FINANCIAL STATEMENTS

Transcription

1 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION Audit Report June 30, 2016 FINANCIAL STATEMENTS

2 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION General Information Official Name of Agency Community Access Network Non Profit Corporation Type of Agency Community Access Network Non Profit Corporation is a non-profit corporation Location of Company Headquarters 2275 S. Main Street, Suite 201 Corona, California (951) Name and Address of Principal Officer Rafik Philobos Executive Director 2275 S. Main Street, Suite 201 Corona, California This Examination Covers July 1, 2015 through June 30, 2016 Scheduled Hours of the Administrative Offices 8:30 a.m. - 5:00 p.m. (M-Fri.) Programs Offered: Foster Family Program Group Home Program Mental Health Programs Therapeutic Behavioral Services Program l

3 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION TABLE OF CONTENTS General Information I Table of Contents II FINANCIAL INFORMATION: Independent Auditor's Report Statement of Financial Position Statement of Activity Statement of Change in Net Assets Statement of Cash-Flow Notes to Financial Statements 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 SUPPLEMENTARY INFORMATION: Report on Supplementary Information Detailed Schedule of Revenue and Other Support Detail Schedule of Functional Expenses COMPLIANCE INFORMATION: Report on Compliance For Each Major Federal Program; Report on Internal Control Over Compliance; and Report on The Schedule of Expenditures of Federal Awards Required By The Uniform Guidance Schedule of Expenditure of Federal Awards Schedule of Findings and Questioned Costs II

4 FINANCIAL INFORMATION

5 1 CRB CLIFFORD R. BENN, CPA Certified Public Accountant INDEPENDENT AUDITOR S REPORT To the Board of Directors Community Access Network Non Profit Corporation Corona, California I have audited the accompanying financial statements of Community Access Network Non Profit Corporation, 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. 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 My responsibility is to express an opinion on these financial statements based on my audit. I conducted my 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 I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 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, I 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. 552 E. Carson St. #104 Carson, CA (310)

6 I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Community Access Network Non Profit Corporation as of June 30, 2016, and the results of its operations and its cash-flow for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, I have also issued my report dated December 15, 2016, on my consideration of Community Access Network Non Profit Corporation s internal control over financial reporting and on my test 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 my 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 Community Access Network Non Profit Corporation s internal control over financial reporting and compliance. 2 Carson, California December 15, 2016

7 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 3 Statement of Financial Position June 30, 2016 ASSETS FOSTER GROUP MENTAL GENERAL TOTAL FAMILY HOME HEALTH TBS & ADMIN Cash $ 849,220 $ 586 $ 246,182 $ 602,452 Accounts Receivable 598,327 $ 90, ,011 $ 95, , Prepaid Expenses 55,847 55,847 Deposits 29,598 29,598 Restricted Certificate of Deposit (Note 4) 302, ,474 Loan Receivable (Note 5) 28,969 28,969 Sub-total 1,864,435 90, ,597 95, ,378 1,019,360 Furniture & Equipment (Note 2): Real Estate - Land 282, ,761 Real Estate - Buildings 983, ,321 Furniture & Equipment 217,163 48,353 20,121 80,560 68,129 Leasehold Improvements 32,772 22,594 10,178 Vehicles 231,743 9, ,493 78,810 36,082 Less: Accum. Depreciation (427,679) (3,899) (103,982) (18,692) (96,838) (204,268) Total Furniture & Equipment 1,320,081 5,459 51,864 1,429 85,126 1,176,203 TOTAL ASSETS $3,184,516 $ 96,425 $ 201,461 $ 96,563 $ 594,504 $2,195,563 LIABILITIES Accounts Payable $ 197,293 $ 197,293 Accrued Payroll Expenses 95,283 95,283 Accrued Leave Payable (Note 3) 57,241 57,241 Unearned Contract Revenue 509,347 $ 509,347 Mortgage Payable (Note 7) 606, ,809 Interfund Account - $(686,862) $(206,941) $148,245 (293,057) 1,038,615 TOTAL LIABILITIES 1,465,973 (686,862) (206,941) 148, ,290 1,995,241 NET ASSETS Unrestricted 1,364, , ,402 (51,682) 24, ,322 Temporarily Restricted 354, ,068 Permanently Restricted - TOTAL NET ASSETS 1,718, , ,402 (51,682) 378, ,322 TOTAL LIABILITIES AND NET ASSETS $3,184,516 $ 96,425 $ 201,461 $ 96,563 $ 594,504 $2,195,563 See Accompanying Notes And Auditor's Report

8 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION Statement of Activity For the Year Ended June 30, REVENUE: TEMPORARILY TOTAL UNRESTRICTED RESTRICTED Allotment Payments $ 2,433,091 $ 2,433,091 Contract Revenue 2,509, ,653 $ 1,981,627 Clothing Allowance 16,798 16,798 Client Fees 11,133 11,133 TOTAL REVENUES 4,970,302 2,988,675 1,981,627 SUPPORT: Food Reimbursements 14,586 14,586 Donations Interest Income 1,971 1,971 Rental Income 6,600 6,600 Other Support 1,531 1,531 Net Assets Released From Restrictions - 1,981,627 (1,981,627) TOTAL REVENUE AND OTHER SUPPORT 4,995,438 4,995,438 - EXPENSES Program Services Foster Family Programs 808, ,012 Group Home 1,484,094 1,484,094 Mental Health Programs 511, ,952 Therapeutic Behavioral Services 1,988,227 1,988,227 General & Administrative 63,648 63,648 TOTAL EXPENSES 4,855,933 4,855,933 - CHANGES IN NET ASSETS $ 139,505 $ 139,505 $ - See Accompanying Notes And Auditor's Report

9 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 5 Statement of Change In Net Assets For the Year Ended June 30, 2016 UNRESTRICTED MENTAL FOSTER GROUP HEALTH GENERAL TOTAL FAMILY HOME PROGRAMS TBS & ADMIN Net Assets, June 30, 2015 $1,226,705 $ 640,735 $ 378,834 $ (78,561) $ 24,146 $ 261,551 Prior Period Adjustment: Over accrued food reimbursement (1,735.00) Increase (Decrease) In Net As Assets 139, ,552 31,303 26,879 (61,229) Net Assets, June 30, 2016 $ 1,364,475 $ 783,287 $ 408,402 $ (51,682) $24,146 $ 200,322 TEMPORARILY RESTRICTED FOSTER GROUP MENTAL GENERAL TOTAL FAMILY HOME HEALTH TBS & ADMIN Net Assets, June 30, 2015 $ 354,068 $ - $ - $ - $354,068 $ - Increase (Decrease) In Net As Assets Net Assets, June 30, 2016 $ 354,068 $ - $ - $ - $354,068 $ - See Accompanying Notes And Auditor's Report

10 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 6 Statement of Cash-flow For the Year Ended June 30, 2016 Cash-flow from operating activities: Increase in net assets $ 139,505 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation $ 112,650 Decrease in receivables 111,924 Increase in prepaid expenses (6,291) Increase in deposits (12,785) Increase in accounts payable 78,070 Increase in accrued leave payable 3,131 Increase in accrued payroll expenses 22,627 Increase in deferred revenue 342,649 Non-cash loss on disposal of assets 264 Total Adjustments 652,239 Net cash provided by operating activities 791,744 Cash-flow from investing activities: Purchase of other capital assets (78,110) Payments received on loan receivable 9,039 Net cash consumed by investing activities (69,071) Cash-flow from financing activities: Growth of cash in collaterized account (341) Principal payment on mortgage payable (56,408) Payment on line-of-credit (181,852) Net cash consumed by financing activities (238,601) Net increase in cash 484,072 Cash at beginning of year 365,148 Cash at end of year $ 849,220 SUPPLEMENTAL DISCLOSURES Interest Paid $ 32,216 See Accompanying Notes and Auditor's Report

11 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 7 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 1: NATURE OF BUSINESS Community Access Network Non Profit Corporation (CAN) is a private nonprofit corporation. The corporation is exempt from corporate income taxes under section 501(c) (3) of the Internal Revenue Code and similar California State law. CAN is primarily a foster family agency in the business of recruiting, screening, and monitoring homes suitable for placing children that are in the county social services system. The agency is still in the growth phase. CAN, also, provide mental health counseling and operates group homes, both activities are funded by Riverside County. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation The financial statements of CAN have been prepared using the accrual method of accounting which reflects revenues and expenditures in the accounts in the period in which they are considered to have been earned and incurred. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader: Fund Accounting CAN receives its revenues under either Memos of Understanding or contracts from three different counties. To ensure observance of limitations and restrictions placed on the use of resources available to CAN, the accounts are maintained in accordance with the principles of fund accounting. Fund accounting is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds established according to their nature and purpose. Separate funds are maintained for each program and each county. Grant Revenue Grant revenue is recognized when the qualifying costs are incurred for cost reimbursement grants or contracts or when a unit of service is provided for performance grants. Functional Allocation of Expenses The cost of providing the organization s programs and other activities is summarized on a functional basis in the statement of activities and statement of functional expenses. Expenses that can be identified with a specific program or support service are charged directly to that program or support service. Costs common to multiple functions have been allocated among the various functions benefited. General and administrative expenses included those cost that are not directly identifiable with any specific program, but which provide for the overall support and direction of the organization. Fundraising costs are expensed as incurred, even though they may result in contributions received in future years. Interfund Accounts The interfund account represent advances from (to) other programs and prior year s increase (decrease) in net assets which has not been transferred to the general fund. The final increase (decrease) in net assets is transferred to the general fund when the fiscal year is closed-out with the funding source. See Accompanying Auditor s Report

12 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 8 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continue) Net Assets The financial statements report net assets and changes in net assets in three classes that are based upon the existence or absence of restrictions on use that are placed by its donors, as follows: Unrestricted Net Assets (General and Administrative Fund) This fund is used to account for all resources over which the governing board has discretionary control to use in carrying on the general operations of the organization. Contributions and activities for general purposes are all accounted for in this fund. Temporarily Restricted Net Assets This fund represent resources that are restricted by a donor for use for a particular purpose or in a particular future period. The organization s unspent contributions are classified in this class if the donor limited their use. When a donor s restriction is satisfied, either by using the resources in the manner specified by the donor or by the passage of time, the expiration of the restriction is reported in the financial statements by reclassifying the net assets from temporarily restricted to unrestricted net assets. Permanently Restricted Net Assets This fund represent resources whose use by the organization is limited by donor-imposed restrictions that neither expired by being used in accordance with a donor s restriction nor by the passage of time. During the audit period, the agency did not have any permanently restricted funds. All revenues and net gains are reported as increases in unrestricted net assets in the statement of activities unless the use of the related resources is subject to temporary or permanent donor restrictions. All expenses and net losses other than losses on endowment investments are reported as decreases in unrestricted net assets. B. Depreciation Land, buildings and equipment are reported in the statement of financial position at cost, if purchased, and at estimated fair value at the date of donation, if donated. All land and buildings are capitalized. Equipment is capitalized if it has a cost of $500 or more and a useful life, when acquired, of more than one year. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: Buildings and improvements Leasehold improvements Equipment Equipment used under capital Leases 25 years 15 years, or remaining lease Term, if shorter 5-10 years 5-7 years See Accompanying Auditor s Report

13 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 9 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continue) C. Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. D. Accounts Receivable Accounts receivable are primarily unsecured non-interest-bearing amounts due from grantors on cost reimbursement or performance grants. Management believes that all outstanding accounts receivable are collectible in full, therefore no allowance for uncollectible receivables has been provided. NOTE 3: ACCRUED VACATION PAY CAN employees accrue vacation and sick leave in varying amounts. In the event of termination, an employee is paid for accumulated vacation leave. The cost of accumulated leave pay which is expected to be paid from currently available resources has been recorded as an expenditure of the current period. NOTE 4: LINE-OF-CREDIT At June 30, 2016, the agency had available the following line-of-credits: Alta Pacific Bank has granted the agency a $300,000 collateralized line-of-credit. The agreement has a fixed rate monthly interest payment plan with an annual interest rate of 2.25%. The line-of-credit matures May 16, The collateral on this loan is an assignment of deposit dated June 25, 2012, on the agency s certificate of deposit in the amount of $300,000. At June 30, 2016, the credit-line was not utilized. NOTE 5: RELATED PARTY TRANSACTION The agency has an outstanding loan receivable from the executive director. The loan is for 48 months, with interest at 4.0%, scheduled to mature April At June 30, 2016, the remaining outstanding receivable balance was $28,969. See Accompanying Auditor s Report

14 NOTE 6: RETIREMENT PLAN COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 10 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 The agency offers its employee the opportunity to participate in a 401(k) saving plan (Plan). All employee of Community Access Network Non Profit Corporation are eligible to participate in the Plan upon completing the Plan s eligibility requirements. Employees can contribute from 1% to 80% of their eligible earnings. The agency will make a Safe Harbor Matching Contribution equal to 100% of the employee s elective deferrals, not to exceed 4% of the employee s eligible earnings. For 2016, employees can contribute up to a limit of $17,500. Employees are fully vested in their elective deferrals and the agency s match at the time of deposit. Benefits are payable to the employee upon leaving the agency for any reason (retirement, termination, disability, or death). NOTE 7: MORTGAGE PAYABLE Mortgage payable at June 30, 2016, consists of the following: Loan payable Falsetto Family Trust, secured by a first trust deed, the original balance of the loan was $300,416, with principal payments of $1, per month, the loan accrues interest at a rate of 4.625%, due January, $220,625 Loan payable Wells Fargo Home Mortgage, secured by a first trust deed, the original balance of the loan was $408,375, with principal payments of $2, per month, the loan accrues interest at a rate of 4.25%, due February, ,184 Total mortgage payable $606,809 Following are maturities of loan payable for each of the next five years, ending June 30: NOTE 8: CONTINGENCIES 2017 $ 18, , , , ,009 Thereafter 505,926 Total $606,809 Financial awards from governmental entities in the form of grants are subject to audit by grantor agencies. Such audits could result in claims against the agency for disallowed costs or noncompliance with grantor restrictions. Based on prior experience, CAN s management believes that costs ultimately disallowed, if any, would not materially affect the financial position of the organization; therefore, no provision has been made for any liabilities that may arise from such an audit. See Accompanying Auditor s Report

15 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 11 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 9: CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject CAN to a concentration of credit risk consist principally of cash and cash equivalents. CAN maintain a majority of its cash or cash equivalent balances with Alta Pacific Bank, Chase Bank, and other reputable financial institutions. Cash accounts are federally insured by the Federal Deposit Insurance Corporation, currently, up to $250,000. Amounts in excess of insured limits totaled $544,547 at June 30, NOTE 10: FACILITY LEASE The agency leases two office facilities under non-cancelable operating lease agreements. The leases expire on varying dates through June 30, 2021, and they provides for renewal options. In the normal course of business, it is expected that these leases will be renewed. The leases provide for increases in future minimum annual rental payments as defined in the leases. Also, these agreements generally require the company to pay common area costs. Lease expenses for these offices totaled $220,278 during the current period. The following is a schedule by year of future minimum rental payments required under the operating lease agreement: Year Ending June 30, Amount , , , , ,107 Total $1,181,612 NOTE 11: TAX STATUS CAN has been granted exemption from federal income taxation under Section 501(c)(3) of the Internal Revenue Code though it would be subject to tax on income unrelated to its exempt purposes (unless that income is otherwise excluded by the Internal Revenue Code). The agency s policy is to record income tax related interest expense and penalties in operating expenses. For the year ended June 30, 2016, there was no interest or penalties expense recorded and no accrued interest or penalties related to income taxes. The agency s federal and state tax returns are open for examination for the years 2013, 2014, and Contributions to the organization are tax deductible to donor under Section 170 of the Internal Revenue Code. See Accompanying Auditor s Report

16 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 12 NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE 12: SUBSEQUENT EVENTS Subsequent events have been evaluated through December 15, 2016, which is the date the financial statements were available to be issued. Events occurring after that date have not been evaluated to determine whether a change in the financial statements would be required. NOTE 13: ADVERTISING General advertising costs are expensed when incurred. Event advertising is expensed as of the date of the event. NOTE 14: CASH AND CASH EQUIVALENTS Cash and cash equivalents consists of checking accounts, demand deposits, interest-bearing time deposits, money market accounts and certificates of deposits with maturity dates up to 180 days. The collateralized cash account is not included in cash and cash equivalents. NOTE 15: RECEIVABLES Grants and contracts receivable consist of the following: Orange County $ 13,788 San Bernardino County 67,724 Riverside County Family Services 78,233 Riverside County Social Services 74,755 Riverside Department of Mental Health 95,257 Riverside County - TBS 263,196 State of California CDE 5,295 Other 79 Total $598,327 NOTE 16: RESTRICTED NET ASSETS Temporarily restricted net assets at June 30, 2016, are available for the following purposes or periods: Purpose restrictions, available for spending: Therapeutic Behavioral Services Program $ 354,068 Total temporarily restricted net assets $ See Accompanying Auditor s Report

17 CRB CLIFFORD R. BENN, CPA 13 Certified Public Accountant 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 To the Boards of Directors Community Access Network Non Profit Corporation Corona, California I have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of Community Access Network Non Profit Corporation (CAN) and the related statements of activity, changes in net assets, cash-flow, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise CAN s basic financial statements, and have issued my report thereon dated December 15, Internal Controls over Financial Reporting In planning and performing my audit of the financial statements, I considered CAN s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of CAN s internal controls. Accordingly, I do not express an opinion on the effectiveness of CAN 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 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. My consideration of internal controls 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 my audit I did not identify any deficiencies in internal control that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 552 E. Carson St. #104 Carson, CA (310)

18 Compliance and Other Matters 14 As part of obtaining reasonable assurance about whether CAN s financial statements are free of material misstatements, I 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 the financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit and, accordingly, I do not express such an opinion. The results of my 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 my testing of internal control and compliance and the result of the testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering organization s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Carson, California December 15, 2016

19 SUPPLEMENTARY INFORMATION

20 CRB CLIFFORD R. BENN, CPA 15 Certified Public Accountant REPORT ON SUPPLEMENTARY INFORMATION To the Board of Directors Community Access Network Non Profit Corporation Corona, California I have audited the financial statements of Community Access Network Non Profit Corporation as of and for the year ended June 30, 2016, and have issued my report dated December 15, 2016, which contained an unqualified opinion on those financial statements. My audit was performed for the purpose of forming an opinion on the financial statements as a whole. The supplementary information is presented for the purpose 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 subject 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 my opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. December 15, 2016 Carson, California 552 E. Carson St. #104 Carson, CA (310)

21 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 16 Detailed Schedule of Revenue And Other Support For the Year Ended June 30, 2016 REVENUE: FOSTER GROUP MENTAL GENERAL TOTAL FAMILY HOME HEALTH TBS & ADMIN Allotment Payments $2,433,091 $934,268 $1,498,823 Contract Revenue 2,509,280 $527,653 $1,981,627 Clothing Allowance 16,798 16, Client Fees 11,133 11,133 TOTAL REVENUE 4,970, ,564 1,499, ,786 1,981,627 - SUPPORT: FoodgReimbursements 14,586 14,586 Donations 448 $448 Interest Income 1,971 1,971 Rental Income 6, Other Support 1,531 1, TOTAL SUPPORT 25,136-16, ,600 2,419 TOTAL REVENUE AND SUPPORT $4,995,438 $950,564 $1,515,397 $538,831 $1,988,227 $ 2,419 See Auditor's Report On Supplementary Information

22 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 17 Detailed Schedule of Revenue And Other Support - Mental Health Programs For the Year Ended June 30, 2016 REVENUE: MENTAL HEALTH SELF TOTAL CONTRACT PAY Allotment Payments $ - Contract Revenue 527,653 $ 527,653 Clothing Allowance - Client Fees 11,133 $11,133 TOTAL REVENUE 538, ,653 11,133 SUPPORT: Food Reimbursements - Donations - Interest Income - Rental Income - Other Support TOTAL SUPPORT TOTAL REVENUE AND SUPPORT $ 538,831 $ 527,698 $ 11,133 See Auditor's Report On Supplementary Information

23 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 18 Detailed Schedule of Functional Expenses For the Year Ended June 30, 2016 PERSONNEL COSTS FOSTER GROUP MENTAL GENERAL TOTAL FAMILY HOME HEALTH TBS & ADMIN Salaries and Wages $ 2,688,325 $ 192,182 $ 826,368 $ 323,256 $ 1,325,978 $ 20,541 Payroll Taxes 237,633 14,927 78,371 29, ,471 3,573 Workers' Comp Insurance 106,167 1,247 91,864 2,045 10, Health Insurance 127,861 21,904 32,497 12,144 60, Other Employee Benefits 64,146 5,884 5,792 8,243 38,384 5,843 Total Direct Expenses 3,224, ,144 1,034, ,979 1,547,261 30,856 OTHER EXPENSES Advertising 1,524 1, Automobile Expenses 62,284 6,189 43,173 2,359 7,704 2,859 Clothing and Other Allowances 40,216 16,237 23,979 Client Services and Incentives 83,036 11,071 36, , Conferences and Meetings 10,142 2,762 1,763 1,160 3, Depreciation 112,650 3,119 62,596 2,757 35,049 9,129 Donations 2,650 2,650 Expendable Equipment 6, , , Food 51,763 51,763 Household and Kitchen Supplies 14,555 14,555 Insurance 48,928 8,442 17,750 4,359 16,806 1,571 Interest Expense 32,001 27,808 4,193 Internet and Cable Services 4, , Mileage 98, ,510 1,100 95, Office Supplies 33,502 2,646 2,475 5,347 18,320 4,714 Other Expenses 18, ,088 4,451 8, Outside Services 82,830 6,429 24,644 39,440 9,501 2,816 Payroll Processing 4, , , Postage 1, , Printing & Copying 5, , , Professional Fees 14,800 3,289 3,289 1,644 4,934 1,644 Provider Payments 467, ,901 Recruitment 7, , Rent Expenses 220,278 15,068 18,203 49, ,117 3,629 Repairs & Maintenance 51,271 1,914 30,185 5,635 10,682 2,855 Staff Training and Development 26,461 4,869 4,415 1,878 8,828 6,471 Taxes & Licenses 6,651 3,843 2, Telephone 39,793 2,646 8,307 4,752 19,487 4,601 Travel 4, ,465 1, Trips and Events 31,728 4,865 22, , Utilities 45,912 3,082 27,308 4,945 8,897 1,680 Overhead Allocation - 3,289 7,014 2,779 7,923 (21,005) Total Operating Expenses 1,631, , , , ,966 32,792 TOTAL PROGRAM EXPENSES $ 4,855,933 $ 808,012 $ 1,484,094 $ 511,952 $ 1,988,227 $ 63,648 See Auditor's Report On Supplementary Information

24 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 19 Detailed Schedule of Functional Expenses - Mental Health Program For the Year Ended June 30, 2016 PERSONNEL COSTS MENTAL HEALTH SELF TOTAL CONTRACT PAY Salaries and Wages $ 323,256 $ 313,062 $ 10,194 Payroll Taxes 29,291 28, Workers' Comp Insurance 2,045 1, Health Insurance 12,144 11, Other Employee Benefits 8,243 8, Total Direct Expenses 374, ,574 11,405 OTHER EXPENSES Advertising Automobile Expenses 2,359 2,359 Clothing and Other Allowances - Client Services and Incentives Conferences and Meetings 1,160 1,160 Depreciation 2,757 2,757 Expendable Equipment Food - Household and Kitchen Supplies - Insurance 4,359 4,359 Interest Expense - Internet and Cable Services Mileage 1,100 1,100 Office Supplies 5,347 5,347 Other Expenses 4,451 2,896 1,555 Outside Services 39,440 39,440 Payroll Processing Postage Printing & Copying Professional Fees 1,644 1,644 Provider Payments - Recruitment Rent Expenses 49,261 49,261 Repairs & Maintenance 5,635 5,635 Staff Training and Development 1,878 1,878 Taxes & Licenses - Telephone 4,752 4,752 Travel 1,465 1,465 Trips and Events Utilities 4,945 4,945 Overhead Allocation 2,779 2,779 Total Operating Expenses 136, ,418 1,555 TOTAL PROGRAM EXPENSES $ 511,952 $ 498,992 $ 12,960 See Auditor's Report On Supplementary Information

25 COMPLIANCE INFORMATION

26 CRB CLIFFORD R. BENN, CPA 20 Certified Public Accountant REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE INDEPENDENT AUDITOR S REPORT Boards of Directors Community Access Network Non Profit Corporation Corona, California Report on Compliance for Each Major Federal Program I have audited Alliance for African Assistance, Inc. s (CAN) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of CAN s major federal program for the year ended June 30, CAN s major federal programs are identified in the summary of auditor s result 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 its federal programs. Auditor s Responsibility My responsibility is to express an opinion on compliance for each of CAN s major federal programs based on my audit of the types of compliance requirements referred to above. I conducted my audit of compliance in accordance with generally accepted auditing standards used 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 I 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 CAN s compliance with those requirements and performing such other procedures, as I considered necessary in the circumstances. 552 E. Carson St. #104 Carson, CA (310)

27 I believe that my audit provides a reasonable basis for my opinion on compliance for each major federal program. However, my audit does not provide a legal determination of CAN s compliance. Opinion on each Major Federal Program In my opinion, CAN complied, in all material respects, with the type of compliance requirements referred to above that could have a direct and material effect on each major federal program for the year ended June 30, Report on Internal Controls over Compliance Management of CAN is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing my audit of compliance, I considered the CAN s internal controls 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, I do not express an opinion on the effectiveness of CAN 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. My 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. I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 21 The purpose of this report on internal control over compliance is solely to describe the scope of my testing of internal control over compliance and the results of that testing based on the

28 requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 22 Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance I have audited the financial statements of CAN as of and for the year ended June 30, 2016, and have issued my report thereon dated December 15, 2016, which contained an unmodified opinion on those financial statements. My audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purpose of additional analysis as required by the Uniform Guidance 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 generally accepted auditing standards used in the United States of America. In my opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the financial statements taken as a whole. Carson, California December 15, 2016

29 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION 23 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2016 FEDERAL PASS-THROUGH FEDERAL GRANTOR/PASS-THROUGH CFDA GRANTOR'S CASH PROGRAM GRANTOR'S PROGRAM TITLE NUMBER PROGRAM RECEIVED EXPENDITURES MAJOR PROGRAM Department of Health and Human Services, Passed Through Administration for Children and Families, Passed Through State of California, Health and Human Services, Department of Social Services, Passed Through: County of Riverside, California $ 905,254 $ 867,238 County of San Bernardino, California , ,643 County of Orange, California , ,554 County of Riverside, California , ,671 County of San Bernardino, California ,353 45,206 County of Orange, California ,536 4,289 Total Major Program 2,040,263 1,838,601 NONMAJOR PROGRAMS Department of Agriculture, Passed Through Food and Nutrition Service, Child and Adult Care Food Program, Passed Through California State Department of Education N/A 14,586 14,586 Total Nonmajor Programs 14,586 14,586 TOTAL ALL PROGRAMS $ 2,054,849 $ 1,853,187 NOTES: BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Community Access Network Non Profit Corporation and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, the preparation of the basic financial statements. See Accompanying Auditor's Report

30 24 Financial Statements COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION Schedule of Findings and Questioned Costs For The Year Ended June 30, 2016 SECTION I Summary of Auditor s Results Type of auditor s report Issued: Unmodified Internal control over reporting: * Material weakness identified? yes X no * Significant deficiency? yes X no Noncompliance material to financial statements noted? yes X no Internal control over major programs: Federal Awards * Material weakness identified? yes X no * Significant deficiency identified? yes X no Type of auditor s report issued on compliance For major programs: Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a)? Unmodified yes X no Identification of major programs: CFDA Number Name of Federal Program or Cluster Administration for Children and Families Dollar threshold used to distinguish between type A and type B program $750,000 Auditee qualified as low-risk auditee? yes X no

31 25 COMMUNITY ACCESS NETWORK NON PROFIT CORPORATION Schedule of Findings and Questioned Costs For the Year Ended June 30, 2016 SECTION II Financial Statement Findings No matters were reported SECTION III Federal Award Findings and Questioned Costs No matters were reported SECTION IV Summary of Prior Year s Findings No prior year findings