ALCOHOLISM CENTER FOR WOMEN (A Non-Profit Corporation)

Transcription

1 1 of 27 ALCOHOLISM CENTER FOR WOMEN AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION REQUIRED BY THE UNIFORM GUIDANCE For The Year Ended June 30, 2017 with INDEPENDENT AUDITORS' REPORT THEREON

2 2 of 27 ALCOHOLISM CENTER FOR WOMEN INDEX Page Independent Auditors Report 1-2 Financial Statements: Statement of Financial Position 3 Statement of Activities 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 7-14 Supplemental Schedule: Schedule of Revenues and Expenditures by Funding Source 15 Supplemental Information Required by the Uniform Guidance: Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Report on Compliance for Each Major Federal Program; Report on Internal Control over Compliance; and Report On Schedule of Expenditures of Federal Awards Required by Uniform Guidance Schedule of Expenditures of Federal Awards 21 Notes to Schedule of Expenditures of Federal Awards 22 Schedule of Findings and Questioned Costs 23-24

3 mmm CERTIFIED PUBLIC ACCOUNTAtlTS 3 of 27 Independent Auditors' Report To the Board of Directors Alcoholism Center for Women Report 011 the Fi11a11cial Statements We have audited the accompanying financial statements or Alcoholism Center for Women (the "Organization," a non-profit corporation), which comprise the statement of financial position as or June 30, 2017, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Mmwgement's Responsibility for the Fimmcial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. A uc/itors' Responsibility 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 Standard~, 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 arc free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion Torrance Boulevard, Su,te 200 Tarrance, CA P (310) I= (310)

4 4 of 27 Opi11io11 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alcoholism Center for Women as of June 30, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Mtttters Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of revenues and expenditures by funding source and the Schedule of Expenditures of Federal Awards as required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statement or the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules and the Schedule of Expenditures of Federal Awards are fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Govemme11t Amliti11g Sta11dartls In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2018 on our consideration of the Organization's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Governmenl Auditing Standards in considering the Organization's internal control over financial reporting and compliance. Torrance, California March 22,

5 ALCOHOLISM CENTER FOR WOMEN ASSETS 5 of 27 STATEMENT OF FINANCIAL POSITION JUNE 30, 2017 CURRENT ASSETS Cash and cash equivalents $ 166,059 Contracts receivable 219,409 Prepaid expenses and other assets 1,418 Client deposits 5, ,663 PROPERTY AND EQUIPMENT, net 887,712 $ 1,280,375 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable and accrued expenses $ 14,500 Accrued payroll and related liabilities 52,246 Forgivable note payable, current portion 50,000 Client deposits held in trust 5, ,523 FORGIVABLE NOTE PAYABLE, net of current portion 811, ,056 NET ASSETS Unrestricted 338,501 Temporarily restricted 7, ,319 $ 1,280,375 The accompanying notes are an integral part of these financial statements 3

6 ALCOHOLISM CENTER FOR WOMEN STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Unrestricted Temporarily Restricted Total REVENUE AND SUPPORT Government contracts $ 1,333,080 $ - $ 1,333,080 Contributions 23,276 73,607 96,883 In-kind revenue 62,003-62,003 Loan forgiveness 50,000-50,000 Client care fees 26,134-26,134 Interest 1,991-1,991 Rental income 1,930-1,930 Other Net assets released from restriction 65,858 (65,858) - 1,564,352 7,749 1,572,101 FUNCTIONAL EXPENSES Program services 1,191,571-1,191,571 Supporting services 132, ,538 Fundraising 17,553-17,553 1,341,662-1,341,662 CHANGE IN NET ASSETS 222,690 7, ,439 NET ASSETS, beginning of year 115, ,880 6 of 27 NET ASSETS, end of year $ 338,501 $ 7,818 $ 346,319 The accompanying notes are an integral part of these financial statements 4

7 7 of 27 ALCOHOLISM CENTER FOR WOMEN STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2017 Program Services Supporting Services Fundraising Total Salaries and wages $ 455,835 $ 69,716 $ 10,726 $ 536,277 Payroll taxes 42,089 6, ,516 Employee benefits 39,580 6, ,565 Total personnel expenses 537,504 82,206 12, ,358 Professional services 165,638 14,562 1, ,020 Client care 122, ,202 In-kind goods 62, ,003 Depreciation and amortization 56,107 4, ,656 Repairs and maintenance 36,860 6,505-43,365 Contract services 34,390 6,069-40,459 Workers compensation 33,416 5, ,313 Equipment 26,896 2, ,556 Utilities 25,075 2, ,555 Insurance 23,895 2, ,258 Supplies 23,542 2, ,870 Licenses, permits and fees 19,671 1, ,616 Training and travel 16,021 1, ,606 Telephone and internet 8,351 1, ,825 $ 1,191,571 $ 132,538 $ 17,553 $ 1,341,662 The accompanying notes are an integral part of these financial statements 5

8 8 of 27 ALCOHOLISM CENTER FOR WOMEN STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2017 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 230,439 Adjustments to reconcile changes in net assets to net cash flows from operating activities: Depreciation and amortization 61,656 Note payable forgiveness (50,000) Changes in operating assets and liabilities: Contracts receivable (126,968) Accounts payable, accrued expenses, and other current liabilities 12,290 Net cash flows from operating activities 127,417 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property and equipment (192,121) Net cash flows used by investing activities (192,121) Net change in cash and cash equivalents (64,704) Cash and cash equivalents, beginning of year 230,763 Cash and cash equivalents, end of year $ 166,059 The accompanying notes are an integral part of these financial statements 6

9 9 of 27 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 - ORGANIZATION Alcoholism Center for Women (the Organization, ACW, a non-profit corporation) has been a substance abuse treatment facility for women for over 40 years and was the first female substance abuse residential facility in the west coast. Over the years, ACW has evolved into a gender responsive trauma informed sophisticated drug and alcohol State licensed and certified substance abuse residential and outpatient treatment and wellness center for women. All our programs help our clients understand the reason why they started and want to continue using drugs/alcohol, while providing the tools to address impulses and triggers in order to maintain sobriety. ACW is also a site where women wearing ankle monitors are able to serve their jail time while receiving treatment. Specifically our programs include a 32 bed substance abuse Residential Treatment program and life affirming Outpatient programs. Our 32 bed residential treatment program offers a 24-hour, 7- day a week set schedule based on a methodology that offers each woman a prescribed process allowing her to move gradually from a structured to a self-determined program. Our Outpatient Programs, Intensive Outpatient Program and Outpatient Counseling are offered during the day or at night to accommodate the individual s family and/or work responsibilities. All programs also use evidence-based curriculum and offer individual and group counseling sessions. ACW is an innovative treatment center, continually striving to fill in the service gaps for our clients by providing supportive programs, which increase long-term positive outcomes. These programs include Family Therapy, a Nutrition Education and Counseling program, and a Women s HIV Prevention program. The Family Therapy program helps to stabilize families and break the cycle of substance abuse among youth. Our Family Therapy Program provides group and individual family therapy sessions to our Residential and Outpatient clients and their families to help insure positive results and to prevent relapse and recidivism. Family involvement helps families recognize negative behavior patterns that support addiction and provides the tools and support to make positive changes. Support and educational materials are provided for adults, youth and children, including fun reading, video and interactive materials to engage children and youth to help with coping with feelings, adjusting to changes in the home, and breaking the cycle of addiction. ACW s Nutrition program helps our clients (many of whom have health issues after years of substance abuse) achieve better health, and also to improve the food combinations prepared at our residential center. The nutritionist also provides nutrition education classes and cooking classes to create healthy menus, using client favorites, which can be easily prepared by the clients when they return home. She also meets individually with clients who have eating disorders and/or digestive problems. 7

10 10 of 27 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 1 - ORGANIZATION, continued A Women's HIV program provides testing and education for our clients, who are at a high risk for HIV, because of unsafe sex or needle sharing when they were using. Women often do not get tested because they lack the understanding of their risk and/or are afraid of HIV discrimination. The community and social media still view HIV as a gay male disease, with little or no focus on women. ACW provides women-specific HIV and related health information, screening and medical linkage to help them build a safe and healthy life for them and their families. The Organization s activities are primarily funded by government contracts and by direct contributions from foundations, individuals, and corporations. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation - The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. These assets are available to support the Organization s activities and operations at the discretion of the Board of Directors. Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that will be met either by actions of the Organization and/or the passage of time and net assets from nongovernmental capital campaign contributions which are reflected as temporarily restricted over the estimated useful lives of the assets acquired. Permanently restricted net assets - Net assets subject to donor-imposed stipulations that the corpus be maintained permanently by the Organization. The donors of these assets permit the Organization to use all or part of the income or gains earned on related investments for general (unrestricted) or specific (temporarily restricted) purposes. Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulations or by law. Expirations of temporary restrictions on net assets are reported as reclassifications between the applicable classes of net assets. 8

11 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued 11 of 27 Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Contributions - Contributions are recognized at fair value when the donor makes an unconditional promise to give to the Organization. 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 recognized. All other donor-restricted contributions are reported as increases in temporarily 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 of donated non-cash assets are recorded at fair value in the period received. Contributions of donated services that create or enhance non-financial assets, or that require specialized skills, are provided by the individual possessing those skills and would typically need to be purchased, if not provided by donation, are recorded at the fair values in the period received. Contributions of services are recognized in the financial statements if the services enhance or create non-financial assets or require specialized skills and are provided by individuals possessing those skills and would typically need to be purchased if not provided by donation. During the year ended June 30, 2017, the Organization received $62,003 in donated goods which it granted to its clients in support of program services. Cash and cash equivalents - For the purpose of reporting cash flows, cash and cash equivalents include operating cash held in banks and money market funds with an original maturity of 90 days or less. The Organization maintains its cash balances in a financial institution, the balances of which may, at times, exceed federally insured limits. Contracts receivable - The Organization's contracts receivable primarily comprise of reimbursements due from contracted government grant reimbursement requests and are subject to government audit. Management believes that no material adjustments will result from subsequent audits, if any, by government agencies. The Organization provides an allowance for uncollectible accounts based on historical experience. Management believes that contracts receivable are fully collectible at June 30, 2017, and as such, no allowance for uncollectible accounts has been recorded. 9

12 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued 12 of 27 Property and equipment - The Organization capitalizes all property and equipment in excess of an amount determined by their internal accounting policy. Donated assets are recorded at their fair market value when received. Purchased assets are carried at cost. Repair and maintenance costs are expensed as incurred. The cost of purchased assets or fair market value of donated assets is depreciated on a straight-line basis over their estimated useful lives ranging from three to thirty years. When equipment is retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and the resulting gain or loss is credited or charged to operations. Normal repairs and maintenance are expensed as incurred. Expenditures which materially increase the value or extend the useful lives of the assets are capitalized. Management of the Organization assesses the recoverability of property and equipment whenever a triggering event occurs by determining whether the depreciation of such assets over their remaining lives can be recovered through projected undiscounted cash flows. The amount of impairment, if any, is measured based on fair value (projected discounted cash flows) and is charged to operations in the period in which such impairment is determined by management. To date, management has not identified any impairment of property and equipment. Long-lived assets - The Organization owns significant long-lived assets, which are used in its operations. These assets are subject to changes in value, including potential declines in value, depending on events or changes in circumstances. In the event that there is a decline in value, the Organization performs an analysis to determine if the decline in value may not be recoverable. Management has determined that no unrecoverable declines in the market values of its long-lived assets exist at June 30, Fair value of financial instruments Financial instruments primary consist of contracts receivable and notes payable. The Organization estimates that the fair value of its financial instruments at June 30, 2017, do not differ materially from its aggregate carrying value. Considerable judgment is required in interpreting market data to develop that estimates of fair value and, accordingly, the estimates are not necessarily indicative of the amounts that the Organization could realize in a current market exchange. 10

13 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued 13 of 27 Expense allocation - The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities and in the statement of functional expenses. During the year, costs are categorized into separate groupings as either direct or indirect. Indirect or shared costs are allocated among program and support activities by the method that best measures the relative degree of benefit. Program services - Expenses include costs that primarily relate to client services and outreach programs. Supporting services - Expenses include costs that primarily relate to management and general administration. Fundraising - Expenses include costs that primarily relate to fundraising activities to obtain grants and generate revenue through contributions. Income Taxes - The Organization is a qualified non-profit organization under Section 501(c)(3) of the Internal Revenue Code and is not classified as a private foundation. Non-profit organizations are not generally liable for taxes on income; therefore, no provision is made for such taxes for the Organization in the financial statements. During the year ended June 30, 2017, the Organization had no unrelated business income. In accordance with accounting principles generally accepted in the United States of America, the Organization recognizes the impact of tax positions in the financial statements if that position more likely than not would not be sustained in an audit, based on the technical merits of the position. To date, the Organization has not recorded any uncertain tax positions. During the year ended June 30, 2017, the Organization did not recognize any amount in potential interest and penalties associated with uncertain tax positions. As of June 30, 2017, all federal tax returns since the 2013 tax year and state tax returns since the 2012 tax year are still subject to adjustment upon audit. No tax returns are currently being examined by taxing authorities. 11

14 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued Risks and uncertainties - Certain of the Organization s services are governed by grant agreements with governmental agencies. All such grant agreements to which the Organization currently is a party are for fixed terms and expire on an annual basis. There can be no assurance that the Organization will be able to obtain future grant agreements as deemed necessary by management. The loss of some of the current grants or the inability to obtain future grants could have an adverse effect on the Organization s financial position and results of its operations. Failure of the Organization to comply with applicable regulatory requirements can result in, among other things, loss of funding, warning letters, fines, injunctions, and civil penalties. The Organization has historically been able to obtain new contract agreements and, based on its relationships, management believes that they will be able to continue obtaining appropriate contracts to fund future operations. Subsequent events - Subsequent events have been evaluated by the Organization through March 22, 2018, which is the date these financial statements were issued, and no subsequent events have arisen, other than those described in these financial statements, that would require disclosure. NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2017 consists of: Buildings and improvements $ 1,917,233 Furniture and equipment 118,751 Vehicles 44,128 2,080,112 Less: accumulated depreciation and amortization (1,539,400) Land 347,000 $ 887, of 27 12

15 NOTE 4 - FORGIVABLE NOTES PAYABLE Forgivable notes payable as of June 30, 2017 consist of: ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Note payable to the Los Angeles Housing and Community Investment Department, secured by a deed of trust on real property at 1147 South Alvarado Street, Los Angeles, California, bearing interest at 0%, due March This note earns forgiveness of $50,000 annually, provided that the Organization continues to be in compliance with loan covenants. The Organization was noted to be in compliance with such covenants at June 30, $ 861,533 Less current portion (50,000) $ 811, of 27 Future expected principal forgiveness amounts on the note payable are scheduled as follows for the years ended June 30: 2018 $ 50, , , , ,000 Thereafter $ 611, ,533 NOTE 5 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consist of the following for the year ended June 30, 2017: Purpose Available June 30, 2016 Additions Releases Available June 30, 2017 Capital improvements $ 69 $ - $ (69) $ - Vehicle - 38,537 (38,537) - HIV program - 35,070 (27,252) 7,818 $ 69 $ 73,607 $ (65,858) $ 7,818 13

16 16 of 27 ALCOHOLISM CENTER FOR WOMEN NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 6 - RETIREMENT PLAN The Organization maintains a deferred annuity plan under IRC Section 403(b) which covers all full-time employees who have been employed by the Organization for at least two years. Employee contributions are voluntary. Employer contributions are not required; however, the Organization may contribute up to five percent of qualified wages. The Organization made no contributions to the plan for the year ended June 30,

17 17 of 27 SUPPLEMENTAL SCHEDULE

18 18 of 27 ALCOHOLISM CENTER FOR WOMEN SCHEDULE OF REVENUES AND EXPENDITURES BY FUNDING SOURCE June 30, 2017 Federally funded State and County funded PH PH PH W1 PH Residential program Nonresident participant program Residential program Residential program Other Total Revenues and support Contributions and other income $ 7,737 $ - $ - $ - $ 231,284 $ 239,021 Government contracts and support 948,847 28,608 56, ,531 14,741 1,333,080 $ 956,584 $ 28,608 $ 56,353 $ 284,531 $ 246,025 $ 1,572,101 Salaries and wages $ 338,138 $ 46,712 $ 28,061 $ 35,212 $ 88,154 $ 536,277 Payroll taxes 35,394 4,829 1,412 2,003 5,878 49,516 Employee benefits 23,208 2,469 3,118 2,355 15,415 46,565 Total personnel expenses 396,740 54,010 32,591 39, , ,358 Professional services 83,249 6,102 1,369 87,875 3, ,020 Client care 109,244 1,492 6,015 3,516 1, ,202 In-kind goods ,003 62,003 Depreciation and amortization 47,182 5,676 3,122-5,676 61,656 Repairs and maintenance 35,355 5,512 2, ,365 Contract services 1, ,820 40,459 Workers compensation 28,078 4,384 1,793 1,935 3,123 39,313 Equipment 25,177 2,942 1, ,556 Utilities 15,567 4, ,046 27,555 Insurance 19,806 2, ,354 2,249 26,258 Supplies 18,756 2, ,260 3,333 25,870 Licenses, permits and fees 15,913 5, ,616 Training and travel 3, ,554 10,574 17,606 Telephone and internet 4,560 2, ,017 9,825 $ 804,149 $ 96,490 $ 51,259 $ 139,781 $ 249,983 $ 1,341,662 15

19 111mm C~RTIFl~O PU8llC ACCOUIITAIIIS 19 of 27 Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Governme11t Amliti11g Stmuftmfs Board of Directors Alcoholism Center for Women We have audited 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, the financial statements of Alcoholism Center for Women (the "Organization," a non-profit corporation), which comprise the statement of financial position as of June 30, 2017, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements and have issued our report thereon dated March 22, Internal Control m er Financial Reporting In planning and performing our audit of the financial statements, we considered the Organization's internal control over financial reporting ("internal control") to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Organization's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified Torrance Boulevard, Su,te 200 Torrance. CA P (310) F (310)

20 20 of 27 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 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 or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. f ()JA, l-l-f Torrance, California March 22,

21 II m 21 of 27 Independent Auditors' Report on Compliance for Each Major Federal Program; Report on Internal Control oyer Compliance; and Report on Schedule of Expenditures of Federal Awards In Accordance with the Uniform Guidance To the Board of Directors Alcoholism Center for Women Report on Compliance for Each Major Federal Program We have audited Alcoholism Center for Women's (the.. Organization," a non-profit corporation) compliance with the types of compliance requirements described in the U.S. Office of Management and Budget ("OMB") Compliance Supplement that could have a direct and material effect on each of the Organization's major federal programs for the year ended June 30, The Organization's major federal programs are identified in the summary of audit results section of the accompanying Schedule of Findings and Questioned Costs. Mmwgement 's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors' Respo11sibility Our responsibility is to express an opinion on compliance for each of the Organization's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issu..:d by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Organization's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Organization's compliance Torrance Boulevard, Su,te 200 Torrance, CA P (310) ~ (310)

22 22 of 27 Opinion on Each Major Federal Program In our opinion, the Organization complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, Report on Internal Control over Compliance Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Organization s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organization s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of This Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 19

23 23 of 27 Report on Schedule of Expenditures of Federal Awards Required bv Uniform Guidance We have audited the financial statements of the Organization as of and for the year ended June 30, 2017, and have issued our report thereon dated March 22, 2018, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Uniform Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the financial statements as a whole. Torrance, California March 22,

24 24 of 27 ALCOHOLISM CENTER FOR WOMEN (A NON-PROFIT CORPORATION) SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2017 Federal Grantor/ Pass-Through Grantor/ Program Title Catalog of Federal Domestic Assistance Number Contract Grant Number Federal Awards Expenditures U.S. Department of Health and Human Services Pass-through programs from: County of Los Angeles, Department of Health Services/ Office of Alcohol and Drug Programs/ Substance Abuse Prevention and Treatment Block Grant/ Alcohol and Drug Residential Services PH $ 965,301 * Drug MediCal Program - ODF PH ,025 Drug MediCal Program - DCH PH ,870 Total U.S. Department of Health and Human Services $ 992,196 Total expenditures of federal awards $ 992,196 * Major program See Accompanying Notes to Schedule of Expenditures of Federal Awards 21

25 NOTE 1 - BASIS OF PRESENTATION 25 of 27 ALCOHOLISM CENTER FOR WOMEN (A NON-PROFIT CORPORATION) NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2017 The accompanying Schedule of Expenditures of Federal Awards (the Schedule ) includes the federal grant activity of Alcoholism Center for Women (the Organization ) under the programs of the federal government for the year ended June 30, The information in this schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected not to use the 10 percent de minimis indirect rate allowed under the Uniform Guidance. NOTE 3 - AMOUNTS PROVIDED TO SUBRECIPIENTS No federal awards expenditures were provided to subrecipients during the year ended June 30,

26 26 of 27 ALCOHOLISM CENTER FOR WOMEN (A NON-PROFIT CORPORATION) SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2017 A. SUMMARY OF AUDIT RESULTS Financial Statements 1. The independent auditors report expresses an unmodified opinion on the financial statements of Alcoholism Center for Women (the Organization ). 2. No material weaknesses related to internal control over financial reporting were identified. 3. No significant deficiencies not considered to be material weaknesses related to internal control over financial reporting were reported. 4. No instances of noncompliance material to the financial statements of the Organization were disclosed during the audit. Federal Awards 5. The independent auditors report on compliance for the major federal award programs for the Organization expresses an unmodified opinion. 6. No material weaknesses related to internal control over major program compliance were identified. 7. No significant deficiencies not considered to be material weaknesses related to internal control over major program compliance were reported. 8. There were no audit findings that were required to be reported in accordance with 2 CFR (a). 9. The programs tested as major programs (including pass-through programs) were: CFDA Number U.S. Department of Health and Human Services/ Pass-through County of Los Angeles/ Department of Health Services/ Office of Alcohol and Drug Programs/Substance Abuse Prevention and Treatment Block Grant/Alcohol and Drug Residential Services The threshold for distinguishing Type A and B programs was $750, The Organization was not considered to be a low-risk auditee for the year ended June 30,

27 27 of 27 ALCOHOLISM CENTER FOR WOMEN (A NON-PROFIT CORPORATION) SCHEDULE OF FINDINGS AND QUESTIONED COSTS, CONTINUED YEAR ENDED JUNE 30, 2017 B. FINANCIAL STATEMENT FINDINGS None reported. C. MAJOR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS None reported. D. SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS None reported. 24