SABINE ASSOCIATION FOR RETARDED CITIZENS, INC. MANY, LOUISIANA FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2003

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1 FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 3, 23

2 TABLE OF CONTENTS JUNE 3, 23 Board of Directors EXHIBIT SCHEDULE PAGE 1 Independent Auditors Report 2 Financial Statements Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses A B C D Notes to the Financial Statements 8 Group Homes Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses Adult Habilitation Program Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses Sheltered Workshop Statement of Financial Position Statement of Activities Statement of Cash Flows Statement of Functional Expenses Schedule of Compensation to Board Members Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 27 Summary Schedule of Prior Audit Findings Corrective Action Plan for Current Year Audit Findings i

3 BOARD OF DIRECTORS JUNE 3, 23 President VicePresident Secretary Treasurer Board Members Pete Abington Welton Anthony Marguerite Spears Mary Hariel Linda Ebarb Carla Garner Katherine Green Gene Hubley Anna Lites Gloria Ruffin Executive Director Wayne Martinez 1

4 HINES, JACKSON & HINES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS FRANK S. HINES, CPA P.O. BOX EAST FIFTH STREET A. NEILL JACKSON, JR., CPA LEWIS C. HINES, CPA NATCHITOCHES, LA E. MERLIN SQUYRES, CPA JAY H. SHEFFIELD, CPA Telephone (318) FAX (318) Board of Directors Sabine Association for Retarded Citizens, Inc. Many, Louisiana INDEPENDENT AUDITORS REPORT We have audited the accompanying statement of financial position of the Sabine Association for Retarded Citizens, Inc., (a nonprofit organization) as of June 3, 23, and the related statements of activities, cash flows, and functional expenses for the year then ended. These financial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Sabine Association for Retarded Citizens, Inc., as of June 3, 23, and the changes in its net assets, cash flows, and functional expenses for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated December 15, 23, on our consideration of the Sabine Association for Retarded Citizens, Inc. s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the financial statements of the Sabine Association for Retarded Citizens, Inc., Many, Louisiana, taken as a whole. The accompanying supplemental information schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. Hines, Jackson & Hines Natchitoches, Louisiana December 15, 23 MEMBERS American Institute of Certified Public Accountants Society of Louisiana Certified Public Accountants 2

5 STATEMENT OF FINANCIAL POSITION JUNE 3, 23 EXHIBIT A ASSETS Cash and cash equivalents Receivables Inventory Prepaid expenses Deposits Property, buildings and equipment, net Total Assets $ 37, ,44 64,74 38,299 31, ,815 $ 1,413,618 LIABILITIES Accounts payable Trade Accrued liabilities Property taxes Accrued interest Notes payable Total Liabilities NET ASSETS Unrestricted Temporarily restricted Total Net Assets Total Liabilities and Net Assets $ 9,136 96,972 1,985 12, , ,199 1,165, ,166,419 $ 1,413,618 3

6 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 3, 23 EXHIBIT B UNRESTRICTED NET ASSETS Support Medicaid Contract work Service feesdhh Service feesgroup homes Patient liability Supported Independent Living Rentals Intercompany transfers Net Assets Released from Restrictions on restricted assets Total Revenues, Gains and Support EXPENSES Program Services Management and General Intercompany transfers Total Expenses Increase in Unrestricted Net Assets TEMPORARILY RESTRICTED NET ASSETS Current depreciation on restricted assets Increase/(Decrease) in Temporarily Restricted Net Assets INCREASE IN NET ASSETS NET ASSETS, Beginning of year NET ASSETS, End of year $ 1,766, , , ,456 84,416 41,537 13,8 254,245 38,819 12,687 3,219,122 2,224,7 71,47 254,245 3,188,299 3,823 (12,687) (12,687) 18,136 1,148,283 $ 1,166,419 4

7 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 3, 23 EXHIBIT C CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash used by operating activities Bad debt expense Gain on sale of assets (Increase)/decrease in operating assets Receivables Inventory Prepaid expenses Deposits Increase/(decrease) in operating liabilities Accounts payable Trade Accrued liabilities Property taxes Accrued interest Accrued provider fees Net Cash Provided By/(Used In) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets Purchase of buildings Purchase of equipment Net Cash Provided By/(Used In) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Principal repayments on notes payable Net Cash Provided By/(Used In) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, Beginning of year CASH AND CASH EQUIVALENTS, End of year $ 18,136 16,22 12 (15,452) (36,187) (31,751) (517) (2,242) 19,58 9,198 (245) 12,424 (156) (11,761) 49,295 22,59 (11,34) (35,956) (24,481) (41,566) (41,566) (16,752) 324,644 $ 37,892 5

8 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 3, 23 EXHIBIT D COMPENSATION AND RELATED EXPENSES Employee benefits Payroll taxes Salaries Workman's compensation insurance Program Services $ 29,893 8,8 1,69,75 39,97 Management and General $ 1,697 2, ,543 7,193 Total $ 4,59 11,771 1,363,293 47,163 Total Compensation And Related Expenses 1,22, ,44 1,552,817 OCCUPANCY EXPENSES Insurance Interest Property taxes Repairs and maintenance Utilities 3,675 27,434 6,79 3,433 2,9 42,952 6,252 7,238 13,182 1,836 36,927 34,672 6,79 3,433 33,191 53,788 Total Occupancy Expenses 13,582 37,58 168,9 TRANSPORTATION EXPENSES Fuel and oil Insurance Repairs and maintenance 45,939 28,78 16,187 3,173 4,772 2,331 5,128 4,7 5,711 31,39 21,315 34,873 Total Transportation Expenses 121,7 16, ,938 OTHER EXPENSES Bad debt Central office expense Client recreation Clothing and other personal items Commissions Contract services Dues Food Insurance License 12 2,234 25,78 8,965 77,92 15,75 12,293 1,889 $ 3,89 251,456 2,69 2, ,547 $ ,456 2,234 25,78 8,965 79,161 18, ,293 12,436 $ 4,53 6

9 STATEMENT OF FUNCTIONAL EXPENSES (CONTINUED) FOR THE YEAR ENDED JUNE 3, 23 EXHIBIT D OTHER EXPENSES (CONTINUED) Materials Postage Professional fees Provider feesdhh Rent Repairs and maintenance Supplies Telephone Training Travel Program Services $ 223,98 1,13 2, ,94 24,143 75,65 2,751 Management and General $ 4,366 2,245 15,572 9,716 1,315 12,792 8, Total $ 223,98 14,379 2,245 36, ,94 9,716 25,458 87,857 11, Total Expenses 752,5 323,24 1,75,29 Total Functional Expenses $ 2,224,7 $ 71,47 $ 2,934,54 7

10 NOTES TO THE FINANCIAL STATEMENTS JUNE 3, 23 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Sabine Association for Retarded Citizens, Inc., is a quasigovernmental, nonprofit organization incorporated August 13, 197, whose purpose is to a) promote the general welfare of mentally retarded citizens everywhere (at home, at school, in the community, and in institutions), b) aid the parents and families of mentally retarded citizens in the solution of personal, family and social problems arising from mental retardation, c) cooperate with all public and private agencies, organizations, groups and individuals working for the welfare of mentally retarded citizens, d) promote through dissemination of information to the general public, a fuller and more sympathetic understanding of the problems of mental retardation, their wide prevalence, and consequential social implications, e) help provide facilities for evaluation, care, treatment, education and employment of mentally retarded citizens, f) research into all phases of mental retardation: The causes, prevention, medical and social treatment, special educational methods, and opportunities for employment, g) train and educate both professional and nonprofessional personnel for work in the field of mental retardation, h) serve as a clearinghouse of information concerning mental retardation and activities on behalf of the mentally retarded in Sabine Parish, I) help foster local, state and national legislation on behalf of mentally retarded citizens. The Association operates three separate divisions. One, the Adult Habilitation Program, receives funding from the State of Louisiana, Department of Health and Hospitals, Office for Citizens with Developmental Disabilities to provide adult day services for a minimum of 44 clients for at least 24 days each year. Two, Sabine Productions, a totally selfsupportive sheltered workshop program, generating revenues through contracts with private individuals and companies for the provision of services performed by the members of the workshop. No federal financial assistance of any type is received by Sabine Productions. Three, Group residential services, which operates six (6) group homes for the benefit of mentally handicapped individuals. The purpose of the group homes is to provide for the needs of mentally handicapped individuals in the area of appropriate residential living. The Community Homes receive funding from the United States Department of Health and Human Services, Medical Assistance Program, Title XIX, Medicaid, as administered by the State of Louisiana, Department of Health and Hospitals. The Sabine Association for Retarded Citizens Community Homes division reimburses the Adult Habilitation Program for actual expenses incurred by the program to provide day training and supervision to participating group home residents. CASH AND CASH EQUIVALENTS Consistent with FASB 95, Statement of Cash Flows, The Association defines cash and cash equivalents as not only currency on hand but also demand deposits with banks or other financial institutions and other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. PROPERTY, BUILDINGS AND EQUIPMENT Donations of property and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property, buildings and equipment are reported as restricted support. When donor stipulations are absent regarding how long those donated assets must be maintained, the Association reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Association reclassifies temporarily restricted net assets to unrestricted net assets at that time. Property, buildings and equipment are depreciated using the straightline method. 8

11 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) JUNE 3, 23 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) NET ASSETS The Association has elected to adopt Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of NotforProfit Organizations. Under SFAS No. 117, the Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. PROMISES TO GIVE Contributions are recognized when the donor makes a promise to give to the Association that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire in the fiscal year in which the contributions are reported as increases in temporary or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. CONTRIBUTIONS The Association has elected to adopt Statement of Financial Accounting Standards (SFAS) No. 116, Accounting for Contributions Received and Contributions Made. In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. COMPENSATED ABSENCES Association employees earn annual and sick leave at various rates depending on the number of years in service. The amount of annual and sick leave that may be accumulated and carried over by each employee is limited to 8 hours. However, there are no vesting privileges. Therefore no liability for compensated absences has been recorded in the accompanying financial statements. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. INCOME TAXES The Sabine Association for Retarded Citizens, Inc., is exempt from income taxes under Internal Revenue Code Section 51(c)(3). NOTE 2 RESTRICTIONS ON ASSETS Restrictions on assets at June 3, 23, relate to vans obtained by the Association through Section 16 of the Federal Transit Act which provides grants for the specific purpose of providing transportation services to elderly and handicapped persons for whom mass transportation services are unavailable, insufficient or inappropriate. The program 9

12 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) JUNE 3, 23 NOTE 2 RESTRICTIONS ON ASSETS (CONTINUED) is administered by the Louisiana Department of Transportation and Development. Disposition of the vehicles must have DOTD approval, must be in conformance with the provisions of OMB Circular A12, Attachment N and a portion of the funds received must be returned to DOTD in proportion to the original percentage of federal funds contributed. It is the policy of the Association to amortize the asset restriction over its estimated useful life using the straightline method. NOTE 3 CASH AND CASH EQUIVALENTS At June 3, 23, the Association had cash and cash equivalents totaling $37,892, as follows: Petty cash Demand deposit accounts Interest bearing accounts Total $ ,24 243,387 $ 37,892 At June 3, 23, the Association had $38,71 in bank deposits. These deposits were secured from risk by $265,313 of federal deposit insurance and $41,338 (market value) of pledged securities held by the custodial banks in the name of the fiscal agent. NOTE 4 RECEIVABLES At June 3, 23, receivables consisted of the following: Medicaid State of LouisianaDHH Contracts receivable Total $ 142,764 27,458 69,71 31,58 $ 271,44 NOTE 5 PROPERTY, BUILDINGS AND EQUIPMENT All property and equipment are stated at historical cost. is charged as an expense against operations and has been provided over the estimated useful lives using the straightline method. The estimated useful lives are as follows: Buildings 152 years Furniture and fixtures 71 years Automobiles 5 years Machinery and equipment 57 years 1

13 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) JUNE 3, 23 NOTE 5 PROPERTY, BUILDINGS AND EQUIPMENT (CONTINUED) A summary of property and equipment at June 3, 23, is presented below: Land Buildings Furniture and equipment Automobiles Cost $ 11,2 771,8 256,744 24,23 Accumulated $ 278,773 22, ,774 Net $ 11,2 492,37 53,879 52,429 This Year $ 36,926 18,583 5,711 Total $ 1,333,227 $ 633,412 $ 699,815 $ 16,22 The Association's automobiles were partially funded by Urban Mass Transportation Capital Improvement Grants and are subject to the applicable restrictions described in Note 2. Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in activities. NOTE 6 NOTES PAYABLE At June 3, 23, the Sabine Association for Retarded Citizens was obligations for $45,492 under two installment notes bearing interest at 7.25%, maturing April 18, 27 and secured by two group homes. One of the notes was paid in full in August 23 and the other in November 23. NOTE 7 LEASE OBLIGATIONS The Sabine Association for Retarded Citizens, Inc. was not obligated under any capital or operating leases at June 3, 23. NOTE 8 EMPLOYEE RETIREMENT SYSTEM All employees of the Association are protected by the Social Security System. All employees contribute 6.2% of their total salary to the System, while the Association contributes a like amount. For the year ending June 3, 23, total contributions to the System were $169,48, of which the Association contributed $84,524 and employees contributed $84,524. Total payroll covered by this System for the year ended June 3, 23 was $1,363,293. Any future deficits in this System will be financed by the Federal government. The Association has no further liability to the system. NOTE 9 LITIGATION The Sabine Association for Retarded Citizens, Inc. was a defendant in two lawsuits as of June 3, 23. Although the outcome of these lawsuits is not presently determinable, any potential losses not covered by applicable insurance are not considered to be material in relation to the Association's overall financial condition. 11

14 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) JUNE 3, 23 NOTE 1 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY The Sabine Association for Retarded Citizens, Inc., entered into a contract with the State of Louisiana Department of Health and Hospitals, Office for Citizens with Developmental Disabilities to provide adult habilitation services. Transactions of the Association were made in accordance with the requirements contained in Formula Funding and Guidelines for Allowable Costs in Adult Habilitation Services Contracted with the Division of Mental Retardation and Developmental Disabilities. All contract services invoiced under this contract were not recovered under any other contract. NOTE 11 RISK MANAGEMENT The Association is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Association maintains commercial insurance coverage covering each of those risks of loss. Management believes such coverage is sufficient to preclude any significant uninsured losses to the Association. NOTE 12 CLAIMS AND JUDGEMENTS The Association participates in federal and state programs that are fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the Association may be required to reimburse the grantor government. Management believes that disallowed expenditures, if any, based on subsequent audits, will not have a material effect on the Association's overall financial position. 12

15 GROUP HOMES STATEMENT OF FINANCIAL POSITION JUNE 3, 23 SCHEDULE 1 ASSETS Cash and cash equivalents Receivables Trade Prepaid expenses Deposits Property, buildings and equipment, net Total Assets $ 142, ,764 29,22 38,299 8,95 549,85 $ 911,193 LIABILITIES Accounts payable Trade Accrued liabilities Accrued interest Notes payable NET ASSETS Unrestricted Total Liabilities Total Net Assets Total Liabilities and Net Assets $ 73,241 67, , ,34 725, ,159 $ 911,193 13

16 GROUP HOMES STATEMENT OF ACTIVITIES YEAR ENDED JUNE 3, 23 SCHEDULE 2 Support Medicaid Patient Liability s Total Revenues, Gains and Support Expenses Program Services Management and General Intercompany transfers Total Expenses Increase/(Decrease) in Net Assets NET ASSETS, Beginning of year NET ASSETS, End of year $ 1,766,983 84,416 25,12 1,876,411 1,3, ,18 213,546 1,98,153 (13,742) 828,91 $ 725,159 14

17 GROUP HOMES STATEMENT OF CASH FLOWS YEAR ENDED JUNE 3, 23 SCHEDULE 3 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities Gain on sale of assets (Increase)/decrease in operating assets Receivables Trade Prepaid expenses Deposits Increase/(decrease) in operating liabilities Accounts payable Trade Accrued liabilities Accrued interest Accrued provider fees Net Cash Provided By/(Used In) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets Purchase of buildings Purchase of equipment Net Cash Provided By/(Used In) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes payable Cash received from sheltered workshops Net Cash Provided By/(Used In) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, Beginning of year CASH AND CASH EQUIVALENTS, End of year $ (13,742) 6,722 (1,32) (4,55) (19,29) (517) (8,925) 26,132 5,859 (156) (11,761) (66,44) 17,359 (11,34) (4,718) 1,67 (41,566) 87,597 46,31 (18,766) 16,894 $ 142,128 15

18 GROUP HOMES STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 3, 23 SCHEDULE 4 COMPENSATION AND RELATED EXPENSES Employee benefits Payroll taxes Salaries Workman's compensation insurance Total Compensation and Related Expenses Program Services $ 2,471 48, ,938 18, ,441 Management and General $ 9,18 19,93 267,316 5,929 31,446 Total $ 29,579 67,96 99,254 24,148 1,3,887 OCCUPANCY EXPENSES Insurance Interest Repairs and maintenance Utilities Total Occupancy Expenses 21,425 2,562 6,79 17,62 31,8 96,676 6,252 7,238 13,182 1,836 37,58 27,677 27,8 6,79 3,784 41, ,184 TRANSPORTATION EXPENSES Fuel and oil Insurance Repairs and maintenance Total Transportation Expenses 21,113 11,676 7,464 9,97 49,35 4,772 2,331 5,128 4,7 16,931 25,885 14,7 12,592 13,797 66,281 OTHER EXPENSES Central office expense Clothing and other personal items Contract services Food Insurance Licenses Postage Professional fees Provider feesdhh Rent Repairs and maintenance Supplies Telephone Training Travel Total Expenses 25,78 72,331 4,282 99,58 1,889 3,69 9,758 2, ,94 6,48 38,334 2, ,32 54,729 2,69 2,878 9, ,921 2,245 6,234 9,716 1,315 11,574 5, ,223 54,729 25,78 74,4 7,16 99,58 11,822 3,75 12,679 2,245 27, ,94 9,716 7,795 49,98 8, ,255 Total Functional Expenses $ 1,3,499 $ 466,18 $ 1,766,67 16

19 ADULT HABILITATION PROGRAM STATEMENT OF FINANCIAL POSITION JUNE 3, 23 SCHEDULE 5 ASSETS Cash and cash equivalents Receivables Trade Deposits Property, buildings and equipment, net Supported Individual Living $ 11,782 3,414 Adult Day Habilitation $ 146,41 24,44 1,884 21,717 8,871 Total $ 158,192 27,458 1,884 21,717 8,871 Total Assets $ 15,196 $ 22,926 $ 218,122 LIABILITIES Accounts payable Trade Accrued liabilities $ $ 2,268 23,128 $ 2,268 23,128 Total Liabilities 25,396 25,396 NET ASSETS Unrestricted Temporarily restricted 15, , , Total Net Assets 15, ,53 192,726 Total Liabilities and Net Assets $ 15,196 $ 22,926 $ 218,122 17

20 ADULT HABILITATION PROGRAM STATEMENT OF ACTIVITIES YEAR ENDED JUNE 3, 23 SCHEDULE 6 UNRESTRICTED NET ASSETS Support Service feesdhh Service feesgroup homes Supported Independent Living Intercompany transfers Net Assets Released from Restrictions Federal Transit Administration Sec.16 on restricted vans Total Revenues, Gains and Support Supported Individual Living $ 41,537 41,537 Adult Day Habilitation $ 285, ,456 15,398 6,454 12, ,986 Total $ 285, ,456 41,537 15,398 6,454 12, ,523 Expenses Program Services Management and General Intercompany Transfers Total Expenses 22 14,727 35,353 5,282 35, , , ,34 226,112 35, ,499 Increase/(Decrease) in Unrestricted Net Assets (8,745) 9,769 1,24 TEMPORARILY RESTRICTED NET ASSETS Federal Transit Administration Sec. 16 Current year depreciation Increase/(Decrease) in Temporarily Restricted Net Assets (12,687) (12,687) (12,687) (12,687) Increase(Decrease) in Net Assets (8,745) (2,918) (11,663) NET ASSETS, Beginning of year 23,941 18,448 24,389 NET ASSETS, End of year $ 15,196 $ 177,53 $ 192,726 18

21 ADULT HABILITATION PROGRAM STATEMENT OF CASH FLOWS YEAR ENDED JUNE 3, 23 SCHEDULE 7 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities Gain on sale of assets (Increase)/Decrease in operating assets Receivables DHH Deposits Increase/(decrease) in operating liabilities Accounts payable Trade Accrued liabilities Net Cash Provided By/(Used In) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets Purchase of equipment Net Cash Provided By/(Used In) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Cash received from group homes Net Cash Provided By/(Used In) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, Beginning of year CASH AND CASH EQUIVALENTS, End of year $ (11,663) 17,56 (1,35) 643 (23) (11,317) 483 1,414 4,243 1,35 (1,545) (195) 2,55 2,55 24, ,639 $ 158,192 19

22 ADULT HABILITATION PROGRAM STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 3, 23 SCHEDULE 8 COMPENSATION AND RELATED EXPENSES Employee benefits Payroll taxes Salaries Workman's compensation insurance Total Compensation and Related Expenses Program Services Supported Individual Living $ Adult Day Habilitation $ 9,422 19, ,845 12,953 31,963 Program Services $ 9,422 19, ,845 12,953 31,963 Management and General $ 1,589 1,878 26,227 1,264 3,958 Total $ 11,11 21, ,72 14, ,921 TRANSPORTATION EXPENSES Fuel and oil Insurance Repairs and maintenance Total Transportation Expenses 17,56 7,722 3,597 1,347 38,722 17,56 7,722 3,597 1,347 38,722 17,56 7,722 3,597 1,347 38,722 OTHER EXPENSES Central office expense Contract services License Professional fees Supplies Telephone Training Total Expenses ,147 1,147 1, , ,473 1,445 5, , , ,473 1, ,445 5, , ,53 Total Functional Expenses $ 22 $ 35,832 $ 351,34 $ 226,112 $ 577,146 2

23 SHELTERED WORKSHOP STATEMENT OF FINANCIAL POSITION JUNE 3, 23 SCHEDULE 9 ASSETS Cash and cash equivalents Accounts receivable Trade Inventory Deposits Property, buildings and equip., net Rental Building $ ,685 Mobile Crew 12,624 41,17 Sabine Car Care $ 65 $ 7,57 $ $ 7,572 1,632 1, ,252 Sabine Production Center 2, , Woodshop 52,649 29, ,942 Total 69, , ,94 Total Assets LIABILITIES Accounts payable Trade Accrued liabilities Property taxes $ 44,81 $ 53,731 $ 22,538 $ 44,375 $ 118,849 $ 284,33 $ $ 3,138 1 $ 3,584 5 $ 58 6, ,424 $ 6,546 1,1 $ 14,627 6,733 1,985 12,424 Total Liabilities 1,426 3,238 3,634 19,825 7,646 35,769 NET ASSETS Unrestricted 43,384 5,493 18,94 24,55 111,23 248,534 Total Net Assets 43,384 5,493 18,94 24,55 111,23 248,534 Total Liabilities and Net Assets $ 44,81 $ 53,731 $ 22,538 $ 44,375 $ 118,849 $ 284,33 21

24 SHELTERED WORKSHOP STATEMENT OF ACTIVITIES YEAR ENDED JUNE 3, 23 SCHEDULE 1 UNRESTRICTED NET ASSETS Support Contract work Rentals Intercompany transfers Total Revenues, Gains, and Support Rental Building $ 13,8 2,4 15,84 Mobile Crew $ 13,246 59,43 2,85 165,481 Sabine Car Care $ 55,917 9,213 65,13 Sabine Production Center $ 194,46 69,135 1,58 264,689 Woodshop $ 115,979 11,69 1, 218,48 Total $ 469,188 13,8 238,847 7, ,188 Expenses Program Services Management and general Intercompany transfers Total Expenses 11,241 1,991 5,346 18,578 15,225 1, ,883 61,983 3,164 65,147 27,218 7, , ,87 3, ,4 572,474 17,827 5, ,647 Increase/(Decrease) in Net Assets (2,738) 13,598 (17) 5,5 72, ,541 NET ASSETS, Beginning of year 46,122 36,895 18,921 (25,5) 38, ,993 NET ASSETS, End of year $ 43,384 $ 5,493 $ 18,94 $ 24,55 $ 111,23 $ 248,534 22

25 SHELTERED WORKSHOP STATEMENT OF CASH FLOWS YEAR ENDED JUNE 3, 23 SCHEDULE 11 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by/(used in) operating activities Bad debt expense Gain on sale of assets (Increase)/decrease in operating assets Receivables Trade Inventory Increase/(decrease) in operating liabilities Accounts payable Trade Accrued liabilities Property taxes Net Cash Provided By/(Used In) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets Purchase of equipment Net Cash Provided By/(Used In) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Cash paid to group homes Net Cash Provided By/(Used In) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, Beginning of year CASH AND CASH EQUIVALENTS, End of year $ 133,541 28, (3,8) (12,92) (173) (31,751) (7,17) (7,75) (245) 12, ,456 3,8 (29,693) (25,893) (18,12) (18,12) (22,539) 3,111 $ 7,572 23

26 SHELTERED WORKSHOP STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 3, 23 SCHEDULE 12 COMPENSATION RELATED EXPENSES Payroll taxes Salaries Workman's compensation insurance Total Compensation and Related Expenses Rental Building $ Mobile Crew $ 5,668 74,96 4,257 PROGRAM SERVICES 84,21 Sabine Car Care $ 1,484 19, ,868 Sabine Production Center $ 3,29 4,859 2,82 46,15 Woodshop $ 1,883 24,61 1,477 27,97 Program Services $ 12, ,967 8,798 18,9 Management and General $ Total $ 12, ,967 8,798 18,9 OCCUPANCY EXPENSES Insurance Property taxes Repairs and maintenance Utilities Total Occupancy Expenses 3,843 2,222 1, ,194 11, ,435 1, ,765 8, ,972 3,326 2, ,623 13,323 9,25 6,872 3,433 2,47 11,944 33,96 9,25 6,872 3,433 2,47 11,944 33,96 TRANSPORTATION EXPENSES Fuel and oil Insurance Repairs and maintenance Total Transportation Expenses 5,679 8,615 3,966 1,16 28,42 2, , ,515 7,77 9,31 5,126 1,729 32,935 7,77 9,31 5,126 1,729 32,935 OTHER EXPENSES Bad debt Central office expense $ 15 $ $ $ 15 $ 12 $ $ 1, $ 1,254 24

27 SHELTERED WORKSHOP STATEMENT OF FUNCTIONAL EXPENSES (CONTINUED) FOR THE YEAR ENDED JUNE 3, 23 SCHEDULE 12 OTHER EXPENSES (CONTINUED) Client recreation Commissions Contract services Dues Food Insurance License Materials Professional fees Repairs and maintenance Supplies Telephone Travel Total Expenses Rental Building $ Mobile Crew $ 7,617 7,48 15,528 6,98 37,278 PROGRAM SERVICES Sabine Car Care $ , ,36 31,841 Sabine Production Center $ 2,199 5, ,67 144, ,56 Woodshop $ 35 3,96 3,545 3,238 4,613 79, ,258 95,999 Program Services $ 2,234 8,965 3,614 11,423 2, , ,663 36, ,624 Management and General $ ,543 1,28 1, ,827 Total $ 2,234 8,965 3,614 11, , , ,543 17,663 37,937 1, ,451 Total Functional Expenses $ 11,241 $ 15,225 $ 61,983 $ 27,218 $ 141,87 $ 572,474 $ 17,827 $ 59,31 25

28 SCHEDULE OF COMPENSATION TO BOARD MEMBERS FOR THE YEAR ENDED JUNE 3, 23 SCHEDULE 13 BOARD MEMBER Pete Abington Welton Anthony Linda Ebarb Carla Garner Katherine Green Mary Hariel Gene Hubley Anna Lites Gloria Ruffin Marguerite Spears Meetings Attended Compensation $ $ Supplementary schedule. Presented as additional analytical data. 26

29 HINES, JACKSON & HINES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS FRANK S. HINES, CPA P.O. BOX EAST FIFTH STREET A. NEILL JACKSON, JR., CPA LEWIS C. HINES, CPA NATCHITOCHES, LA E. MERLIN SQUYRES, CPA JAY H. SHEFFIELD, CPA Telephone (318) FAX (318) REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Sabine Association for Retarded Citizens, Inc. Many, Louisiana We have audited the financial statements of the Sabine Association for Retarded Citizens, Inc., as of and for the year ended June 3, 23, and have issued our report thereon dated December 15, 23. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the Sabine Association for Retarded Citizens financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Sabine Association for Retarded Citizens internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatement in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the Sabine Association for Retarded Citizens management and the Legislative Auditor of the State of Louisiana and is not intended to be, and should not be, used by anyone other than the specified parties. Hines, Jackson & Hines Natchitoches, Louisiana December 15, 23 MEMBERS American Institute of Certified Public Accountants Society of Louisiana Certified Public Accountants 27

30 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 3, 23 SCHEDULE 14 Ref. No. Fiscal Year Finding Initially Occurred Description of Finding Corrective Action Taken (Yes, No, Partially) Planned Corrective Action/Partial Corrective Action Taken Nothing came to our attention that would require disclosure under Government Auditing Standards. 28

31 CORRECTIVE ACTION PLAN FOR CURRENT YEAR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 3, 23 SCHEDULE 15 Ref. No. Description of Finding Correct Action Planned Name(s) of Contact Person(s) Anticipated Completion Date Nothing came to our attention that would require disclosure under Government Auditing Standards. 29