andnotbedetected.also,projectionofanyevaluationoftheinternalcontroltofuture

Transcription

1 -E_~ERNST&YOUNGI.LPOFICIAL,42o.~,st,~,s(~ 701PuydrasStret~t'~. ~Phone:504Sil420( ~ O(eroxr~eoe$~arY copies'~rort,'~h~s L~DOUT louisiana ~"~4/t;/e/~'(d/"tor 95OEC copyandplace 2~&~'/If:12. ReportofIndependentAuditorsontheInternalControl RACK,inIT~LE/ Structure-BasedonAuditofFinancialStatementsPerformed inacordancewithgovernmentauditingstandards TheAudilandFinanceComite VoluntersofAmericaofGreaterNewOrleans,lnc WehaveauditedthecombiningfinancialstatementsofVoluntersofAmericaofGreater NewOrleans,Inc.andComunityLivingCenters,Inc.(colectivelyreferedtoasthe Organization)asofmidfortheyearendedJune30,196,andhaveisuedoureport thereondatedseptember25,196. Weconductcdourauditinacordancewithgeneralyaceptedauditingstandardsand (;overnmentauditingstandards,isuedbythecomptrolergeneraloftheunitedstates. Thosestandardsrequirethatweplanandperformtheauditobtainreasonableasurance aboutwhetherthecombiningfinancialstatementsarefreofmaterialmistatement. ThemanagcmenloftheOrganizationisrespnsibleforestablishingandmaintaininginternalcontrol.Infulfilingthisresponsibility,estimatesandjudgmentsbymanagementare requiredtoasesthexpectedbenefitsandrelatedcostsofinternalcontrolpoliciesand procedures.theobjectivesofinternalcontrolaretoprovidemanagementwithreasonable, butnotabsolute,asurancethatasetsaresafeguardedagainstlosfromunauthorizeduse ordisposition,andthatransactionsarexecutedinacordancewithmanagemenrs authorizationandrecordedproperlytopermithepreparationofcombiningfinancial sla{cmentsinacordancewi~hgeneralyacepledacountingprinciples.becauseof irqhcrentlimitationsinanyinternalcontrol,erorsoriregularitiesmayneverthelesocur andnotbedetected.also,projectionofanyevaluationoftheinternalcontroltofuture periodsisul~jecltotheriskthatproceduresmaybecomeinadequatebecauseofchanges inconditionsorihatlhefectivenesofthedesignandoperationofpoliciesand proceduresmaydeteriorate. InphmningandperformingourauditofthecombiningfinancialstatementsoftheOrganizationfortheyearendedJune30,196,weobtainedanunderstandingofinternalcontrol. Withrespectointernalcontrol,weobtainedanunderstandingofthedesignofrelevant policiesandproceduresandwhethertheyhavebenplacedinoperation,andweasesed controlriskinordertodetermineourauditingproceduresforthepurposeofexpresing ouropiniononthecombiningfinancialstatementsandnotoprovideanopiniononinternalcontrol.acordingly,wedonotexpresuchanopinion.

2 Ourconsiderationofinternalcontrolwouldnotnecesarilydisclosealmatersininternal controlthatmighlbematerialweaknesesunderstandardsestablishedbytheamerican InstituteofCertifiedPublicAcountants.Amaterialweaknesisaconditioninwhichthe designoroperalionofoneormoreoftheinternalcontrolcomponentsdoesnotreduceto arelativelylowleveltheriskthaterorsoriregularitiesinamountsthatwouldbemalerial detectedwithinatimelyperiodbyemployesinthenormalcourseofperformingtheir asignedfunctions.wenotednomatersinvolvinginternalcontrolanditsoperationthat inrelationtothecombiningfinancialstatementsbeingauditedmayocurandnolbe weconsidertobematerialweaknesesasdefinedabove. However,wenotedothermatersinvolvinginternalcontrolanditsoperationthatwehave reportedtotheauditandfinancecomiteoftheorganizationinaseparateleterdated September25,196. Thisreportisintendedfortheinformationoftheauditandfinancecomilte,theboard ofdirectors,management,andthecognizantandotherfederalagencies.however,this ~eporlisamaterofpublicrecordanditsdistributionisnotlimited. Septemher25,196 ~ q"~ LP ~lnderprovisionsofstatelaw,th~ reportisapublicdocument.a CopyofthereporthasbensubmittedtotheatJdited,oreviewed, entityandothelapropriatepublic oficials.thereportisavailablefor publicinspectionathebaton RougeoficeoftheLegislativeAuditorand,whereapropriate,athe oficeoftheparishclerkofcourt. ~teleasedate

3 =-_~IERNST&YOUNGl.LP OFICIAL TILECOPY DONOTS~NOoUT (Xeroxneoe~r~' copiesf:omthie, copyandplaoe ~ACKinFILE") TheAuditandFinanceComite VoluntersofAmericaofGreaterNewOrlean ~420C)l)eShelSquare ~Phon(': [)[ 7[1PoydrasStr(!~.\ NewOrlRECEI,lED 96DEC24A,~]I:I2 jnoerprovisions.ofstatelaw,ihls reportisapublicdocument.a copyofthereporthasbensubmittedtotheatdited,oreviewed, entryandotheraproptia~.epublic oficials.thereportisavailablefor publicinspectionathebaton RougeoficeoftheLegislativeAuditorand,whereapropriate,athe s,incoficeoftheparishclerkofcourt qo.leasedate InplaningandperformingourauditofthecombiningfinancialstatementsofVolunters ofamericaofgreaterneworleans,inc.andcomunitylivingcenters,inc. (colectivelyreferedtoastheorganization)fortheyearendedjune30,196,weconsidereditsinlernalcontrolstructuretodetermineourauditingproceduresforthepurposeof expresingouropiniononthecombiningfinancialstatementsandnotoprovideasurance (mlbeinternalcontrolstructure.ourconsiderationoftheinternalcontrolstructurewould notnecesarilydisclosealmatersintheinternalcontrolstructurethatmightbematerial weaknesesunderstandardsestablishedbytheamericaninstituteofcertifiedpublic Acountants.Amaterialweaknesisaconditioninwhichthedesignoroperationofone ormoreofthespecificinternalcontrolstructurelementsdoesnotreducetoarelatively l,~wleveltheriskthaierorsoriregularitiesinamountsthatwouldbematerialinrelation lothecombiningfinancialstatementsbeingauditedmayocurandnotbedetectedwilhin atimelyperiodbyemployesinthenormalcourseofperformingtheirasignedfunctions. However,wenotednomailersinvolvingtheinternalcontrolstructureanditsoperation lhaiweconsideriobematerialweaknesesasdefinedabove. Wehavethefolowingcomentsonothermaters Anumberofyear-endadjustingentrieswererecordedaftertimgeneral ledgerwasinitialyclosedandtheauditwasinprogres.themajorityof thesentries(i.e.,dueto/fromacounts,balanceswithaffdiatedentities,and payableandexpenseacruals)wereatributabletotheorganizationot havingcontrolproceduresinplacetoensurethathegeneraledgeracounts wereproperlyreconciled,analyzedandadjustedonatimelybasisthroughout theyear.thisresultedinadelayedyear-endclosingandadelayinisuingthe Organization'sfinancialstatements.

4 VoluntersofAmericaofGreaterNewOrleans,hlc andcomunitylivingcenters,inc. CombiningStatementofActivities YearendedJune30,196 I{evelUesfrnlnoperations UnrestrictedRestrictedRestrictedVOAGNO "rempm,arilypermanentlytotal Condned Publicsuportreceivedirectly: Total Contributions Specialevents,netofdirectbelefil costsof$4(i,416 $ 75,045$ Publicsuportreceivedindirectly: Totalpublicsuport UnitedWay $75,045$ $75, gevcliucaudgranl~;from ()filerevenue: governlnentalageucies Plngranlservicefes Rentalincome Totalotherevenue Salesolinalerialsandsen,ices,net Netasetsreleasedfromrestrictions ofdirectbenefitcostof$38,569 Totalrevenueslromoperations Oi)eralingexpenses l,29,13 1,29,13 89,7051,318,818 Ploglamservices: ShelteredRclnulera[ive CnununilyLivmgServices SuportedLivingServices Employment 2,367,519 1,393,920 ElderlySelvics Conlnunily('orctionCel[el 1,325,629-1,393,920-1,393,920 JuvenileServices 518,375-2,367,519-1,325, ,375 9,3072,46,826 1,325, ChildrenServices Tolalpro~2falns,arvices MaternityServices Casemalagernelt 1,028, , , , , , ,721-1,028, , , ,847 Suporlselvices: Mauagelnentaudgeleral Totalsuportservices "]'laiuingald13vahlaliol A/hniuistnltivcles Colnlunitysuporl Tolaloperalingexpenses l)cficitlioulopt:rations N<moperatlngains Interest+aidividendincome GailSOlsalesofasets GailSO1investments ()~lclilcoinc Tl/la]IlOlOpCIaBlg,~lilS Changeinetasets SeacompanybTgnotes $ ~$ -$10,495$(9,602)$90,893

5 TheOrganizationcontinuestoexperiencedelaysincolectingitsrevenues, particularlyfromvariousgovernmentalagencies.forexample,receivablesof $1.5milionasofJune30,196wereagedasfolows: Curent1-30days31o60days61-90daysOver90days PastDue 52% (%oftotalreceivablebalanceinagingcategory) Wetmderstandthathisprocesisometimesdificult;however,werecommendthatheOrganizationexplorealternativesfromthecurentprocesthat mayaceleratecolectionsinorderloreducetheorganization'sinterest expense. 25% 8% 5% 10% icy.noncomplianceincludedbusinespurposedocumentationotalways Basedonacursoryreviewofoficers'expensereimbursements,wel]Oted beingincluded,thepeopleatendingwerenotalwaysidentified,andsuport- severalinstancesofexpensefilingsnotincompliancewithorganizationpolingreceiptswerenotatachedinalcases.werecomendthatheorganizalionper't?~rmaninternalreviewofitsexpensereimbursementprogramand monitoritsaprovalprocestoensurethatorganizationpolicyisfolowed. TheOrganizationisintheprocesofreviewingandupdatingitspropertyand equipmentsubledgers,inchldingphysicalyidentifyingalitems.weconcur withtheirefortandrecomenditscompletionbyjune30,197. Thisreportisintendedsolelyfurtheinformalionanduseoftheauditandfinancecorn mitec,boardofdirectors,management,andotherswithintheorganization. September25,196 ~ LV

6 -2_~IERNST&YOUNGI_LP OFICIAL ~420OneShelSquare DONOlSI~IDoUT FILEcOPY 701l'o;,dras~tr~(jt., ~Phon(,:5( ( co~iesitem1his copyandplact TheAuditandFinanceComite P,ACKh~fILE% VoluntersofAmericaofGreaterNewOrleans,Inc Wehaveaudited,inacordancewithgeneralyaceptedauditingstandards,t~ecombining, financialstatementsofvoluntersofamericaofgreaterneworleans,inc.(voagno) andcomunitylivingcenters,inc.(clc)(colectivelyreferedtoastheorganization) h)rtheyearendedjune30,196,andhaveisuedoureporthereondatedseptember25, 196. TheAuditingStandardsBoardoftheAmericanInstituteofCertifiedPublicAcountants AuditComites.Thistatementrequirestheindependentauditortocomunicatetothe (AICPA)hasisueditsStatementonAuditingStandardsNo.61,ComunicationWith auditaudfinancecomitecertaininformationregardingthescopeandresultsofthe audfltoasisthecomiteinoverseingthefinancialreportingandisclosureproces torwhichnlanagemeniisresponsible.thisletersumarizesthereportingrequirementsof thistatementforour196audit.asimilarleterwasisuedlastyear. Audilors'ResponsibilityUnderGeneralyAceptedAuditingStandards Ouraudit,conductedinacordancewithgeneralyaceptedauditingstandards,wasdesignedtoprovidereasonable,ratherthanabsolute,asurancethatheOrganization's financialstatemenlsarefreofmaterialmistatement.thesefinancialstatementsarcthe respunsibilityofmanagementanditisouresponsibilitytoexpresanopiniononthese financialstatementsbasedonourauditresults. SignificantAcountingPolicies TheacountingprinciplesfolowedbytheOrganizationandthemethodsofaplyingthese principlesconform,inalmaterialrespects,withgeneralyaceptedacountingprinciples generalyusedbyvoluntaryhealthandwelfareorganizations.thecombiningfinancial statcmenksincludeasumaryofthesesignificantacountingpolicies. ChangesinAcountingPolicies InJtme193,theFinancialAcountingStandardsBoardisuedStatementofFinancial AcountingStandardsNo.17(SFAS17),FinancialStatementsofNot-for-Profit Orgmdzations,whichestablishedstandardsforeportinginformationingeneralpurpose exlerna]financialstatementsisuedbynot-for-profitorganizations.theorganization

7 adoptedtheprovisionsofthislandardinits196financialstatements,asrequiredby SFAS17,andhasrestateditsnetase!balancesasofJune30,195toconformwiththe presentationrequirementsofsfas17. InJune193,theFinancialAcountingStandardsBoardisuedStatementofFinancial AcountingStandardsNo.16,AcountingforContributionsReceivedandContributionsMade(SFAS16),whichestablishedstandardsofacountingforcontributionsand apliestoalentitiesthatreceiveormakecontributions.sfas16requirescontributions receivedandunconditionalpromisestogivetoberecognizedasrevenueintheperiod receivedaltheirfairvalues.conditionalproml~estogivearetoberecognizedwhenthey becomeunconditional;thatis,whentheconditionsaresubstantialymet.theorganization adoptedtheprovisionsofthistandardinits196financialstatements,asrequiredby SFAS16;however,theadoptionhadnoimpactontheOrganization'sfinancial statements. AuditAdjustments Theloluwingadjustmentswereidentifiedinmanagement'sfinalgeneraledgersduring Ih~COl'SOoftheauditofthecombiningfinancialstatementsandwerenotrecordedbythe Organization. VOAGNO Ajournalentryof$28,175wasnotrecordedtoreserveforuncolectibleacounts receivable.setheacountingestimatesandmanagementjudgmentsdiscusion below. Ajournalentryof$26,14wasnotrecordedtoreversetherecognitionofmiscellaneousincomeforexcesdepreciationrecordedinprioryears.Webelievethe excesdepreciationshouldbeconsideredachangeinacountingestimateandcorrectedprospectivelythroughadeductionofuturedepreciationexpense. I.Ajournalentryof$1,54wasnotrecordedtoproperlyamortizeprepaidinsurance AcontingFstimatesandManagementJudgments expense. acountsof$70,492.i1ismanagement'sopinionthataljune30,196amountstiloutstandingasofseptember25,196arefilycolectibleorapropriatelyreservedbythe Acotmtsreceivableof$1,54,521atJune30,196isnetofanalowancefordoubtful alowance.itisuncertainwhetherthefutureactualcolectionswilexcedorfalbelow IhenelrecordedreceivableatJune30,196.

8 ~aleasedate Therewere$231,0ofacountsreceivabletestedbyusandhadnotbencolectedasof September196.Ilconectionwithourtestșweproposedtoincreasethealowancefor doubtfulacountsby$28,175asofjune30,196(sevoganoentry#1above). DificultiesEncounteredinPerformingtheAudit ledgerwasinitialyclosedandtheauditwasinprogreṣtheorganizationrecorded20 ConsiderableimprovementintheOrganization'syear-endclosingprocedureshasben noted;however,anumberofyear-endadjustingentrieswererecordedafterthegeneral journalentries(14forvoagnoand6forelc)proposedbyusduringthecourseof audililaditiontopostingseveraloftheirownadjustmentswhiletheauditwasinprogres.thisituationresultedinadelayedyear-endclosingandadelayinisuingthe Organization'sfinancialstatements, OtherMaters StalementonAnditingStandardsNọ61alsorequh'escomunicationstothecomite inthefolowingareas: ~Disagremenk~wid~managemenṭ ~Otherinformationindocumentscontainingauditedfi~anciaJstatementṣ *Consultationswithotheracountantṣ Majorisuesdiscusedwithmanagementpriortoretentionasauditors, Duringouraudil,wedidnotencounteranychcumstancesandweareunawareofan), ilemsinanyoflheseareaswhichre.quirediscusionwiththeauditandfinancecomitẹ Thisrepor!isintendedsolelyfortheinformationanduseoftheauditandfinance conlmiite. September25,196

9 ?s~j LEGI:;LAtlVEAUDITOR RECEIVED I:I.EcoPY o~lc~j- 96DEC2[~AtlI:12 (y.ero~neoe~ry oples~romthis copyandplace BAC~,if,rILE) CombiningFinancialStatements GreaterNewOrleans,Inc.and VoluntersofAmericaof ComnmnityLivingCenters,Inc ReportofIndependentAuditors YearendedJune30,196with

10 VoluntersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,lne. CombiningFinancialStalements YearendedJune30,196 Contents ReportofIndependentAuditors AuditedCombiningFinancialStatements CombiningBalanceShet CnmbmingStatementofActivities CombiningStatementofNetAsets CombinedStatementofFunctionalExpenses CombiningStatementofCashFlows NotestoCombiningFinancialStatements

11 EmvsrYOUNGte ~420OneShe]lSquare 701PoydrasStret NewOrleans louisiana ReportofIndependentAuditors TheBoardsofDirectors VohmtersofAmericaofGreaterNewOrleans,Inc andcomnilylivingcenters,inc. WehaveauditedtheacompanyingcombiningbalanceshetofVoluntersofAmericaof GreaterNewOrleans,inc.andComunityLivingCenters,Inc.asofJune30,196,and therelatedcombiningstatementofactivities,combiningstatementsofnetasets,combinedstatementofimctionalexpenses,andcombiningstatementofcashflowsforthe yearthenended.thesefinancialstatementsaretheresponsibilityoftheorganization's management.ouresponsibilityistoexpresanopiniononthesefinancialstatements basedonouraudit. Weconductedourauditinacordancewithgeneralyaceptedauditingstandards.Those standardsrequirethatweplanandperformtheauditobtainreasonableasuranceabout whetherthefinancialstatementsarefleofmaterialmistatement.anauditincludes examining,onateslbasis,evidencesuportingtheamountsandisclosuresinthefinancialstatements.anauditalsoincludesasesingtheacountingprinciplesusedandsignificanlestimalesmadebymanagement,aswelasevaluatingtheoveralfinancialstatement presentation.webelievethatourauditprovidesareasonablebasisforouropinion. Inouropinion,thefinancialstatementsreferedtoabovepresentfairly,inalmalerial respects,theindividualandcombinedfinancialpositionofvoluntersofamericaof GreaterNewOrleans,Inc.andComunityLivingCenters,Inc.atJune30,196,andthe individualandcombinedresultsoftheiroperalionsandchangesintheirnetasetsandtheir cashlowsfortheyearthenendedinconformitywithgeneralyaceptedacounting principles. AsdiscusedinNote2tothecombiningfinancialstatements,theOrganizationchangedits acountingpoliciesrelatedtofinancialstatementdisplay. September25,196

12 Liabililiesandnetasets VOAGNO CLC Combined Tolal Curentliabilities: Bankoverdraft Acountspayable Acruedexpenses Othercurentliabilities Curentportionofdebt: Notepayable Mortgagesandloanspayable Tolalcunentliabilities 1,178,481 27,761,206,247 Otherliabilities: Tola]lotherliabilities Mortgagesandloanspayable,lescurentportion Other 409, ,29 836, Tolaliabilities Nelasets: 1,594, , ,(1652,049,968 Temporarilyrestricted Unrestricted Totalnetasets Permanentlyrestricted 3,48,076 3,470,382(136,182)3,34, (136,182)3,31, Totaliabilitiesandnetasets Seacoml.,anyilgloles $5,065,285$318,83$5,384,168

13 =-~ERNST&YOUNGI.LP0r~Ic~p'L.~(,(,o,s~,sq FILEGOPY~.-'~-7olro~,a~,s~e~ NewOrleans Iouisiana ~Phone: kidf~ CTJ(h cod~olp,~t. co~y~o~/t:~ U-~3>.rI ComplianceWithLawsandRegulations ReportofIndependentAuditorson TimAuditandFinanceComite VohmtersofAmericaofGreaterNewOrleans,lnc WehaveauditedthecombiningfinancialstatementsofVoluntersofAmericaofGreater NewOrleans,Inc.andComunityLivingCenters,Inc.(colectivelyreferedtoasthe Organization)asofandfortheyearendedJune30,196,andhaveisuedoureport Ihereol~datedSeplember25,196. Weconductedourauditinacordancewithgeneralyaceptedauditingstandardsand GovernmentAudithTgStandards,isuedbytheComptrolerGeneraloftheUnitedStates. Thosestandardsrequirethatweplanandperformtheauditobtainreasonableasurance aboutwhetherthefinancialstatementsarefreofmaterialmistatement. Compliancewithlaws,regulations,contracts,andgrantsaplicabletotheOrganizationis theresponsibilityoftheorganization'smanagement.aspartofobtainingreasonable asuranceaboutwhetherthefinancialstatementsarefreofmaterialmistatemcnt,we performedtestsoftheorganization'scompliancewithcertainprovisionsoflaws,regulations,contracts,andgrants.however,theobjectiveofourauditofthefinancialstatements wasnotoprovideanopiniononoveralcompliancewithsuchprovisions.acordingly, wedo1o1expresuchanopinion. Theresultsofonrtestsdisclosednoinstancesofnoncompliancethatarerequiredtobe reportedhereinundergovernmentauditingstandards. Thisreportisintendedfortheinformationoftheauditandfinancecomite,theboard c,fdirectors,management,andthecognizantandotherfederalagencies.however,this reporlisamaterofpublicrecordanditsdistributionisnotlimited. September25,196 D.~leaseDate

14 VoluntersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,inc. NotestoCombiningFinancialStatements(continued) 2.SignilicanlAcountingPolicies(continued) IncomeTaxes VOAGNOisincludedinthegroupincometaxexemptiongrantedtoVOA.Acordingly, theorganizationisexemptfromfederalincometaxesundersection501(a)oftheinternal RevenueCodeasareligiousorganizationdescribedinSection501(c)(3).Thefederaltax exemptionalsoextendstostateincometaxes. RestrictiveCovenantsandAgrements TheFederalHousingAdministration(FHA)andtheU.S.DepartmentofHousingand UrbanDevelopmentHUD)exercisecontrolovertheapartmentcomplexesoperatedby CLCthroughprovisionsofaregulatoryagrement.Theprovisionsofthisagrement restrictclc,withoutpriorwritenaprovalfromhud,fromencumbering,acquiring, alteringordisposingofland,improvementsandbuildings;usingtheland,improvements andbuildingsforanypurposeotherthantheuseoriginalyintended;engaginginanyother businesoractivity;andisbursingfundslotpaymentofdividends,compensationtoficersordirectors,oranypurposeotherthanreasonableoperatingexpenses.theagrement alsostipulatesthatfija/hudshalcontroltherentalrates,rateofreturnoninvestment andmethodofoperation. RestrictedFesandGrants TheOrganizationrecivesfesandgrantsfromlocal,stateandfederalgovernmental agencies.theprogramslmnsoredbytheseagenciesaresubjectodiscretkmaryauditsby 1hegrantingagencies.Therehavebenoauditsbygrantingagenciesinfiscalyear196 andmanagementdoesnotanticipateanyadjustmentasaresultofi~tureaudits.any adjustmentfromanauditperformedbyagrantingagencywouldflowthroughthecomhiningfinancialstatementsduringtheyearoftheauditasachangeinacountingestimate. Eventhoughgrantsarerestricted,grantagrementsandcontractsalowtheOrganization Iotransfersurplusestothecurentunrestrictedfundathendofeachfiscalyear. 12

15 VoluntersofAmericaofGreaterNewOrleans,Inc andconmnitylivingcenters,inc. CombiningStatementofCashFlows YearendedJune30,196 Operatingactivities Changeinetasets VOAGNO CLC Combined Total Adjusln~entstoreconcilechangeinetasetstonet cashprovidedbyoperatingactivities: Depreciationandamortization Gainsoninvestments Gainsonsalesofasets Changesinoperatingasetsandliabilities: Acountsandnotesreceivable Prepaidexpenses Otherasets Acountspayable Netcashprovidedbyoperatingactivities Acruedexpenses Olhercurentandnoncurentliabilities Investingactivities Procedsfromsaleofinvestments Purchaseofinvestments Procedsfromsaleofpropertyandequipment Purchasesofpropertyandequipment Increaseinasetsheldforsale AmountsduefromCLC(duetoVOAGNO) Financingactivities Nclcashprovidedby(usedin)investingactivities Increaseinbankoverdraft Netcashusedinfinancingactivities Netiacreaseinotepayable Paymenlsonmortgagesandloanspayable Netincrease(decrease)incashandcashequivalenks Cashandcashequivalentsatbeginingofyear Cashandcashequivalenksatendofyear Unencumberedcashandcashequivalentsatendof Encumberedcashandcashequivalentsatendof year year $41,53$34,724$76,257 $41,53$45,706$87,239-10,982 10,982 Seacompanyingnotes

16 ManagementTraining SuportServices MalerlfityCase and andcomunity Programand Tota Seacompanyingnotes 1,40, ,409 $

17 VoluntersofAmericaofGreaterNewOrleans,lnc andcormnitylivingcenters,inc. CombiningBalanceShet June30,196 Asets CHNen(asets" VOAGNO CLC Combined Total Cashandcashexluivalents Acountsreceivable,(lesalowancefordoubtful Investments,alfairvalue acountsof$70,492) Prepaidexpenses Olhercurentasets: An)oul)lsduefromCLC(duetoVOAGNO) Asetsheldforsale Totalctlen[ascts Propertyandequipment: 2,58,654 (53,390)2,535,264 Land,buildingsandimprovements Furnishingsandequipment , ,185 Totalproperlyandequipmenl Lesacumulatedepreciationandamortization 1,962,40 1, ,479, ,69 1,962,40 1, Olherasets: Encutuberedasets lnveslmenl~,atfairvalue Other: 1,412, , ,794-1,819,87 405,827 Notesreceivable AmountsduefromCLC(duetoVOAGNO) Other 26,606 35,763 13,683 (35,763) () Tola]olherasets Totalasets

18 VoluntersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,inc. NotestoCombiningFinancialStatements June30,196 1.Organization VoluntersofAmericaofGreaterNewOrleans,Inc.(VOAGNO)isanot-for-profit ChristianhumanservicesorganizationwhichprovidesocialserviceswithintheGreater NewOrleansandSoutheastLouisianareas.VOAGNOoperatesunderacharterisued byvoluntersofamerica,inc.(voa),anationalreligiousnot-for-profitcorporation,and isincorporatedinthestaleoflouisiana. VOAGNOoperatesandmaintainsprogramstometawidevarietyofnedsforindividualsinVOAGNO'sareas.Theprogramsprovidenumerousocialservicesincludingthe folowing: ~Adoptionandmaternityservices ~Casemanagementservicesforindividualswithmentalilnes ~Cashmanagementservicesforadultswhoarehomeleswithamentalilines ~Comunitycorectionalcenterforfederalprisoners ~Familypreservation/in-homeinterventionservicesforabusedandneglected ~Grouphomesforadolescentswhoaremotionalydisturbed,behavioraly elderlycitizens ~Men'srehabilitationcenter ~Residentialservices disordered,orwhoareadjudicated ~Thriftstores ~Mealsonwhels ~Repairsonwhels ~Respitecrisisinterventionforadolescents ~Subsidizedhousingforfamilies ~Suportedemploymentforindividualswithdevelopmentaldisabilitiesormental ~TherapeuticFosterCare ilnes ConmoityLivingCenters,Inc.(CLC)ksanot-for-profitcorporationorganizedunderthe lawsofthestateoflouisianandsponsoredbyvoagno.nocapitalstockisauthorized,isued,oroutstanding.clcwasformedtoacquireaninterestinrealpropertyandto constructandoperatethereontwosix-unitapartmentcomplexesundersection202ofthe NationalHousingActinordertoprovidehousingforpersonsdevelopmentalydisabled. CLCoperatesFHAProjectNo.(164-EH4136-WHC-L8-NP(seRestrictiveCovenants andagrementsbelow).

19 VoluntersofAmericaofGreaterNewOrleans,Inc. andcomunitylivingcenters,inc. NotesIoCombiningFinancialStatements(continued) 2.SignificantAcountingPolicies(continued) UseofEstimates Thepreparationofinancialstatementsinconformitywithgeneralyaceptedacounting principlesrequiresmanagementomakestimatesandasumptionsthatafecthe amountsreportedinthefinancialstatementsandacompanyingnotes.actualresultscould diferfromthosestimates. 3.EncumberedAsets AtJune30,196,anaountsincludedinencumberedasetswereasfolows: VOAGNOCLC Combined Total Cashandcashequivalents Investments,atfairvalue 2,306 -$10,982$10,982 Propertyandequipment: 2,136 24,42 Land,buildingsandimprovements2,686,17525,3503,21,527 Fumishin,~sandequipment 201,70-201,70 Totalpropertyandequipment Lesacumulatedepreciationand amortization 2,87,87525,3503,413,27 1,498,10130,6741,628,74 $1,412,083$407,794$1,819,87 1,389,7394,6761,784,453

20 VoluntersofAmericaofGreaterNewOrleans,lnc andcomunitylivingcenters,lnc. NolestoCombiningFinancialStatements(continued) 10.Contingencies TheOrganizationisadefendantinvariouslawsuits.However,intheopinionofmanagemenhtheamountofpotentialos,ifany,wilnotmaterialyimpacthesecombining financialstatements. 18

21 VohmlersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,inc. NotesIoCombiningFinancialStatements(continued) Throughouthenotestothecombiningfinancialstatements,VOAGNOandCLCwilbe 1.Organization(continued) colectivelyreferedloastheorganization.thefinancialstatementsof"qoagnoand CLChavebencombinedastheyareundercomonmanagement.Alsignificantinlerorganizationbalance~sandtransactionsarelinfinatedinthecombinedstatements. 2.SignificantAcountingPolicies InJne193,theFinancialAcountingStandardsBoardisuedStatementofFinancial externalfinancialstatementsisuedbynot-for-profitorganizations,theorganization AcountingStandardsNo.17(SFAS17),FinancialStatementsofNot-for-Profit Organizations,whichestablishedstandardsforeportinginformationingeneralpurpose adoptedtheprovisionsofthistandardinits196financialstatementsandhasrestatedits netasetbalancesasofjune30,195toconformwiththepresentationrequirementsof SFAS17. inaditiontosfas17,theorganizationfolowstheacountingandfinancialreporting guidelinesetforthintheauditsofvoluntaryhealthandwelfareorganizations.significanlacountingpoliciesaresumarizedbelow. BasisofAcounting "FhcOrganizationpreparesitsfinancialstatementsontheacrualbasisofacounting Revenuesarerecognizedwhenearnedandexpensesarerecognizedwhenincured. CashEquivalents TheOrganizationconsidersalhighlyliquidinvestmentswithamaturityofthremonths orleswhenpurchasedtobecashequivalents,unlesheldforeinvestmentaspartofthe investmentportfolio,pledgedtosecureloanagrementsorotherwisencumbered.the caryingamountaproximatesfauvaluebecauseoftheshortmaturilyofthose ins~.~umen'ts. Investments Investmentsconsistprimarilyofstocks,bondsandmutualfunds.Theyarerecordedatfair valuebasedonquotedmarketpricesforthoseorsimilarinvestments. 1(1

22 VolunlersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,lnc. NotestoCombiningFinancialStatements(continued) 2.SignificantAcountingPolicies(continued) EncumberedAsets Encumberedasetsrepresenthetotalofalasetsencumberedbylegalagrementsorare otherwiseunavailableforthegeneraluseoftheorganization.thiscategorygeneraly includesasetsuchasclient/custodialfunds,escrow/reservefunds,temporarilyandpermanenflyrestrictedasets,andsecuritieswhicharepledgedandheldbythelenderascollaleralforfinancing. NetAsets' TheOrganizationclasifiesnetasetsintothrecategories:unrestricted,temporarily restrictedandpermanentlyrestricted.alnetasetsareconsideredtobeavailablefor unrestricteduseunlespecificalyrestrictedbythedonororbylaw.temporarily restrictednelasetsincludecontributionswithtemporary,donor-imposedtimeorpurpose restrictions.temporarilyrestrictednetaselsbecomeunrestrictedandarereportedinthe y;talemeutofactivitiesas/)elasetsreleasedfromrestrictionwhenthetimerestrictions expireorthecontributionsareusedfurtheirestrictedpurpose.permanentlyrestrictednet aselsincludecontributionswithdonor-imposedrestrictionsrequiringresourcestobe maintainedinperpetuily,butpermitinguseofalorpartoftheinvestmentincomearned,:mtheconlributions. TheOrganization'sunencumberedinvestmentsaretheresultofnumerouscontributions andonationsreceivedovermanyears.theorganizationisnotawareofanyagrements :~uportingthenatureandextentofanyrestrictionsthatmaybeplacedonthesemonies. Acordingly,lheOrganizationdesignatesthesemoniesaspartofunrestrictednetasets andconsidersalprincipalavailableforitsgeneraloperations. AIlocationofFunctionalExpenses Programandsuportservicesexpensesarespecificalyidentifiedwithoralocatedtothe Olganization'svariousfunctions.Expensesrequiringalocationincludesalariesandrent andareproratedbasedontimespentoractualusage.

23 VoluntersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,inc. CombiningStatementofNetAsets YearendedJune30,196 Balalecalbeginingofyear UnrestrictedRestrictedPernmnentlyTotal Temporaril) RestrictedVOAGNO Coml)ined Pilotpc:liodadjustJnen( (Note2) Balanceatbeginingofyear (Note9) $3,456,480$ -$2,306$3,478,786$(126,580)$3,352,206 ChangeJr nelasets Ba]anest[cn0ofyea asrestated Seacompanyinglotes

24 VoluntersofAmericaofGreaterNewOrleans,lnc andcomnmnitylivingcenters,inc. NotestoCombiningFinancialStatements(conlinued) 4.lnvestmenls AtJune30,196,thecostandfairvalueofinvestmentswereasfolows Unencumbered: Cost Market Comonstocks Bonds Mutualfunds Encumbered: 5.Mortgages,LoansandNotePayable Certificatesofdeposit Mortgages,loansandnotepayableatJune30,196consistedofthefolowing VOAGNO: Mortgagespayabletobanks,primeandprimeplus.5%maturing LoanspayableIobank,1.5%andprimeplus.5%,maturingfrom fiom197to19,interestandprincipalpaidinmonthly instalments $47,126 Advancesundera$50,0lineofcreditbearinginterestathe bank'sprimerateandexpiringindecember to19,interestandprincipalpaidinmonthlyinstalments 154,982 3,626 $409, , ,719 MortgagepayabletoHUDrelatingtotwosix-unitapartment complexesoperatedbyclc.theloanbearsinterestat9.25% andispaidmonthly.clchasreceivedpermisionfromhudto deferprincipalpaymentonthismortgageuntilclchasrepaidits notepayablelovoagno.(senote7.)

25 VoluntersofAmericaofGreaterNewOrleans,lnc andcomunitylivingcenters,inc. NotestoCombiningFinancialStatements(continued) 2.SigniticantAcountingPolicies(continued) Contributions Contributionsaregeneralyrecordedonlyuponreceipt,unlesanunconditionalprnmiseto givehasbenreceivedandconfirmed.unconditionalpromisestogivethatarexpectedto becolectedinfuture),earsarerecordedathepresentvalueoftheamountsexpectedto becolected.conditionalpromisestogivearenotincludedasuportuntilsuchtimeas theconditionsaresubstantialymet.alcontributionsareconsideredtobeavailablefor ContributedServices nreslricleduseunlespecificalyrestrictedbythedonor. TheOrganizationrecognizescontributionrevenueforcertainservicesreceivedathefair valueofthoseservicesprovidedthoseservicescreateorenhancenonfmancialasetsor requirespecializedskilswhichareprovidedbyindividualsposesingthoseskilsand wouldlypicalynedtobepurchasedifnotprovidedbydonatioṇ DonatedMerchandise VOAGNOoperatesalvagestoreswheredonatedmerchandiseisresoldtothepublic. Thismerchandiseisnotasignedavalueasthereisnobjectivebasisfordeterminingthe [airvalueoftheseitems. PropertyatdEquipment Land,buildingsandequipmentpurchasedbytileOrganizationarerecordedatcost.Donationsofpropertyandequipmentarerecordedatheirfairvalueathedateofgift. Depreciationandamortizationiscomputedusingthestraight-linemethodbaseduponthe folowingestimatedusefulives: Transportationvehicles Furnitureandequipment Buildingsandimprovements 10-40years 5-10years 3-5years

26 VoluntersofAmericaofGreaterNewOrleans,Inc andcomunitylivingcenters,inc. NotestoCombiningFinancialStatements(continued) 5.Mortgages,LoansandNotePayable(continued) Mortgages,loansandnotepayablearecolateralizedbysubstantialyalpropertyand equipmentownedbytheorganization.inadition,clchasasigned,pledgedand morlgagedtohudalofitsrightstotheincome(aproximately$89,(1(1(iin196)and anyreimbursablecostswhichitmayreceiveorbentitledtoreceivefromtheoperationof itsapartmentcomplexes. Thescheduledprincipalmaturitiesofmortgagesandloanspayableare:$193,093in197 $139,560in198;$175,61in19;and$93,794in20. Interestexpenserelatedtomortgages,loansandnotepayablewas$84,463fortheyear endedjune30,196andisincludedinocupancyexpense.theprimerateatjue3(i, 196relatingtothemortgages,loansandnotepayableabovewas9%. 6.Leases VOAGNOhaseveraloperatingleasesfortherentalofoficespacewhicharenoneancl- ;ableoverthenextyear.rentexpenseincuredndertheseandotherleaseswasaproximately$430,(1(10foriheyearendedjune30,196.thefutureminimumrentalpayments requiredonthesenoncancelableoperatingleasesis$53,767infiscalyear EmployeBenefitPlans TheOrganizationofersaSection403(b)plantoaleligiblenonministers.Nonministers areligibletoparticipateaftercompleting12monthsofservicẹunderthetermsofthe plan,theorganizationcontributes3%ofyearlyemployecompensationandmatchesan aditional50%ofemployecontributionsuptoatotalmaximumcontributionof3.25%of yearlyemployecompensation.theorganizationcontributedaproximately$96,10to IheplanfortheyearendedJune3(I, RelatedPartyTransactions VOAprovidesadministrativeservicestoVOAGNOforafe.Admhfistrativefesforthe fiscalyearendedjune30,196totaled$276,409.includedinacountspayablewere amountsduetovoaof$93,2(12forunpaidadministrativefesatjune30,196.

27 VoluntersofAmericaofGreaterNewOrleans,lnc andcomunitylivingcenters,inc. NotestoCombiningFinancialStatements(continued) 8.RelatedPartyTransactions(continued) VOAGNOpaysthetenants'portionofthemonthlyCLCreinasdeterminedbyHUDin aditiontoprovidingthetenantsofclcotherhumancareservices.voagnopaid $17,624toCLCwhichrepresentsitsportionoftenants'rentfortheyearendedJune30. riesandfringebenefilsfortwovoagnoemployesthatmanagedtheclcapartment complexesfortheyearendedjune30, CLCpaid$8,493toVOAGNOwhichrepresentsreimbursementof25%ofthesala- AmountsduefromCLCincludethefolowingpayabletoVOAGNOwhichisdueon demandandbearsnointerest: Workingcapitaladvance$38,968 Closingcosts $78,968 40,0 AmountsduefromCLCalsoincludeanotepayabletoVOAGNOof$46,834asof June30,196representingmoniesborowedfromVOAGNOtomakerepairstothetwo six-unitaparunentcomplexesoperatedbyclc.thenotebearsnointerestinacordance withhudrequirements.clcischeduledtomakepaymentsof$5,109peryearthrough 20O4. VOAGNOhasenteredintoauagrementwithHUDtomanagethetwoapartmentcomplexesol"CLC.Undertheagrement,VOAGNOearnsamanagementfequalto5%of thegroscolectkmsofclc.fortheyearendedjune30,196,voagnoearned$4,704 underthisagrement.priortojuly1,193,voahousingcorporationmanagedthetwo apartmentcomplexesofclcand,asofjune30,196,$26,456wasincludedinacounts payableformanagementfesduetovoahousingcorporation. 9.PriorPeriodAdjustment FortheyearendedJune30,195,VOAGNOincorectlycalculatedtheadministrativefe duetovoawhichresultedinanunderstatementofthepreviouslyreportedeficiencyof publicsuportandrevenueunderexpensesof$108,89.thefectofcorectingthisprior perioderorwastoincreasevoagno'sliabilitiesandecreaseitsnetasetsasof June3(1,195by$1(18,89.