CAREER RESOURCES, INC. FINANCIAL STATEMENTS JUNE 30, 2015

Transcription

1 FINANCIAL STATEMENTS JUNE 30, 2015

2 FINANCIAL STATEMENTS JUNE 30, 2015 CONTENTS Page INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS, SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND SCHEDULE OF EXPENDITURES OF STATE AWARDS 1-2 FINANCIAL STATEMENTS Statements of Financial Position 3 Statements of Activities and Changes in Net Assets 4 Statements of Cash Flows 5 Notes to Financial Statements 6-12 INDEPENDENT AUDITORS' REPORT ON THE SUPPLEMENTARY INFORMATION 13 Schedule of Functional Expenses 14 FEDERAL GOVERNMENTAL REPORTS AND SCHEDULES Schedule of Expenditures of Federal Awards 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 Auditor s Report on Compliance for a Major Program and on Internal Control Over Compliance Required by OMB Circular A Schedule of Findings and Questioned Costs STATE GOVERNMENTAL REPORTS AND SCHEDULES Schedule of Expenditures of State Awards Independent Auditors Report on Compliance for Each Major State Program and on Internal Control Over Compliance Required by the State Single Audit Act Schedule of Findings and Questioned Costs 27

3 CARTER HAYES + ASSOCIATES, P.C. established 1988 CERTIFIED PUBLIC ACCOUNTANTS 1952 WHITNEY AVENUE HAMDEN CONNECTICUT (203) Fax (203) INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS, SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND SCHEDULE OF EXPENDITURES OF STATE AWARDS Board of Directors Career Resources, Inc. Bridgeport, Connecticut Report on the Financial Statements We have audited the accompanying financial statements of Career Resources, Inc. (a nonprofit organization), which comprise the statements of financial position as of June 30, 2015 and 2014 and the related statements of activities and changes in net assets and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial 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. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 audits to obtain reasonable assurance about whether the financial statements are 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 auditor s 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 entity 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 entity 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 statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Career Resources, Inc. as of June 30, 2015 and 2014, and the changes in its net assets and in its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information 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 and Schedule of Expenditures of State Awards, as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-profit Organizations, and by the State Single Audit Act, respectively, are presented for purposes of additional analysis 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 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 information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2015, on our consideration of Career Resources, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Career Resources, Inc. s internal control over financial reporting and compliance. Carter, Hayes + Associates, P.C. Hamden, Connecticut October 30,

5 STATEMENTS OF FINANCIAL POSITION JUNE 30, 2015 AND 2014 ASSETS CURRENT ASSETS Cash $ 56,270 $ 118,005 Grants receivable 435, ,534 Accounts receivable 142, ,097 Contributions receivable 50, ,834 Prepaid expenses 64, ,504 Total current assets 748, ,974 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $133,362 in 2015 and $114,451 in ,872 52,724 SECURITY DEPOSIT 17,945 17,945 $ 834,807 $ 855,643 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 40,357 $ 65,888 Accrued expenses 179, ,662 Deferred program revenue - 16,901 Total current liabilities 219, ,451 NET ASSETS Unrestricted Board of Directors' designations 317, ,709 Equipment 67,872 52,724 Unobligated excess 132, , , ,732 Temporarily restricted 96,699 95, , ,192 $ 834,807 $ 855,643 See Notes to Financial Statements. 3

6 UNRESTRICTED NET ASSETS CAREER RESOURCES, INC. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS YEARS ENDED JUNE 30, 2015 AND SUPPORT AND REVENUE Federal awards $ 2,575,129 $ 2,152,010 State awards 2,551,600 3,114,040 Program revenue 561, ,542 Contributions 173, ,402 Net assets released from restrictions 153, ,525 Miscellaneous revenue 13,749 2,843 Total support and revenue 6,028,613 6,197,362 EXPENSES Program services Workforce development 3,541,276 3,814,461 STRIVE program 824,672 1,049,778 Alternative incarceration 523, ,863 Adult and youth programs 443, ,441 Supportive services General and administrative 677, ,309 Total expenses 6,011,186 6,198,852 Increase (decrease) in unrestricted net assets 17,427 (1,490) TEMPORARILY RESTRICTED NET ASSETS Contributions 154, ,299 Net assets released from restrictions (153,308) (245,525) Increase (decrease) in temporarily restricted net assets 1,239 (66,226) Increase (decrease) in net assets 18,666 (67,716) NET ASSETS, beginning of year 596, ,908 NET ASSETS, end of year $ 614,858 $ 596,192 See Notes to Financial Statements. 4

7 STATEMENTS OF CASH FLOWS YEARS ENDED JUNE 30, 2015 AND CASH FLOWS FROM OPERATING ACTIVITIES Increase (decrease) in net assets $ 18,666 $ (67,716) Adjustments to reconcile changes in net assets to net cash used in operating activities: Depreciation 18,911 10,645 (Increase) decrease in: Grants receivable (223,524) 185,365 Accounts receivable 48,195 (163,970) Contributions receivable 92,834 (42,834) Prepaid expenses 56,744 (45,295) Increase (decrease) in: Accounts payable (25,531) (23,532) Accrued expenses 2,930 51,398 Deferred program revenue (16,901) 16,901 Net cash used in operating activities (27,676) (79,038) CASH FLOWS FROM INVESTING ACTIVITIES Investments in the purchase of property and equipment (34,059) (52,082) Net cash used in investing activities (34,059) (52,082) NET DECREASE IN CASH (61,735) (131,120) CASH, beginning 118, ,125 CASH, ending $ 56,270 $ 118,005 See Notes to Financial Statements. 5

8 NOTES TO FINANCIAL STATEMENTS YEARS ENDED JUNE 30, 2015 AND Nature of Organization and Summary of Significant Accounting Policies Nature of Organization Career Resources, Inc. is a not-for-profit, non-stock Connecticut corporation, exempt from federal income taxes under Internal Revenue Code 501(c)(3). Career Resources provides job training, placement and support services for dislocated and economically disadvantaged individuals in Southwestern Connecticut. In 2000, the U.S. Congress enacted the Workforce Investment Act (WIA) to replace the Job Training Partnership Act (JTPA). The WIA provides the framework for the One-Stop System, a national workforce preparation and employment system designed to meet the needs of both employers and job seekers. The WorkPlace, Inc. has been designated the Local Workforce Investment Board. Career Resources has been awarded various grants by The WorkPlace, Inc. to be the One-Stop Operator and Provider and the TANF case manager for the One-Stop System established by the WIA. Career Resources was operating under a contract with The WorkPlace, Inc. for the period October 1, 2012 through June 30, The contract has been extended until December 31, Financial Statement Presentation In accordance with FASB ASC Not for Profit Entities, Presentation of Financial Statements, Career Resources reports 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. Unrestricted Equipment Net assets reflect the total carrying value after depreciation of all equipment used by Career Resources, less directly related liabilities. Unrestricted Undesignated Unrestricted net assets represents available sources other than donor restricted contributions. Included in unrestricted net assets are grants and contracts, which may be earmarked for specific purposes. Unrestricted Designated Net assets are to be used for purposes specified by the Board of Directors. Temporarily Restricted Temporarily restricted net assets represent contributions that are restricted by the donor either as to purpose or as to time of expenditure. 6

9 NOTES TO FINANCIAL STATEMENTS, Continued Permanently Restricted Permanently restricted net assets represent contributions received with the donor restriction that the principal be invested in perpetuity. Career Resources has no permanently restricted net assets. Recognition of Support and Revenue Grants and Contracts Grants and contracts are generally considered to be exchange transactions in which the grantor or contractor requires the performance of specified activities. Entitlement to cost reimbursement grants and contracts is conditioned on the expenditure of funds in accordance with grant restrictions and, therefore, revenue is recognized to the extent of grant expenditures. Entitlement to performancebased grants and contracts is conditioned on the attainment of specific performance goals and, therefore, is recognized to the extent of performance achieved. Grant and contract receipts in excess of revenues recognized are presented as deferred grant revenue. Contributions Contributions are defined as voluntary, non-reciprocal transfers. Unrestricted and unconditional contributions are recognized as support when received or pledged, if applicable. Contributions are reported as temporarily restricted support if they are received with donor stipulations that limit the use of such assets. When a restriction expires, that is, when a stipulated time restriction ends or a purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of changes in net assets as net assets released from restrictions. Career Resources policy is to present temporarily restricted net assets received during the year whose restrictions are also met during the current year as unrestricted net assets. Contributions received with donor imposed conditions are presented as deferred support until such conditions are substantially met, at which time they are recognized as support. Career Resources policy is to recognize the expiration of donor restrictions for contributions of property and equipment or the use of contributions restricted for property and equipment in the year the property and equipment is placed in service. Furniture, Equipment and Depreciation Donated property is stated at fair market value as determined by management at the date contributed. Property purchased is recorded at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the respective assets. For the years ended June 30, 2015 and 2014, depreciation expense was $18,911 and $10,645, respectively. Maintenance and repair costs are charged to operations as incurred; major renewals and betterments are capitalized. The costs relating to assets sold or retired are removed from the account balance at the time of the disposition and the related gains and losses are included in the change in net assets. 7

10 NOTES TO FINANCIAL STATEMENTS, Continued Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Actual results could vary from the estimates that are used. Income Taxes Career Resources, Inc., a not-for-profit organization operating under section 501(c)(3) of the Internal Revenue Code, is generally exempt from federal, state and local taxes and, accordingly, no provision for income taxes is recorded in the financial statements. Career Resources accounts for uncertainty in income taxes in accordance with FASB ASC 740, Accounting for Uncertainty in Income Taxes. Career Resources believes that there are no uncertain tax position with any of its open tax years and has no open tax years prior to the year ended June 30, Career Resources tax returns are subject to examination, generally for three years after they are filed. Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statements of unrestricted revenues, expenses and other changes in unrestricted net assets. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Programs Workforce Development Grants passed through The WorkPlace, Inc. from the U.S. Department of Labor Workforce Investment Act (WIA) and from the Connecticut Department of Labor Jobs First Employment Services program for One-Stop Operator and Provider services. Alternative Incarceration Center Grants from the Connecticut Department of Corrections and Department of Mental Health and Addiction Services, and program revenue contracts with various organizations to perform specified activities. STRIVE Program Contributions from the general public and grants from Connecticut Department of Labor and U.S. Department of Labor. Adult and Youth Programs Grants passed through The WorkPlace, Inc. from the U.S. Department of Labor Workforce Investment Act (WIA) and from the Connecticut Department of Social Services Fatherhood program; and program revenue contracts with various organizations to perform specified activities. 8

11 NOTES TO FINANCIAL STATEMENTS, Continued Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. There is no allowance for doubtful accounts at June 30, Disclosure of Subsequent Events Management has evaluated subsequent events through October 30, 2015, the date the financial statements were available to be issued. 2. Concentrations of Credit Risk Career Resources financial instruments that are exposed to concentrations of credit risk consist primarily of cash, and grants and contracts receivable. Cash 3. Line of Credit Career Resources places its cash deposits with high credit-quality institutions and such deposits may exceed federal depository insurance limits. Career Resources believes it is not exposed to any significant credit risk on cash. Grants and Contracts Receivable Grants and contracts receivable are evidenced by signed contracts with a variety of state and federal governments and The WorkPlace, Inc. Based on historical experience, management believes these receivables represent negligible credit risk. Accordingly, management has not established an allowance for potential credit losses. Support and Revenue Concentrations Career Resources receives a majority of its support and revenue from federal and state grants passed through The WorkPlace, Inc. All of these grants are subject to reduction or termination in future years. Any significant reduction in these grants could have an adverse impact on the Career Resources program services. Career Resources has available a $250,000 line of credit with People s Bank United. Amounts outstanding bear interest at 1% above People s United Bank Prime Rate and are secured by all business assets of Career Resources. Career Resources has not been advanced any amounts under this line of credit and no amounts were outstanding as of June 30,

12 NOTES TO FINANCIAL STATEMENTS, Continued 4. Net Assets Temporarily restricted net assets consisted of the following at June 30, 2015: Balance Balance at June 30, at June 30, 2014 Addition Released 2015 STRIVE program $95,460 $143,497 ($152,149) $86,808 Accessing Learning and Technology - 10,000 (1,159) 8,841 Semple Memorial Scholarship - 1,050-1,050 $95,460 $154,547 ($153,308) $96,699 On January 14, 2000, the Career Resources Board of Directors designated unrestricted net assets for various purposes. During the year ended June 30, 2015 no amounts were released from the Board of Directors designations which consisted of the following: Cash flow reserve $222,579 Funds to support additional capacity and personnel 57,000 Funds to address miscellaneous needs and expenses 20,000 Funds to address increased marketing needs and expenses 9,239 Funds to promote lifelong learning and economic self-sufficiency for graduates 8, Retirement Plan 10 $317,709 Career Resources has established a profit sharing plan in accordance with Section 401(k) of the Internal Revenue Code. Employees are eligible for participation in the plan after six months of employment and after they reach 21 years of age. Career Resources is required to match participant's contributions up to 1.5% of annual compensation. For the years ended June 30, 2015 and 2014, $21,484 and $22,498, respectively, has been recorded as an expense under the 1.5% matching requirement of this plan. In addition, under the plan Career Resources has the option to elect to make additional contributions to the plan as a fixed percentage of compensation. Career Resources has the right to change this fixed percentage in accordance with the plan documents. Effective July 1, 2012, Career Resources elected to not make future additional contributions to the plan. 6. Commitments STRIVE Trademark License Career Resources has been granted a non-exclusive license from STRIVE International, Inc. to use the STRIVE trademark. STRIVE International, Inc. owns the STRIVE trademark and has developed a distinctive and proprietary system to help unemployed men and women find jobs and achieve financial independence. Career Resources must

13 NOTES TO FINANCIAL STATEMENTS, Continued adhere to the STRIVE guidelines which delineate basic mission, operating benchmarks and principles, outcome standards and activity standards for the program. As part of the agreement, STRIVE International, Inc. will provide Career Resources with training, technical support and guidance. Effective July 1, 2015, Career Resources entered into an Affiliation and Trademark License Agreement (the Agreement ) with STRIVE International, Inc. The Agreement designates the State of Connecticut as the official STRIVE territory of Career Resources and requires Career Resources to follow the STRIVE International, Inc. s Affiliate Policy Manual. In addition, the Agreement requires Career Resources to pay an annual fee based upon $100 for each graduate of the STRIVE program or $20,000, whichever is lower. 350 Fairfield Avenue, Bridgeport, Connecticut Career Resources leases its corporate office space at 350 Fairfield Avenue, Bridgeport, Connecticut. In July 2005, Career Resources entered into a 5 year lease for 9,249 square feet of office space at 350 Fairfield Avenue for an annual minimum rent amount of $131,336 to be paid in monthly installments of $10,945. Career Resources was provided a Fit Up Allowance (the Allowance ), not to exceed $92,490, to paint, re-carpet and construct demising walls. In October 2005, Career Resources was notified that the unused portion of the Allowance was $54,430. The landlord issued a credit of $1,814 for the period of July through October 2005 and beginning in November 2005, $454 was credited to the monthly rent through June 30, In January 2010, Career Resources entered into a lease extension for a period of 10 years commencing July The lease extension calls for annual minimum rent of $101,739 for years one through five and $112,375 for year six. For years one through five, the monthly rent will continue to be reduced by the Allowance of $454. For years seven through ten, annual minimum rent will be $112,375 increased annually by the CPI North East Factor. In addition, Career Resources is required to pay for electricity at $1.75 per square foot during year 1 of the lease extension, with this amount increasing 3% annually for years two through ten. Also, Career Resources is required to pay for building operating expenses at $5.25 per square foot during year one, amount to be increased for years two through ten to reflect increase in Landlord costs provided that such increase will not exceed more than 3% annually. For each of the years ended June 30, 2015 and 2014, annual rent expense for corporate office space, net of Allowance, amounted to approximately $167, Sargent Street, Hartford, Connecticut Career Resources has entered into a lease agreement to rent office space for the STRIVE program in Hartford. The lease commenced January 1, 2011 and has been amended over time to increase space, relocate office within the building and to extend the term. For the period July 1, 2013 through June 30, 2015, monthly rent was $2,350. For the years ended June 30, 2015 and 2014, annual rent expense amounted to $28,200. Effective July 1, 2015 through June 30, 2017, monthly rent is $2,

14 NOTES TO FINANCIAL STATEMENTS, Continued 746 Chapel Street, New Haven, Connecticut As part of the merger with STRIVE New Haven, Inc. in April 2012, Career Resources assumed the office lease for the New Haven office effective July 1, The lease called for monthly lease payments of $4,243 through November 30, In November 2012, Career Resources entered into a new three year lease commencing January 1, 2013 for a monthly rent of $3,473. For the years ended June 30, 2015 and 2014, annual rent expense amounted to $41,700. Future minimum lease payments as of June 30, 2015 are as follows: 7. Subsequent Events Year ending June 30, 2016 $163, , , , ,500 $677,300 Career Resources was awarded a renewal of a three year $950,000 contract with the Northwest Regional Workforce Investment Board to operate the Jobs First Employment Services (JFES). JFES is a program for Adults and Out-of-School minor recipients of Temporary Assistance to Needy Families that helps them gain and maintain independence from federal and state financial assistance by providing employment, education, training services, and case management and the necessary skills needed to secure employment by the 21-month expiration of benefits. All participants receive assistance in preparing and looking for a job, transportation assistance, and help with payment for childcare. Career Resources received a $520,000 three year U.S. Department of Labor Face Forward Grant for New Haven. The grant addresses the employment barriers of court involved youth while helping these youth develop the employment skills needed to obtain good jobs. The grant will help participants move forward into the future by combining the most promising workforce and juvenile justice strategies available. The grant will systematically improve the workforce outcomes of court-involved youth who will obtain industry-recognized credentials that prepare them for jobs in demand industries using career pathways. Career Resources, in partnership with The WorkPlace, Inc., secured funding to expand services to former offenders in both New Haven and Bridgeport. Career Resources will provide youth and adult mentoring services along with GED preparation to eligible participants over a three year contract period. Despite significant state budget reductions, Career Resources was able to secure funding for the STRIVE and Fatherhood Programs in Connecticut s 2016 and 2017 fiscal year budgets. 12

15 CARTER HAYES + ASSOCIATES, P.C. established 1988 CERTIFIED PUBLIC ACCOUNTANTS 1952 WHITNEY AVENUE HAMDEN CONNECTICUT (203) Fax (203) INDEPENDENT AUDITORS' REPORT ON THE SUPPLEMENTARY INFORMATION Board of Directors Career Resources, Inc. Bridgeport, Connecticut We have audited the financial statements of Career Resources, Inc. as of and for the year ended June 30, 2015, and have issued our report thereon dated October 30, 2015, which contained an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses is presented for the purposes of additional analysis 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 information is fairly stated in all material respects in relation to the financial statements as a whole. Carter, Hayes + Associates, P.C. Hamden, Connecticut October 30,

16 SCHEDULE OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2015 (with comparative totals for 2014) Workforce Development Program Services Total Adult Alternative and Youth General and Incarceration STRIVE Programs Administrative Salaries $ 2,315,122 $ 343,210 $ 485,954 $ 258,304 $ 422,541 $ 3,825,131 $ 4,026,874 Payroll taxes and fringe benefits 754, , ,490 85, ,511 1,246,265 1,182,852 Occupancy 93,373 28,201 62,778 35,056 27, , ,584 Professional fees 87,060 15,551 27,840 21,723 28, , ,420 Office supplies and expenses 102,585 13,958 31,199 13,423 2, , ,029 Program service contracts 89, ,681 18,286 9, , ,922 Travel 27,835 5,405 13,539 1,911-48,690 55,145 Equipment maintenance and leases 28,958 3,597 9,919 2,291-44,765 28,815 Conferences and meetings 10,729 1,000 4, ,846 40,065 28,387 Participant support and program supplies 1,639 1,896 15,645 2,432 1,741 23,353 54,193 Depreciation ,911 18,911 10,645 Insurance 12,422 3,202 2, ,252 15,628 Marketing 7, , ,159 15,446 29,820 Equipment purchases 2, ,578 3, ,083 2,295 Dues and subscriptions 6, ,447 6,159 Staff training 1,102-1, ,147 5,084 Total expenses $ 3,541,276 $ 523,895 $ 824,672 $ 443,754 $ 677,589 $ 6,011,186 $ 6,198,852 14

17 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2015 Catalog of Federal Domestic Pass Through Grantor/Program title Assistance Number Number Expenditures U.S. Department of Labor Passed through the WorkPlace, Inc.: Workforce Investment Act WIA Dislocated Worker Formula Grants WIA-2013-CR1Stop-001 $1,026,559 WIA-2013-CRICOAC ,300 WIA-2014-CRIDFSB ,750 Adult Program WIA-2013-CR1Stop ,183 WIA-2013-CRICOAC ,300 WIA-2014-CRIDFSB ,750 WIA Youth Activities WYOU-2014-CRI ,000 WYOU-2014-CRI-002 8,800 Total Workforce Investment Act Cluster 1,893,642 Employment Service/Wagner- Peyser Funded Activities DEIN-2014-CRI ,100 Total passed through The WorkPlace, Inc. 1,910,742 WIA Pilots, Demonstrations, and Research Projects passed through STRIVE National YF A ,981 Total U.S. Department of Labor 2,179,723 U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Projects of Regional and National Significance passed through Connecticut Department of Mental Health and Addiction Services MHA2291AA 240,000 Affordable Care Act (ACA) Health Profession Opportunity Grants passed through The WorkPlace, Inc HHS CRI ,191 HHS CRI ,397 Total U.S. Department of Health and Human Services 317,588 15

18 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, Continued YEAR ENDED JUNE 30, 2015 U.S. Department of Education Adult Education Basic Grants to States passed through the Connecticut Department of Education ,818 U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants Passed through City of Hartford ,000 Passed through City of New Haven A ,000 Total U.S. Department of Housing and Urban Development 15,000 Total expenditures of federal awards $2,575,129 Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule ) includes the federal grant activity of Career Resources, Inc. under programs of the federal government for the year ended June 30, The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments and Nonprofit Organizations. Because the Schedule presents only a selected portion of the operations of Career Resources, Inc., it is not intended to and does not present the financial position, changes in net assets or cash flows of Career Resources, Inc. 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 OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. 16

19 CARTER HAYES + ASSOCIATES, P.C. established 1988 CERTIFIED PUBLIC ACCOUNTANTS 1952 WHITNEY AVENUE HAMDEN CONNECTICUT (203) Fax (203) 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 To the Board of Directors Career Resources, Inc. Bridgeport, Connecticut We have audited, in accordance with the 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 Career Resources, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2015,and the related activities and changes in net assets and cash flows for the years then ended, and the related notes to the financial statements, and have issued our report thereon dated October 30, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Career Resources, Inc. 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 Career Resources, Inc. 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 entity 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 weakness 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. 17

20 Compliance and Other Matters As part of obtaining reasonable assurance about whether Career Resources, Inc. s financial statements are free of 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. Carter, Hayes + Associates, P.C. Hamden, Connecticut October 30,

21 CARTER HAYES + ASSOCIATES, P.C. established 1988 CERTIFIED PUBLIC ACCOUNTANTS 1952 WHITNEY AVENUE HAMDEN CONNECTICUT (203) Fax (203) INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR A MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 To the Board of Directors Career Resources, Inc. Bridgeport, Connecticut Report on Compliance for A Major Federal Program We have audited Career Resources, Inc. s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on Career Resources, Inc. s major federal program for the year ended June 30, Career Resources, Inc. s major federal program is identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for Career Resources, Inc. s major federal program 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, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 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 Career Resources, Inc. 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 a major federal program. However, our audit does not provide a legal determination of Career Resources, Inc. s compliance. Opinion on a Major Federal Program In our opinion, Career Resources, Inc. complied, in all material respects, with the types compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30,

22 Report on Internal Control Over Compliance Management of Career Resources, Inc. 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, we considered Career Resources, Inc. s internal control over compliance with the types of requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for a major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 Career Resources, Inc. 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. 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 the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Carter, Hayes + Associates, P.C. Hamden, Connecticut October 30,

23 SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015 SECTION I SUMMARY OF AUDITORS RESULTS Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: Material weaknesses identified: Significant deficiencies identified: Noncompliance material to financial statements noted: No None reported No Federal Awards Internal control over major programs: Material weaknesses identified: No Significant deficiencies identified: None reported Type of report issued on compliance for major programs: Any findings disclosed that are required to be reported in accordance with Section.510(a) of Circular A-133? Unmodified No Identification of Major Programs CFDA Number Name of Federal Program U.S. Department of Labor Workforce Investment Act - Adult Program U.S. Department of Labor Workforce Investment Act - WIA Dislocated Worker Formula Grants U.S. Department of Labor Workforce Investment Act -WIA Youth Activities Dollar threshold used to distinguish between Type A and Type B Programs $300,000 Auditee qualified as low-risk: Yes 21

24 SCHEDULE OF FINDINGS AND QUESTIONED COSTS, Continued SECTION II FINANCIAL STATEMENT FINDINGS No matters are reported. SECTION III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters are reported. PRIOR YEAR FINDINGS No matters were reported. 22

25 SCHEDULE OF EXPENDITURES OF STATE AWARDS YEAR ENDED JUNE 30, 2015 State Grant Program Grantor/Program Title CORE-CT Number Expenditures Connecticut Department of Labor Jobs First Employment Services DOL Passed through The WorkPlace, Inc. WIA-2013-CRIStop-001 $ 912,708 JFES-2013-CRIFUN ,000 JFES-2014-IBESTCRI ,000 Passed through Northwest Regional Workforce Investment Board 939,022 Total Jobs First Employment Services 1,994,730 STRIVE DOL ,500 Total Connecticut Department of Labor 2,251,230 Connecticut Department of Corrections Nonresidential Programs DOC ,650 Connecticut Department of Social Services Fatherhood Initiative Program (FIP) DSS ,720 Total expenditures of state awards $2,551,600 Notes to Schedule The accompanying Schedule of Expenditures of State Awards includes state grant activity of Career Resources, Inc. under programs of the State of Connecticut for the fiscal year ending June 30, Various departments and agencies of the State of Connecticut have provided awards through grants and other authorizations in accordance with the General Statutes of the State of Connecticut. These awards fund the Workforce Development, Alternative Incarceration, STRIVE, and Adult and Youth programs. 23

26 SCHEDULE OF EXPENDITURES OF STATE AWARDS, Continued YEAR ENDED JUNE 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Career Resources, Inc. conform to accounting principles generally accepted in the United States of America as applicable to not-for-profit agencies. The information in the Schedule of Expenditures of State Awards is presented based upon regulations established by the State of Connecticut, Office of Policy and Management. Basis of Accounting The expenditures reported on the Schedule of Expenditures of State Awards are reported on the accrual basis of accounting. In accordance with Section of the Regulations to the State Single Audit Act, certain grants are not dependent on expenditure activity, and accordingly, are considered to be expended in the fiscal year of receipt. These grant program receipts are reflected in the expenditures column of the Schedule of Expenditures of State Awards. 24

27 CARTER HAYES + ASSOCIATES, P.C. established 1988 CERTIFIED PUBLIC ACCOUNTANTS 1952 WHITNEY AVENUE HAMDEN CONNECTICUT (203) Fax (203) INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR EACH MAJOR STATE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE STATE SINGLE AUDIT ACT To the Board of Directors Career Resources, Inc. Bridgeport, Connecticut Report on Compliance for Each Major State Program We have audited Career Resources, Inc. s compliance with the types of compliance requirements described in the Office of Policy and Management Compliance Supplement that could have a direct and material effect on each of Career Resources, Inc. s major state programs for the year ended June 30, Career Resources, Inc. s major state programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its state programs. Auditors Responsibility Our responsibility is to express an opinion on compliance for each of Career Resources, Inc. s major state 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, issued by the Comptroller General of the United States; and the State Single Audit Act (C.G.S. Sections to 4-236). Those standards and the State Single Audit Act 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 state program occurred. An audit includes examining, on a test basis, evidence about Career Resources, Inc.'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 state program. However, our audit does not provide a legal determination of Career Resources, Inc.'s compliance. Opinion on Each Major State Program In our opinion, Career Resources, Inc. 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 state programs for the year ended June 30,

28 Report on Internal Control over Compliance Management of Career Resources, Inc. 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 Career Resources, Inc. s internal control over compliance with the types of requirements that could have a direct and material effect on each major state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major state program and to test and report on internal control over compliance in accordance with the State Single Audit Act, 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 Career Resources, Inc. 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 state 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 state 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 state 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. 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 the requirements of the State Single Audit Act. Accordingly, this report is not suitable for any other purpose. Carter, Hayes + Associates, P.C. Hamden, Connecticut October 30,