AREAWIDE AGING AGENCY, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION. For the Year Ended June 30, 2017

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1 AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION For the Year Ended June 30, 2017

2 TABLE OF CONTENTS Page Independent Auditor s Report 1 Consolidated Statement of Financial Position 3 Consolidated Statement of Activities and Changes in Net Assets 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 Supplemental Information: Consolidated Schedule of Program Expenditures by Natural Classification 14 Consolidated Schedule of Supporting Services Expenses 15 Consolidated Schedule of Program Expenditures by Nature of Service 16 Consolidated Schedule of Expenditures of State Awards 17 Reports Required by Governmental Auditing Standards and the Uniform Guidance 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 18 Independent Auditor s Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance 20 Schedule of Expenditures of Federal Awards 22 Notes to the Schedule of Expenditures of Federal Awards 23 Schedule of Findings and Questioned Costs 25 Summary Schedule of Prior Audit Findings 27

3 INDEPENDENT AUDITOR S REPORT To the Board of Directors of Areawide Aging Agency, Inc. Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Areawide Aging Agency, Inc., (a nonprofit organization) ( Areawide ), which comprise the consolidated statement of financial position as of June 30, 2017, and the related consolidated 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 Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to Areawide 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 Areawide s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Areawide as of June 30, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. 309 N. Bryant Ave. Edmond, OK Fax Member of AICPA and OSCPA

4 Other Matters Other Information The supplemental information, as listed in the table of contents, is also presented for purposes of additional analysis and is not a required part of the financial statements. This 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. Such 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 other supplementary information is fairly stated, in all material respects, in relation to the basic 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 15, 2017 on our consideration of Areawide s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Areawide s internal control over financial reporting and compliance. December 15, 2017

5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION JUNE 30, 2017 ASSETS Current assets: Cash and cash equivalents $ 385,285 Grants and contracts receivable 431,514 Other assets 2,066 Total current assets 818,865 Land 549,000 Property and equipment, net 4,729 Beneficial interest in community foundation 50,293 Related party receivable 859,817 TOTAL ASSETS $ 2,282,704 LIABILITIES AND NET ASSETS Current liabilities: Accounts payable and accrued expenses $ 95,861 Payable to subcontractor agencies 405,624 Deferred revenue 42,751 Total current liabilities 544,236 Note payable 300,000 NET ASSETS Permanently restricted - beneficial interest in community foundation 50,293 Temporarily restricted - special programs 85,293 Unrestricted: Designated for special programs 124,538 Undesignated 1,178,344 Total net assets 1,438,468 TOTAL LIABILITIES AND NET ASSETS $ 2,282,704 The accompanying notes are an integral part of these financial statements. 3

6 CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30, 2017 Temporarily Permanently Unrestricted Restricted Restricted Total REVENUES AND OTHER SUPPORT Federal grants for: Administration (includes direct services) $ 418,598 $ - $ - $ 418,598 Social services 3,106, ,106,112 State grants for: Administration (includes direct services) 226, ,356 Social services 860, ,268 Government grants/reimbursements for special projects 375, ,731 Other grants 54, , ,117 Total grants and fees 5,041, ,834-5,142,182 Program income and in-kind contributions 611, ,662 Other income: Contributions 10,218 1,964-12,182 Non-cash contributions 578, ,716 Interest 68, ,293 Administrative charge 6, ,780 Miscellaneous income Net increase (decrease) in beneficial interest - - 2,413 2, ,074 1,964 2, ,451 Net assets released from restriction 114,202 (114,202) - - TOTAL REVENUES AND SUPPORT 6,431,286 (11,404) 2,413 6,422,295 EXPENSES Program services: Area agency activities 648, ,451 Social services provided by subcontractors 4,929, ,929,474 Total program services 5,577, ,577,925 Management and general: Area agency activities 293, ,231 Housing project activities Total management and general 294, ,124 Total expenses 5,872, ,872,049 Change in net assets 559,237 (11,404) 2, ,246 Net assets at beginning of year 743,645 96,697 47, ,222 Net assets at end of year $ 1,302,882 $ 85,293 $ 50,293 $ 1,438,468 The accompanying notes are an integral part of these financial statements. 4

7 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 550,246 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation 2,845 Net community foundation (gain) loss (2,413) Noncash donation (7,000) Change in operating assets and liabilities (Increase) Decrease in Grants and contracts receivable 52,478 (Increase) Decrease in Related party receivable (550,817) (Increase) Decrease in Other assets (416) Increase (Decrease) in Accounts payable and accrued expenses 22,151 Increase (Decrease) in Payable to subgrantor agencies 4,178 Increase (Decrease) in Deferred revenue (6,543) Total adjustments (485,537) Net cash provided (used) by operating activities 64,709 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 64,709 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 320,576 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 385,285 The accompanying notes are an integral part of these financial statements. 5

8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Areawide Aging Agency, Inc. (Areawide) is a non-profit corporation organized to cooperate with and assist governmental and private agencies in accomplishing the purposes described in the Older Americans Act. To accomplish those purposes, Areawide implements programs under grants primarily from the Oklahoma Department of Human Services Special Unit on Aging within central Oklahoma including Canadian, Cleveland, Logan, and Oklahoma counties. Areawide has two wholly owned subsidiaries Areawide Management Company and Areawide TG Housing Corporation. Areawide Management Company (AMC) was incorporated in 2000 and was created to participate as a general partner in a for profit joint venture for the construction and management of Areawide Elderly Center, L.P., a 59 unit apartment development in Oklahoma City for elderly, low-income individuals. Areawide TG Housing Corporation (TG Housing) was incorporated in 2004 and was created to participate as a managing general partner in a for profit joint venture, Temple Gardens, L.P., for the construction and management of an apartment development in Oklahoma City for elderly, low-income individuals. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Areawide Aging Agency, Inc., Areawide Management Company, and Areawide TG Housing Corporation (all together Areawide ). Areawide Elderly Center, L.P. and Temple Gardens, L.P. are not included in the consolidated statements because those entities do not meet the criteria for consolidation under Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 810 since AMC and TG Housing do not have a controlling financial or managerial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Basis of Accounting Areawide follows the recommendations contained in FASB ASC 958, Financial Statements of Not-For-Profit Organizations, which establishes standards of basic accounting and reporting for not-for-profit organizations. Under this standard, the Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted. Contributions received are reported as unrestricted, temporarily restricted, or permanently restricted depending on the existence or nature of any donor restrictions. Temporarily restricted net assets are those whose use by Areawide has been limited by donors to a specific time period or purpose. Permanently restricted net assets are those that have been restricted by donors to be maintained by Areawide into perpetuity. Contributions Gifts of cash and other assets are reported 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. Areawide reports gifts of land, buildings and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long-lived assets are placed in service. 6

9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) Contributed materials are recorded at market value at the time of donation, and contributed services are recorded at the fair value of the services, provided they meet the following criteria: Create or enhance non-financial assets; or require specialized skills, provided by individuals possessing those skills and would typically be purchased if not provided by donation. Estimates The preparation of financial statements in conformity with U.S. 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 financial statements. Actual results could differ from those estimates. It is at least reasonably possible that the significant estimates used will change within the next year. Property and Equipment Purchased assets are recorded at cost, and donated assets are recorded at market value at the time of donation. Property and equipment with initial values of $300 or more are capitalized and depreciated over their estimated useful lives of three to five years on a straight-line basis. Property and equipment acquired under certain government contracts is considered to be owned by Areawide while used in the program for which it was purchased or in other future authorized programs; however, the United States has a revisionary interest in the property. Its disposition, as well as the ownership of any proceeds, is subject to federal regulations. Income Taxes and Uncertain Tax Positions Areawide qualifies as an organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and is subject to a tax on income from any unrelated business, as defined by Section 509(a)(1) of the Code. AMC and TG Housing are subject to tax under IRS rules; however, these entities are experiencing net operating losses. Therefore, no provision has been made for income taxes in the consolidated financial statements. Areawide has not identified any uncertain tax positions as of June 30, Federal and state income tax statutes dictate that tax returns filed in any of the previous three reporting periods remain open to examination. Currently, Areawide has no open examinations with the Internal Revenue Service or the Oklahoma Tax Commission. Delegated Activities Certain program activities have been subcontracted by Areawide to other agencies within the service area. The responsibility of the operations of the subcontractors remains with Areawide. The subcontractors provide monthly reports of program expenses which are summarized in the accompanying financial statements. Cash and Cash Equivalents For purpose of the statement of cash flows, cash and cash equivalents consist of demand deposits and money market funds. 7

10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont d) Expense Allocation The costs of providing various program activities have been summarized on a functional basis in the Statements of Activities. Directly identifiable expenses are charged to programs and supporting services. Expenses related to more than one function are charged to programs and supporting services on the basis of periodic time and expense evaluations. Management and general expenses include those expenses that are not directly identifiable with any other specific function but provide for the overall support and direction of Areawide. Concentration of Credit Risk Amounts held in financial institutions occasionally are in excess of the Federal Deposit Insurance Corporation limits. Areawide deposits its cash with high quality financial institutions and management believes Areawide is not exposed to significant credit risk on those amounts. At June 30, 2017, Areawide's deposits held by financial institutions do not exceed federally insured limits. NOTE 2 DEFERRED REVENUE - GOVERNMENT CONTRACT ADVANCES Government contract advances represent funds made available to Areawide for which program-related expenses had not yet been incurred at the financial statement date. These funds are held for use in approved programs and, if not used, may be subject to refund to the grantor. NOTE 3 GRANTS AND CONTRACTS RECEIVABLE Grants and contracts receivable represent amounts due from grantors under expense-reimbursement arrangements for which expenses had been incurred at year-end and reimbursements had not yet been received. Due to the nature of the receivables, Areawide considers them to be fully collectible; accordingly, no allowance for doubtful accounts is required. NOTE 4 NET ASSETS Unrestricted Net Assets: The amounts designated by the board of directors for special programs include amounts for hearing aids and eyeglasses of clients in the service area and special needs of the Agency. These designated funds are not externally restricted and may be changed by action of the board of directors. Temporarily Restricted Net Assets: Temporarily restricted net assets include other private grants and contributions for special projects and needs of the elderly. Permanently Restricted Net Assets: Permanently restricted net assets consist of funds contributed by Areawide and held by the Oklahoma City Community Foundation (OCCF). 8

11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 5 BENEFICIAL INTEREST IN OKLAHOMA CITY COMMUNITY FOUNDATION The Oklahoma City Community Foundation (OCCF) has assets whose earnings have been designated by the original donor to benefit specific charitable organizations. These donations have been set up as designated funds by the OCCF in the charitable organization's name. Areawide has such a fund at the OCCF. Areawide follows the provisions in Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) , Transfers of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or Holds Contributions for Others. In accordance with FASB ASC , the portions of the funds contributed by Areawide and held by the OCCF are considered reciprocal transfers, because Areawide is also a beneficiary of the funds. As a result, Areawide has recorded these funds as an investment in the net assets of the OCCF in its June 30, 2017 statements of financial position as a beneficial interest in community foundation. The OCCF has variance power assuring donors that if the charitable purpose of their contribution becomes impractical or impossible, the distributions will be directed to similar purposes in the community. Therefore, the portion of the funds held by the OCCF on behalf of Areawide contributed by unrelated third party donors is included in the net assets of the OCCF and is not reflected in the accompanying financial statements. Annual distributions from income are made to Areawide based on OCCF s spending policy, which is currently five percent of the average market value over the previous twelve quarters of all assets held for the benefit of Areawide. Distributions to Areawide under the spending policy of $5,449 were received during the year ended June 30, 2017 and are included in interest income in the statement of activities. Areawide s activity for the year ended June 30, 2017 is as follows: Reciprocal Third Party Balances Balances Totals Balance at June 30, 2016 $ 47,880 $ 56,324 $ 104,204 Contributions Distributions (2,504) (2,947) (5,451) Gains (losses on investments and third party contributions) 4,917 5,798 10,715 Balance at June 30, 2017 $ 50,293 $ 59,375 $ 109,668 9

12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 6 FAIR VALUE MEASUREMENT Areawide s beneficial interest in community foundation is reported at fair value in the accompanying statement of financial position. FASB ASC establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). Fair value for Areawide s beneficial interest in community foundation is measured on a recurring basis using level 3 measurements. These measurements are based on statements from the foundation reporting the value of Areawide s interest in their net assets. A reconciliation of the activities for these level 3 financial instruments is included in Note 5. NOTE 7 PROPERTY AND EQUIPMENT A summary of property, plant, and equipment is as follows as of June 30: 2017 Furniture, fixtures, and equipment $ 72,152 Less: accumulated depreciation (67,423) Net property, plant, and equipment $ 4,729 Depreciation expense was $2,845 for the year ended June 30, NOTE 8 LEASES Areawide is obligated on a noncancelable lease agreement for office and storage space which is classified as an operating lease for accounting purposes. Lease expense incurred during 2017 was $57,995. Future minimum lease payments of the non-cancelable lease are as follows: Year Ending June 30, 2018 $ 59, ,516 $ 119,771 10

13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 9 CONCENTRATIONS Approximately seventy-two percent of Areawide s total revenues were provided by government grants. NOTE 10 RETIREMENT PLAN Areawide provides a tax-deferred annuity plan for the benefit of all employees effective on the completion of one year of service. The plan provides for Areawide to make contributions to the plan equal to 9% of compensation up to Internal Revenue Code Limits. Contributions to the plan become fully vested upon the completion of three years of service. Areawide s contributions for the year ended June 30, 2017 totaled $45,005. NOTE 11 PROGRAM SERVICES AREA AGENCY ACTIVITIES Expenses for area aging agency activities allocated to program services include amounts directly related to the provision of Ombudsman and Information and Assistance services provided to the elderly by Areawide as well as the allocation of expenses related to subgrantee oversight and certain related overhead costs. Also included in program services directly attributable to Areawide is specific assistance to seniors for utilities, limited medical needs and home safety and access modifications. NOTE 12 RELATED HOUSING PROJECTS AND RELATED PARTY NOTES RECEIVABLE AND PAYABLE Areawide is involved with two related parties through its for-profit subsidiaries, AMC and TG Housing. Areawide has assisted both entities in obtaining financing for their elderly apartment developments and corresponding housing management projects. Temple Gardens Areawide borrowed $300,000 through the Affordable Housing Program ( AHP ) through a Federal Home Loan Bank ( FHLB ). Under the terms of the loan, no interest shall accrue on the principal balance unless the partners in the joint venture default, violate the AHP and/or violate terms of the loan agreement. In the event of a default or violation, interest shall accrue at 10 percent per year. As of June 30, 2017, no default or violation of the agreement has occurred and the entire principal balance of $300,000 is reported in notes payable. Per the agreement with the FHLB member bank, all principal and interest on the loan will be forgiven 15 years after the date of project completion. The project was completed and placed in service in November of 2006, and if no default or violation of the AHP occurs, the note will be forgiven in November of

14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2017 NOTE 12 RELATED HOUSING PROJECTS AND RELATED PARTY NOTES RECEIVABLE AND PAYABLE (Cont d) Temple Gardens (Cont d) As a result of the loan from the FHLB bank, Areawide issued a promissory note to Temple Gardens, L.P. for the amount of the loan of $300,000 which is included on the statement of net assets as a note receivable. Under the terms of the promissory note, Temple Gardens, L.P. is required to pay interest from available net cash flows from the housing project in the amount of one percent per annum. In the event net cash flow is insufficient to allow the regularly scheduled interest payment, the payment will be deferred. If a violation of the agreement occurs or there is a violation of the AHP, the note receivable will begin to accrue interest at 12 percent per year. Per the agreement with Areawide, all principal and accrued interest on the loan will be due and payable in full on April 1, As of June 30, 2017, $300,000 of principal and $9,000 of accrued interest is reported in notes receivable. Areawide Management Company During fiscal year 2017, a note receivable of the managing general partner of Areawide Elderly Center, L.P. (the partnership in which AMC is a general partner) was contributed to Areawide. Under the terms of the donor s agreement with Areawide Elderly Center, terms that were assumed by Areawide, all principal and accrued interest on the loan will be due and payable in full in August As of June 30, 2017, $550,817 of principal is reported in notes receivable. NOTE 13 CONTINGENT LIABILITIES Areawide, through its investment in TG Housing, is liable under certain contractual guarantees related to development and operations of Temple Gardens. These guarantees are provisions to reimburse the limited partner any amounts related to a tax credit shortfall, should it occur. No estimate is available for the potential amount of future payments that could be required under these guarantees, and Areawide believes any such amounts will not have a material effect on Areawide s financial position or future operations. NOTE 14 SUBSEQUENT EVENTS Subsequent events have been evaluated through December 15, 2017, which is the date the financial statements were available to be issued. When the note receivable in Note 12 came due in August 2017, the balloon payment was not received by Areawide. A new agreement was put in place to keep the current payment schedule for principal and interest on the note until the property is sold. Areawide has continued to receive monthly payments on the note and will continue to do so until the property is sold, at which time the principal balance will be paid to Areawide at closing as part of the settlement. 12

15 SUPPLEMENTAL INFORMATION

16 CONSOLIDATED SCHEDULE OF PROGRAM EXPENDITURES BY NATURAL CLASSIFICATION FOR THE YEAR ENDED JUNE 30, 2017 Nutrition Personnel Travel Food Costs Consultants Equipment Rent & Utilities Other Total Aging Services of Canadian Co. $ 207,473 $ 7,127 $ 57,067 $ 4,368 $ - $ 15,000 $ 55,153 $ 346,188 Aging Services, Inc. - Cleveland Co. 508,867 31, ,602 8,112-19, ,240 1,008,270 Logan County Aging Services 234,615 6, ,103 6,675 5,490 10, , ,129 Oklahoma County Senior Nutrition Program 992,958 13, ,766 26, , ,759 2,073,684 COTPA/Metro-Transit 41, , ,763 Legal Aid Services of Oklahoma 48, ,395 10,947 64,256 Mobile Meals - Oklahoma County, Inc. 62, ,538 11,859 24, ,661 Sunbeam Family Services - Caregiver Fundamentals 112,258 15, ,328 19, ,394 University of Central Oklahoma - Center for Active Living and Learning 29, ,193-21,976 53,465 Oklahoma City Housing Authority - Senior Nutrition 92,009 2, , , ,581 Community Enhanced Nutrition Assistance ,344-6,088-9, ,083 Areawide Aging Agency, Inc. 476,748 16, , , ,451 Total program expenditures $ 2,807,514 $ 93,872 $ 1,193,050 $ 45,363 $ 15,309 $ 184,000 $ 1,238,817 $ 5,577,925 14

17 CONSOLIDATED SCHEDULE OF SUPPORTING SERVICES EXPENSES FOR THE YEAR ENDED JUNE 30, 2017 Salaries $ 141,411 Employee benefits 26,435 Payroll taxes 11,608 Professional services 22,830 Equipment rental and maintenance 10,072 Office expense Supplies 5,062 Printing 8,544 Postage 1,067 Telecommunications 5,499 Subscriptions 297 Occupancy 46,330 Travel 497 Depreciation 2,845 Insurance 6,512 Miscellaneous 4,222 Total area agency activities 293,231 Housing project activities 893 Total management and general expenses 294,124 Total supporting services expenses $ 294,124 15

18 CONSOLIDATED SCHEDULE OF PROGRAM EXPENDITURES BY NATURE OF SERVICE FOR THE YEAR ENDED JUNE 30, 2017 Nutrition Caregiver Support Transportation OK County Other Supportive Services* Health Promotion Advocacy & Abuse Prevention Access Info & Assistance Total Aging Services of Canadian Co. $ 260,294 $ 4,129 $ - $ 81,766 $ - $ - $ - $ 346,189 Aging Services, Inc.- Cleveland Co. 592, , , ,008,271 Logan County Aging Services 379,243 8, , ,128 Oklahoma County Senior Nutrition Program 1,837,723 61, , ,073,684 COTPA/Embark , ,763 Legal Aid Services of Oklahoma , ,256 Mobile Meals of Oklahoma County , ,662 Sunbeam Family Services - Caregiver Fundamentals - 151, ,395 University of Central Oklahoma - Center for Active Living and Learning , ,465 Oklahoma City Housing Authority 258, ,579 Community Expansion Nutrition Assistance 116, ,082 Areawide Aging Agency, Inc. 85,870 13,694 7,517 18,823 3, , , ,451 Total program expenditures $ 3,530,546 $ 503,296 $ 276,280 $ 691,791 $ 56,660 $ 241,878 $ 277,474 $ 5,577,925 * Includes outreach, homemaker services, legal assistance & education in all four counties and transportation in counties other than Oklahoma County. Also includes coordination of volunteers for Mobile Meals in Oklahoma County. All funded with Older Americans Act grants. 16

19 SCHEDULE OF EXPENDITURES OF STATE AWARDS FOR THE YEAR ENDED JUNE 30, 2017 State Grantor/Pass-Through Grantor/ Program Title Project Contract Number State Expenditures Passed through to subgrantees State Department of Human Services Special Unit on Aging Supportive services $ 221,990 $ 130,840 Nutrition , ,820 Health promotion ,827 7,827 Caregiver services , ,781 Abuse prevention ,662 - State Department of Commerce Community Expansion of Nutrition Assistance CENA , ,278 TOTAL EXPENDITURES OF STATE AWARDS $ 1,202,707 $ 970,546 17

20 INDEPENDENT AUDITOR S 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 Board of Directors of Areawide Aging Agency, Inc. 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 consolidated financial statements of Areawide Aging Agency, Inc. ( Areawide ) (a nonprofit organization), which comprise the statement of financial position as of June 30, 2017, 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 15, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered Areawide s internal control over financial reporting (internal control) 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 Areawide s internal control. Accordingly, we do not express an opinion on the effectiveness of Areawide 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. 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether Areawide 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. 309 N. Bryant Ave. Edmond, OK Fax Member of AICPA and OSCPA

21 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Areawide s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Areawide s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. December 15, 2017

22 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors of Areawide Aging Agency, Inc. Report on Compliance for Each Major Federal Program We have audited Areawide Aging Agency, Inc. s ( Areawide ) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Areawide s major federal programs for the year ended June 30, Areawide s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of Areawide s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Areawide 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 Areawide s compliance. Opinion on Each Major Federal Program In our opinion, Areawide complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, Report on Internal Control over Compliance Management of Areawide 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 Areawide s internal control over compliance with the types of requirements that could 309 N. Bryant Ave. Edmond, OK Fax Member of AICPA and OSCPA

23 have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Areawide s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of Areawide as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Areawide s basic financial statements. We issued our report thereon dated December 15, 2017, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic 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 basic 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 basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. December 15, 2017

24 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2017 Federal Pass-Through Passed CFDA Entity Through to Federal Federal Grantor/Pass-Through Grantor/Program Title Number Identifying Number Subrecipients Expenditures U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Pass-through State Department of Human Services - Special Unit on Aging Aging Cluster Special Programs for the Aging - Title III Part B, Supportive Services and Senior Centers $ 741,429 $ 955,206 Special Programs for the Aging - Title III, Part C, Nutrition Services ,620,735 1,776,616 Nutrition Services Incentive Program , ,126 Total Aging Cluster 2,697,290 3,066,948 Special Programs for the Aging - Title VII, Chapter 3, Programs for Prevention of Elder Abuse, Neglect and Exploitation ,089 Special Programs for the Aging - Title III, Part D, Disease Prevention and Health Promotion Services ,356 44,356 National Family Caregiver Support, Title III, Part E , ,317 Money Follows the Person Rebalancing Demonstration ,070 TOTAL U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 3,106,112 3,525,780 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 3,106,112 $ 3,525,780 See notes to schedule of expenditures of federal awards. 22

25 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2017 NOTE A BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards ( SEFA ) includes the federal award activity of Areawide Aging Agency, Inc. ( Areawide ) under programs of the federal government for the year ended June 30, The information in this SEFA is presented in accordance with the 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). Because the SEFA presents only a selected portion of the operations of Areawide, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Areawide. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Areawide has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 23

26 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS--Continued Year Ended June 30, 2017 NOTE C SUBRECIPIENTS Of the federal expenditures presented in this schedule, Areawide provided federal awards to subrecipients as follows: CFDA Amount Program Number Sub-recipient Provided Aging Cluster / Aging Services of Canadian County $ 231,613 Aging Services, Inc. of Cleveland County 468,899 Aging Services of Logan County 345,544 Oklahoma County Senior Nutrition Program 1,300,627 COTPA Embark 217,994 Legal Aid Services of Oklahoma 54,703 Mobile Meals 77,910 Total Aging Cluster 2,697,290 Special Programs for the Aging UCO Center for Active Living and Learning 44,356 National Family Caregiver Support Aging Services of Canadian County 3,095 Aging Services, Inc. of Cleveland County 197,033 Aging Services of Logan County 6,210 Oklahoma County Senior Nutrition Program 46,047 Sunbeam Family Services 112,081 Total National Family Caregiver Support 364,466 Total awards provided to subrecipients $ 3,106,112 24

27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2017 Section I--Summary of Auditor s Results Financial Statements Type of auditor s report issued on whether the financial statements were in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies)? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major federal programs: Material weakness(es) identified? yes X no Significant deficiency(ies)? yes X none reported Type of auditor s report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a)? yes X no Identification of major federal programs: Program CFDA Number Aging Cluster * National Family Caregiver Support, Title III, Part E *Refer to the Schedule of Expenditures of Federal Awards for CFDA numbers related to these programs. Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? X yes no 25

28 SCHEDULE OF FINDINGS AND QUESTIONED COSTS--Continued Year Ended June 30, 2017 Section II--Findings Required to be Reported in Accordance with Government Auditing Standards: None to report for the June 30, 2017 period. Section III--Findings Required to be Reported in Accordance with the Uniform Guidance: None to report for the June 30, 2017 period. 26

29 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Year Ended June 30, 2017 There were no audit findings for the year ended June 30, 2016 that require preparation of a summary of prior audit findings. Corrective Action Plan: No corrective action plan is required. 27