CENTRAL CALIFORNIA CHILD DEVELOPMENT SERVICES, INC. (A Nonprofit Corporation) FINANCIAL REPORT. DECEMBER 31, 2017 and 2016

Transcription

1 CENTRAL CALIFORNIA CHILD DEVELOPMENT SERVICES, INC. (A Nonprofit Corporation) FINANCIAL REPORT DECEMBER 31, 2017 and 2016

2 CONTENTS INDEPENDENT AUDITORS' REPORT 1-2 FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities 4-5 Statements of Cash Flows 6 Notes to Financial Statements 7-11 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 UNIFORM GUIDANCE SUPPLEMENTARY INFORMATION Page Schedules of Unrestricted Program Activities Schedule of Expenditures of Federal and State Awards SCHEDULE OF FINDINGS AND QUESTIONED COSTS

3 BOWMAN CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT Board of Directors Central California Child Development Services, Inc. (A Nonprofit Organization) Ceres, California Report on the Financial Statements We have audited the accompanying financial statements of Central California Child Development Services, Inc. (A Nonprofit Organization) which comprise the statements of financial position as of December 31, 2017 and 2016, and the related statements of activities and cash flows 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. Auditors' 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. Those standards require that we plan and perform the audits 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 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 expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such op1mon. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of significant 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. Established Bowman & Company, LLP Trinity Parkway, Suite 310 Stockton, CA Telephone: Facsimile:

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Central California Child Development Services, Inc. as of December 31, 2017 and 2016, and changes in its net assets and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Supplementary Information Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The schedules of unrestricted program activities on pages is presented for purposes of additional analysis and is not a required part of the financial statements. The accompanying schedule of expenditures of federal and state awards on page 18, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits 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 April 30, 2018 on our consideration of Central California Child Development Services, Inc.'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 the Organization's internal control over financial reporting and compliance. Stockton, California April 30,

5 (A Nonprofit Organization) STATEMENTS OF FINANCIAL POSITION Years Ended December 31, and 2016 ASSETS CURRENT ASSETS Cash and cash equivalents $ 859,352 $ 992,635 Restricted cash 147, ,935 Grant funds receivable 236,140 98,944 Prepaid expenses 51,803 44,012 Total current assets 1,294,350 1,268,526 PROPERTY, FURNITURE AND EQUIPMENT, net 861, ,951 $ 2,155,435 $ 2,102,477 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and accrued expenses $ 127,143 $ 93,085 Accrued vacation and payroll related expenses 166, ,836 Deferred revenue 493, ,313 Total current liabilities 786, ,234 NET ASSETS Unrestricted - operating 507, ,292 Unrestricted - property, furniture and equipment 861, ,951 Total net assets 1,368,498 1,146,243 $ 2,155,435 $ 2,102,477 See Notes to Financial Statements

6 (A Nonprofit Organization) STATEMENT OF ACTIVITIES Year Ended December 31, 2017 Operating Property, Furniture and Equipment Total REVENUES, SUPPORT AND PROPERTY, FURNITURE & EQUIPMENT ACQUISITIONS Federal and state grants income $ 13,555,972 $ In-kind revenue 2,335,243 Parent fees income 85,977 Other income 67,538 Property, furniture, and equipment acquisitions 150,548 Total revenues, support and property, furniture and equipment acquisitions 16,044, ,548 EXPENSES Program expenses Migrant head start program 8,759,689 Migrant early head start program 520,893 Regional head start program 704,703 Migrant child care part year program 2,166,732 Migrant child care full year program 622,593 General child care program 962,464 California state preschool program 1,422,086 Child care food program 688,870 Other 1,579 Depreciation expense 123,414 Total expenses 15,849, ,414 CHANGES IN UNRESTRICTED NET ASSETS 195,121 27,134 $ 13,555,972 2,335,243 85,977 67, ,548 16,195,278 8,759, , ,703 2,166, , ,464 1,422, ,870 1, ,414 15,973, ,255 Unrestricted net assets, beginning of year 312, ,951 1,146,243 Unrestricted net assets, end of year $ 507,413 $ 861,085 $ 1,368,498 See Notes to Financial Statements. -4-

7 - I CENTRAL CALIFORNIA CHILD DEVELOPMENT SERVICES, INC. (A Nonprofit Organization) STATEMENT OF ACTIVITIES Year Ended December 31, 2016 Operating Property, Furniture and Equipment Total REVENUES, SUPPORT AND PROPERTY, FURNITURE & EQUIPMENT ACQIDSITIONS Federal and state grants income $ 12,995,300 $ In-kind revenue 1,836,136 Parent fees income 137,910 Other income 9,254 Property, furniture, and equipment acquisitions 393,527 Total revenues, support and property, furniture and equipment acquisitions 14,978, ,527 EXPENSES Program expenses Migrant head start program 7,483,487 Migrant early head start program 520,675 Regional head start program 797,098 Migrant child care part year program 2,091,794 Migrant child care full year program 677,735 General child care program 1,040,457 California state preschool program 1,541,131 Child care food program 650,469 Other 4,903 Property, furniture and equipment dispositions, net 80,615 Depreciation expense 107,841 Total expenses 14,807, ,456 $ 12,995,300 1,836, ,910 9, ,527 15,372,127 7,483, , ,098 2,091, ,735 1,040,457 1,541, ,469 4,903 80, ,841 14,996,205 CHANGES IN UNRESTRICTED NET ASSETS 170, , ,922 Unrestricted net assets, beginning of year 141, , ,321 Unrestricted net assets, end of year $ 312,292 $ 833,951 $ 1,146,243 See Notes to Financial Statements. -5-

8 (A Nonprofit Organization) STATEMENTS OF CASH FLOWS Years Ended December 31, 2017 and CASH FLOWS FROM OPERATING ACTIVITIES Change in unrestricted net assets $ 222,255 Adjustments to reconcile change in unrestricted net assets to net cash provided by operating activities: Depreciation 123,414 Loss on disposition of equipment Changes in assets and liabilities: (Increase) decrease in: Restricted cash (14,120) Grant funds receivable (137,196) Prepaid expenses (7,791) (Decrease) increase in: Accounts payable and accrued expenses 34,058 Accrued vacation and payroll related expenses 17,409 Deferred revenue (220,764) Net cash provided by operating activities 17, $ 375, ,841 80,615 (14,985) (29,849) 8,623 (50,820) 11,542 (218,472) 270,417 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, furniture and equipment (150,548) Net cash used in investing activities (150,548) Decrease in cash and cash equivalents (133,283) Cash and cash equivalents: Beginning of year 992,635 End of year $ 859,352 (393,527) (393,527) (123,110) 1,115,745 $ 992,635 See Notes to Financial Statements

9 (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Operations and Significant Accounting Policies Central California Child Development Services, Inc. (the Organization) was incorporated on April 24, The Organization provides Migrant Head Start, State Preschool, State Based Migrant, and General Child Care Services to migrant and low income families in the Stanislaus and Merced counties. The Organization also administers the Child Care Food Program which provides free to low cost meals to children enrolled in the Organization's other programs. Summary of significant accounting policies is as follows: Basis of Accounting: The financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America and accounting practices prescribed or permitted by the Department of Health and Human Services, Department of Agriculture, and the California Department of Education. Cash and Cash Equivalents: For purposes of reporting the statements of cash flows, the Organization includes all cash accounts which are not subject to withdrawal restrictions or penalties, and all certificates of deposits as cash on the accompanying statements of financial position. Grant Funds Receivable: Management considers receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been provided. If amounts become uncollectible, they are charged to operations in the period in which that detennination is made. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. Property, Furniture and Equipment: Property, furniture and equipment is recorded at cost. Depreciation of property, furniture and equipment is provided on a straight-line basis over the following estimated useful lives: Furniture and equipment Leasehold improvements Vehicles Years 3-15 years 15 years 5 years The Organization capitalizes all acquisition of property and equipment in excess of $5,000. Expenditures for maintenance and repairs are expensed as incurred

10 (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Operations and Significant Accounting Policies (Cont.) Property, Furniture and Equipment: (Cont.) A significant amount of the Organization's property, furniture and equipment were acquired with federal funds and remain in the Organization's possession. Accordingly, the grantor has a reversionary interest in such assets which are accounted for in net assets, unrestricted - property, furniture and equipment. Accrued Vacation: Accrued unpaid employee vacation benefits are recognized as liabilities of the Organization. Accrued vacation at December 31, 2017 and 2016 was $162, 190 and $14 7,055, respectively. Deferred Revenue: Deferred revenue consists of grant revenue received but not yet earned under the terms of the contract. Net Assets: Unrestricted- Operating: These net assets are presently available for use by the Organization at the discretion of the Board of Directors. If the Board specifies a purpose where none has been stated by the original donor, such assets are classified as Board designated unrestricted net assets. Unrestricted - Property, Furniture and Equipment: These net assets represent equipment acquired with federal funds and remain in the Organization's possession. Income Taxes: The Organization is a not-for-profit entity that is exempt from income tax under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than a private foundation. Generally, the Organization's Forms 990, Return of Organization Exempt from Income Tax, are subject to examination by the IRS for three years after they were filed. Expense Allocation: The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited

11 (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS Note 1. Summary of Operations and Significant Accounting Policies (Cont.) Fair Value of Financial Instruments: The carrying amount of financial instruments, including cash, restricted cash, grant funds receivable, prepaid expenses, accounts payable, accrued expenses, accrued vacation, payroll related expenses and deferred revenue approximate their value due to the short-term maturities of these instruments. Estimates: 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Reclassifications: Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements. Subsequent Events: Management has evaluated subsequent events through April 30, 2018, the date the financial statements were available to be issued. Note 2. Property, Furniture and Equipment Property, furniture and equipment for the years ended December 31 consisted of: Leasehold improvements Furniture and equipment Vehicles Less accumulated depreciation $ 813, , ,508 1,606,819 (745,734) $ 729, , ,959 1,480,895 (646,944) $ 861,085 $ 833,951 ====== - 9 -

12 (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS Note3. Leases The Organization is obligated under several operating leases for buildings and equipment. Aggregate rental expense under leases for the years ended December 31, 2017 and 2016 were $66,788 and $119,268 in cash and $309,805 and $174,818 in in-kind donations, respectively. Future minimum lease payments under the non-cancelable leases are as follows for the years ending December 3 1: $ 56,292 32,837 $ 89,129 Note 4. In-kind Donations The Organization is required by the granting agency to generate a portion of its revenues from non-federal sources. A major portion is received through in-kind donations of services, materials and rents. The in-kind donations are recorded as both revenue and expense, in accordance with accounting principles generally accepted in the United States of America and are valued as follows: Donated Rent - based on a standard fair market value rate per square foot calculated by the Organization, and agreed to by the lessor. Donated Services - valued at fair market wage for the particular service. Materials - valued at fair market value or estimated value per donor. The total in-kind revenues and expenditures for the years ended December 31 were as follows: Materials, supplies, and other Services Rent $ 1,021,867 1,003, ,805 $ 891, , ,818 $ 2,335,243 $ 1,836,

13 (A Nonprofit Corporation) NOTES TO FINANCIAL STATEMENTS Note 5. Employee Benefit Plan The Organization has a 401(k) Retirement Plan for those employees who meet the eligibility requirements set forth in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Employees may contribute up to the IRS maximum of their salary. The amount of the Organization's contributions to the plan is at the discretion of the Board of Directors. For the years ended December 31, 2017 and 2016, the Organization contributed $171, 720 and $156,976 to the plan, respectively. Note 6. Contingencies The Organization's grants and contract activities are subject to inspection and audit by the appropriate funding agencies. The purpose is to determine whether program funds were used in accordance with their respective guidelines and regulations. The potential exists for disallowance of previously funded program costs. The ultimate liability, if any, which may result from these governmental audits cannot be reasonably estimated and, accordingly, the Organization has no provision for the possible disallowance of program costs. Note 7. Concentrations Substantially all of the Organization's support was provided by Federal and State grants from the Stanislaus County Office of Education. Accordingly, substantially all of the grants receivable is due from the Stanislaus County Office of Education. The Organization had uninsured cash and cash equivalents as of December 31, 2017 and 2016 of $786,3 78 and $901,866, respectively

14 BOWMAN CERTIFIED PUBLIC ACCOUNTANTS 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 Directors Central California Child Development Services, Inc. (A Nonprofit Organization) Ceres, California 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 Central California Child Development Services, Inc. (the Organization) which comprise the statement of financial position as of December 31, 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 April 30, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Organization'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 Organization's internal control. Accordingly, we do not express an opinion of the effectiveness of 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 a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of Organization'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. Established Bowman & Company, LLP Trinity Parkway, Suite 310 Stockton, CA Telephone: Facsimile:

15 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization'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 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 Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance wi~h Government Auditing Standards in considering the organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Stockton, California April 30,

16 BOWMAN CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE Board of Directors Central California Child Development Services, Inc. (A Nonprofit Organization) Ceres, California Report on Compliance for Each Major Federal Program We have audited Central California Child Development Services, Inc.'s compliance of the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Organization's major federal programs for the year ended December 31, The Organization'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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the Organization'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 the Organization'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 Organization's compliance. Established Bowman & Company, LLP Trinity Parkway, Suite 310 Stockton, CA Telephone: 209, Facsimile: 209,

17 Opinion on Each Major Federal Program In our opinion, Central California Child Development Services, Inc. complied, in all material respects, with the types of compliances requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, Report on Internal Control Over Compliance Management of Central California Child Development Services, Inc. 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 Organization's internal control over compliance with the types of requirements that could have a direct and material effect on a 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 the 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 the Organization'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, as defined above. 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. Stockton, California April 30,

18 SUPPLEMENTARY INFORMATION

19 (A Nonprofit Organization) SCHEDULES OF UNRESTRICTED PROGRAM ACTIVITIES Year Ended December 31, 2017 (Comparative totals for 2016) PROGRAMS MIGRANT MIGRANT CHILD MIGRANT CHILD GENERAL MIGRANT HEAD EARLY HEAD REGIONAL HEAD CARE PY CARE FY CHILDCARE START PROGRAM START PROGRAM START PROGRAM PROGRAM PROGRAM PROGRAM REVENUES: FEDERAL GRANT INCOME $ 6,748,122 $ 531,108 $ 418,714 $ $ $ 959,640 STATE GRANT INCOME 2,181, ,502 IN-KIND REVENUE 2,045, ,261 PARENT FEES 26,121 8,496 16,714 OTHER INCOME 67, ,861, , ,983 2,207, , ,357 EXPENSES: SALARIES 4,744, , ,895 1,450, , ,923 OTHER SERVICES 1,064,722 11, ,396 37,292 15,750 20,283 HEALTH INSURANCE 497,521 26,497 43, ,599 52,650 79,982 CONTRACTS 640, ,265 RENTAL LEASES/MAINTENANCE 478,881 14,976 62,551 78,078 29,134 32,532 PAYROLL TAXES 361,795 12,585 25, ,294 32,373 54,742 FOOD 73,663 20,779 30,565 28,909 45,185 UTILITIES/TELEPHONE 179,059 6,899 10,521 81,197 13,972 16,269 WORKERS COMPENSATION 146,491 5,074 10,846 53,405 13,149 23,330 EQUIPMENT 174,679 11,639 3,568 22,514 7,179 12,571 OTHER SUPPLIES 107,474 7,672 3,980 24,369 5,172 8,747 CLASS INSTRUCTIONAL 106,239 28,427 (1,124) 38,162 3,805 9,630 RETIREMENT 82,030 4,943 4,255 31,932 8,558 13,624 INSURANCE 35,383 2,690 3,195 11,340 4,937 6,870 TRAVEL 41,568 6, , ,261 MEMBERSHIPS/DUES/LICENSES 13, , ,515 CONSULTANTS 12,642 8,759, , ,703 2,166, ,464 INCREASE IN UNRESTRICTED OPERATING NET ASSETS $ 101,933 $ 10,217 $ 3,280 $ 40,622 $ $ 13,893 See Notes to Financial Statements

20 (A Nonprofit Organization) SCHEDULES OF UNRESTRICTED PROGRAM ACTIVITIES (Cont.) Year Ended December 31, 2017 (Comparative totals for 2016) PROGRAMS CALIFORNIA STATE PRESCHOOL CHILDCARE PROGRAM FOOD PROGRAM OTHER TOTAL TOTAL REVENUES: FEDERAL GRANT INCOME $ $ 688,928 $ $ 9,346,512 $ 8,682,248 STATE GRANT INCOME 1,405,725 4,209,460 4,313,052 IN-KIND REVENUE 2,335,243 1,836,136 PARENT FEES 34,646 85, ,910 OTHER INCOME 5 67,538 9,254 1,440, ,928 16,044,730 14,978,600 EXPENSES: SALARIES 915, ,109 9,016,699 8,462,245 OTHER SERVICES 24,189 1,299,807 1,176,160 HEAL TH INSURANCE 133,071 60,957 1,061, ,244 CONTRACTS 883, ,442 RENT AL LEASES/MAINTENANCE 45, , ,006 PAYROLL TAXES 77,177 32, , ,177 FOOD 77, , , ,646 UTILITIESffELEPHONE 27, , ,186 WORKERS COMPENSATION 34,331 14, , ,874 EQUIPMENT 19, , ,935 OTHER SUPPLIES 24,183 46,785 1, , ,186 CLASS INSTRUCTIONAL 8, , ,175 RETIREMENT 18,824 7, , ,976 INSURANCE 11,135 75,550 78,563 TRAVEL 2,283 4,015 60,036 42,456 MEMBERSHIPS/DUES/LICENSES 2,390 22,932 17,892 CONSULTANTS 12,642 26,586 1,422, ,870 1,579 15,849,609 14,807,749 INCREASE IN UNRESTRICTED OPERATING NET ASSETS $ 18,290 $ 58 $ (1,579) $ 195,121 $ 170,851 See Notes to Financial Statements

21 (A Nonprofit Corporation) SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS Year Ended December 31, 2017 FEDERAL Program Name Federal Catalog Number Contract Number Federal or State Expenditures Department of Health and Human Services: Pass-through from Stanislaus County Department of Education: Head Start: Migrant Head Start Migrant Early Head Start Regional Head Start Child Care and Development Block Grant: General Child Care & Development Program General Child Care & Development Program Department of Agriculture: Pass-through from California Department of Education: Child and Adult Care Food Program CM CM CH-9169 CCTR-6300 CCTR-7301 $ 6,748, , , , , ,928 Total Federal Awards 9,346,512 STATE California Department of Education: Pass-through from Stanislaus County Department of Education: Migrant Child Care Part Year Program Migrant Child Care Part Year Program Migrant Child Care Part Year Program Migrant Child Care Part Year Program Migrant Child Care Full Year Program Migrant Child Care Full Year Program Migrant Child Care Full Year Program Migrant Child Care Full Year Program State Preschool Program State Preschool Program CMIG-6017 CMSS-6017 CMIG-7017 CMSS-7017 CMIG-6018 CMSS-6018 CMIG-7018 CMSS-7018 CSPP-6602 CSPP , , , , ,537 45, ,796 49, , ,493 Total State Awards 4,209,460 Total Federal and State Awards $ 13,555,972 ===~===== Basis of Presentation: The schedule of federal and state awards includes the federal and state grant activity of Central California Child Development Services, Inc. and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because this schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization

22 (A Nonprofit Corporation) SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, Section I - Summary of Auditor's Results Financial Statements Type of auditor's report issued: Internal control over financial report: Material weakness( es) identified? Significant deficiency identified that is not considered to be material weakness? Noncompliance material to financial statements noted? unmodified yes Xno yes _x none repo11ed yes _xno Federal Awards Internal control over major programs: Material weakness( es) identified? Significant deficiency identified that is not considered to be material weakness? Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance? yes _x no yes _x none reported unmodified yes _x no Identification of major programs: CFDA Number(s) Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? Name of Federal Program or Cluster Migrant Head Start Migrant Early Head Start Regional Head Start $ 750,000 _X_yes _no Section II - Financial Statement Findings None Section III - Federal Award Findings and Questioned Costs None Section IV -Prior Year Federal Award Findings and Questioned Costs None