Legal Services of North Louisiana, Inc. Shreveport, Louisiana

Transcription

1 7 5^(^ Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Finanial Statements As f and fr the Year Ended Deember 31,2009 Witti Cmparative Ttals fr 2008 and Supplemental Infrmatin Shedules LSC Grant Reipfertt Number Under prvisins f state law. this reprt is a publi dument. A py f the reprt has t>een submitted t the entity and ther apprpriate publi ffiials. The reprt is available fr publi inspetin at the Batn Ruge ffie f the LegislativeAuditr and, where apprpriate, at the ffie f the parish lerk f urt. Release Date l ^^llo

2 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Table f Cntents Page N. Independent Auditrs' Reprt 1-2 Finanial Statements: Statement f Finanial Psitin 3 Statement f Ativities 4 Statement f Funtinal Expenses 5 Statement f Cash Flws 6 Ntes t Finanial Statements 7-12 Supplemental Infrmatin Shedules Prepared Fr Grants and Cntrat Analysis Legal Servies Crpratin - Grant Reipient Number Fr the Cntrat Perid: January 1, 2009 t Deember 31, 2009 interest n Lawyers Tnjst Aunts (IQLTA) - Grant Numt)er & Fr the Cntrat Perid: January 1, 2009 t Deember 31, Shedule f Expenditures f Federal Awards 16 Reprt n Internal Cntrl Over Finanial Reprting and n Cmpliane and Other Matters Based n an Audit f Finanial Statements Perfrmed in Ardane With Gvmmer}t Auditing Standards Reprt n Cmpliane with Requirements Appliable t Eah Majr Prgram and n Intemal Cntrl ver Cmpliane in Ardane with OMB Cirular A-133 Summary Shedule f Prir Audit Findings 21 Shedule f Findings and Questined Csts 21 Shedule f Prir Audit Findings fr Luisiana Legislative Auditr 22 Shedule f Current Audit Findings fr Luisiana Legislative Auditr 23

3 OK & MOREHART Cert^edPubli Auntants tzls HA WW AVEPOJE - 5HKEVEP0RT. LOWSJANA P.O. BOX 7M40 SHREVEPORT, LOUISIANA TI 137-W40 TRAVIS K KOBEHART. CPA TELEPHONE (318) 121-M15 FAX (318) I22-5W1 A. EDWARD BALL. CPA VKKE D. CASE, CPA MEMB^ AJ^WCAN rnstttuth C BRYAN YLE. CPA CERTIFIED PUBUC ACUNTAWS STUART L. REEKS. CTA SOCIETY Of LOUISIANA CERTlFIEn PUBUC ACUNTANTS independent Auditrs' Reprt T the Bard f Diretrs Legal Servies f Nrth Luisiana, in. Shreveprt. Luisiana We have audited the ampanying statement f finanial psitin f Legal Servies f Nrth LuJsJana, In. (a nnprfit rganizatin) as f Deember 31, 2009, and the related statements f ativities, funtinal expenses, and ash flws fr the year then ended. These finandal statements are the respnsibility f Organizatin's management Our respnsibility is t express an pinin n these finandaf statements based n ur audit. We nduted ur audit in ardane with auditing standards generally aepted in the United States f Ameria and the standards appliable tfinanialaudits ntained in Gvemment Auditing Standards, issued by the Cmptrller General f the United States. Thse standardsrequirethat we plan and perfrm the audit t btain reasnable assurane abut whetherthe finanial statements are free f material misstatement An audit inludes examining, n a test basis, evidene supprting tfie amunts and disfsures in the finanial statements. An audit als inludes assessing the aunting priniples used and the signifiant estimates made by management, as well as evaluating the verall finanial statement presentatin. We believe ttiat ur audit pravites a reasnabte basis fr ur pinin. In ur pinin, the finanial statements refen-ed t abve present fairly, In all material respets, the finanial psftfn f Legal Servies f Nrtii Luisiana. Ina, as f Deember 31, 2009, and the hanges in its net assets and its ash flvra fr the year then ended in nfrmity with au nting prindples generally aepted in the United States f Ameria. In ardane with Gvemment Auditing Standards, we have als issued ur reprt dated April 22,2010, n ur nsideratin f Legal Servies f Nrth Luisiana, In.'s internal ntra ver friandal reprting and n ur tests f its mpliane with ertain prvisins f laws, regulatins, ntrats and grant agreements and ther matters. The purpse f that reprt is t desribe the spe f ur testing f internal ntrl ver finanial reprting and mpliane and the results f that testing, and nt t prvide an pinin n intetal ntrl verfinanialreprting r n mpliane. That reprt is an integral part f an audit perfmried in ardane with Gvemmant Auditing Standards and shuld be nsidered in assessing the results f ur audit Our audit was nduted fr the purpse f frming an pinin n the basi finanial statements f Legal Servies f Nrth Luisiana, In. taken as a whle. The ampanying shedule f expenditures f federal awards is presented fr purpses f additinal analysis as required by U.S. Offie f Management and Budget Cirular A-133, Audits f States, Lal Gvamments, and Nn-Prfit Organizatins, and is nt a required part f the basi finanial statements. Suh infrmatin has been subjeted t the auditing predures applied in the audit f the basi finandal statements and. in urpinin, is fairly stated, in all material respets, in relatin t the baa finanial statements taken as a whle.

4 The ampanying supplemental shedules, listed as "Supplemental Infrmatin Shedules Fr Grants and Cntrat Analysis'* in the table f ntents and shwn n pages 14-15, are presented fr the purpse f prviding the varius funding sures f Legal Servies f Nrth Luisiana, In. additinal Individual grant and ntrat analysis and are nt a required part f the finanial statements. The infrmatin is prepared n a presribed basis f the funding sures f Legal Servies f Nrth Luisiana, In. The shedules are nt presented in ardane with generally aepted aunting priniples. Ardingly, the shedules mentined previusly and shwn n pages are nt intended t presentfinandalpsittn and results f peratins in nfmnity with generally aepted aunting priniples. Suh Infrmatin has been subjeted t the auditing predures apppied in the audit f the finandal statements and In ur pinin they are fairly stated n the basis f aunting praties presribed by the funding sures. Ck and Mrehart Certified Publi Auntants April 22, 2010

5 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Statement f Finanial Psitin Deember with Cmparative Ttals fr 2008 Assets Cun-ent Assets Cash Client esrw funds Investments Grants reeivable Aunts reeivable , , $ , ,572 Ttal urrent assets Prperty and equipment Aumulated depreiatin Depsits Nat prperty and equipment Ttal assets 496,765 1, (1,001,376) 493, $ 992, ( ) $ 1, Liabilities and Net Assets Cunent liabilities Aunts payable Arued liabilities Current prtin f lng-term debt Refundable advanes Client trust depsits Ttal urrent liabilities Lng-term debt, (ess urrent prtin Ttal liabilities , , $ ,822 17, , , ,436 Net assets Unrestrited ,436 Temprarily restrited Legal servies rpratin-grant Nn-LSC Ttal temprarily restrited 543, , ,309 36, Ttal net assets Ttal liabilities and net assets? $ 1,135,444 The ampanying ntes are an integral part f the finanial statements. 3

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7 Legal Servies f Nrth Luisiana, In. Shreveprt Luisiana Statement f Funtinal Expenses Fr the Year Ended Deember 31, with Cm parative Ttals fr 2008 Prgram Management & General 2009 Ttal 2008 Ttal Persnnel Expenses Lawyers Paralegals Other Emplyee Benefits Ttal Persnnel Expenses 836,574 $ $ 940,672 $ , , ,118 2, , ,882,203 Other Expenses Spae and Oupany Equipment Rental Offie Supplies and Expenses Telephne Travel Training Library Insurane Dues and Fees Interest Litigatin Cntrat Servies t Clients Depreiatin Other Ttal Other Expenses , , , , ,469 12, , , ,916 53,189 15,686 84, , , ,186 12, ,014 58, , , ,086 41, ,763 13, ,924 61, , ,344 TOTAL EXPENSES $ 2,414,409 a ) 480,640 3 ; 2, $ 2,601,547 "The ampanying ntes are an integral part f thefinanialstatements. 5

8 Legal Servies f Nrth Luisiana, In. Shreveprt. Luisiana Statement f Cash Flvvs Fr the Year Ended Deember 31, 2009, with Cmparative Ttals fr 2008 Operating Ativities: Change in net assets Adjustments t renile hange in net assets t net ash prvided (used) by perating ativities: Depreiatin Lss n dispsal (Inrease) derease in: Client esrw funds Grants reeivable Aunts reeivable Inrease (derease) in: Aunts payable Aaied expenses Client trust depsits Deferred revenue Net ash prvided by perating ativities (4.677) $ (2,333) (1.968) (10,515) 112 (3,101) (33.998) ^85,701) (69.810) 61, (1,316) 44,625 (1.135) (24.407) (21.976) , ,519 Investing Ativities: Cash payments fr purhase f investments Purhase f prperty and equipment Net ash (used) by investing ativities Finaning Ativities: Payments f lng-tenn debt Net ash (used) byfinaningativ/ftes Net inrease (derease) in ash Cash as f beginning f year Cash as f end f year (1.036) ( ) ( ) (17,889)^ (17.889) (195,190) ( ) (11,403) (207,074) (17.065) (17.065) (62,620) S Supptementai dislsure: Cash paid fr interest in 2009 and 2008 was $1,497 and S3,872. respetively. The ampanying ntes are an integral part f thefinanialstatenr>ents. 6

9 Legal Servies f Nrth Luisiana,»n. Shreveprt, Luisiana Ntes t Finandal Statements Deember , with Cmparative Ttals fr 2008 (1) Summary f Signifiant Aunting Pliies Legal Servies f Nrth Luisiana, In. (LSNL) is a prfvate nnprfit rpratin inrprated under the lavre f the State f Luisiana and is gverned by a Bard f Diretrs mpsed f 16 members. A Nature f Ativities LSNL administered varius federal, state, and misellaneus grants during the year ended Deember 31, The grants are designed t prvide eligible individuals with free legal servies. The fllwing prgrams, with their apprximate perentagefttalrevenues indiated, are administered by LSNL: Legal Servies Crpratin (LSC) - 72% Interest n Lawyers' Trust Aunts (lolta) -17% United Way-1% Lal Cunils n Aging -1% Reginal HUD Husing Frelsure -1% Reginal HUD Husing Cunseling - 2% Other-6% B. Basis f Aunting The finanial statements f LSNL have been prepared n the arual basis f aunting. C. Basis f Presentatin Finanial statement presentatin fllws the remmendatins f the Finanial Aunb'ng Standards Bard in its Statement f Finanaal Aunting Standards (SFAS) N. 117, Finandal Statements f Nt-fr-Prfit Organizatins. Under SFAS N. 117, the Organizatin Is required t repri infrmatin regarding its finanial psitin and ativities arding t. three lasses f net assets: unrestrited net assets, temprarily restrited net assets, and pennanently restrited net assets. D. Inme Tax Status LSNL is a nnprfit rpratin and is exempt frm state and federal inme taxes under Setin 501 ()(3) f the Interna! Revenue Cde. Hwever, inme frm ativities nt diretly related t LSNL's tax-exempt purpse is subjet t taxatin as unrelated business inme. LSNL had n suh Inme fr this audit perid. E. Prperty and Equipment It is the pliy f the ageny t apitalize a\l fixed assets with a unit st f $1.000 r mre. All fixed assets are valued at histrial st. Depreiatin ts mputed using the straight-line methd ver the estimated useful life f eah asset. The Federal Gvemment has a reversinary interest in prperty purhased witii federal funds. Its dispsitin as well as the wnership f any preeds therefrm is subjet t federal regulatins. F. Revenue and Supprt Cntributins reeived are rex:>rde6 as unrestrited, temprarily restrited, r permanentfy restrited supprt, depending f the existene and/r nature f any dnr restritins. (Cntinued)

10 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Ntes l Finanial Statements Deember 31, vwth Cmparative Ttals fr 2008 (Cntinued) Federal and slate grant revenue and all ther dnr-restrited supprt ans reprted as an inrease in temprarily r permanently restrited net assets, depending n the naluns f the restritin. When a restritin expires, (that is, Vkrtien a stipulated time restritin ends r purpse restritin is amplished), temprarily restrited net assets are relassified t unrestrited net assets and reprted in the Statement f Ativities as net assets released frm restritins. G. Use f Estimates Management uses estimates and assumptins in preparing finanial statements. TtTOse estimates and assumptins affet the reprted amunts f assets and liabilities, the disistire f ntingent assets and liabilities, and reprted revenues and expenses. Atual results uld differ frm thse estimates. H. Cmpensated Absenes - Amed Leave Emplyees f LSNL arue leave at a rate based upn their length f servie. Emplyees may nt an7 fnward leave in exess f 75 hurs frm ne year t the next Emplyees leaving emplyment whether vluntarily r in vluntary will be pajd fr all arued annualfeave. Emplyees may als arue health leave, but aumulated hearth leave is frfeited upn separatin f emplyment At Deember 31, 2009, the apprximate amunt f aumulated and vested emplyee leave benefits anjed was $37, Cash and Cash Equivalents Fr purpses f the Statement f Cash Flws, LSNL nsiders all unrestrited highly liquid investments with an initial naturity f three mnths r less t be ash equivalents. J. Expense Allatin The sts f prviding varius prgrams and ther ativities have been summarized n a funtinal basis in the Statement f Ativities and In the Statement f Funtinal Expenses. Ardingly, ertain sts have been allated amng prgram and management and general servies. K. Refassiftatins The fllviring amunts have been relassifiedfrmtemprarily restiited net assets t unrestrited net assets by expending funds whih satisfied the restrited purpses speified by the dnrs: LSC $ 2,172,702 United Way 22,530 Cunils n Aging 40,863 lolta 456,718 Other 13,395 HUD - Frelsure 35,654 HUD Ttal 2.787,167 (Cntinued) 8

11 Legal Sen/ies f Nrth Luisiana. In. Shreveprt, Luisiana Ntes t Finandal Statements Deember 31, 2009, with Cmparative Ttals fr 2008 (Cntinued) L Cmparative Finanial Statements Thefinanial staten^nts inlude ertain prir-year summarized mparative infbrmatkin in ttal but nt by net asset lass. Suh infnmatln des nt inlude suffiient detail t nstitute a presentatin in nfrmity with generally aepted aunting priniples. Ardingly, suh infrmatin shuld be read In njuntin with the rganizatin's finanial statements fr the year ended Deember 31, 2008, frm whih ttie summarized infrmatin was derived. M. Dnated Sen/ies Dnated servies are regnized as ntiributins in ardane with SFAS N Aunting fr Cntributins Reeived and Cntributins Made, If tha servies (a) reate r enhane nnfinanial assets r (b) require speialized skills, are perfnnaed by peple with thse skills, and wuld therwise be purhased by LSNL Inluded In ther revenue and ntrat sen/ies t lients in the ampanying finanial statements is $64,995 f dnated servies frm attrneys. (2) Cnenh^tins f Credit Risk Finanial instruments that ptentially subjet LSNL t nentratins f reditrisknsist prinipally f temprary ash investments and grants reeivable. Cnentratins f reditriskwith respet t grants reeivable are limited due t the majrity f these amunts being due frm gvemn^ental agenies under ntratual terms. As f Deember 31,2009. LSNL had n signifiant nentratins f redit risk in relatin t grants reeivable. LSNL maintains ash balanes at several finanial Institutins. Aunts at eah institutin are insured by the Federal Depsit Insurane Crpratin (FDJC) up t $250,000. At Deemtjer 31, 2009, ttal ash balanes held at the finanial institutin were $507,017. This entire amunt was seured by FDIC. (3) Investments Investments inluded in the ampanying finandal statements at Deember 31, nsist f ertifjates f depsits ttaling $196,707. "The ertifiates bear interest ranging frm 1.00% t 1.69% and have riginal maturities ranging frm 6-12 mntiis. (4) Prperty and Equipment Prperty and equipment at Deember nsisted f the fllwing: Land Buildings Building Imprvements Furniture. Fixtures, and Equipment Law Library Aumulated depredatin Estimated Depreiable Life 20^30 years years years 5-10 years 6 years Net investment in prperty and equipment Purhased With LSC Funds $ 137, ,516 66,635 ( ^ $ Purhased With Nrh-LSC - 100, ,044 ( ) Ttal $ , ( ) Depredatin expense fr the year ended Deember 31,2009 was $68,070. (Cntinued)

12 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Ntes t Finanial Statements Deember 31, writh Cmparative Ttals fr 2008 (Cntinued) (6) Anjed Liabilities An analysis f LSNL's arued liabilities at Deember 31, 2009 ts as fllws: (6) Leases PaynDll taxes S 17,433 Anjed payrll Pensin payable 9,873 Arued leave Ttal LSNL leases pstage mahines, a seurity system, and piers under perating leases. The rental st n the equipment paid during the year ended Deember 31,2009 was $ Cmmitments under lease agreements having initial r remaining nn-anelable terms in exess f ne year are as fllws: Fr the Year Er>ding Deember $ , , , Ttal minimum future rentals (7) Temprarily Restrited NetAssets Temprarily restrited net assets at Deember 31,200.9 were available tr the fllwing purpses: LSC Gram "Operating $ 154,312 LSC ^Prperty 389,567 Nn-LSC Prperty 95,743 Misellaneus Grants (8) Refundable Advanes LSNL rerds funds reeived In exess f expenditures as a refundable advane until tiiey are expended fr the purpse f the ntrat r until the funds are returned t the apprpriate funding sure. (9) Cntratijal Revenue - Grants During the year ended Deember 31,2009, LSNL reeived ntratual revenue frmfederal,state, and misellaneus grants in the amunt f $2,684,718. The ntinued existene f these funds is based n annual ntrat renewals with varius funding sures. (Cntinued) 10

13 Legal Servies f Nrth Luisiana. In. Shreveprt Luisiana Ntes t Finanial Statements Deember 31, 20O9 wfth Cmparative Ttals fr 2008 (Cntinued) (10) Client Taist Funds Client tiust funds are funds reeived by LSNL frm r n behalf f a dient A separate esrw bank aunt is maintained, as well as separate lient tiust rerds fr eah dient Client bustfijndsare nt the prperty f LSNL. and, as a result, ars reprted as bth an asset and a liability in the Statement f Finanial Psitin. (11) Private Attrney Invlvement The fltwing details tiie private attrney invlvement (PAI) ativity fr the year ended Deember 31, 2009: Lawyers Paralegals Other Emplyee Benefits Spae and upany Equipment rental Offie supplies and expenses Telephne Travel Training Library Insurane Dues & fees Litigatin Cntrat servies t lients Other Ttal (12) Lng-Term Debt LSC S 25,670 $ 32, ,338 3,552 1,304 6,685 3,980 1,582 8,532 3,421 2, , _ Ttal $ ,101 36, ,304 5,685 3,980 1,582 8, , ^MAm Lng-term debt at Deember 31, 2009, nsisted f tiie fllwing: Prmissry nte t a lal bank, in the riginal amunt f $51,783, dated June 5, 2007, due in thirty-five (35) mnthly payments f $1,610.79, induding interest, witii final payment due June , Witii an Interest rate f 7.5%, seured by tiiree (3) vehiles. Less urrer^t prtin Lng term prtin Apprximate maturities f lng-term debt are summarized as fllws: $ f E= 8, ) - Fr the Year Ending Deember Apprximate Amunt s_ (Cntinued) 11

14 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Ntes t Finandal Statements Deember 31, 2009, with Cmparative Ttals fr 20()8 (Cntinued) (13) Retirement Plan LSNL ntributes 5% f the emplyees' annual mpensatin t an annuity prgram n behalf f its emplyees. An emplyee must ntn'bute three years f emplyment In rder t be vested in the plan. Cntributins made by the emplyer are returned t the emplyer if the emplyee leaves befre beming vested. Emplyees may ntribute up t twenty-five per ent f their annual mpensatin. The emplyee ntributins are tax-deferred t the emplyee. Ttal emplyer ntributins fr the year ended Deember 31, were $79,477. (14) Buildings - Prperty Csts The fllwing details sts diretly related t the purhase and/r maintenane f prperty paid ut f LSC fijnds: Central Offie Building Mnrae Building Nathithes Building. Ttal Derivative inme Paid in prindpai Interest expense Building maintenane Insurane Taxes Imprvements 13,860 6,012 $ , ,321 $ 26,117 8, ^ ^ ^ 5,422 ^ ^ ^ (15) Cntingeny LSNL is urrently the defendant in a lawsuit, the ultimate utme f whih is unknwn at this time. In the pinin f legal unsel, the amunt f any damages awarded in exess f LSNL's un'ent insurane verage annt be reasnably estimated at this time. (16) Subsequent Events Subsequent events have been evaluated thrugh April 22, the date the finanial statements were available t be issued. 12

15 Supplemental Infrmatin Shedules Prepared Fr Grants and Cntrats Analysis 13

16 LegaJ Servies f Nrth Lusiarta, In. Shrevaprt. Luisiana Sheduie f Supprt, Revenue, and Expenses and Chariges in NetAssets fr LSC Funds Fr the Year Ended Deembar with CmparalivB Ttals fr 2008 Supprt and Revenue Grants and Cnirats Interest Inme Other- dnated servies Ttal Basi Field Private Attrney Exess Fund Grant Invlvement Balane Carryver $1,734,275 S 7, , ,939 39, ,959 Ttal $2,008, ,272 Prperty 2009 Grand Ttal 2008 Grand Ttal $2,008,214 $1,824, ,995 66,412 2.O ,218 Persnnel Expenses Uwyws Paralegals Other Emplyae Benefits Ttal , , ,175 25, S ,345 69, ,971 1,550, , ,971 1, ,343 1, Other Ejpenses Spae and Oupany Equipment Rental OFfie Supplies and Expenses Telephne Travel Training Library Insurane Dues and fees UtigaSn Cntrat Servies t Clients Other Interest expense Depreiatin Ttal 48,424 14,3S ,315 47,503 41, ,975 83,516 1, , , , ,620 2,845 75, ,976 15,566 71,912 48,835 20,897 56, , , , ^ 44, , , , ; , , , ,763 57, ,609 Ttal Expenses , , , ,892,037 Supprt and Revenue Ovef (Under) Expenses and lsses 2, (38.660) [34,699) (57.731) (92.430) Other Changes in Net Assets: Nte Payments Aquisitin f prperty (16.458) (15,441) (1.431) (17.889) (15.441) Ttal Other Changes (31,599) (1,431) (33.330) 33,330 Ttaf Changes in NetAssets (29.368) (38,860) (68.029) (24,401) (92.430) 11,181 Net Assets at beginning f year 183, , , , ,128 Net Assets at end f year $ S $ 154,312 $ $.543,879 $ 636,309 14

17 Legal Servies f Nrth Luisiana, In. Shreveprt, Luisiana Shedule f Interest n Lawyers Trust Aunts ((OLTA) Grant Ativity Grant N and Fr the Year Ended Deemtyer 31, 2009, with Cmparative Ttals fr fi Revenue Reeived - lolta Grant S 456,718 $ 269,843 Persnnel Expenses Lawyers Paralegals Other Emplyee Benefits Tta! Persnnel Expenses Other Expenses Spae and upany Offie supplies Telephne Training Insurane Dues and fees Aess t Justie Audit expense Ttal Other Expenses ,594 48, ,902 24, , ,297 4, , , , ,900 9, , ,900 39,546 Ttal Expenses ,843 Exess (Defiit) 15

18 0> in -^ id "» (D t It -*! < =?^i «g -> ID ^ ISII III? J= UJ rt t a 2 s a. D- (u 2-9 g^ EO 3 i >5!:: «W 3 5 O) "D r S "^ (/> CQ (U ' «3 X B S a 0} CL e D B

19 OK & MOREHART Certifled Publi A^untanti UlS HAWN AVENin SHBttVEPORT, LOITISIANA ' P.a BOX78240 «SHREVEPORT. L0UlSIAf4A 7U37-81W TRAVIS H. MOHEHAJir, CPA TIUTHONE (518) FAX (318) 21^M4I A.E[HVARDBAa.CFA vracle D. CASE. CPA C BRYAN YLE. CPA STUART LlfiBM. CPA AMBJUCA«INSTITUTE CERTIFtED PtJBUC ACWTAmS aooety <ff LOUISCAMA CmUimO) FUBUC ACCCnJWTANTS Reprt n Intemal Cntrl Over Finanial Rertinq and n Cmpltane and Other Matters Based n an Audit f Finanial Statements Perfrmed In Ardane With Gvemment Auditing Standards T the Bard f Diretrs Legal Servies f Nrth Luisiana. In. Shreveprt, Luisiana We have audited thefinanialstatements f Legal Servies f Nrth Luisiana, Ina (a nnprfit rganizatin) as f and fr the year ended Deember 31,2009, and have issued ur reprt theren dated April 22, We nduted ur audit in ardane with auditmg standards'generally aepted in the United States f Ameria and the standards appliable t finanial audits ntained in Gvemment Auditing Standards, issued by the Cmptrller General f the United States. Internal Cntrl Over Finanial Reprting In planning and perfrming ur audit, we nsidered Legal Servies f Nrth Luisiana, In.'s intemal ntrl verfinanialreprting as a basis fr designing ur auditing predures fr the purpse f expressing ur pinin n ttie finanial statements, but nt fr the purpse f expressing an pinin n the effetiveness f Legal Sen/ies f Nrth Luisiana, In.'s Internal ntrl ver finandal reprting. Ardingly, we d nt express an pinin n the effetiveness f the Organizatin's intemal ntrl ver finanial reprting. A defi/e/ty/n mfer77a/^frt)/exists when the desig n r peratin f a ntrl des nt allw mariag8nr>ent OT emplyees, in the nrmal urse f perfnming their assigned funtins, t prevent, r detet and rret misstatements n a timely basis. A material weakness is a defiieny, r a mbinatin f defiienies. In Intemal ntrl suh that there Is a reasnable pssibility that a material misstatement f the rganizatin's fmanial statements will nt be prevented, r deteted and rreted n a timely basis. Our nsideratin f the intemal ntrl ver finanial reprting was fr the limited purpse desribed in the first paragraph f this setin and was nt designed t identify all defiienies in internal ntrl ver finanial reprting that might be defliengies. signifiant defiienies, r material weaknesses. We did nt identify any defiienies in intemal ntrl ver finanial reprting that we nsider t be material weaknesses, as defined abve. Hwever, we identified a ertain defiieny In internal ntrl verfinanialreprting, desribed in the ampanying shedule f findings and questined sts, that we nsider t be a signifiant defiieny in mtemal ntrl ver finanial reprting (i(em2009-b1). A signifiant defiieny is a defllenif, rmbhatin r defiienies, in internal ntrl that is less severe than a material weakness, yet imprtant enugh t merit attentin by thse harged with gvernane. Cmtiane and Other Matters As part f btaining reasnable assurane abut whether Legal Servies f Nrth Luisiana. In.'s finanial statements are free f material misstatement, we perfnmed tests f its mpliane with ertain prvisbns f 17

20 laws, regulatins, ntrats and grant agreements, nnmpliane with whih uld have a diret and material effet n the determinatin f finanial statement amunts. Hwever, pndviding an pinin n mpliane with thse prvisins was nt an bjetive f ur audit, and, ardingly, we d nt express suh an pinin. The results f ur tests dislsed n instanes f nnmpliane r ther matters that are required t be reprted under Gvemment Auditing Standards. Legal Servies f Nrth Luisiana, In.'s respnse t the finding identified in ur audit is desribed in the ampanying shedule f findings and questined sts. We did nt audit Legal Servies f Nrth Luisiana, In.'s respnse and, ardingly, we express n pinin n it. This reprt is Interwied slely fr the infmiatin and use f management, the Bard f Diretrs, thers within the entity, and federal av/arding agenies and pass-thndugh entities and is nt Intended t be and shuld nt be used by anyne ther than these speified parties. Cid^:^nH/L^ Ck & Mrehart Certified Publi Auntants April 22, 2010 ^ 18

21 OK & MOREHART Certt/ied Publi Aunlanls I2»5 HAWN AVENUE SHMVIPORT. LOUISIANA P.O. BOXTK'tt- SHRfiVtPOKT, LOUISIANA ni37-n«travis H. MOREHART. CPA TELEPHONE PtS) FAX (318) A EDWARD BALL. CTA vraoed. CASE. CPA C_ BUYAN YLa Cf A STUAJIT U K C$, CPA AMEWCAN JNSTmJIB CERTlPieD PUBUC ACUNTANIS SOCIETY OF toulslaka UiKILFltiDPUBLIC ACUNTANTS Reprt n Cmpliane with Requirements Appliable \ Eah Mair Pnaram and n Intemal CntPjl Over Cmpliane in Ardane With OMB Cirular A-133 T the Bard f Diretrs Legal Servies f Nrth Luisiana, In. Shreveprt Luisiana Cmpliane We have audited the mpliane f Legal Servies f Nrth Luisiana, In., (a nnprfit rganizatin) with the types f mpliane requirements desribed in the OMB Cirular A-133 Cmpfiane Supplement anti in the Legal Servies Crpratin Audit Guide and Cmpfiane Supplement that are appliable t eah f its majr federal prgrams fr the year ended Deemt^er 31, Legal Servies f Nrth Luisiana, In's majr federal prgram is identified In the summary f auditr's results setin f the ampanying shedule f findings and questined sts. Cmpliane with tiie requirements f laws, regulatins, ntrats and grants appliable t its majr federal prgram is the respnsibility f Legal Servies f Nrth Luisiana, In.'s management Our respnsibility is t express an pinin n Legal Servies f Nrth Luisiana, In.'s mpliane tiased n ur audit W nduted ur audit f mpliane in ardane with auditing standards generally aepted in the United States f Ameria; the standanjs appliable t finanial audits ntained in Gvemment Auditing Standards, issued by the Cmptrller General f the United States; OMB Cirular A-133, Audits f States, Lal Gvernments, and t\in-prfrt Organizatins; and tiie Legal Servies Crpratin Audit Guide and Cmpliane Supplement. Thse standards and OMB Cirular A-l 33 require that we plan and perfrm the audit t btain reasnable assurane abut whether nnmpliane with the types f mpliane nsquirements referred t abve that uld have a diret and material effet n a majr federal prgram urred. An audit inludes examining, n a test basis, evidene abut Legal Sen/ies f Nrth Luisiana, In.'s mpliane with thse requirements and perfrming suh ther predures as we nsidered neessary in the irumstanes. We believe that ur audit prvides a reasnable basis fr ur pinin. Our audit des nt prvide a legal determinatin f Legal Servies f Nrth Luisiana, In.'s mpliane vattx thse nequlrements. In ur pinin. Legal Servies f Nrth Luisiana, In. mplied, in all material respets, with the requirements referred t abve that are appliable t eah f its majr federal prgrams fr the year ended Deern t>er 31, Intemal Cnti-l Over Cmpliane The management f Legal Sen/ies f Nrth Luisiana, In. is respnsible fr establishing and maintaining effetive Intemal nfrl ver mpliane with requirements f taws, regulatins, ntrats and grants appliable t federal prgrams. In planning and perfrming ur audit, we nsidered Legal Servies f Nrth Luisiana, In.'s internal ntrl ver mpliane with the requirements that uld have a diret and materia! effet n a majr federal prgram in rder t detennine ur auditing predures fbrthe purpse f expressing ur pinin n mpliane and l test and reprt n intemal ntrl ver mpliane in ardane with OMB 19

22 Cirular A-133, but nt fr the purpse f expressing an pinin n the effetiveness f internal ntrl ver mpliane. Ardingly, we d nt express an pinin n the effetiveness f Legal Servies f Nrth Luisiana, In's Intemal ntrl ver mpliane. A defiieny in intemal ntrl ver mpliane exists when the design r peratin f a ntrl ver mpliane des nt allw management r emplyees, in the nrmal urse f perfmiing their assigned funtins, t prevent r detet and n'et nnmpliane with a type f mpliane requirementf a federal pngram n a timely basis. A material weakness in internal ntrl ver mpfiane is a defiieny, r mbinatin f defiienies, in intemal ntrl ver mpliane, suh that there Is a reasnable pssitwlity that material nnmpliane with a type f mpliane requirement f a federal prgram will nt be prevented, r deteted and nneted, n atimelybasts. Our nsideratin f the intemal ntrl ver mpliane was fr the limited purpse desribed in the first paragraph f this setin and was nt designed t identify all defiienies In intemal ntrl ver mpliane thai might be defiienies, signifiant defiienies r material weaknesses. We did nt identify any defiienies in intemal nti'l ver mpliane that we nsidertidbe ntrial weaknesses, as defined abve. Hwever, we tdentifled a ertain defiieny in intemal ntrl ver mpliane that we nsider t be a signifiant defiieny as desribed in the ampanying shedule f findings and questined sts as item 2009-CI. A signifiant defiieny in internal ntrl ver mpliane is a defiieny, r mbinatn r defiienies, in intemal ntrl ver mpliane with a type f mpliane requirement f a federal prgram that is less severe than a material weakness in Intemal ntrl ver mpliane, yet imprtant enugh t merit attentk>n by thse harged vwth gvernane. Legal Servies f Nrth Luisiana, In's respnse t ti^e finding identified in ur audit fe desribed in the ampanying shedule ffindingsand questined sts. We did nt audit Legal Servies f Nrth Luisiana, In's respnse and, ardingly, we express n pinin n it. This reprt is intwided slely fr the infrmatin and use f management, the Bard f Diretrs, thers within the entity, and federal awarding agenies and pass-tiirugh entities and is nt intended t be and shuw nt be used by anyne ther than tiiese speified parties. Ck & Mrehart Certified Publi Auntants April 22,

23 Legal Servies f Nrth Luisiana. In. Shreveprt. Luisiana Summary Shedule f Prir Audit Findings Deember There were n findings r questined sts fr the prir audit perid ended Deember 31, A. Summary f Audit Resulte Shedule f Findings and Questkxied Csts Deember 31, The auditr's reprt expresses an unqualrfied pinin n the finanial statements f Legal Servies f Nrth Luisiana, In. 2. One signifiant defiieny is reprted in the Reprt n Cmpliar>e and n intemal Cntrl Over Finanial Reprting Based n an Audit f Finanial Statements Perfrmed in Ardane with Gvemment Auditing Standanjs. The defiieny is nt reprted as a material weakness. 3. N instanes f nnmpliane material t the finanial statements f Legal Servies f Nrth Luisiana, In. were distsed during the audit 4. One signifiant defiieny is reprted In the Reprt n Cmpliane With Requirements Appliable t Eah Majr Prgram and Internal Cntrl Over Cmpliane in Ardane Witii OMB Cirular A-133. The defiieny is nt reprted as a material weakness. 5. The auditr's reprt n mpliane fr the majr federal award prgram fr Legal Servies f Nrth Luisiana, In. expresses an unqualified pinin. $. Findings relative t the majr federal award prgram fr Legal Servies f Nrth Luisiana, In. are reprted in Part C. f this Shedule. 7. The prgram tested as a rnajr prgram was the Legal Servie Crpratin prgram CFDA # The threshld fr distinguishing Types A and B prgrams was $300, Legal Servies f Nrth Luisiana. In. des nt qualify as atw-riskauditee. B. Findings - Finanial Statements Audit 2009-B1 SIGNIFICANT DEFICIENCY Statement f Cnditfn: During ur audit we nted that mst f the ageny's emplyees enter their time wried int a sftware prgram by prjet / funding sure. Fr transatins seleted fr testing, the altatin ftimet the varius prjets/funding sures entered int the sftware traking prgram did nt alvifays agree with the allattn f time entered int the general ledger fr eah funding sure. We als nted that the ageny peridfally makes jurnal entries t revise the allatin f payrll harges n the general ledger. Supprt fr thse jurnal entries did nt always prvide fr a reniliatin f the allatin f time riginally entered int the general ledger lthe atual altaatin f time as entered int the sftware prgram. Criteria: Methds f alkx^ating sts shuld be in ardane with appliable st priniples and shukj prdue an equitable and nsistent distributin f sts. 21

24 (Cntinued) Legal Servies f Nrth Luisiana, In. Shreveprt Luisiana Shedule f Findings and Questined Csts Deember 31,2009 (Cntinued) Cause; Payrll is nt being prepared frm the atual ativity reprts perttiesftwaretibklngprgram. In additin, a peridi reniliatin is nt being perfmned f the salaries psted t tiie general ledger t the salaries per the atual ativity reprts. Effet Ageny's sts may nt be allated equitably t varius prgrams f the ageny. Remmendatin: We remmend that the salaries harged t the general ledger t the varius prgrams be reniled peridially t the atual time wrked as entered int the sftware traking prgram. Respnse: Effetive January 1, 2010, Legal Sen/ies f Nrth Luisiana has implemented new time keeping predures t better renile riginal time entered in tiie ase management system t the general ledger C. Findings and Questined Cste - Majr Federal Award Prgrams Audit LEGAL SERVICES RPORATION - CFDA# ^1 SIGNIFICANT DEFICIENCY As disussed in Sig nifiant Defiieny 2009-B1, we nted that mst f the ageny's em plyees enter their time wri<ed int a sftware prgram by prjet / funding sure. Fr transatins seleted fr testing, the alkxatin f time t the varius prjets / funding sures entered int the sftware traking prgram did nt ahvays agree with the allatin f time entered int the general ledger fr eah funding sure. Ws als nted that the ageny peridially makes jurnal entries t revise the allatin f payrll harges n the general ledger. Supprt fr thse jurnal entries did nt always prvide fr a reniliatin f tiie altatin f time riginally entered int tiie general ledger ttineatual allatin ftimeas entered Int the sftware prgram. 22

25 Legal Sen/ies f Nrth Luisiana, In. Shreveprt. Luisiana Shedule f Prir Audit Rndings Fr Luisiana Legislative Auditr Deember 31,2009 There were n findings fr the prir year audit perid ended Deember 31,2008. There were tw management letter mments fr tiie prir audit year ended Deember 31,2008, as fllws: Cmment #1 - Cst Altatin Plan - Nn-LSC Prgrams See signifiant deffieny in unent year audit. Cmment #2 - Retirement Plan A new retirement plan was established. N mment in unent year audit. Shedule f Current Audrt Findings Fr Luisiana Legislative Auditr Deembers! 2009 There is ne sign'rfiant defiieny fr the urrent year audit perid ended Deember 31, 2009, as dislsed in the ampanying shedule f findings and questined sts. There are n management letter mments fr the un'ent audit year ended Deember 31,