FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORTS THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND. September 30, 2015 and 2014

Transcription

1 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORTS THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND September 30, 2015 and 2014

2 TABLE OF CONTENTS Independent Auditors Report 3-4 Financial Statements Statements of Financial Position 5 Statements of Activities and Changes in Net Assets 6 Statements of Cash Flows 7 Statements of Functional Expenses 8-9 Notes to Financial Statements Supplementary Information 16 Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards 19 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 Independent Auditors Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A Schedule of Findings and Questioned Costs 26-27

3 RIVERO, GORDIMER & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants Herman V. Lazzara Stephen G. Douglas Marc D. Sasser Michael E. Helton Sam A. Lazzara Cesar J. Rivero, of Counsel Richard B. Gordimer, of Counsel INDEPENDENT AUDITORS' REPORT Board of Trustees The Salvation Army, a Georgia Corporation Report on the Financial Statements We have audited the accompanying financial statements of the of The Salvation Army Sarasota Command (a nonprofit organization), which comprise the statements of financial position as of September 30, 2015 and 2014, and the related statements of activities and changes in net assets, cash flows, and functional expenses for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States 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 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. 3 ONE TAMPA CITY CENTER SUITE N. FRANKLIN STREET P. O. BOX TAMPA, FLORIDA FAX

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of as of September 30, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with 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 December 11, 2015 on our consideration of s internal control over financial reporting and 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 the 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 s internal control over financial reporting and compliance. Tampa, Florida December 11,

5 STATEMENTS OF FINANCIAL POSITION September 30, ASSETS CURRENT ASSETS Cash and cash equivalents (notes A6, A8 and A9) $ 603,241 $ 618,026 Accounts receivable (note B) Trade 3,930 - Grants 153, ,253 Related party (note G) 5,072 93,804 Prepaid expenses 6,587 4,999 Other 9,486 2,383 Total current assets 781, ,465 EQUIPMENT AND VEHICLES (note A6) 583, ,022 Less accumulated depreciation (346,251) (303,103) Total equipment and vehicles 237, ,919 TOTAL ASSETS $ 1,018,497 $ 1,157,384 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable Trade $ 49,967 $ 28,920 Related party (note G) 88,387 57,127 Accrued expenses 123,963 27,773 Total current liabilities 262, ,820 Net assets - unrestricted 756,180 1,043,564 TOTAL LIABILITIES AND NET ASSETS $ 1,018,497 $ 1,157,384 The accompanying notes are an integral part of these statements. 5

6 STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS For the year ended September 30, PUBLIC SUPPORT AND REVENUE Contributions (notes A3 and A4) $ 4,447,835 $ 3,798,205 Donations in-kind (note A5) 3,250,472 2,789,470 United Way allocations 161, ,010 Grants from governmental agencies Federal 1,230,716 1,294,750 County 480, ,119 Other grants - 100,000 Program service fees 111,900 99,352 Special events (note E) 81,368 38,593 Interest and other 13,608 9,809 Gain on sale of asset 6,000 - Total public support and revenue 9,783,699 8,757,308 EXPENSES Program services Corps community center 914, ,979 Residential and institutional services 1,088,401 1,148,564 Other social services 6,868,975 5,850,674 Total program services 8,871,570 7,906,217 Supporting services Management and general 850, ,624 Fundraising 348, ,237 Total expenses 10,071,083 8,762,078 Change in net assets (287,384) (4,770) Net assets at beginning of year 1,043,564 1,048,334 Net assets at end of year $ 756,180 $ 1,043,564 The accompanying notes are an integral part of these statements. 6

7 STATEMENTS OF CASH FLOWS For the year ended September 30, Cash flows from operating activities Change in net assets $ (287,384) $ (4,770) Adjustments to reconcile change in net assets to net cash provided (used) by operating activities Depreciation 68,875 62,150 Decrease (increase) in related party accounts receivable 88,732 (26,586) Decrease in grants receivable 39,141 10,454 (Increase) decrease in trade receivable (3,930) - Increase in prepaid expenses and other assets (8,691) 2,282 Increase (decrease) in trade accounts payable 21,047 (31,305) Increase (decrease) in related party accounts payable 31,260 (10,735) Increase (decrease) in accrued expenses 96,190 (75,449) Gain on sale of asset (6,000) - Total adjustments 326,624 (69,189) Net cash provided (used) by operating activities 39,240 (73,959) Cash flows from investing activities Proceeds from sale of asset 6,000 - Purchases of equipment and vehicles (60,025) - Net cash flows used in investing activities (54,025) - Net decrease in cash and cash equivalents (14,785) (73,959) Cash and cash equivalents at beginning of year 618, ,985 Cash and cash equivalents at end of year $ 603,241 $ 618,026 Supplemental disclosures of cash flow information Cash paid during the year Interest $ - $ - Income taxes $ - $ - The accompanying notes are an integral part of these statements. 7

8 STATEMENT OF FUNCTIONAL EXPENSES For the year ended September 30, 2015 Program Services Supporting Services Corps. Other Total Management Community Residential Social Program and Fund Total Center Services Services Services General Raising Expenses Salaries and allowances $ 314,482 $ 401,473 $ 853,512 $ 1,569,467 $ 425,713 $ 133,817 $ 2,128,997 Officer and employee benefits 78, , , , ,807 29, ,741 Payroll taxes 26,508 38,220 72, ,425 35,483 11, ,012 Professional fees 9,142 2,338 30,611 42, ,927 41, ,710 Supplies 39,979 40,308 54, ,503 15,119 17, ,947 Direct assistance 108,516 11,361 4,575,625 4,695, ,695,502 Telephone 19,020 7,990 11,603 38,613 7,533 1,087 47,233 Postage and shipping 4,752 7,810 12,011 24,573 2,790 27,999 55,362 Occupancy 137, , , ,825 54,353 4, ,919 Furnishings and equipment 13,015 33,149 65, ,988 47,479 1, ,689 Printing and publications ,210 2, ,858 58,163 Local travel and meals 6,862 3,921 5,587 16,370 5,656 8,856 30,882 Vehicles 21,913 7,060 29,179 58,152 3,498 1,725 63,375 Supportive services 61,982 60, , , ,681 Conferences, meetings and trips 33,071 2,850 4,414 40,335 9,013 9,221 58,569 Miscellaneous 11,035 2, ,758 6,524 1,144 22,426 Depreciation 27,365 6,807 26,151 60,323 4,751 3,801 68,875 Total expenses $ 914,194 $ 1,088,401 $ 6,868,975 $ 8,871,570 $ 850,990 $ 348,523 $ 10,071,083 The accompanying notes are an integral part of this statement. 8

9 STATEMENT OF FUNCTIONAL EXPENSES For the year ended September 30, 2014 Program Services Supporting Services Corps. Other Total Management Community Residential Social Program and Fund Total Center Services Services Services General Raising Expenses Salaries and allowances $ 280,563 $ 423,484 $ 533,897 $ 1,237,944 $ 291,420 $ 102,803 $ 1,632,167 Officer and employee benefits 79, , , ,103 69,348 15, ,771 Payroll taxes 22,741 36,635 49, ,251 28,464 10, ,347 Professional fees 5,027 13,731 49,651 68,409 43,444 31, ,451 Supplies 30,808 41,420 48, ,561 10,587 14, ,163 Direct assistance 90,551 20,512 4,071,107 4,182, ,182,170 Telephone 19,603 9,831 9,374 38,808 4, ,148 Postage and shipping 5,063 8,462 12,485 26,010 3,082 34,401 63,493 Occupancy 160, , , ,621 61,459 1, ,398 Furnishings and equipment 23,311 34,304 40,444 98,059 21,305 4, ,285 Printing and publications ,588 2, ,122 75,078 Local travel and meals 11,821 2,074 4,168 18,063 5,808 1,457 25,328 Vehicles 33,680 6,679 33,132 73,491 3, ,981 Supportive services 68,962 64, , , ,336 Conferences, meetings and trips 39,903 4,399 1,157 45,459 9,276 1,474 56,209 Miscellaneous 6,752 3, ,737 5, ,604 Depreciation 27,408 4,907 23,190 55,505 6,644-62,149 Total expenses $ 906,979 $ 1,148,564 $ 5,850,674 $ 7,906,217 $ 564,624 $ 291,237 $ 8,762,078 The accompanying notes are an integral part of this statement. 9

10 NOTES TO FINANCIAL STATEMENTS September 30, 2015 and 2014 NOTE A - DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the organization s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows: 1. Purpose and Organization The Salvation Army, founded in 1865, is a not-for-profit international religious organization and charitable movement organized and operated on a quasi-military pattern and is a branch of the Christian Church. Its membership includes officers (clergy), soldiers and adherents (laity), members of varied activity groups and volunteers who serve as advisors, associates and committed participants in its service functions. (the Command ), an operating unit of the Florida Division ( Divisional Headquarters ) of the Southern Territory of The Salvation Army, a Georgia corporation (the Southern Territory ), operates a variety of programs including a community center, day care services, transient lodge, transitional housing and social services and related programs. The accompanying financial statements are summaries of the financial position, changes in net assets, cash flows, and functional expenses of The Salvation Army Sarasota Command (the ). The Operating Fund represents a division of the Sarasota Command and includes the community center, transient lodging and social services, and related programs. The does not include the F.A.I.T.H. program. The Command s financial statements are prepared in accordance with generally accepted accounting principles, which require the use of management estimates. All items of support, revenue and expenses are stated on the accrual basis of accounting. 2. Basis of Accounting The accompanying financial statements have been prepared in accordance with the national accounting policies of The Salvation Army. These policies are consistent with those appearing in the Audit and Accounting Guide - Not-for-Profit Organizations issued by the American Institute of Certified Public Accountants. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. Financial Accounting Standards The Program adheres to provisions of the Financial Accounting Standards Board Accounting Standards Codification ( FASB ASC ). 10

11 NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 2015 and 2014 NOTE A - DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued FASB ASC requires the Program to distinguish between contributions that increase unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. It also requires recognition of contributed services meeting certain criteria at fair values. FASB ASC established the standards for external financial reporting for not-for-profit organizations, and requires a statement of financial position, a statement of activities, and a statement of cash flows. It also requires the classification of resources into three classes of net assets based on the absence or existence of donor imposed restrictions. Unrestricted net assets - not subject to donor-imposed restrictions or the donorimposed restrictions have expired. Unrestricted net assets may be designated for specific purposes by action of the Advisory Board. Temporarily restricted net assets - subject to donor-imposed stipulations that may be fulfilled by actions of the Command to meet the stipulations or become unrestricted at the date specified by the donor. Permanently restricted net assets - subject to donor-imposed stipulations that they be retained and invested permanently by the Command. The donors require the Command to use all or part of the investment return on these net assets for specified or unspecified purposes. As previously mentioned at note A1, the accompanying financial statements encompass the Operating Net Assets of the Command. 4. Support and Revenue Support and revenue are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions that are not fulfilled in the accounting period. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulations or by law. All expenses are reported as decreases in unrestricted net assets. 5. Donations In-Kind Material gifts-in-kind items used in The Salvation Army programs (e.g., vehicle, free rent, equipment, etc.) and donated goods distributed (clothing, furniture, food-items, etc.) are recorded as income and expense at the time the items are placed into service or distributed. 11

12 NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 2015 and 2014 NOTE A - DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Contributed services are reported as contributions at their fair value if such services create or enhance non-financial assets; the services would have been purchased if not provided by contribution; and the service requires specialized skills. In addition, the appropriate value of donated services of individuals is recorded as an expense when such services qualify for cost reimbursement from third-party providers. 6. Vehicles, Depreciation and Reserves All land and buildings used by the Command, as well as any contributions or reserves established for purchase or replacement of land or buildings are held in separate funds, which are under the legal control and discretion of The Salvation Army, a Georgia corporation. Consequently, these assets are not included in the accompanying financial statements. Capitalized equipment is stated at cost or, if donated, at fair market value at the date of donation. As a matter of policy, items costing $10,000 or more are capitalized, and all other items are expensed. Depreciation is provided on vehicles at straight-line rates based on estimated service lives of three years. A full month of depreciation is charged in the month of acquisition, and no depreciation is charged in the month of disposition. Provision is made for major future costs of property maintenance and replacement of vehicles and some equipment by transfer of operating net assets to board designated unrestricted net assets. Cash and cash equivalents include the following assets that are board designated to be used for certain purposes as of September 30,: Auto revolving reserve $ 45,943 $ 99,968 Property reserve 8,201 8,938 $ 54,144 $ 108, Allocation of Functional Expenses Certain expenses are allocated on the basis of employee time involved. Expenses incurred for benefiting a single function are recorded directly into the appropriate function. 12

13 NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 2015 and 2014 NOTE A - DESCRIPTION OF THE ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 8. Cash Equivalents For purposes of these statements, cash equivalents are defined as short-term, highly liquid money market investments that are both readily convertible to known amounts of cash and having original maturities of three months or less. 9. Concentration of Credit Risk The Command occasionally maintains deposits in excess of federally insured limits. Statement of Financial Accounting Standards No. 105 identifies these items as a concentration of credit risk requiring disclosure, regardless of the degree of risk. The risk is managed by maintaining all deposits in high quality financial institutions. NOTE B - ACCOUNTS RECEIVABLE The Command paid expenses on behalf of The Salvation Army programs not included in the, including Florida Divisional Headquarters, Southern Territorial Headquarters, and the F.A.I.T.H. Program of. The Command also receives support from various federal, state and county grants. None of the amounts receivable at September 30, 2015 and 2014 are deemed to be uncollectible. Therefore, no provision for uncollectible amounts has been made in the accompanying financial statements. NOTE C - INCOME TAX STATUS The Salvation Army has received a determination of tax exempt status under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes has been reflected in the accompanying financial statements. Management is not aware of any activities that would jeopardize the Salvation Army s tax exempt status. The Salvation Army is not aware of any tax positions it has taken that are subject to a significant degree of uncertainty. NOTE D - GRANTS FROM GOVERNMENTAL AGENCIES The Command received various county, state and federal grants. These grants and awards function as a reimbursement of funds expended by the Command. 13

14 NOTE E - SPECIAL EVENTS NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 2015 and 2014 The Command conducted a special event during the years ended September 30, 2015 and 2014 to generate additional support. Net special event revenue consisted of the following for the year ended September 30,: Special event revenue $ 121,239 $ 68,532 Less - direct expenses (39,871) (29,939) Special event revenue, net $ 81,368 $ 38,593 NOTE F - PENSION, RETIREMENT AND BENEFIT PLANS Employee Pension Plan Eligible employees of the Command participate in The Salvation Army Pension Plan (the Plan ) with other Salvation Army territories. The Plan is a defined contribution, money purchase plan that provides for death, disability and retirement benefits. Annual contributions to the Plan are based on a stipulated percentage of employees salaries. The Command incurred $89,590 and $56,692 of expense under this Plan for the fiscal years ended September 30, 2015 and 2014, respectively. Employee Medical Plan Employees of The Salvation Army are provided health benefits under a self-insured program that is administered by a third party claims administrator. Amounts charged to the Command and included in expense for this plan were $443,940 and $323,133 for the years ended September 30, 2015 and 2014, respectively. Officers Retirement Provisions The Salvation Army has a noncontributory retirement provision for officers that provides retirement and certain health care and death benefits to retired officers, as defined by Salvation Army policy governing such benefits. The corporate headquarters has total responsibility for the administration of retirement benefits. Retirement allowances are determined based on active officer allowances and length of service. They are self-funded principally by annual assessments to all centers of operation, by designated portions from legacy income, by earnings on assets designated for retirement benefits, and by appropriations. Amounts charged to the unit and included in expenses for this plan were $10,950 and $15,000 for the years ended September 30, 2015 and 2014, respectively. 14

15 NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 2015 and 2014 NOTE F - PENSION, RETIREMENT AND BENEFIT PLANS - Continued Officers and Auxiliary-Captains Sick Benefit and Burial Fund The Salvation Army provides certain health care and death benefits for active Salvation Army officers and Auxiliary-Captains through Officers and Auxiliary-Captains Sick Benefit and Burial Funds, as defined by the national Salvation Army policy. All active Salvation Army officers and Auxiliary-Captains and their eligible dependents are eligible for these benefits. Amounts charged to the unit and included in expenses for this plan were $39,510 and $40,212 the fiscal years ended September 30, 2015 and 2014, respectively. Insurance Programs The Salvation Army maintains insurance programs for general liability, automobile, workers compensation, and property coverage. The programs, administered by territorial headquarters, are intended to provide coverage for claims arising in all centers of operation. Funding for these programs is obtained through assessments to all centers of operation for each line of coverage and through earnings on designated assets held to pay claims. NOTE G - RELATED PARTY TRANSACTIONS The Command is assessed an administrative charge for support services provided by the Florida Divisional Headquarters and the Southern Territorial Headquarters to the Command. Support services include administration related to program, personnel, business, and other support services provided to the Command. Total support services charged to the Command for the years ended September 30, 2015 and 2014 approximated $756,000 and $706,000, respectively. The amounts shown as related party accounts receivable at September 30, 2015 and 2014 represent the reimbursement of expenses due to the Command from Divisional Headquarters, the Southern Territory, and the F.A.I.T.H. Program of The Salvation Army Sarasota Command. The amounts shown as related party accounts payable at September 30, 2015 and 2014 represent amounts due to Divisional Headquarters and the Southern Territory for employee medical insurance coverage, workers compensation expenses and other related items, as well as liabilities for support services. NOTE H - SUBSEQUENT EVENTS The Program has evaluated events and transactions occurring subsequent to September 30, 2015 as of December 11, 2015 which is the date the financial statements were available to be issued. 15

16 SUPPLEMENTARY INFORMATION 16

17 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND For the year ended September 30,

18 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the year ended September 30, 2015 Federal Grantor/Project Title Federal Contract CFDA Number Expenditures U.S. Department of Housing and Urban Development Direct awards Supportive Housing Program FL0003L4H $ 196,261 Indirect awards Emergency Shelter Grants Program Pass-through Florida Department of Children and Families QPZ4F 31,638 Pass-through Florida Department of Children and Families LPZ10 3,554 Total CFDA # ,192 Community Development Block Grants Pass-through Sarasota County B-14-UC Government ,797 Total U.S. Department of Housing and Urban Development 254,250 U.S. Department of Homeland Security Direct awards Emergency Food and Shelter National Board Program ,299 Total U.S. Department of Homeland Security 67,299 U.S. Department of Health and Human Services Indirect awards Low-Income Home Energy Assistance Pass-through Florida Department of Community Affairs EA-OF ,309 Pass-through Florida Department of Community Affairs EA-OF ,961 Total CFDA # ,270 Community Services Block Grant Pass-through Sarasota County Government SB-OD ,158 Total U.S. Department of Health and Human Services 1,105,428 Total expenditures of federal awards $ 1,426,977 The accompanying notes are an integral part of this schedule. 18

19 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS NOTE A - BASIS OF PRESENTATION September 30, 2015 The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the of 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 State and 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 financial statements. The Schedule of Expenditures of Federal Awards also includes federal expenditures related to the F.A.I.T.H. Program of in order to comply with OMB Circular A-133 guidelines. As noted in note A1 of the financial statements, the F.A.I.T.H. Program is not included in the basic financial statements, but is audited as a separate entity. Below is reconciliation between the Schedule of Expenditures of Federal Awards and Statement of Activities and Changes in Net Assets: Federal expenditures included in Command audit $ 1,230,716 Federal expenditures included in F.A.I.T.H. Program audit 196,261 Total federal expenditures for $ 1,426,977 NOTE B - CONTINGENCIES These federal programs are subject to financial and compliance audits by grantor agencies which, if instances of material noncompliance are found, may result in disallowed expenditures and affect the Command s continued participation in specified programs. The amount, if any, of expenditures which may be disallowed by the grantor agencies cannot be determined at this time, although the Command expects such amounts, if any, to be immaterial. NOTE C - SUBRECIPIENTS Of the federal expenditures presented in this schedule, the of The Salvation Army Sarasota Command did not provide federal awards to subrecipients. 19

20 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 THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND September 30,

21 RIVERO, GORDIMER & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants Herman V. Lazzara Stephen G. Douglas Marc D. Sasser Michael E. Helton Sam A. Lazzara Cesar J. Rivero, of Counsel Richard B. Gordimer, of Counsel 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 Board of Trustees The Salvation Army, a Georgia Corporation 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 the of (a nonprofit organization), which comprise the statement of financial position as of September 30, 2015, 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 December 11, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered The Salvation Army Sarasota Command s internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization 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 combination of deficiencies, in internal control, such that 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. 21 ONE TAMPA CITY CENTER SUITE N. FRANKLIN STREET P. O. BOX TAMPA, FLORIDA FAX

22 Compliance and Other Matters As part of obtaining reasonable assurance about whether The Salvation Army Sarasota Command s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report This 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. Tampa, Florida December 11,

23 INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND September 30,

24 RIVERO, GORDIMER & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 Member American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants Herman V. Lazzara Stephen G. Douglas Marc D. Sasser Michael E. Helton Sam A. Lazzara Cesar J. Rivero, of Counsel Richard B. Gordimer, of Counsel Board of Trustees The Salvation Army, a Georgia Corporation Report on compliance for Each Major Federal Program We have audited the of s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement, that could have a direct and material effect on each of The Salvation Army Sarasota Command s major federal programs for the year ended September 30, The Salvation Army Sarasota Command s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of The Salvation Army Sarasota Command 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 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 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 The Salvation Army Sarasota Command s compliance. Opinion on Each Major Federal Program In our opinion, the of 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 September 30, ONE TAMPA CITY CENTER SUITE N. FRANKLIN STREET P. O. BOX TAMPA, FLORIDA FAX

25 Report on Internal Control Over Compliance Management of 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 The Salvation Army Sarasota Command s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of 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 or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Tampa, Florida December 11,

26 SCHEDULE OF FINDINGS AND QUESTIONED COSTS THE SALVATION ARMY SARASOTA COMMAND OPERATING FUND September 30,

27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I - Summary of Auditors' Results Financial Statements Type of auditors' report issued For the year ended September 30, 2015 Internal control over financial reporting Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Unmodified 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)? yes X none reported Type of auditors' report issued on compliance for major projects Unmodified Any audit findings disclosed that are required to be reported in accordance with section 501(a) of Circular A-133? yes X no Identification of major projects: CFDA Number Project Name Low-Income Home Energy Assistance Dollar threshold used to distinguish between type A and type B state projects Auditee qualified as low-risk auditee? X yes no Section II - Financial Statement Findings No matters to report Section III - State Financial Assistance Findings and Questioned Costs No matters to report Section IV - Other Issues 300,000 No summary schedule of prior audit findings is required because there were no prior audit findings related to federal programs $ 27