CALCASIEU ASSO C IATIO N FO R RETARDED C ITIZENS.INC FINANCIAL STATEM ENTS AND INDEPENDENT AUDITO RS'REPO RT. YearEnded June 30.

Transcription

1 '::? 3 CALCASIEU ASSO C IATIO N FO R RETARDED C ITIZENS.INC FINANCIAL STATEM ENTS AND INDEPENDENT AUDITO RS'REPO RT YearEnded June G RAGSON,CASIDA~ & G UILLORY,L.L.P. C ERTIFIED PU BLIC AC C O U NTA NTS

2 CO NTENTS Page NDEPENDENT AUDITO RS'REPO RT 3 FINANCIAL STATEM ENTS STATEM ENT O F FINANCIAL PO SITIO N STATEM ENT O F ACTIVITIES STA'rEM ENT O F FUNCTIO NAL EXPENSES STATEM ENT O F CASH FLOW S NO TES TO FINANC IAL STATEM ENTS SUPPLEM ENTARY INFO RM ATIO N SCHEDULE O F SUPPO RT,REVENUES,AND EXPENSES - DEPARTM ENTALIZED NDEPENDENT AUDITO RS'REPORT ON CO M PLIANCE AND O N INTERNAL CO NTRO L OVER FINANCIAL REPO RTING BASED O N AN AUD IT O F FINANCIAl.STATEM ENTS PERFO RM ED IN ACCO RDANCE W ITH GOVE RNM ENT _ AUpJ-E!NG STANDARpS G RACSON,CASIDAY & G UI,LORY,L.IJ ), C ERTIFIED PU BLIC AC C O U NTA NTS

3 G R A G SO N,C A SID A Y & G U ILL O R Y,L.L.P. C ERTIFIED PU B LIC A C C O U NTA N TS W.GEORG~ G~AG~.CJN.C p,~, RICHARD W.CAS)DAY,C.P,A RAYMON~ GUILLORY,JR.,C P.A G RAHAM A PORTUS,E A COY T.W N CEN'T.C.P.A JULIA W.pORTUS,C P.A M ICHELLE BOURNE.C P,A paige F,BROW NE,C.P,A DAW N REDD,C P.A ~ ^DLEY J C A~ OAy.C.~.A NDEPENDENT AUD ITO RS'REPO RT Septem ber18,2002 To tile Board ofdirectors C alcasieu A ssociation for Retarded C itizens.inc. W e have audited the accom panying statem entoffinancialposition ofc alcasieu Association for Retarded Citizens,Inc.(a nonprofitorganization),asofjune 30,2002,and the related statementsof activities,functionalexpenses and cash flows forthe yearthen ended. These financialstatem ents are the responsibility ofthe Calcasieu Association forretarded C itizens,inc.'s m anagem ent. O urresponsibility is to express an opinion on these financialstatem ents based on ouraudit. W e conducted ourauditin accordance w ith auditing standards generally accepted in the United States ofam erica and the standards applicable to financialaudits contained in _ G ~vee!m ~~(A. ud!(ng Sta. nda[ds,issued by the Com ptrolerg eneralofthe United States.Those standards require thatw e plan end perform the auditto obtain reasonable assurance aboutw hetherthe financialstatem ents are free of m aterialm isstatem ent. A n auditincludes exam ining,or1a testbasis,evidence supporting the am ounts and disclosures in the financialstatem ents. An auditalso includes assessing the accounting principles used and significantestim ates m ade by m anagem ent,as w e las evaluating the overa lfinancial presentation. W e believe thatourauditprovides a reasonable basis forouropinion. In ouropinion,the financialstatem entsreferred to above presentfairly,in allm aterialrespects,the financialposition ofc alcasieu Association forretarded Citizens,inc.as ofjune 30,2002,and the changes in its netassets and its cash flow s forthe yearthen ended in conform ity with accounting principles genera ly accepted in the United States ofam erica. In accordance w ith G ove[nm entauditi09 Staq _ dards,w e have also issued a reportdated Septem ber18,2002,on ourconsideration ofcalcasieu Association forretarded Citizens,Inc.'s internal controloverfinancialreporting and oartests ofits com pliance w ith certain provisions oflaw s,regulalions, contracts and grants.thatreportis an integralpartofan auditperform ed in accordance with G overnm en Auditing Standardsand should be read in conjunction with thisreportin considering the resultsofour audit. O urauditw as conducted forthe purpose ofform ing an opinion on the basis financialstatem ents taken as a whole.the supplem entary inform ation on pages 19 and 20 is presented forpurposes of additionalanalysis and is nota required partofthe basic financialstatem ents. Such inform ation has been subjected to the auditing proceduresapplied in the auditofthe basic financialstatementsand,in our opinion,is fairly stated in a~lm aterialrespects in relation to the basic financialstatem ents taken as a w hole. ONE LAKESIDE PLAZA,SUITE 700,P.O.DRAW ER 1847 LA,KE CHARLES,LOUiSiANA ~rel~'phg'ne ~337~439 I~,FACSlMJLE 1337)43~ 1366 t215 POST OAt{ ROAD.SUITi~ 6 SULPHUR,LOUISIANA TELEPHONE (~373S2F~.I~B6.FAC$1MJLE 1337)625.S67

4 CALCASIEU ASSOCIATIO N FO P,RETARDED CITIZENS. INC Statem entoffinancialposilion June C URR ENT ASSETS Cash and cash equivalents,including interest-bearing accountsof$236,301 Investm ents Unconditionalprom ises to give Accounts receivable G rants and conlracts,net M edicaid,net W ork A ctivity,net C lientliability,net O ther Accrued interestreceivable M erchandise inventory Prepaid expenses "l-otalcurrentassets ASSETS $ 380, , , ,267 49,144.!, PRO PERTY,PLANT,AND EQ UIPM ENT Buildingsand im provem ents. Leasehold im provem ents Furniture,fixtures,and equipm ent Transportation equipm ent Construclion in progress Less accum ulated depreciation and am ortization Land O THER ASSETS Deposits _ 2,438,393 80,766 1,225, ,917 50(~,9 _ 11 4, ~(2,39Q,523) 2,589,194 _ 184,148 2,773,342 1,695 $ 5,646,308 The accom panying notes are an integralpartofthis statem anḷ

5 LIABILI'f'IES AND N ET ASSETS CURREN T LIABILITIES Accounts payable - trade Accounts payable - conslruclion Accrued salaries Payrolltaxes payable Accrued expenses -other Totalcurrentliabilities NET ASSETS Unrestricted Tem porarily restricted $ 78,931 14,263 37,910 49,509 ~1~6~4 192,277 5,338,031.!~6~OOQ $ 5,646,308 G RAGSON,CASIIrAY ~ G UILLORYrL.L P. C ERTIFIED PU BLIC ACC O U N TAN TS

6 CAI.CASIEU ASSO CIAI-IO N FO R RETARDED C I'IZENS,INC Statem entofactivities YearEnded June 30,2002 LID res t[jcje._d. Tem porarily R g st _ ricte,d T#Lal REVENUE,GAINS AND O THER SUPPO RT Federal,slate and local grants/contracts M edicaid United W ay grant Contributions M em bership dues Auxiliary activities O therprogram fees Fund raising Investm entincom e O therincom e G ain on disposalofassets N etassets released from restrictions Expiration oftim e restrictions- United W ay TOTAL REVENUES,G AINS AND O THI-R SUPPO RT $ 1,227,199 2,360,533 7,401 1,050 1,063,234 24& 106 5,452 76,204 ~ 61,550 3, _.195,50Q (195LSOQ) $ 1,227,199 2,360, ,000 7,401 1,050 1,063, ,106 5,452 76,204 61, ,250,082 6,500 5,256,582 EXPENSES AND LO SSES Program services Supporling services M anagem entand general TOTAL EXPENSES AND LO SSES 4,942,641. _4~961, ,641 NCREASE IN NET ASSETS 282,269 6, ,769 NET ASSETS AT BEG INNING O F YEAR 5,055~ ,~ Q. 5,165,262 NET ASSETS AT END OF YEAR $.5,338,03! $ 116,000 $ 5,454,031 The accom panying no[es are an integraldartofthis;statem ent. G R.~GSON,C hsiday & G LILLORY,[.,L,P C ERTIFIED PUBLIC AC C O U NTANIS

7 CALCASIEU ASSO CIATIO N FO R RETARD ED C ITIZENS,INC Statem entoffunctionalexpenses YearEnded June 30,2002 Salaries and w ages Payro ltaxes Totalsalaries and related expenses Advertising A RC m em bership fees Bad debts Centraloffice overhead C onsultants Contractservices Day care tuition Dues and subscriptions Em ployee benefits Habilitative services Insurance Licenses M edicaid providerfees M edical M iscellaneous Office expense Professionalservices Purchases-resale item s Recreation expense Rent Repairs and m aintenance Sem inars Supplies Telephone Transportation Travel Utilities Totalexpenses before depreciation expense Depreciation expense _P~ Ea _ m Se rv _ ic _ e s W ork Ao!iyity_._. $ 488,79O 37~ , , ,861 15,120 7,769 44, , ,667 92,296 31, , ,860 3,807 _35~ 05~ 1,013,478 87~376 $ 1,100,85"t Adult Ha bili[a t_iqrz $ 552,783 41, , , ,668 65, , ,547 2,449 14,650 1, ,083 27,894 2, ,689 $ 381, , ,626 2, ,433 18, , ,854 9,099 3,559 14,442 6, , ,601 $ 1,029,698 $ 635,429 The accom panying notes are an integralpartofthis statem ent 7

8 _ Residential Se_[v ice_s Supervised _ Uyjn.cL _ Bes_ire s Ẹ!in]Ln _ations _."total $ 616,448 46,_53~4 $ 152,822 11j58 _ ~ $ 313, $ 2,506, , , , , ,695, ,541 39, ,433 19, ,432 37,740 3, ,460 7,382 24, ,453 7,783 1, ,474 2,551 13,340 1,978 _ 21.57o 47,906 2, ,842 6, ,449 4, ,848 5, , ,743 13, , (174,432) (5,547) (21,473) (347) (1,634) i 4, ,972 41,704 17,832 2,400 4, ,134 5, ,460 7,382 42,346 1,746 27,787 92,296 12,351 7,606 41,409 6, ,481 19,053 54,028 56,595 82,4~0 1,600, ,989 4 L4 _ ,713 2 _ 8 _ 7 (203,433) 4, ,658,605 $ 25p,488 $ 47!,000 $ (203,~33) $ 4,942,641 G RAGSON,CASII)AY & G UI,,ORY,L.L.E C ERTIFIED PU BLIC AC CO U NTAN TS Continued

9 CALCASIEU ASSO CIATIO N FO R RETARDED CITIZENS,INC Statem entoffunctionalexpenses -Continued YearEnded June 30,2002 Salaries and w ages Payrolllaxes Totalsalaries and related expenses Advertising ARC m em bership fees Bad debts Centraloffice overhead Consultants Contractservices Day care tuition Dues and subscriptions Em ployee benefits Faadraising Habilitative services insurance Licenses M edicaid providerfees M edical M isce laneous O ffice expense Professionalservices Purchases -resale item s Recreation Rent Repairs and m aintenance Sem inars Supplies Telephone Transportation Travel Utilities Totalexpenses before depreciation expense Depreciation expense M anagem ent ~S uj :~ _ P o_ri _ Lq g _S_9 ryjc-el - Fund and G g. pera/ $ 5,512 ~ RaLs)r)g _ $ 424 c 5,936 1,910 1, g 3, , _ 4 24, $ 25,172 $ The accom panying notes are nil integralpartofthis statem ent, G I~AGSON,C ASIDAY & G U LLORY,L.L.I~. C ERTIFIED PU BLIC AC C O U NTA NTS

10 CALCASIEU ASSO CIATIO N FO R RETARD ED C ITIZENS,INC Statem entofcash Flow s YearEnded June 30,2002 CASH FLO W S FRO M O PERATING ACTIVITIES Change in netassets Adjustments1o reconcile change in netassets to netcash provided by operating activities Depreciation Bad debts G ain on the disposition ofassets Unrealized depreciation ofinvestm ents (Increase)decrease in: Unconditionalprom ises to give Accounts receivable Accrued interestreceivable Inventory D eposits and prepaids Increase (decrease)in: Accounts payable -trade Accrued salaries Payro ltaxes payable Accrued expenses -other N ET CASH FRO M O PERA'IING ACTIVITIES $ 288, ,635 4,436 (3,853) (6,500) (112,467) 8,054 (1,580) ,600 3,530 (5,116) (~ ] 520,150 CASH FLO W S FRO M INVESTING ACTIVITIES Proceeds from m aturity ofinvestm ents Purchase ofinvestm ents Proceeds from sale offixed assets Purchases offixed assets and construction in progress N ET CASH FRO M INVESTING ACTIV ITIES NET INCREASE IN CASH AND CASH EQ UIVALENTS _ 787,388 (542,000) 4,215 (49_2,639) 27,511 C ash and cash equivalents,june 30,2001 Cash and cash equivalents,june 30, ,753 $ 380,264 The accom panying notes are an integralpartofthis statem ent G RAGSON,CASIDAY & C UII,LORY,L.L.P. C ERTIFIED PU B LIC A C C O U N TA N TS

11 CALCASIEU ASSO CIATIO N FO R R ETARDED C ITIZENS.INC Notes to Financia)Statem ents June 30,2002 NOTE A -SUM M ARY O F SIG NIFICANT ACCO UNTING PO LICIES This sum m ary ofsignificantaccounting policies ofcalcasieu Association forrelarded Citizens,Inc (CARC)ispresented to assistin understanding CARC's financialstatements.the financial statem ents and notes are representations ofcarc's m anagem ent,w ho is responsible fortheir integrity and objectivity,l+hese accounting policiesconform to generaly accepted accounting principles,which have been consistently applied in the preparation ofthe financialstatem ents. 1. N _ ature _ ofaptivities Calcasieu Association forretarded Citizens,Inc.was organized undersection 501(c)(3)ofthe InternalRevenue Code asa nonprofitorganization fortbe purpose ofproviding the folowing services to m entaly and physicaly handicapped persons(clients)in SouthwestLouisiana: W ork A ct!vj~ -Clientsprovide servicesto area businesseson a contract basis and produce various m erchandise forresale to the public. Adu/t _. HabilitaJjon -Adults are taughtday to day opportunities. tying skils and w ork Infa n t _Ḥabilitation -infants through three years ofage are taughtbasic developm entalskills. ResidentiaLS#rvjge_s-The Association maintainssixcommunity homes wh)ch house six c)ients each on a "round the c)ock"supervised basis. Superv.!sed Ind epe.r~dent[.ivjng -Clientsare placed in supervised on a day-to-day,part-tim e basis. opalapartm ents and are Respite Services. - The Association provides siters forparents and guardians ofclients. The m ajority ofthe funding forthe above programsisprovided by Medicaid and the State offices ofthe Louisiana Departm entofhealth and Hospitals.W ithoutthis funding,the Association would be forced to find altern ative funding sources in order to m aintain operations. 2. _ Basts gf._ A _ cc _ ounting The financialstatem ents have been prepared on the accrualbasis ofaccounting in accordance w ith genera ly accepted accounting principles. G RAGSON,CASIDAY ~ G UILLORY,L,L+I~. CERTIFIED pui3lic ACCOUNTANTS C ontinued

12 CALCASIEU ASSOCIATION FO R RETARDED CITIZENS.INC Notes to FinancialStatem ents June NOTE A -SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3. Ba _ sjsofp[.esentatlob. Financialstatem entpresentation fo low s the recom m endations ofthe FinancialAccounting StandardsBoard initsstatementoffinancialaccountingstandards(sfas)no.117,fina0c_(~! _Statem ~n!sofnoefor~profito~-ganjzatioqs.undersfas No.117,CARC is required to report inform ation regarding its financialposition and activities according to three classes ofnetassets unrestricted netassets,tem porarily restricted netassets,and perm anently restricted netassets 4, U se pf _ Estim ates The preparation offinancialstatem ents in conform ity with generally accepted accounting principles requires m anagem entto m ake estim ates and assum ptions thatafectthe reported am ounts of assets and liabilities and disclosure ofcontingentassets and liabilities atthe date ofthe financial statem ents and the reported am ounts ofrevenues and expenses during the reporting period. Actualresults could diferfrom those estim ates. 5. _ C ash and._ C ash Equivalents The Association considers a lunrestricted highly liquid investm ents w ith an initialm aturity ofthree m onths orless to be cash equivalents. 6.Ln2 e#tj~ e nts Investm ents consistofu.s.treasury Notesand Certificate ofdepositswith a costof$1,744,196 w hich do notm eetthe Association's definition ofcash equivalents. The investm ents are carried at theirfairvalues in the statem entoffinancialposition. Unrealized gains and losses are included in the change in netassets in the accom panying statem entofactivities.accum ulated unrealized depreciation in assets classified asinvestm entsatjune 30,2002 was$27, P[gperty,Planj,a0d E qujpme_p.! 3-he Association folows the practice ofrecording assets atcostorestim ated fairvalue ofdonated assets atdate ofdonation. Allassets w ith estim ated usefullives in excess ofone yearare capitalized. Depreciation and am ortization is provided on the straight-line m ethod atrates calculated to allocate the recorded am ounts overthe estim ated usefullives ofthe assets. Depreciation and amortization amounted to $274,635,ofwhich $36,657 isincluded in centraloffice overhead expense in the.accompanying statementoffunctionalexpenses,forthe yearended June 30,2002 and m ay be allocated as fo low s: Assets stated athistoricalcost Donated assets recorded atfairvalue Total $ 272,297. 2,338 $ 274,635 G RAGSON,CASIDAY ~.~ G UILLORY,L.I,.P C ERTIFIED PU BLIC AC C O U NTA NTS C ontinued

13 CALCASIEU ASSO C IATIO N FO R RETARDED C I'[IZENS,INC Notes to FinancialStatem ents June NOTE A -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) AtJune 30,2002 construction in progress of$506,911consisted ofthe RiegelStreethom e construction and the W estsale Road hom e construction atcosts of$316,769 and $190,123 respectively. Both hom es are expected to be com pleted in the early partofthe June 30,2003 fisca yearatadditionalcostsof$45,000 and $54,000,respectively. 8. E xpen se AJl_ocation Directcosts are charged directly to the grants and program s in w hich the expense is incurred or they are allocated to the grants and program s based on the proportion ofbenefitresulting from the parlicularexpenditure. A lothercosts notidentifiable as direclcharges are regarded as "central office overhead"and accum ulated in a pool.this poolis distributed m onthly to the grants and program s based on the proportion ofeach grant's/program 's directcosts to totaldirectcosts, com puted on a m onthly basis. 9.Eli~!0~!ioq~ Forreportpurposes,a lsignificantinter-departm entalaccounts and transactions have been elim inated. I0. _ lqgom e Taxes Tire Association isa nonprofitorganization undersection 501(c){3)ofthe InternalRevenue Code and generaly isnotsubjectto income taxesaccording to the provisionsoffederaland Louisiana State incom e tax laws and regulations. In addition,carc hasbeen determ ined by the Internal Revenue Service notto be a "private foundation"within the meaning ofsection 509(a)(1)ofthe code. 11.P#nate_d_Services No amountshave been reflected in the statementsfordonated servicesinasm uch asno objective basis is available to m easure the value ofsuch services;how ever,a substantialnum berof volunteers have donated significantam ounts oftheirtim e to the organization's program services. 12.p_esign~ ted NetA ssat~ Atits discretion,the Board m ay designate revenue forspecific purposes.any Board-designated funds w ould be segregated underthe unrestricted netassets. 13.h2.ento~ Inventory is stated atthe lowerofcostorm arket.costis determ ined underthe first-in,first-ou m ethod olaccounting. G RAGSON,CASIDA~ & G UILLORY,L.L.E C ERTIFIED PU BLIC AC C O U NTA NTS Continued

14 CALCASIEU ASSO CIATION FO R RETARDED CITIZENS,INC Notes to FinaneialStatem ents June NOTE A -SUM MARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Restriched And Ụ n~e s_ tricted R.eye _n u e a nd~ ~_u.peo Contributions received are recorded as unrestricted,tem porarily restricted,orperm anently restricted support,depending on the existence and/ornature ofany donorrestrictions. Supportthatis restricted by the donoris reported as an increase in unrestricted netassets ifthe restriction expires in the reporting period in w hich the supportis recognized. A lotherdonorrestricted supportis reported as an increase in tem porarily orperm anently restricted netassels, depending on the nature ofthe restriction.w hen a restriction expires(thatis,when a stipulated time restriction endsorpurpose restriction isaccomplished),temporarily restricted netassetsare reclassified to unrestricted netassets and reported in the Statem entofactivities as netassets released from restrictions. 15. Tem oorarilv Restricted NetAssets Tem porarily restricted netassets atjune 30,2002 includes the principalam ountofa donation received in a priorfiscalyear.the donorplaced certain stipulations on the use ofthese funds. As ofjune 30,2002,none ofthe originaldonation of$15,000 had been expended. Also included in tem porarily restricted netassets as ofjune 30,2002 is the rem aining United W ay a location yetto be received forcalendaryear2002 am ounting to $101, _ Prornises to G ive Unconditionalprom ises to give are recognized as revenues orgains in the period received and as assets,decreases ofliabilities,orexpenses depending on the form ofthe benefits received. Conditionalprom ises to give are recognized only w hen the conditions on w hich they depend are substantia ly m etand the prom ises becom e unconditional. NOTE B -CASH AND CASH EQ UIVALENTS As ofjune 30,2002,cash and cash equivalents consisted ofthe foilowing O perating accounts,netof outstanding item s M utualfunds $ 186, $ 380,264 G RAGSON,CASIDAY ~.~G UILLORY,L.L.~. C ERTIFIEO PU BLIC AC C O U NTANTS

15 CALCASIEU ASSO CIATIO N FO R RETAR DED C ITIZENS,INC Notes to FinancialStatem ents June NOTE B -CASH AND CASH EQUIVALENTS (CONTINUED) Allcash deposits in operating accounts and certificates ofdepositwere fully co lateralized atjune 30,2002,eitherby FD IC lim its orby peedged securities. How ever,a significantrisk ofloss existed atjune 30,2002 w ith regard to the m onies invested in m utualfunds because those funds are not insured againstm arketrisk. NOTE C - ACCO UNTS RECEIVABLE A ccounts receivable am ounts in the accom panying statem entoffinancialposition are reported net ofthe fo low ing allow ance fordoubtfulaccounts: Contracts _$_ I_?~942 $ 17,942 NOTE D -M EDICAID PROVIDER FEE The Association's residentialservices program is required,underlouisiana R.S.46: ,to pay to the Departm entofhealth and Hospitals a fee perpatientday foreach bed w hich is in use or reserved fora patient.the totalofsuch feesforthe yearended June 30,2002 is$135,460. NOTE E -RELATED PARTY TRANSACTIO NS Included in accounts receivable-otheratjune 30,2002 are operating advances of$31,400 m ade in priorfiscalyears to Louisiana Disabled Persons Finance Corporation,an affiliated non-profit organization undera com m on board ofdirectors, fn addition,louisiana Disabled Persons Finance Corporation paid $4,752 In m anagem entfeesto Calcasieu Association forretarded Citizens,Inc. forthe yearended June 30,2002. Sum m arized financialdata oflouisiana Disabled Persons Finance Corporation as ofand forthe yearended June 30,2002 is asfo low s: TotalAssets TotalLiabilities NetAssets TotalRevenue TotalExpenses Change in NetAssets $ 400,661 6oo~ o2 $ (199,841) $ 101,023!:!.3,575 $ (12,552) G RAGSON,CASIDAY ~ G U1LLORY,L.L I: C ERTIFIED PU B LIC A C C O U N TA N TS

16 CALCASIEU ASSO CIATION FO R RETARDED CITIZENS.INC Notes to FinancialStatem ents June NOTE F -INVESTM ENT INCO M E Investm entincom e included in the statem entofactivities is sum m arized as fo low s Interestincom e Netunrealized losses $ 101,668 _ L2._5 L4_6~4_) NO TE G -R ETIR EM ENT PLAN Totalunrestricted investmentincome $ 76,204 Effective Septem ber1,1997,a retirem ents savings plan and trustforthe benefitofeligible em ployees w as adopted.the plan covers substantialy alofthe em ployees,with the exception ofclientem ployees,ofcalcasieu Association forretarded Citizens,Inc.w ho have attained the age of21and completed one yearofservice (atleast1,000 hours ofservice in a plan year).the plan issubjectto the provisionsofthe Employee RetirementIncome Security Actof1974 (ERISA). Each participantofthe plan m ay electto deferfrom zero to fifteen percentofhis com pensation. The m axim um annualam ountthatan em ployee could contribute as an elective deferralfor calendaryear2001was $10,500 peryear. Forthe yearended June 30,2002,salary deferrals by eligible participantstotaled $ 73,543.The employermay make a matching contribution to each participantbased on the participant's elective deferrals in a percentage setby the em ployerpriorto tire end ofeach plan year. Forthe yearended June 30,2002,the Board ofdirectors adopted an em ployercontribution of50% ofthe first6% thatan em ployee contributes.additionalam ounts m ay be contributed atthe option ofthe Board ofdirectors. Forthe yearended June 30,2002,the em ployerm atch totaled $20,386. NO TE H -PRO M ISES TO G IVE Unconditionalprom ises to give atjune 30,2002 are as follow s 2002 United W ay Allocation Receivable in less than one year Receivable in one to five years Receivable in m ore than five years Totalunconditionalprom ises to give Less discounts to netpresentvalue Lessalowanceforuncolectible promisesreceivable $ 101,000 $ 101, Netunconditionalprom ises to give at June 30,2002 $ 101,000 G RAGSON,CASIDAY ~ G UILLORY,L.L.P. C ERTIFIED PU BLIC ACC O U NTANTS

17 CALCASIEU ASSO CIATIO N FO R RETARDED CITIZENS,INC Notes to FinancialStatem ents June 30,2002 NOTE I-CENTRAL O FFICE OVERHEAD Included in centraloffice overhead expense in the accom panying Statem entoffunctiona Expenses are the follow ing naturalexpense categories: Salaries and wages Payro ltaxes Totalsalary and related expenses Advertising Contractservices Dues and subscriptions Em ployee benefits Insurance Licenses M isce laneous Office expense Professionalservices Repairs and m aintenance Sem inars Supplies Telephone Transportation Travel Utilities Totalexpenses before depreciation expense Depreciation expense Totalcentralofice overhead $ 542,397 40~ ,553 11,367 42,507 35, ,493 6,399 15,900 25,093 2,032 25,840 7,949 7,950 7,307 14,5Q3 800,737 $ 837,394 NOTE J - LO SS CO NTING ENCIES AtJune 30,2002,the Association w as involved in tw o law suits currently being handled by the Association'sinsurance carrierand the carrier's attorney.any judgmentin excess ofthe ir~surance coverage would have to be paid by the Association.As ofjune 30,2002,itis m anagem ent's opinion thatthe suits w ilbe concluded atno m aterialcostto the Association. G RAGSON,CASIDAY ~ G UILLORY,L.L.P. C ERTIFIED PU IEILIC ACC O U NTANTS

18 SUPPLEM ENTARY INFO RM ATIO N G RAGSON,CASIDAY ~ G UILI.ORY,I.L.E C ERTIFIED PU BLIC AG C O U NI"AN~IS

19 CALCASIEU ASSO C IATIO N FO R RETARDED C ITIZENS,INC Schedule ofsupport,revenues,and Expenses -Departm entalized YearEnded June 30,2002 C entra O ffice W ork Activity _ Adult Ha b!!ta~lon Infant H# bj!ila!!o~ Public supportand revenue Public support Federal,state and local grants/contracts M edicaid United W ay grant Contribulions Totalpublic supped 2.03 _ $ $ 58, , ,832 43,200 _. _ 4~! 919,292 $ 426, ,600 4, Revenue M em bership dues O therprogram fees Fund raiserincom e Auxiliary activities Investm entincom e O therincom e G ain on disposition ofassets Totalrevenue 1,050 5,452 4,753 76,204 1,085, , , _ 3. 3,.2!5 638 r 1, _2 ~ Totalpublic suppart and revenue ,172,402 1,11t, ,386 Expenses and losses Program services Supporting services M anagem entand general Totalexpenses and losses 2~5.!72= ~ _ 75j72_ 1,100,854 1,029, ,429 Excess(deficiency)of public supportand revenue overexpenses $ 64,320 $ 71,548 $ 81,975 $ (63,044)

20 R esidential _ $e_r~lces Sdpervised ndependent Liviq9 Respite Elim inations Tota $ 1,536,132 _ $ 49, ,338 $ 45,893 $ 447, ,124 $ 1,227,199 2,360, , , _. _ 22~8 610 (176,066) (27,367) _ (203,433) 1, ,106 5,452 1,063,234 76, ,853 1,459,449 1,764, , ,124 (203,433) 5,256,582 1,658, , ,000 (203,433) 4,942, _ (203,433) 25j172 $ 106,152 $ 5,694 $ 22,124 $ 268,769 G RAGSON,CASIDAY ~ G DILLORY,L.L.I~ C ERTIFIED PU B LIC A C C O U NTA N TS 20

21 G R A G SO N,C A SID A Y & G U ILL O R Y,L.L.P. w,george GRAGSON,C.P.A. RICHARD W.CASIDAY,C P,A. RAYM OND G UILLO RY,JR,C p,a GRAHAM A.PORTUS.E A CO Y ~.VINCENt,C.P.A. JULIA W.pORTU$,C P.A, MICHELLE BOURNE,C.P,A PAIGE F,BROWNE,C.P.A. D AW N REOD,C.I~,A. BRADLEY J,CASlDAY.~ P.A INDEPENDENT AUDITO RS'REPO RT O N CO M PLIANCE AND O N INTERNAL CO NTRO L OVER FINANCIAL REPO RTING BASED O N At',]AUDIT O F FINANCIAL STATEM ENTS PERFO RM ED IN ACCO RDANCE W ITH GQ_VE R NM E N'r_. ALI _ DI _ TING STAN. DARD _Ṣ Septem ber18,2002 To fhe Board ofd irectors Calcasieu Association for Retarded C itizens.inc. W e have audiled lhe financialstatem enls ofc alcasieu Associalion forretarded C itizens,inc.as of and forthe yearended June 30,2002,and have issued ourreportthereon dated Septem ber18,2002. W e conducted ourauditin accordance with auditing standards genera ly accepted in the United States of Am erica and the standards applicable to financialaudits contained in Ggy _grnn3#ntaud[tlo~g_stai3dard_s, issued by the C om ptrollerg eneralofthe United States. As partofobtaining reasonable assurance aboutwhethercalcasieu Association forretarded Citizens,Inc.'s financialstatem ents are free ofm aterialm isstatem ent,w e perform ed tests ofits com pliance w ith certain provisions oflaw s,regulations,contracts and grants,noncom pliance w ith w hich could have a directand m alerialeffeclon lhe determ ination offinancialslalem enlam ounts. How ever, providing an opinion on com pliance with those provisionswasnotan objective ofourauditand, accordingly,w e do notexpress such an opinion. The results ofourtests disclosed no instances of noncom pliance thatare required to be reporled underg overnm entauditing Standards Inte[na]Cpn[rolOverFi.nanc!_a.]Repprlhng In planning and perform ing ouraudit,w e considered Calcasieu Association forretarded C itizens, Inc.'s internalcontroloverfinancialreporting in orderto determ ine ourauditing procedures forthe purpose ofexpressing ouropinion on the financialstatem ents and notto provide assurance on the internalconlrol overfinancialreporting. O urconsideration ofthe internalcontroloverfinancia]reporting w ould not necessarily disclose a lm ailers in lhe internalcontroloverfinancialreporling thatm ightbe m aterial w eaknesses.a m aterialw eakness is a condition in which the design oroperation ofone orm ore ofthe internalcontrolcom ponents does notreduce to a relatively low levelthe risk thatm isstatem ents in am ounts thatw ould be m aterialin relation to the financialstatem ents being audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse ofperform ing theirassigned functions. W e noted no m atters involving the internalcontroloverfinancialreporting and its operation thatw e considerto be m aterialw eaknesses. This reportis inlended forthe inform ation and use ofthe Board ofdirectors,m anagem entand others w ithin the organization,aw arding agencies,and the Louisiana Legislative Auditorand is not intended to be and should notbe used by anyone otherthan these specified parties. O NE I-AKESID E PLAZA.BU ITE 7Oo,P,O,DRAW IER le47 LAKE CHARLES,LOUISIANA '7 TELEpbtoNE (337145~)IQe6,FACe;fMILE (337;43g f.3~;6 2l 1215 PO$~ OAK ROAO.SUITE S SULPH UR,LO UISIANA 7~ 6~ TELEPHONE (~37]6Z5 t~,facsfm/le (33~)62S 567