges Receivable Contributions receivable represent amounts promised by donors (unconditional promises to give), some of which are due in installments. All amounts are deemed collectible and no discount is deemed necessary as the balances approximate fair value. Property and Equipment Property and equipment are stated at cost. Acquisitions of property and equipment in excess of $500 and those items which substantially increase the useful lives of existing assets, are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which are: Building and improvements Leasehold improvements Furniture and equipment Vehicles Inventory Inventory consists of salt, uniforms and trash bags recorded at cost. 40 years 2-5 years 5 years 5 years Net Assets Released from Restrictions Net assets were released from restriction by incurrence of expenses satisfying the restricted purpose or by occurrence of events specified under the terms of the agreements. Support and Revenue The Organizations report gifts of cash and other assets 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 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. Government Grants Support funded by government contracts, which qualify as exchange transactions, are recognized when the contracted services have been performed. Revenue is therefore recognized as earned as the eligible expenses are incurred. These expenditures are subject to audit and acceptance by the granting organization and, as a result of such audit, adjustments could be required. -11-

14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 1 Nature of Operations and Summary of Significant Accounting Policies (cont.) Contributed Services and In-Kind Donations Contributed services are required to be recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. During the year ending June 30, 2017, The Organizations received donated services meeting the above criteria valued at $43,850. The Organizations also receive a significant amount of donated services from unpaid volunteers who act as mentors and provide other assistance to students. No amounts for these volunteer services have been recognized in the statement of activities or statement of functional expenses because the criteria for recognition under GAAP has not been satisfied. In-kind donations were recognized at fair value in the consolidated financial statements during the year ending June 30, In-kind donations received consisting of the following: Donated equipment $ 4,685 Dumpsters 48,360 Total in-kind donation revenue received 53,045 Less: Capitalized equipment (4,685) Plus: Prior year capitalized software amortization 2,625 Net in-kind donation expense $ 50,985 Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the consolidated statement of activities and the consolidated statement of functional expenses. Directly identifiable expenses are charged to the specific program or supporting service. Expenses related to more than one function are generally allocated to program expenses and supporting services on the basis of periodic time and expense reviews made by management. Income Tax Status Cara Chicago was granted an exemption from federal income taxes by the Internal Revenue Service pursuant to the provisions of Internal Revenue Code Section 501(c)(3). The tax-exempt purpose of the Organization and the nature in which it operates is described in the first paragraph of Note 1. The Organization continues to operate in compliance with its tax-exempt purpose. -12-

15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 1 Nature of Operations and Summary of Significant Accounting Policies (cont.) Cleanslate Chicago, LLC and TCP Staffing, LLC dba Cara Connects are sole-member LLC s. For tax purposes, Cleanslate and TCP Staffing are treated as disregarded entities and are included in Cara s financial statements and tax reporting. The Organizations annual information and income tax returns filed with the federal and state governments are subject to examination, generally for three years after they are filed. The Organization has adopted the requirements for accounting for uncertain tax positions and management has determined that the Organization was not required to record a liability related to uncertain tax positions as of June 30, Subsequent Events Accounting principles generally accepted in the United States of America establish general standards of accounting for, and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The Organization has evaluated subsequent events through the date of the report on the financial statements, which is the date the statements were available to be issued. No subsequent events have been identified that are required to be disclosed as of that date. Note 2 Contributions and Pledges Receivable At June 30, 2017, contributions and pledges receivable are reflected in the consolidated statement of financial position as follows: Capacity Building Campaign Other Total Due within one year $ 319,500 $ 571,740 $ 891,240 Due in 1-5 years 179, ,000 Contributions receivable designated for specific purposes are as follows: $ 498,500 $ 571,740 $ 1,070,240 Restricted to future time periods - capacity building campaign $ 498,500 Restricted to future time periods - unrestricted contributions 571,740 $ 1,070,

16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 3 Lines of Credit The Organizations maintains a $1,000,000, variable interest, line of credit with Wintrust Bank expiring on June 26, 2018 As of June 30, 2017, nothing was borrowed against this line. The line of credit is secured by the general assets of the Organizations. Note 4 Long Term Debt Long-term debt consists of the following at June 30, 2017: Cara 4% loan payable to First Midwest Bank, due April 10, 2023 with interest and principal of $15,835 payable monthly. Loan is secured by a primary lien on commercial property located at 237 South Desplaines, Chicago, IL, with a net book value of $5,872,590 as of June 30, $ 2,690,731 Cleanslate Ford Credit term loans secured by vehicles with a net book value of $387,158. Interest ranging from 0% to 6.5%. Monthly payments totaling $9,473, including interest. Due at various dates through February 9, ,764 John Deere Financial, 0% term loan secured by a vehicle with a net book value of $8,294, due January 27, Monthly payment totaling $394. 7,477 3,101,972 Less current portion (202,460) Net long-term debt $ 2,899,512 The total interest incurred and expensed for the year ending June 30, 2017 was $110,126. Future anticipated principal loan payments at June 30, are as follows: June 30, Amount 2018 $ 202, , , , , and thereafter 2,237,930 $ 3,101,

17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 5 Leases The Organization leases office space and copiers under non-cancellable operating lease arrangements. These leases expire at various dates through August Rental expense for these leases included in the consolidated statement of activities for the year ended June 30, 2017 was $169,842. Future minimum lease payments anticipated under these operating leases are as follows: Year Total 2018 $ 113, , , ,604 Cleanslate also leases vehicles used in operation of its mission under master capital lease agreements with various outside parties that expire over the next five years. The gross amount of vehicle costs and related accumulated depreciation recorded under these capital leases and included in property and equipment are as follows: Cost of vehicles $ 110,802 Accumulated depreciation (98,928) $ $ 11,874 The future minimum capital lease payments are as follows: 2018 $ 19, ,473 Total minimum lease payments 22,089 Amount representing interest (861) Present value of net minimum capital lease payments 21,228 Current installments of obligations under capital leases (19,616) Long-term capital lease obligations $ 1,

18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2017 Note 6 Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following projects as of June 30, 2017: Restricted to future time periods - capacity building campaign $ 498,500 Restricted to future time periods - unrestricted contributions 571,740 Advancement Scholarship 10,000 Cleanslate Ward by Ward Program 180,000 Traditional Program Services 70,000 Student supports 27,441 Total temporarily restricted net assets $ 1,357,681 Note 7 Unrestricted Net Assets Unrestricted net assets consist of the following as of June 30, 2017: Unrestricted General $ 1,079,610 Net investment in property and equipment 3,455,882 Operating reserve 1,957,000 6,492,492 Operating Reserves - Cara s Board maintains operating reserves for use in emergencies to sustain financial operations in the unanticipated event of significant unbudgeted increases in operating expenses and/or losses in operating revenues. Cara s current goal is three months of the annualized operating expense budget which is projected to be $652,261 per month. Note 8 Retirement Plans The Organizations have a 401(k) defined contribution plan for the benefit of substantially all of its employees, allowing both employee and employer contributions. All employees are eligible after one year of service and are immediately fully vested in the employer match. The employer match is dollar for dollar on the employee s contribution up to two percent of their salary. Employer contributions are reviewed annually by senior management and approved by the Board of Directors as part of their approval of the annual budget. Cara Chicago contributed $30,069 and Cleanslate contributed $2,635 to the 401(k) plan during the year ending June 30, $ -16-

19 SUPPLEMENTARY INFORMATION

20 CONSOLIDATING SCHEDULE OF FINANCIAL POSITION As of June 30, 2017 Exhibit I Page 1 of 4 Assets Current Assets Cash and cash equivalents 2,152,357 Cara Cleanslate Cara Chicago Chicago, LLC Connects Consolidated $ $ 472,983 $ 427,975 $ 3,053,315 Accounts receivable Government 182, ,543 Other contributions 571, ,740 Fee for service - 382, , ,028 Total accounts receivable 754, , ,186 1,265,311 Capacity building campaign pledges receivable, current 319, ,500 Inventory - 20,785-20,785 Prepaid expenses 79,134 3,291-82,425 Total current assets 3,305, , ,161 4,741,336 Property and Equipment (at cost) Building and improvements 7,247, ,247,912 Leasehold improvements 13,385 12,634-26,019 Furniture and equipment 1,138, ,697 1,100 1,424,669 Vehicles - 730, ,033 Total property and equipment 8,400,169 1,027,364 1,100 9,428,633 Less accumulated depreciation (2,319,838) (529,163) (550) (2,849,551) Net property and equipment 6,080, , ,579,082 Other Assets Website in progress 68, ,980 Due to/from related party 764,820 (586,846) (177,974) - Capacity building campaign pledges receivable, net of current portion 179, ,000 Other long-term assets 7,425 11,992-19,417 Total other assets 1,020,225 (574,854) (177,974) 267,397 Total Assets $ 10,405,830 $ 803,248 $ 378,737 $ 11,587,

21 CONSOLIDATING SCHEDULE OF FINANCIAL POSITION As of June 30, 2017 Exhibit I Page 2 of 4 Liabilities and Net Assets Current Liabilities Current portion of long-term debt 84,063 Cara Cleanslate Cara Chicago Chicago, LLC Connects Consolidated $ $ 118,397 $ - $ 202,460 Current portion of capital lease obligations - 19,616-19,616 Accounts payable 314,239 50,525 28, ,590 Accrued payroll and related costs 68,596 35,368 44, ,001 Refundable advances 62, ,879 Deferred revenue - 4,664-4,664 Accrued interest payable 5, ,308 Total current liabilities 535, ,570 72, ,518 Long-Term Liabilities Long-term debt, less current maturities 2,606, ,844-2,899,512 Long-term portion of capital lease obligations - 1,612-1,612 Total long-term liabilities 2,606, ,456-2,901,124 Total Liabilities 3,141, ,026 72,863 3,737,642 Net Assets Unrestricted 5,906, , ,874 6,492,492 Temporarily restricted 1,357, ,357,681 Total net assets 7,264, , ,874 7,850,173 Total Liabilities and Net Assets $ 10,405,830 $ 803,248 $ 378,737 $ 11,587,

22 CONSOLIDATING STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Exhibit I Page 3 of 4 Cleanslate Cara Cara Chicago Chicago, LLC Connects Consolidated Temporarily Temporarily Unrestricted Restricted Unrestricted Unrestricted Eliminations Unrestricted Restricted Total Public Support and Revenue Special Events Contributions $ 556,150 $ - $ - $ - $ - $ 556,150 $ - $ 556,150 Ticket revenue 277, , ,726 Auction and raffle revenue 136, , ,017 In kind contributions - food and drink 16, ,849-16,849 Less costs of direct benefits to donors (341,367) (341,367) - (341,367) Net revenues from special events 645, , ,375 Government grants 1,128, ,128,184-1,128,184 Private contributions 1,916,443 1,537, ,916,443 1,537,497 3,453,940 Capacity building campaign contributions 75, ,000-75,000 Fee for service revenue - - 2,617,340 1,651,337 (21,371) 4,247,306-4,247,306 Subcontracted work from related party , ,762 (1,261,909) Management fees 488, , ,023 (801,338) Donated services 43, ,850-43,850 In-kind donations 4,685-48, ,045-53,045 Gain on sale of equipment - - 4, ,000-4,000 Miscellaneous 47,470-8, ,870-55,870 Net assets released from restrictions - satisfaction of program restrictions 1,047,427 (1,047,427) ,047,427 (1,047,427) - Total Public Support and Revenue 5,397, ,070 3,042,852 2,861,122 (2,084,618) 9,216, ,070 9,706,570 Expenses Program Services Traditional Services 1,452, (6,851) 1,445,800-1,445,800 Southside Campus 538, (738) 537, ,817 Employment Retention 558, (4,050) 554, ,839 Cleanslate 274,632-2,504,875 - (1,253,052) 1,526,455-1,526,455 TCP Staffing ,302,298 (102,882) 2,199,416-2,199,416 Total program services 2,824,727-2,504,875 2,302,298 (1,367,573) 6,264,327-6,264,327 Management and general 1,490, , ,223 (712,775) 1,214,938-1,214,938 Fundraising 961, (4,270) 957, ,300 Total Expenses 5,276,810-2,706,852 2,537,521 (2,084,618) 8,436,565-8,436,565 Change in Net Assets 120, , , , , ,070 1,270,005 Net assets, beginning of year 5,786, ,611 (55,778) (17,727) - 5,712, ,611 6,580,168 Net assets, end of year $ 5,906,396 $ 1,357,681 $ 280,222 $ 305,874 $ - $ 6,492,492 $ 1,357,681 $ 7,850,

23 CONSOLIDATING STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2017 Exhibit I Page 4 of 4 Cara Chicago Combined Traditional Southside Employment Total Management Services Campus Retention Cleanslate Cara Connects Program and General Fundraising Total Salaries $ 750,775 $ 290,445 $ 271,723 $ 743,881 $ - $ 2,056,824 $ 680,017 $ 548,064 $ 3,284,905 Payroll taxes and employee benefits 161,219 80,417 64, , , , , ,551 Intern wages and benefits ,162,558 2,162, ,162,558 Staff training and development 1, , ,955 1,111 1,052 7,118 Pre-admissions screening 21, ,631 1,840-23,471 Student assistance 153,514 25,272 44, ,518 1, ,951 Professional and contractual fees 19,623 8,894 11,883-3,858 44,258 78,583 17, ,707 Uniforms ,589-24, ,589 Donated services 12,985 5,009 4, ,694 11,630 9,526 43,850 Occupancy 97,716 46,354 50, , ,029 73,830 58, ,274 Telephone 11,160 16,512 5,803 20,329-53,804 7,817 7,411 69,032 Insurance 8,010 4,010 3,841 9,333 4,273 29,467 5,826 4,801 40,094 Building repairs and maintenance 4,945 1,338 2,404 1,793-10,480 11,767 2,943 25,190 Equipment and software purchases ,298-29, ,698 Rental and maintenance of equipment 30,130 14,102 13,257 29, ,797 24,318 21, ,961 Supplies 5,577 3,601 2,502 49, ,604 3,830 4,633 70,067 In-kind donations ,360-49, ,985 Marketing and promotion 4,929 1,788 1,624 6,820 2,061 17,222 2,648 7,992 27,862 Printing and publications 4,080 1,844 1,854 2,610-10,388 2,816 3,930 17,134 Postage and shipping ,021 1,177 6,925 9,123 Dues and memberships 6,436 1,580 2,921 3, ,156 4,494 5,830 25,480 Fees 7,574 3,787 3,837 11,977 19,876 47,051 8,922 34,220 90,193 Vehicle costs 1, , , ,352 Travel and meetings 6,502 4,743 2,209-1,532 14,986 4,622 1,872 21,480 Special events 250 1, , ,113 32,668 Sales tax Bad debt expense ,896-42,896 Miscellaneous 2, ,231 1,358 2,891 9,231 4,837 8,280 22,348 Total expenses before interest, and depreciation 1,313, , ,226 1,405,043 2,199,049 5,922,617 1,117, ,796 7,919,342 Interest 37,559 4,304 18,342 3,630-63,835 27,630 22, ,756 Depreciation 94,629 19,826 45, , ,875 69,379 56, ,467 Total Expenses $ 1,445,800 $ 537,817 $ 554,839 $ 1,526,455 $ 2,199,416 $ 6,264,327 $ 1,214,938 $ 957,300 $ 8,436,

24 Exhibit II Page 1 of 4 CARA SEGMENT INFORMATION: THE CARA PROGRAM dba CARA CHICAGO STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Assets Current Assets Cash and cash equivalents $ 2,152,357 Government contributions receivable 182,543 Other contributions receivable 571,740 Capacity building campaign pledges receivable 319,500 Prepaid expenses 79,134 Total current assets 3,305,274 Property and Equipment (at cost) Building and improvements 7,247,912 Leasehold improvements 13,385 Furniture and equipment 1,138,872 Total property and equipment 8,400,169 Less accumulated depreciation (2,319,838) Net property and equipment 6,080,331 Other Assets Website in progress 68,980 Due from related party, Cleanslate 503,820 Due from related party, TCP Staffing 261,000 Capacity building campaign pledges receivable, net of current portion 179,000 Other long-term assets 7,425 Total other assets 1,020,225 Total Assets $ 10,405,

25 Exhibit II Page 2 of 4 CARA SEGMENT INFORMATION: THE CARA PROGRAM dba CARA CHICAGO STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Liabilities and Net Assets Current Liabilities Current portion of long-term debt $ 84,063 Accounts payable 314,239 Accrued payroll and related costs 68,596 Refundable advances 62,879 Accrued interest payable 5,308 Total current liabilities 535,085 Long-Term Liabilities Long-term debt, less current maturities 2,606,668 Total Liabilities 3,141,753 Net Assets Unrestricted 5,906,396 Temporarily restricted 1,357,681 Total net assets 7,264,077 Total Liabilities and Net Assets $ 10,405,

26 SEGMENT INFORMATION: THE CARA PROGRAM dba CARA CHICAGO STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Exhibit II Page 3 of 4 Before Intercompany Eliminations Consolidating After Intercompany Eliminations Total Eliminations Temporarily Before to Temporarily Unrestricted Restricted Eliminations Unrestricted Unrestricted Restricted Total Public Support and Revenue Special Events Contributions $ 556,150 $ - $ 556,150 $ - $ 556,150 $ - $ 556,150 Ticket revenue 277, , , ,726 Auction and raffle revenue 136, , , ,017 In kind contributions - food and drink 16,849-16,849-16,849-16,849 Less costs of direct benefits to donors (341,367) - (341,367) - (341,367) - (341,367) Net revenues from special events 645, , , ,375 Government contributions 1,128,184-1,128,184-1,128,184-1,128,184 Private contributions 1,916,443 1,537,497 3,453,940-1,916,443 1,537,497 3,453,940 Capacity building contributions 75,000-75,000-75,000-75,000 Management fees 488, ,710 (488,710) Donated services 43,850-43,850-43,850-43,850 In-kind donations 4,685-4,685-4,685-4,685 Miscellaneous 47,470-47,470-47,470-47,470 Net assets released from restrictions - satisfaction of program restrictions 1,047,427 (1,047,427) - - 1,047,427 (1,047,427) - Total Public Support and Revenue 5,397, ,070 5,887,214 (488,710) 4,908, ,070 5,398,504 Expenses Program Services Traditional Services 1,452,651-1,452,651 (6,851) 1,445,800-1,445,800 Southside Campus 538, ,555 (738) 537, ,817 Employment Retention 558, ,889 (4,050) 554, ,839 Cleanslate 274, ,632 (274,632) Total program services 2,824,727-2,824,727 (286,271) 2,538,456-2,538,456 Management and general 1,490,513-1,490,513 (320,801) 1,169,712-1,169,712 Fundraising 961, ,570 (4,270) 957, ,300 Total Expenses 5,276,810-5,276,810 (611,342) 4,665,468-4,665,468 Change in Net Assets 120, , , , , , ,036 Net assets, beginning of year 5,786, ,611 6,653,673 1,158,614 6,944, ,611 7,812,287 Net assets, end of year $ 5,906,396 $ 1,357,681 $ 7,264,077 $ 1,281,246 $ 7,187,642 $ 1,357,681 $ 8,545,

27 SEGMENT INFORMATION: THE CARA PROGRAM dba CARA CHICAGO STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2017 Exhibit II Page 4 of 4 Program Services Total Traditional Southside Employment Management Services Campus Retention Cleanslate Total and General Fundraising Total Salaries $ 750,775 $ 290,445 $ 271,723 $ - $ 1,312,943 $ 680,017 $ 548,064 $ 2,541,024 Payroll taxes and employee benefits 161,219 80,417 64, , , , ,699 Intern wages and benefits 6, ,050-11,639 8,173 4,270 24,082 Staff training and development 1, ,381 1,111 1,052 4,544 Sub-contracting related party, Cleanslate , , ,632 Contribution to related party, Cleanslate and TCP Staffing , ,628 Pre-admissions screening 21, ,631 1,840-23,471 Student assistance 153,514 25,272 44, ,518 1, ,951 Professional and contractual fees 19,623 8,894 11,883-40,400 56,253 17, ,519 Donated services 12,985 5,009 4,700-22,694 11,630 9,526 43,850 Occupancy 97,716 46,354 50, ,150 73,830 58, ,395 Telephone 11,160 16,512 5,803-33,475 7,817 7,411 48,703 Insurance 8,010 4,010 3,841-15,861 5,826 4,801 26,488 Building repairs and maintenance 4,945 1,338 2,404-8,687 11,767 2,943 23,397 Equipment and software purchases ,400 Rental and maintenance of equipment 30,130 14,102 13,257-57,489 24,318 21, ,653 Supplies 5,577 3,601 2,502-11,680 3,830 4,633 20,143 Donated materials , ,625 Marketing and promotion 4,929 1,788 1,624-8,341 2,648 7,992 18,981 Printing and publications 4,080 1,844 1,854-7,778 2,816 3,930 14,524 Postage and shipping ,021 1,177 6,925 9,123 Dues and memberships 6,436 1,580 2,921-10,937 4,494 5,830 21,261 Fees 7,574 3,787 3,837-15,198 8,922 34,220 58,340 Vehicle costs 1, , ,218 Travel and meetings 6,502 4,743 2,209-13,454 4,622 1,872 19,948 Special events 250 1, , ,113 32,668 Bad debt expense ,000-20,000 Miscellaneous 2, ,231-4,982 4,837 8,280 18,099 Total expenses before interest and depreciation 1,320, , , ,632 2,604,796 1,393, ,066 4,881,366 Interest 37,559 4,304 18,342-60,205 27,630 22, ,126 Depreciation 94,629 19,826 45, ,726 69,379 56, ,318 Total Expenses $ 1,452,651 $ 538,555 $ 558,889 $ 274,632 $ 2,824,727 $ 1,490,513 $ 961,570 $ 5,276,

28 SEGMENT INFORMATION: CLEANSLATE CHICAGO, LLC - STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Exhibit III Page 1 of 3 Assets Current Assets Cash and cash equivalents $ 472,983 Contracts receivable, net of $20,986 allowance 382,842 Inventory 20,785 Prepaid expenses 3,291 Total current assets 879,901 Property and Equipment (at cost) Leasehold improvements 12,634 Furniture and equipment 284,697 Vehicles 730,033 Total property and equipment 1,027,364 Less accumulated depreciation (529,163) Net property and equipment 498,201 Other Assets Other long-term asets 11,992 Total other assets 11,992 Total Assets $ 1,390,094 Liabilities and Net Assets Current Liabilities Current portion of long-term debt $ 118,397 Current portion of capital lease obligations 19,616 Accounts payable 50,525 Accrued payroll and related costs 35,368 Deferred revenue 4,664 Total current liabilities 228,570 Due to related party, Cara 505,573 Due to related party, TCP Staffing 81,273 Long-term portion of capital lease obligations 1,612 Long-term debt 292,844 Total liabilities 1,109,872 Net assets - unrestricted 280,222 Total Liabilities and Net Assets $ 1,390,

29 SEGMENT INFORMATION: CLEANSLATE CHICAGO, LLC STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Exhibit III Page 2 of 3 Consolidating Before Eliminations After Intercompany to Intercompany Eliminations Unrestricted Eliminations Public Support and Revenue Fee for service contracts $ 2,617,340 $ (8,839) $ 2,608,501 Subcontracted work from related party, Cara 262,147 (262,147) - In-kind management fee to related party, Cara 102,605 (102,605) - Donated supplies 48,360-48,360 Miscellaneous income 8,400-8,400 Gain on disposal of vehicles and equipment 4,000-4,000 Total Public Support and Revenue 3,042,852 (373,591) 2,669,261 Expenses Program services 2,504,875 (978,420) 1,526,455 Management and general 201,977 (156,751) 45,226 Total Expenses 2,706,852 (1,135,171) 1,571,681 Change in net assets - unrestricted 336, ,580 1,097,580 Net assets (deficit) - unrestricted, beginning of year (55,778) 1,514,122 1,458,344 Net assets - unrestricted, end of year $ 280,222 $ 2,275,702 $ 2,555,

30 SEGMENT INFORMATION: CLEANSLATE CHICAGO, LLC STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2017 Exhibit III Page 3 of 3 Management Total Prior Program and General Management to Intercompany Intercompany Intercompany Program and General Eliminations Eliminations Eliminations Total Salaries $ 743,881 $ - $ 743,881 $ - $ - $ 743,881 Payroll taxes and employee benefits 193, , ,852 Intern wages and benefits 976, ,727 (976,727) - - Staff training and development 2,027-2, ,027 Management fee to related party, Cara - 48,000 48,000 - (48,000) - In-kind management fee from related party, Cara - 102, ,605 - (102,605) - Professional and contractual fees - 22,330 22, ,330 Uniforms 24,589-24, ,589 Occupancy 115, , ,879 Telephone 20,329-20, ,329 Insurance 11,026-11,026 (1,693) - 9,333 Building repairs and maintenance 1,793-1, ,793 Equipment and software purchases 28,298-28, ,298 Rental and maintenance of equipment 29,613-29, ,613 Supplies 49,666-49, ,666 Donated supplies 48,360-48, ,360 Marketing and promotion 6,820-6, ,820 Printing and publications 2,610-2, ,610 Dues and memberships 3,719-3, ,719 Fees 11,977 6,146 18,123 - (6,146) 11,977 Vehicle costs 110, , ,134 Sales tax Interest expense 3,630-3, ,630 Bad debt expense - 22,896 22, ,896 Miscellaneous 1,358-1, ,358 Total expenses before depreciation 2,387, ,977 2,589,070 (978,420) (156,751) 1,453,899 Depreciation 117, , ,782 Total Expenses $ 2,504,875 $ 201,977 $ 2,706,852 $ (978,420) $ (156,751) $ 1,571,

31 Exhibit IV Page 1 of 3 CARA SEGMENT INFORMATION: TCP STAFFING, LLC dba CARA CONNECTS STATEMENT OF FINANCIAL POSITION As of June 30, 2017 Assets Current Assets Cash and cash equivalents $ 427,975 Accounts receivable 128,186 Due from related party, Cleanslate 83,026 Total current assets 639,187 Property and Equipment (at cost) Furniture and equipment 1,100 Less accumulated depreciation (550) Net property and equipment 550 Total Assets $ 639,737 Liabilities and Net Assets Current Liabilities Accounts payable $ 28,826 Accrued payroll and related costs 44,037 Due to related party, Cara 261,000 Total Liabilities 333,863 Net Assets 305,874 Total Liabilities and Net Assets $ 639,

32 SEGMENT INFORMATION: TCP STAFFING, LLC dba CARA CONNECTS STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Exhibit IV Page 2 of 3 Consolidating Before Eliminations After Intercompany to Intercompany Eliminations Unrestricted Eliminations Public Support and Revenue Subcontracted work from related party, Cleanslate $ 999,762 $ (999,762) $ - In-kind management fee to related party, Cara 210,023 (210,023) - Temporary staffing service revenue 1,651,337 (12,532) 1,638,805 Total Public Support and Revenue 2,861,122 (1,222,317) 1,638,805 Expenses Program services 2,302,298 (102,882) 2,199,416 Management and general 235,223 (235,223) - Total Expenses 2,537,521 (338,105) 2,199,416 Change in net assets - unrestricted 323,601 (884,212) (560,611) Net assets (deficit), beginning of year (17,727) (2,672,736) (2,690,463) Net assets (deficit), end of year $ 305,874 $ (3,556,948) $ (3,251,074) -29-

33 SEGMENT INFORMATION: TCP STAFFING, LLC dba CARA CONNECTS STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2017 Exhibit IV Page 3 of 3 Management Total Prior Program and General Management to Intercompany Intercompany Intercompany Program and General Eliminations Eliminations Eliminations Total Intern wages and benefits $ 2,265,440 $ - $ 2,265,440 $ (102,882) $ - $ 2,162,558 Staff development and training In-kind management fee from related party, Cara - 235, ,223 - (235,223) - Professional fees 3,858-3, ,858 Travel and meetings 1,532-1, ,532 Insurance 4,273-4, ,273 Rental and maintenance of equipment Supplies Marketing and promotions 2,061-2, ,061 Dues and memberships Fees 19,876-19, ,876 Depreciation Miscellaneous 2,891-2, ,891 Total Expenses $ 2,302,298 $ 235,223 $ 2,537,521 $ (102,882) $ (235,223) $ 2,199,