CHILDREN IN PLACEMENT CONNECTICUT, INC.

Transcription

1 Michael Solakian, CPA P.O. Box 716 North Branford, CT CHILDREN IN PLACEMENT CONNECTICUT, INC. Financial Statements and Supplementary Information Years ended June 30, 2014 and 2013

2 CHILDREN IN PLACEMENT CONNECTICUT, INC. Table of Contents Years ended June 30, 2014 and 2013 Page Independent Auditor s Report Statements of Financial Position 1 Statements of Activities 2 Statements of Functional Expenses 3 Statements of Cash Flows 4 Notes to Financial Statements 5 8 Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 9-10

3 Michael Solakian, CPA P.O. Box 716 North Branford, CT To the Board of Directors Children In Placement Connecticut, Inc.: INDEPENDENT AUDITOR S REPORT We have audited the accompanying financial statements of Children In Placement Connecticut, Inc. (a nonprofit organization) which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities, functional expenses 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 statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. THIS REPORT IS ISSUED WITH THE UNDERSTANDING THAT WHILE IT MAY BE REPRODUCED IN ITS ENTIRETY, EXTRACTS FROM IT OR REFERENCES TO IT SHALL FIRST BE SUBMITTED FOR OUR WRITTEN APPROVAL.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Children In Placement Connecticut, Inc. as of June 30, 2014 and 2013, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 15, 2014 on our consideration of Children In Placement Connecticut, Inc. s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 Government Auditing Standards in considering Children In Placement Connecticut, Inc. s internal control over financial reporting and compliance. Solakian & Company, LLC October 15, 2014 THIS REPORT IS ISSUED WITH THE UNDERSTANDING THAT WHILE IT MAY BE REPRODUCED IN ITS ENTIRETY, EXTRACTS FROM IT OR REFERENCES TO IT SHALL FIRST BE SUBMITTED FOR OUR WRITTEN APPROVAL.

5 CHILDREN IN PLACEMENT, INC. Statements of Financial Position June 30, 2014 and 2013 Assets Cash and equivalents $ 12,822 38,906 Investments 19,835 17,039 Grants and accounts receivable 75,014 47,634 Prepaid expenses and other assets 2,342 3,320 Property and equipment, net of accumulated depreciation - - Liabilities and Net Assets $ 110, ,899 Accounts payable and accrued expenses $ 12,750 14,852 Deferred revenue 18,180 26,250 Total liabilities 30,930 41,102 Net assets: Unrestricted net assets 50,149 36,863 Temporarily restricted net assets 14,413 14,413 Permanently restricted net assets 14,521 14,521 Total net assets 79,083 65,797 $ 110, ,899 See accompanying notes to financial statements. - 1

6 CHILDREN IN PLACEMENT, INC. Statements of Activities Years ended June 30, 2014 and 2013 Unrestricted Temporarily Permanently Temporarily Permanently restricted restricted Total Unrestricted restricted restricted Total Support and revenue: Government grants $ 315, , , ,499 Non-governmental grants 79, ,338 94, ,376 Contributions 39, ,822 38, ,487 Special events 32, ,258 37, ,031 In-kind 20, ,000 30, ,000 Investment and other income 3, ,462 2, ,048 Net assets released from restrictions Total support and revenue 490, , , ,441 Expenses: Program 380, , , ,580 Management and general 65, ,356 60, ,248 Fundraising 30, ,548 19, ,229 Total expenses 476, , , ,057 Change in net assets 13, ,286 25, ,384 Net assets beginning of year 36,863 14,413 14,521 65,797 11,479 14,413 14,521 40,413 Net assets end of year $ 50,149 14,413 14,521 79,083 36,863 14,413 14,521 65,797 See accompanying notes to financial statements. 2

7 CHILDREN IN PLACEMENT, INC. Statements of Functional Expenses Years ended June 30, 2014 and Management Management Program and general Fundraising Total Program and general Fundraising Total Salaries $ 254,269 25,000 20, , ,472 25,000 15, ,472 Rent 43,457 2,400 1,200 47,057 57,000 2,400-59,400 Payroll taxes 26,383 2,000 1,614 29,997 27,247 2,312 1,847 31,406 Employee benefits 20,330 1,850-22,180 17,918 5,000-22,918 Telecommunications 9,753 5,783 2,587 18,123 8,065 1,500-9,565 Miscellaneous 12,346 2,011 3,700 18,057 7,738 2,939-10,677 Professional fees - 13,250-13,250-9,400-9,400 Travel and training 9, ,998 4, ,204 Printing and copying 3,137 3, ,467 1,500 1,500 2,382 5,382 Office supplies and expense 1,299 5, ,331 11,998 3,998 15,996 Insurance - 3,975-3,975-6,199-6,199 Depreciation , ,438 Total functional expenses $ 380,972 65,356 30, , ,580 60,248 19, ,057 See accompanying notes to financial statements. 3

8 CHILDREN IN PLACEMENT, INC. Statements of Cash Flows Years ended June 30, 2014 and Cash flows from operating activities: Change in net assets $ 13,286 25,384 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Depreciation - 6,438 Unrealized gain on investments (2,796) - Decrease (increase) in operating assets: Grants and contracts receivable (27,380) 8,421 Prepaid expenses and other assets Increase (decrease) in operating liabilities: Accounts payable and accrued expenses (2,102) (8,167) Deferred revenues (8,070) 2,929 Net cash provided by (used in) operating activities (26,084) 35,709 Cash flows used in investing activities: Net redemption (purchase) of investments - (327) Net cash provided by (used in) investing activities - (327) Net increase (decrease) in cash and equivalents (26,084) 35,382 Cash and equivalents beginning of year 38,906 3,524 Cash and equivalents end of year $ 12,822 38,906 See accompanying notes to financial statements. 4

9 CHILDREN IN PLACEMENT CONNECTICUT, INC. Notes to Financial Statements June 30, 2014 and 2013 (1) Summary of Significant Accounting Policies Organization and Nature of Activities Children In Placement Connecticut, Inc. ( Organization ) is a not-for-profit corporation organized under the laws of the state of Connecticut for the purpose of providing advocacy, monitoring and guardian ad litem services to children placed in Connecticut s foster care system. Financial Statement Presentation The Organization follows accounting for not-for-profit organizations as outlined in professional standards. The Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. The Organization records restricted contributions whose restrictions are met in the same reporting period as unrestricted contributions. 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 based on the expenditure of funds in accordance with grant restrictions and, therefore, revenue is recognized to the extent of grant expenditures. Entitlement to performance based grants and contracts are based on the attainment of specific performance goals and, therefore, revenue is recognized to the extent of performance achieved. Contributions Contributions are defined as voluntary, nonreciprocal transfers. Contributions are recognized when the donor makes a promise to give that is, in substance, unconditional. Unrestricted contributions, and contributions that are restricted by the donor, for which the restriction expires in the year in which the contributions are recognized, are reported as increases in unrestricted net assets. All other donor-restricted contributions are reported as increases in temporarily restricted net assets depending on the nature of the restriction. When a temporary restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. 5 (Continued)

10 CHILDREN IN PLACEMENT CONNECTICUT, INC. Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Donated Materials and Services The Organization recognizes donated rent from the Connecticut Superior and Probate Courts at the estimated fair value at the date of donation. At June 30, 2014 and 2013 donated rent of $20,000 and $30,000, respectively, was recognized in the accompanying financial statements. In addition to donated rent, volunteers donate time and perform a variety of tasks that assist the Organization in its advocacy activities. The value of such services has not been recognized in the accompanying financial statements as they do not meet the criteria for recognition under professional standards. Cash and Equivalents and Concentration of Risk The Organization considers all highly liquid investments with a maturity date of six months or less to be cash equivalents. The Organization also maintains its cash in bank accounts which, at times, may exceed federally insured limits. The Organization has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash equivalents. Investments The Organization s investments consist of certain publicly traded stock in the amount of approximately $3,100 and approximately $16,700 held by the Community Foundation for Greater New Haven, Inc. The investments are recorded at their fair market value as of June 30, Property and Equipment Property and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. The Organization s policy is to capitalize property and equipment with an original cost or, if donated, a fair value at the date of donation of at least $2,000 and a useful life in excess of three years. Property and equipment is depreciated using the straight-line method. Income Tax Status The Organization is exempt from federal income taxes pursuant to the provisions of Section 501(c) (3) of the Internal Revenue Code and has been classified as other than a private foundation. The Organization has adopted the provisions of Financial Accounting Standards Board Accounting Standards Codification , Accounting for Uncertainty in Income Taxes. As a result of the implementation, the Organization did not recognize any liability for uncertain tax positions. The Organization s returns for 2013, 2012 and 2011 are generally subject to examination for three years after they were filed. 6 (Continued)

11 CHILDREN IN PLACEMENT CONNECTICUT, INC. Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Organization 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. Functional 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. Accordingly, certain costs have been allocated among programs and supporting services benefited. Subsequent Events Subsequent events have been evaluated through October 15, 2014, which is the date the financial statements were available to be issued. (2) Major Revenue and Support The Organization received approximately 64% and 59% of its operating support and revenue in 2014 and 2013, respectively, under government grant agreements. Any significant decrease or elimination in this grant would have a major adverse impact on the operations of the Organization. (3) Employee Benefit Plan The Organization has established a 403(b) Profit Sharing Plan which covers all full time employees who are at least 18 years of age, have worked at least 1,000 hours and have six months of service. Employees may defer a portion of their salaries for deposit into an individual investment account. The Organization does not match any employee contributions. 7 (Continued)

12 CHILDREN IN PLACEMENT CONNECTICUT, INC. Notes to Financial Statements (4) Compensated Absences Employees are entitled to receive upon termination the value of two weeks of vacation leave incurred but unpaid. The accompanying financial statements reflect an accrual of approximately $10,900 and $6,700 for 2014 and 2013, respectively, for these accumulated compensated absences. (5) Operating Lease The Organization moved into its new facility during November 2013 under a noncancelable operating lease through November 30, 2015 at a monthly base rate of approximately $1,100. The Organization may also renew the lease under two option periods of 12 months each through November 30, The total approximate remaining operating lease payments under this non-cancelable operating lease are as follows: 2015, $12,700; and 2016, $5,300. Total occupancy expense was $27,100 and $29,400 for 2014 and 2013, respectively. (6) Temporarily Restricted Net Assets Temporarily restricted net assets of approximately $14,400 consist of donations whose restricted purpose has not yet been met. 8

13 Michael Solakian, CPA P.O. Box 716 North Branford, Connecticut USA 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 To the Board of Directors Children In Placement Connecticut, Inc.: 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 Children In Placement Connecticut, Inc. ( Organization ) which comprise the statement of financial position as of June 30, 2014 and the related statements of activities, and cash flows as of and for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 15, Internal Control over 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 over financial reporting. 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 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 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 over financial reporting 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. 9 (Continued)

14 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization'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 result 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. Solakian & Company, LLC October 15,