CENLA COMMUNITY ACTION COMMITTEE, INC. AUDIT REPORT MARCH 31,2007

Transcription

1 CENLA COMMUNITY ACTION COMMITTEE, INC. AUDIT REPORT MARCH 31,2007 Under provsons of state law, ths report s a publc document. Acopy of the report has been submtted to the entty and other approprate publc offcals. The report s avalable for publc nspecton at the Baton Rouge offce of the Legslatve Audtor and, where approprate, at the offce of the parsh clerk of court / I Release Date /Q/3 V/07 Terre L. Jackson Certfed Publc Accountants

2 CENLA COMMUNITY ACTION COMMITTEE, INC. TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT ON EXAMINATION OF THE FINANCIAL STATEMENTS 12 STATEMENTS OF FINANCIAL POSITION 3 STATEMENTS OF ACTIVITIES 4 STATEMENTS OF CASH FLOWS 5 STATEMENTS OF FUNCTIONAL EXPENSES 6 NOTES TO THE FINANCIAL STATEMENTS 712 PAGE SUPPLEMENTAL INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 13 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 14 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1516 REPORT ON COMPLIANCE WITH REQUIRMENTS APPLICABLE TO EACH MAJOR 1718 PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH CIRCULAR A133 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 19 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 2021 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR LOUISIANA LEGISLATIVE AUDITOR 22 COMBINING STATEMENTS OF FINANCIAL POSITION 23 COMBINING STATEMENTS OF ACTIVITIES 24

3 Terre L. Jackson Certfed Publc Accountants P.O. Box Houston, Texas (713) Member: Amercan Insttute of Certfed Publc Accountants Texas Socety of Certfed Publc Accountants Houston Chapter, Texas Socety of CPAs Socety of Lousana CPAs INDEPENDENT AUDITORS' REPORT To the Board of Drectors Cenla Communty Acton Commttee, Inc. Alexandra, Lousana We have audted the accompanyng statements of fnancal poston of Cenla Communty Acton Commttee, Inc. (Cenla) as of March 31, 2007 and 2006, and the related statements of actvtes, functonal expenses, and cash flows for the years then ended. These fnancal statements are the responsblty of Cenla Communty Acton Commttee, Inc.'s management. Our responsblty s to express an opnon on these fnancal statements based on our audt. We conducted our audt n accordance wth audtng standards generally accepted n the Unted States of Amerca and the standards applcable to fnancal audts contaned n Government Audtng Standards, ssued by the Comptroller General of the Unted States of Amerca. Those standards requre that we plan and perform the audt to obtan reasonable assurance about whether the fnancal statements are free of materal msstatement. An audt ncludes examnng, on a test bass, evdence supportng the amounts and dsclosures n the fnancal statements. An audt also ncludes assessng the accountng prncples used and the sgnfcant estmates made by management, as well as evaluatng the overall fnancal statement presentaton. We beleve that our audt provdes a reasonable bass for our opnon. In our opnon, the fnancal statements referred to above present farly, n all materal respects, the fnancal poston of Cenla Communty Acton Commttee, Inc. as of March 31, 2007 and 2006, and the changes n ts net assets and ts cash flows for the years then ended n conformty wth accountng prncples generally accepted n the Unted States of Amerca. In accordance wth Government Audtng Standards, we have also ssued our report dated September 21, 2007 on our consderaton of Cenla Communty Acton Commttee, Inc.'s nternal control over fnancal reportng and on our tests of ts complance wth certan provsons of laws, regulatons, contracts, and grant agreements and other matters. The purpose of that report s to descrbe the scope of our testng of nternal control over fnancal reportng and complance and

4 the results of that testng, and not to provde an opnon on the nternal control over fnancal reportng or on complance. That report s an ntegral part of an audt performed n accordance wth Government Audtng Standards and should consdered n assessng the results of our audt. Our audt was performed for the purpose of formng an opnon on the basc fnancal statements of Cenla taken as a whole. The accompanyng schedule of expendtures of federal awards s presented for purposes of addtonal analyss as requred by U. S. Offce of Management and Budget Crcular A133, Audts of States, Local Governments, and NonProft Organzatons, and s not a requred part of the basc fnancal statements. Such nformaton has been subjected to the audtng procedures appled n the audt of the basc fnancal statements and, n our opnon, s farly stated, n all materal respects, n relaton to the basc fnancal statements taken as a whole. Houston, Tetf&s September 21,2007 fcj?

5 Cenla Communty Acton Commttee, Inc. Statements of Fnancal Poston March 31,2007 and 2006 Cash Grants recevable Other assets Assets Current assets Total current assets $ 268, , ,682 $ 219, ,567 2, ,519 Prepad expenses 8,547 32,091 Property and Equpment Furnture, fxtures, equpment Vehcles Buldngs Land Less accumulated deprecaton Net property and equpment 997,822 1,237,048 1,525,492 45,225 (1,877,834) 1,927, , ,184 1,525,492 45,225 (1,730,785) 1,784,938 Total assets $ 2,584,982 $ 2,411,549 Accounts payable Accrued labltes Labltes and Net Assets Current labltes Deferred revenues Current porton of long term debt Total current labltes $ 471,306 70, , ,824 $ 208, , ,914 43, ,410 Noncurrent labltes Notes payable Total labltes 563,168 1,322, ,687 1,388,097 Net assets Unrestrcted Temporarly restrcted Permanently restrcted Total net assets Total labltes and net assets 148,657 15,111 1,098,222 1,261,990 $ 2,584,982 63, ,136 1,023,452 $ 2,411,549 See accompanyng notes. Page 3

6 Cenla Communty Acton Commttee, Inc. Statements of Actvtes For the Years Ended March 31,2007 and 2006 Revenues, gans, and other support: Grant funds Interest Local Senor Ctzens Other Net assets released from restrcton: Satsfacton of program restrctons Satsfacton of captal acquston Mortgage payments Expraton of tme restrctons Total unrestrcted revenues, gans, and other support Unrestrcted $ $ 50,114 50,880 23, ,966 6,926, ,049 7,073,569 7,198,535 Temporarly Restrcted 7,274,617 7,274,617 (6,926,520) (289,864) (43,122) (7,259,506) 15,111 Permanently Restrcted $ 289,864 43,122 (147,049) 185, , Total 7,274,617 50, ,880 23,972 7,399,582 _ 7,399, Total $ 7,391,049 11,593 60,266 2,572 7,465,480. 7,465,480 Expenses and losses: Head Start and Early Head Start Grant Chld and Adult Care Food Program Communty Servces Block Grant Home Energy Assstance Home Land Securty TANF FEMA Senor Ctzens Clent Assstance Total expenses and losses 6,111, , ,473 13,228 1,585 7,251 7,165 74,232 7,161,045. 6,111, , ,473 13,228 1,585 7,251 7,165 74,232 7,161,045 5,996, , , ,200 33,045 22,065 7,337,809 Changes n net assets: Net assets at begnnng of year 37, ,167 15,111 _ 185, , ,538 1,023, , ,781 Net assets at end of year $ 148,657 $ 15,111 $ 1,098,222 $ 1,261,990 $ 1,023,452 See accompanyng notes. Page 4

7 Cenla Communty Acton Commttee, Inc. Statements of Cash Flows For the Years Ended March 31,2007 and 2006 Cash flows from operatng actvtes: Cash receved from grants Cash pad to employees and supplers Interest pad Net cash provded (used) by operatng actvtes Cash flows from nvestng actvtes: Captal purchases Other Net cash provded (used) by nvestng actvtes Cash flows from fnancng actvtes: Increase (Decrease) n notes payable Other Net cash provded (used) by fnancng actvtes Net ncrease (decrease) n cash Cash at begnnng of year 2007 $ 7,391,598 (6,829,747) (63,527) 498,324 (289,864) (116,793) (406,657) (43,152) (43,152) 48, , $ 7,410,412 (7,107,030) (67,078) 236,304 (174,887) (17.196) (192,083) (64,089) (64,089) (19,868) 239,483 Cash at end of year 268,130 $ 219,615 Reconclaton of change n net assets to net cash provded by operatng actvtes: Change n net assets $ 238,538 $ 127,671 Adjustments to reconcle change n net assets to net cash provded by operatng actvtes: Deprecaton Change n recevables Change n accounts payables 147,049 (7,985) 120, ,947 (55,068) 22,754 Net cash provded (used) by operatng actvtes 498, ,304 See accompanyng notes Page 5

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9 CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 3, 2007 NOTE It SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organzaton and Program Descrpton The Cenla Communty Acton Commttee, Incorporated was ncorporated by the State of Lousana on September 27,1971. Specfcally, the corporaton s organzed to: A. promote and develop economc opportunty n the communty comprsng all of the Parsh of Rapdes and the State of Lousana, B. provde servces, drectly and ndrectly to those n need of ncreased economc opportunty, C. promote the educaton and welfare of the people of the communty and State of Lousana, D. provde decent housng that s affordable to low and moderate ncome people or homeless ndvduals, E. to moblze such human and fnancal resources as may be avalable to combat poverty and economc nstablty n the communty and the State of Lousana, and F. to aval tself and the communty of the benefts conferred by Publc Law 88452, 78 stat. 508, as may be perodcally amended and supplemented by other statues and by approprate rules and regulatons of any admnstratve body. Cenla's operatons are segregated nto general grant programs as follows: Head Start Program (HS) provdes comprehensve educatonal and support servces to lowncome and dsabled chldren three to fve years of age and chldren who have not reached the compensatory school age. Ths program provdes health, mental health, nutrton, educaton and parent nvolvement servces to chldren n an effort to enable the chld to functon at an optmum level n ther envronment. Early Head Start Program (EHS) provdes smlar servces as Head Start to chldren zero to three years of age. Cenla operates Head Start and Early Head Start centers n Rapdes Parsh. The goal of the program s to brng about a greater depth of socal competence n chldren by consderng the total development of the chld, to enable parents to become better caregvers and teachers to and for ther chldren, and to assst parents n obtanng ther personal goals ncludng educaton and economc ndependence. Fundng s provded through federal funds from the U.S. Department of Health and Human Servces.

10 CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) Chld and Adult Care Food Program (CACFP) provdes a food servce program n conjuncton wth the Head Start and Early Head Start Programs. Fundng s provded by federal funds passed through the State of Lousana, Department of Educaton. Communty Servces Block Grant (CSBG) provdes admnstratve costs for varous programs n order to provde assstance to lowncome, dsadvantaged and unemployed persons through provdng emergency assstance, transportaton servces, housng servces, nutrton servces, communty projects, employment servces, and other servces. Fundng s provded by federal funds passed through the State of Lousana, Department of Labor. Home Energy Assstance Program (LIHEAP) provdes assstance to low ncome households to offset the burden of hgh energy costs. Fundng s provded by federal funds passed through the Lousana Housng Fnance Agency. Senor Ctzens Program provdes fundng to meet varous needs of senor ctzens of Rapdes Parsh. Fundng s provded by an ad valorem tax passed through the Rapdes Parsh Polce Jury. Temporary Assstance for Needy Famles (TANF) provdes earned ncome tax credt (EITC) outreach and free federal tax preparaton servces for lowndvduals and famles. Fundng s provded through federal funds passed through the Department of Health and Human Servces. Reportng Entty The governng body of Cenla s ts Board of Drectors. The Board apponts an Executve Drector to admnster the affars of the agency. Cenla s not consdered a component of the cty, county or any governmental body. The governng board ndependently oversees the agences operatons. 1) The accompanyng fnancal statements nclude all of the organzaton's programs, actvtes and functons of Cenla for whch the Board has oversght responsblty, except as descrbed n the followng paragraph. Such oversght responsbltes nclude desgnaton of management, the ablty to sgnfcantly nfluence operatons, accountablty for fscal matters, and the scope of publc servces. 2) Some equpment s owned by Cenla whle used n the program for whch t was purchased or n other future authorzed programs. The fundng sources, however, have a reversonary nterest n the equpment purchased wth grant funds, therefore ts dsposton, as well as the ownershp of any sale proceeds therefrom s subject to fundng source regulatons.

11 NOTE 2: BASIS OF ACCOUNTING CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) The accompanyng fnancal statements have been prepared n conformty wth generally accepted accountng prncples. Cenla uses the accrual bass of accountng. Fnancal Statement Presentaton The fnancal statements are presented as recommended by Fnancal Accountng Standards Board's Statement of Fnancal Accountng Standard (SFAS) No. 117, Fnancal Statements of NotforProft Organzatons. SFAS No. 117 requres the agency to report nformaton regardng ts fnancal poston and actvtes nto three classes of net assets: unrestrcted, temporarly restrcted, and permanently restrcted net assets. Revenue and Support Grant revenues (Grants and Governmental rembursements) are recognzed usng the legal and contractual requrements of the Agency's programs as gudance. Grant revenues (where funds must be expended for specfc purposes pror to amount beng rembursed to the Agency) are recognzed based on expendtures recorded. Cenla reports grants and gfts of cash and other assets as restrcted support f they are receved wth donor or grant stpulatons that lmt the use of the donated assets. When a donor restrcton expres, that s, when a stpulated tme restrcton ends or purpose restrcton s accomplshed, temporarly restrcted net assets are reclassfed to unrestrcted net assets and reported n the statement of actvtes as net assets released from restrctons. Property and Equpment It s the Cenla's polcy to captalze property and equpment over $500. Lesser amounts are expensed. Purchased property and equpment s captalzed at cost. Donatons of property and equpment are recorded as contrbutons at ther estmated far value. Such donatons are reported as unrestrcted contrbutons unless the donor has restrcted the donated asset to a specfc purpose. Assets donated wth explct restrctons regardng ther use and contrbutons of cash that must be used to acqure property and equpment are reported as restrcted contrbutons. Absent donor stpulaton regardng how long those donated assets must be mantaned, the Agency reports expratons of donor restrctons when the donated or acqured assets are placed n servce as nstructed by the donor. Cenla recognzes deprecaton on ts fxed assets n accordance wth generally accepted accountng prncples. The Federal government has a reversonary nterest n property purchased wth Federal funds. Its dsposton, as well as any dsposton proceeds, s subject to federal regulatons. The use of assets purchased wth federal funds s lmted to the purposes ntended by the fundng source. Fxed assets are deprecated usng the straghtlne method as follows: Property & Equpment Useful Lfe Method Buldngs 30 years Straghtlne Furnture, fxtures, equpment 510 years Straghtlne Vehcles 5 years Straghtlne

12 CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) Deprecaton expense for the year ended March 31,2007 totaled $147,049. Cash and Cash Equvalents For purposes of the Statement of Cash Flows, Cenla consders all unrestrcted hghly lqud nvestments wth an ntal maturty of three months or less to be cash equvalents. Cenla had no cash equvalents at March 31,2007. Use of Estmates Management must make estmates and assumptons to prepare fnancal statements n accordance wth generally accepted accountng prncples. Those estmates and assumptons affect the reported amounts of assets and labltes, the dsclosure of contngent assets and labltes, the reported revenues and expenses, and the allocaton of expenses among varous functons. Actual results could vary from the estmates that were used. Income Taxes Cena s a notforproft organzaton that s exempt from ncome taxes under Secton 501 (c)(3) of the Internal Revenue Code and classfed by the Internal Revenue Servce as a prvate corporaton. Contrbuted Servces Durng the year ended March 31, 2007, the value of contrbuted servces meetng the requrements for recognton n the fnancal statements was not materal and has not been recorded. In addton, many ndvduals volunteer ther tme and perform a varety of tasks that assst the Agency at the Head Start and Early Head Start facltes n meetng ther non federal share requrement, but these servces do not meet the crtera for recognton as contrbuted servces. NOTE 3: PROGRAM EXPENSES Net assets were released from grantor restrctons by ncurred expenses satsfyng the restrcted purposes or by occurrence of other events specfed by fundng sources. Purpose restrctons accomplshed: Head Start & Early Head Start Program $6,296,934 Chld and Adult Care Food Program 539,905 Communty Servces Block Grant 406,473 Temporary Assstance for Needy Famles 7,250 General Admnstraton 7,165 Homeland Securty 1,584 Total $7,259,311 10

13 CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) NOTE 4: LEASE COMMITMENTS Cenla leases several buldngs and certan operatng equpment under operatng leases. Rent expense for the year ended March 31,2007 was $ 118,558. NOTES: NOTES PAYABLE Cenla had notes payable n the amount of $781,650 at yearend. These notes were netted aganst property and equpment. Notes payable conssts of the followng at March 31: 2007 Loan payable, Peoples State Bank, maturty December 14,2007, nterest at 8.75%, monthly payments of $2, ncludng nterest, wth one balloon payment at maturty collateralzed by buldngs $ 184,546 Loan payable, Peoples State Bank, maturty March 23,2014, nterest at 7.5%, monthly payments of $4, ncludng nterest, wth one balloon payment at maturty collateralzed by buldng 427,860 Loan payable, Peoples State Bank, maturty December 15,2013, nterest at 7.5%, monthly payments of $1, ncludng nterest, wth one balloon payment at maturty collateralzed by buldngs Interest expense related to the notes for the year totaled $63,527. Total 781,650 Less current porton ( ) Longterm porton $ 563,168 Future maturtes of longterm debt as of March 31,2007 are as follows: n

14 CENLA COMMUNITY ACTION COMMITTEE, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) Year ended March 31, Approxmate Amount 2009 $ 34, , , ,672 Thereafter NOTE 6; CONCENTRATION OF CREDIT RISK Total $563,168 Cenla receved over 98% of ts fundng from Federal and State grants wth the Head Start program provdng over 85% of all grant revenues. Concentratons of credt rsk wth respect to grant recevables are lmted due to these amounts beng due from governmental agences under contractual terms. As of March 31,2007, Cenla had no sgnfcant concentratons of credt rsk n relaton to grant recevables. NOTE 7; PENSION Cenla partcpates n a qualfed 403(b) plan for all elgble employees. Employees elgble to partcpate may contrbute $9,500 or 20% of ther annual salary to the plan. Cenla wll match the employees' contrbutons up to 5% of the employees' gross wages. The assets of the plan are managed by separate drectors and are not ncluded n these fnancal statements. Cenla contrbuted $108,960 to the plan for the year ended March 31, NOTES: CONTINGENCY Employees of the agency are enttled to annual leave dependng on job classfcaton, length of servce and other factors. Cenla's polcy s to pay one year accumulated annual leave, not to exceed one hundred fortyfour hours, f funds are avalable. Accordngly, no lablty has been recorded n the accompanyng statement of fnancal poston. Cenla agrees to recognze the costs of compensated absences when actually pad. 12

15 SUPPLEMENTAL INFORMATION

16 CENLA COMMUNITY ACTION COMMITTEE, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended March 31,2007 Federal Grantor/Pass through Grantor/Program Ttle U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Drect Program Federal CFDA Number Agency or Passthrough Number Federal Expendtures Head Start Program CH5002/41 $ 6,296,934 Passed through Lousana Department of Labor Communty Servces Block Grant (CSBG) Communty Servces Block Grant (CSBG) Passed through Lousana Housng Fnance Agency Home Energy Assstance Program (LIHEAP) N N Unknown 119, , ,473 13,228 Passed through Lousana Department of Socal Servces Temporary Assstance for Needy Famles (TANF) Unknown 7,251 Total U.S. Department of Health and Human Servces 6,723,885 U. S. DEPARTMENT OF HOMELAND SECURITY Passed through a local governng board Emergency Food and Shelter Program (FEMA) N/A 7,165 Passed through State of Lousana Homeland Securty and Emergency Preparedness Unknown 1,584 Total U.S. Department of Homeland Securty 8,749 U. S. DEPARTMENT OF AGRICULTURE Passed Through Lousana Department of Educaton Chld and Adult Care Food Program (C ACFP) N/A 539,904 Total Federal Expendtures $ 7,272,538 RECONCILIATION OF FINANCIAL STATEMENT EXPENSES TO FEDERAL EXPENDITURES EXPENSES FROM FINANCIAL STATEMENTS Less: Non federal expenses Deprecaton Add: Mortgage payments Equpment acquston Total Federal Expendtures $7,161,045 (74,444) (147,049) 43, ,864 $ 7, See accompanyng notes. Page 13

17 Cenla Communty Acton Commttee, Inc. Notes to Schedule of Expendtures of Federal Awards March 31,2007 Bass of Presentaton Schedule of Expendtures of Federal Awards The accompanyng schedule of expendtures of federal awards ncludes federal grant actvty of Cenla Communty Acton Commttee, Inc. and s presented on the accrual bass of accountng. The nformaton n ths schedule s presented n accordance wth the requrements of OMB Crcular A133, Audts of States, Local Governments, and NonProft Organzatons. Therefore certan amounts presented n ths schedule may dffer from amounts presented or used n the fnancal statements. Cenla s able to reconcle the amounts on the accompanyng schedule of federal awards to those on the fnancal statements. Nonfederal expenses consst of the followng: Senor Servces $74,232 Benevolent Expenses 212 Total $74,444 14

18 Member: Amercan nsttute of Certfed Publc Accountants Texas Socety of Certfed Publc Accountants Houston Chapter, Texas Socety of CPAs Socety of Lousana CPAs Terre L. Jackson Certfed Publc Accountants P.O. Box Houston, Texas (713) 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 Drectors Cenla Communty Acton Commttee, Inc. Alexandra, Lousana We have audted the fnancal statements of Cenla Communty Acton Commttee, Inc. (Cenla) as of and for the year ended March 31,2007, and have ssued our report thereon dated September 21, We conducted our audt n accordance wth audtng standards generally accepted n the Unted States of Amerca and the standards applcable to fnancal audts contaned n Government Audtng Standards, ssued by the Comptroller General of the Unted States. Internal Control Over Fnancal Reportng In plannng and performng our audt, we consdered Cenla Communty Acton Commttee, Inc.'s nternal control over fnancal reportng as a bass for desgnng our audtng procedures for the purpose of expressng our opnon on the fnancal statements, but not for the purpose of expressng an opnon on the effectveness of Cenla's nternal control over fnancal reportng. Accordngly, we do not express an opnon on the effectveness of the Organzaton's nternal control over fnancal reportng. A control defcency exsts when the desgn or operaton of a control does not allow management or employees, n the normal course of performng ther assgned functons, to prevent or detect msstatements on a tmely bass. A sgnfcant defcency s a control defcency, or combnaton of control defcences, that adversely affects the organzaton's ablty to ntate, authorze, record, process, or report fnancal data relably n accordance wth generally accepted accountng prncples such that there s more than a remote lkelhood that a msstatement of the organzaton's fnancal statements that s more than nconsequental wll not be prevented or detected by the organzaton's nternal control. A materal weakness s a sgnfcant defcency, or combnaton of sgnfcant defcences, that results n more than a remote lkelhood that a materal msstatement of the fnancal statements wll not be prevented or detected by the organzaton's nternal control. 15

19 Our consderaton of nternal control over fnancal reportng was for the lmted purpose descrbed n the frst paragraph of ths secton and would not necessarly dentfy all defcences n nternal control that mght be sgnfcant defcences or materal weaknesses. We dd not dentfy any defcences n nternal control over fnancal reportng that we consder to be materal weaknesses, as defned above. Complance and Other Matters As part of obtanng reasonable assurance about whether Cenla's fnancal statements are free of materal msstatement, we performed tests of ts complance wth certan provsons of laws, regulatons, contracts, and grant agreements, noncomplance wth whch could have a drect and materal effect on the determnaton of fnancal statement amounts. However, provdng an opnon on complance wth those provsons was not an objectve of our audt, and accordngly, we do not express such an opnon. The results of our tests dsclosed no nstances of noncomplance or other matters that are requred to be reported under Government Audtng Standards. Ths report s ntended solely for the nformaton and use of management, the board of drectors, others wthn the organzaton, federal awardng agences and passthrough enttes and s not ntended to be and should not be used by anyone other than these specfed partes. Houston, Texas September 21,

20 Terre L. Jackson Certfed Publc Accountants P.O. Box Houston, Texas (713) Member: Amercan Insttute of Certfed Publc Accountants Texas Socety of Certfed Publc Accountants Houston Chapter, Texas Socety of CPAs Socety of Lousana CPAs REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A133 To the Board of Drectors Cenla Communty Acton Commttee, Inc. Alexandra, Lousana Complance We have audted the complance of Cenla Communty Acton Commttee, Inc. (Cenla) wth the types of complance requrements descrbed n the U. S. Offce of Management and Budget (OMB) Crcular Al33 Complance Supplement that are applcable to each of ts major federal programs for the year ended March 31,2007. Cenla Communty Acton Commttee, Inc. *s major federal programs are dentfed n the summary of audtor's results secton of the accompanyng schedule of fndngs and questoned costs. Complance wth the requrements of laws, regulatons, contracts, and grants applcable to each of ts major federal programs s the responsblty of Cenla's management. Our responsblty s to express an opnon on Cenla's complance based on our audt. We conducted our audt of complance n accordance wth audtng standards generally accepted n the Unted States of Amerca; the standards applcable to fnancal audts contaned n Government Audtng Standards, ssued by the Comptroller General of the Unted States; and OMB Crcular A133, Audts of States, Local Governments, and NonProft Organzatons. Those standards and OMB Crcular A133 requre that we plan and perform the audt to obtan reasonable assurance about whether noncomplance wth the types of complance requrements referred to above that could have a drect and materal effect on a major federal program occurred. An audt ncludes examnng, on a test bass, evdence about Cenla's complance wth those requrements and performng such other procedures as we consdered necessary n the crcumstances. We beleve that our audt provdes a reasonable bass for our opnon. Our audt does not provde a legal determnaton of Cenla's complance wth those requrements. In our opnon, Cenla Communty Acton Commttee, Inc. compled, n all materal respects, wth the requrements referred to above that are applcable to each of ts major federal programs for the year ended March 31,

21 Internal Control Over Complance The management of Cenla s responsble for establshng and mantanng effectve nternal control over complance wth the requrements of laws, regulatons, contracts, and grants applcable to federal programs. In plannng and performng our audt, we consdered Cenla's nternal control over complance wth the requrements that could have a drect and materal effect on a major federal program n order to determne our audtng procedures for the purpose of expressng our opnon on complance, but not for the purpose of expressng an opnon on the effectveness of nternal control over complance. Accordngly, we do not express an opnon on the effectveness of Cenla's nternal control over complance. A control defcency n an entty's nternal control over complance exsts when the desgn or operaton of a control does not allow management or employees, n the normal course of performng ther assgned functons, to prevent or detect noncomplance wth a type of complance requrement of a federal program on a tmely bass. A sgnfcant defcency s a control defcency, or combnaton of control defcences, that adversely affects the entty's ablty to admnster a federal program such that there s more than a remote lkelhood that noncomplance wth a type of complance requrement of a federal program that s more than nconsequental wll not be prevented or detected by the entty's nternal control. A materal weakness s a sgnfcant defcency, or combnaton of sgnfcant defcences, that results n more than a remote lkelhood that materal noncomplance wth a type of complance requrement of a federal program wll not be prevented or detected by the entty's nternal control. Our consderaton of the nternal control over complance was for the lmted purpose descrbed n the frst paragraph of ths secton and would not necessarly dentfy all defcences n nternal control that mght be sgnfcant defcences or materal weaknesses. We dd not dentfy any defcences n nternal control over complance that we consder to be materal weaknesses as defned above. Ths report s ntended solely for the nformaton and use of management, the board of drectors, others wthn the entty, and federal awardng agences and passthrough enttes and s not ntended to be and should not be used by anyone other than these specfed partes. Houston, Texas September 21,

22 Cenla Communty Acton Commttee, Inc. Summary Schedule of Pror Audt Fndngs March 31, : FINDING DEPARTMENT OF HEALTH AND HUMAN SERVICES Head Start and Early Head Start Programs CFDA #93.600, YEAR ENDED MARCH 31,2005 Statement of Condton: It was noted that the pror year's SF 269 dd not reconcle to the books of orgnal entry and dd not reconcle to the SF 272 for the perod. The agency under reported the federal expendtures on the Schedule of Expendtures of Federal Awards for the year ended March 31, Ths condton dd not exst for the year ended March 31,2006. Recommendaton: It was recommended that the agency reconcle the SF 272 to the SF 269's. Current Status: SF 269 and SF 272 reports for the ensung year have been reconcled to each other and to the books of orgnal entry. Condton no longer exsts. 19

23 Secton I Summary of Audtor's Results Fnancal Statements Type of audtor's report ssued: Unqualfed Internal control over fnancal reportng: CENLA COMMUNITY ACTION COMMITTEE, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED MARCH 31, 2007 Materal weaknesses dentfed? No Sgnfcant defcences dentfed that are not consdered to be materal weakness? None reported Noncomplance materal to fnancal statements noted? No Federal Awards Internal control over major programs: Materal weaknesses dentfed? No Sgnfcant defcences dentfed that are not consdered to be materal weaknesses? None reported Type of audtor's report ssued on complance for major programs: Unqualfed Any audt fndngs dsclosed that are requred to be reported n accordance wth secton 510(a) of Crcular A133? No Identfcaton of major programs: CFDA Numbers (Head Start and Early Head Start Program) (Chld & Adult Care Food Program) (Communty Servces Block Grant) Dollar threshold used to dstngush between type A and type B programs: $300,000 Audtee qualfed as lowrsk audtee? No 20

24 CENLA COMMUNITY ACTION COMMITTEE, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED MARCH 31,2007 (Contnued) Secton 11FnancaI Statement Fndngs None reported Secton IllFederal Award Fndngs and Questoned Costs Major Programs None reported 21

25 Cenla Communty Acton Commttee, Inc. Summary Schedule of Pror Audt Fndngs Schedule for Lousana Legslatve Audtor For the Year Ended March 31,2006 FINDING DEPARTMENT OF HEALTH AND HUMAN SERVICES Head Start and Early Head Start Programs CFDA # Statement of Condton: It was noted that the pror year's SF 269 dd not reconcle to the books of orgnal entry and dd not reconcle to the SF 272 for the perod. The agency under reported the federal expendtures on the Schedule of Expendtures of Federal Awards for the year ended March 31, Ths condton dd not exst for the year ended March 31,2006. Recommendaton: It was recommended that the agency reconcle the SF 272 to the SF 269's. Current Status: SF 269 and SF 272 reports for the ensung year have been reconcled to each other and to the books of orgnal entry. Condton no longer exsts. 22

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