CENTER FOR INDEPENDENT LIVING IN CENTRAL FLORIDA, INC. CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2010

Transcription

1 CENTER FOR INDEPENDENT LIVING IN CENTRAL FLORIDA, INC. CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2010

2 TABLE OF CONTENTS INDEPENDENT AUDITORS REPORT 1 FINANCIAL STATEMENTS Consolidated Statement of Financial Position 2 Consolidated Statement of Activities and Changes in Net Assets 3 Consolidated Statement of Cash Flows 4 Consolidated Statement of Functional Expenses 5 Page Notes to Consolidated Financial Statements 6 SUPPLEMENTAL INFORMATION 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 14 Independent Auditors Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs 18 Schedule of Expenditures of Federal Awards 20 Management Letter 21 Management s Response 23

3 INDEPENDENT AUDITORS REPORT To the Board of Directors of We have audited the accompanying consolidated statement of financial position of Center for Independent Living in Central Florida, Inc., a nonprofit corporation, and subsidiary as of June 30, 2010, and the related consolidated statements of activities and changes in net assets, functional expenses, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Organization s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of and subsidiary as of June 30, 2010, and the changes in their net assets and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated September 30, 2010, on our consideration of the Organization s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements. 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, and should be considered in assessing the results of our audit. Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Organization taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly stated, in all material respects, in relation to the basic consolidated financial statements taken as a whole. September 30, 2010 Winter Park, Florida

4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION June 30, 2010 ASSETS Cash and equivalents $ 230,779 Investments 124,196 Contracts and grants receivable 159,246 Other receivables, net of allowance for doubtful accounts of $2,000 25,873 Prepaid expenses 14,520 Property and equipment, net 309,587 Total assets $ 864,201 LIABILITIES AND NET ASSETS Accounts payable $ 44,935 Unearned revenue 73,590 Accrued liabilities 31,266 Notes payable 11,693 Total liabilities 161,484 Unrestricted net assets 702,717 Total liabilities and net assets $ 864,201 The accompanying notes are an integral part of these consolidated financial statements. 2

5 CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS For the Year Ended June 30, 2010 REVENUES AND SUPPORT Fees, grants and contributions from government agencies $ 2,221,942 Program service fees 151,570 United Way contributions 79,976 Contributions 52,640 Fundraising and special events 20,891 Other grants 18,719 Other income 4,707 Interest income 556 Net investment gain 36,531 Total revenues and support 2,587,532 EXPENSES Program services: Independent Living Services 1,497,510 Social Security Services: Work Incentives Planning and Assistance 276,398 Project with Industry Services 363,510 Polk Country Services 288,066 Total program services 2,425,484 Support services: General and administrative 193,487 Development 63,807 Total support expenses 257,294 Total expenses 2,682,778 Change in unrestricted net assets (95,246) UNRESTRICTED NET ASSETS, BEGINNING OF YEAR 797,963 UNRESTRICTED NET ASSETS, END OF YEAR $ 702,717 The accompanying notes are an integral part of these consolidated financial statements. 3

6 CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended June 30, 2010 CASH FLOWS FROM OPERATING ACTIVITIES Decrease in unrestricted net assets $ (95,246) Adjustments to reconcile decrease in unrestricted net assets to net cash used in operations: Depreciation 34,097 Realized loss on investments 3,944 Unrealized gain on investments (35,390) Increase in contracts and grants receivable (40) Decrease in other receivables 7,561 Increase in prepaid expenses (7,178) Increase accounts payable 20,391 Decrease in accrued expenses (37,879) Increase in unearned revenue 73,590 Cash used in operating activities (36,150) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment securities, net of fees (130,085) Proceeds from sale of securities 190,277 Purchase of fixed assets (27,793) Cash provided by investing activities 32,399 CASH FLOWS USED IN FINANCING ACTIVITIES Payments on mortgage notes payable (6,018) Decrease in cash and equivalents (9,769) Cash and equivalents, beginning of year 240,548 Cash and equivalents, end of year $ 230,779 Supplemental cash flow information: Cash paid for interest $ 1,140 The accompanying notes are an integral part of these consolidated financial statements. 4

7 CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2010 Program Services Support Services Independent Social Security Projects with Polk County General and Total Living Services Services Industries Services Total Administrative Development Total Expenses Salaries, payroll taxes and worker's compensation $ 932,331 $ 45,532 $ 143,928 $ 147,705 $ 1,269,496 $ 121,214 $ 42,221 $ 163,435 $ 1,432,931 Contract services 6, , , , ,497 Employee benefits 131,532 7,130 20,312 27, ,396 30,200 4,536 34, ,132 Repairs and maintenance 69,087 1,129 2,584 10,069 82,869 6,772-6,772 89,641 Occupancy 42,201 1,310 1,510 33,963 78,984 5,931-5,931 84,915 Other program expenses 61, ,338 83, ,725 Supplies and miscellaneous 55, ,807 5,529 63,099 2, ,239 66,338 Interpreting fees 45, , ,399 Telephone 9,076 1,526 4,391 9,639 24,632 17,584-17,584 42,216 Local travel 13,954 4,555 6,820 8,759 34, ,027 Professional fees 23, ,080 4,450 33, ,338 Conferences and workshops 21,782-4,452 4,696 30,930-2,554 2,554 33,484 Insurance 18,854-1,039 2,103 21,996 4,561-4,561 26,557 Program equipment expense 16, ,418 20,783 1,501-1,501 22,284 Printing 9,419-1,172 1,670 12,261 1,558-1,558 13,819 Fundraising and special events ,259 11,259 11,259 Postage and shipping 6, ,350 9,425 1, ,442 10,867 Recruiting expense 1,551-3, , ,096 Resource material , ,466 Interest expense 1, , ,140 Bad debt expense 1, , ,031 Advertising Total expenses before depreciation 1,468, , , ,573 2,391, ,487 63, ,294 2,648,603 Depreciation 28, ,414 34, ,096 Total expenses $ 1,497,510 $ 276,398 $ 363,510 $ 287,987 $ 2,425,405 $ 193,487 $ 63,807 $ 257,294 $ 2,682,699 The accompanying notes are an integral part of these consolidated financial statements. 5

8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of Center for Independent Living in Central Florida, Inc. (the Center ) and the Central Florida Chamber for Persons with Disability, LLC (collectively, the Organization ) is presented to assist in understanding the Organization s financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been applied consistently in the preparation of these consolidated financial statements. 1. Basis of Consolidation The consolidated financial statements include the accounts of Center for Independent Living in Central Florida, Inc. and the Central Florida Chamber for Persons with Disability, LLC (the Chamber ). All inter-company accounts and transactions have been eliminated in consolidation. 2. Organization and Nature of Activities The Center is a not-for-profit corporation organized in the state of Florida in 1979, serving primarily the Central Florida area and is dedicated to serving citizens with disabilities so that they may achieve their self-determined, maximum potential for living and thriving independently. The Center seeks to fulfill its mission by implementing programs in the form of adaptive living facilities, educational, vocational and social opportunities, and meaningful leisure time activities. On February 6, 2009, the Center established the Chamber as a subsidiary to provide educational programs on entrepreneurial and disability issues to entrepreneurs with disabilities and by providing educational programs to persons in Central Florida as to the benefits of doing business with persons with disabilities. 3. Basis of Accounting and Financial Statement Presentation The accompanying consolidated financial statements and accompanying schedule have been prepared on the accrual basis of accounting. The Organization reports information regarding its financial position and activities according to three classes of net assets as follows: Unrestricted - Net assets not subject to donor-imposed stipulations. Temporarily Restricted - Net assets subject to donor-imposed stipulations that may or will be met by actions of the Organization and/or passage of time. Permanently Restricted - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. 6

9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. Revenue Recognition Contributions received and promises to give to the Organization that are, in substance, unconditional are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor imposed restrictions. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. The Organization receives a substantial portion of its grants and contract revenue from Federal, State, County and City agencies. The Organization recognizes contract revenue (up to the contract ceiling) from its contracts primarily on a pro-rata basis over the contract service period, to the extent reimbursable expenses have been incurred or to the extent that contracted service fees have been earned. The determination of the method used is dependent upon the terms of each contract. Certain contracts require the Organization to return funding in excess of contracted service fees earned or units of service performed. Any such amounts are reflected as unearned grant revenue when they can be reasonably determined. A substantial number of volunteers have made significant contributions of their time and services to the Organization's programs and supporting services. The value of this contributed time is not reflected in these consolidated financial statements since they do not meet the criteria for recognition. 5. Cash and Equivalents The Organization considers all highly liquid investments with an original maturity when acquired of three months or less to be cash equivalents. 6. Accounts Receivable Accounts receivable are stated at unpaid balances, less an allowance for doubtful accounts. The allowance is based on experience and other circumstances which may affect the ability of its customers to meet their obligations. The Organization charges off uncollectible accounts receivable when management determines the receivable will not be collected. 7. Functional Allocation of Expenses The cost of providing the various programs and supporting services have been summarized on a functional basis in the Statement of Activities and Changes in Net Assets. Accordingly, certain costs have been allocated among the program and supporting services benefited. 7

10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 8. Investments Investments are initially recorded at cost or fair value if donated, and at the balance sheet date are adjusted to fair value with any chance recorded as an unrealized gain or loss in the Consolidated Statement of Activities and Changes in Net Asset. 9. Property and Equipment It is the Organization s policy to capitalize property and equipment exceeding $1,000. Property and Equipment is recorded at cost at the date of purchase or estimated fair value at the date of contribution. Equipment and furniture are being depreciated using the straight-line method over 5-7 years. Buildings and improvements are being depreciated using the straight-line method over years. Expenditures for repairs and maintenance are expensed as incurred. 10. Income Taxes The Organization is exempt from federal income taxes under Internal Revenue Code Section 501(c)(3), and therefore has made no provision for Federal income taxes in the accompanying financial statements. The Organization adopted newly issued guidance relating to accounting for uncertainty in income taxes. Management has analyzed its various federal and state filing positions and believes that its income tax filing positions and deductions are well documented and supported. Additionally, management believes that no accruals for tax liabilities are necessary. Therefore, no reserves for uncertain income tax positions have been recorded. In addition, no cumulative effect adjustment related to implementation was recorded. 11. Fair Value Measurement The Organization follows accounting guidance relating to fair value measurements, which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 -- quoted prices (unadjusted) in active markets for identical assets or liabilities that the Organization has the ability to access as of the measurement date. Level 2 -- inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 -- unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. 8

11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The asset or liability s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value. Level 1 Fair Value Measurements The fair values of mutual funds are based on quoted market prices. Level 3 Fair value Measurements The value of the Organization s investment in City Water, Inc. is deemed to be unobservable. Management has used a present value of estimated future cash flows to determine that his investment has no fair value. 12. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates, and those differences could be material. 13. Concentration of Credit Risks Financial instruments, which potentially expose the Organization to concentrations of credit risk, consist principally of cash and equivalents and accounts receivable. The Organization s policy is to place its cash investments with high quality financial institutions. As of June 30, 2010, the Organization held cash and equivalents of $7,092 in excess of FDIC amounts. However, the Organization has never experienced any loss from such holdings. Accounts receivable balance as of June 30, 2010 was $25,873. The Organization routinely performs credit evaluations of its trade customers and generally does not require collateral. 14. Subsequent Events Management has evaluated the effect subsequent events would have on the consolidated financial statements through the time these consolidated financial statements were available to be issued on September 30,

12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE B - INVESTMENTS The Organization is a minority shareholder (owning 21% of the shares) of a for-profit corporation (City Water, Inc.). City Water, Inc. is a 1% owner and general partner of a partnership (Forrest Edge, Ltd.). Forrest Edge, Ltd. is a multi-unit affordable housing project. The ownership shares in City Water, Inc. were donated to the Organization at the time of City Water Inc. s inception in Through various arrangements and indemnifications, the Organization does not participate in any incidences of ownership. The Organization has never received, nor does it expect to receive, any distributions or dividends from City Water, Inc. As such, management has estimated the fair value of the investment in City Water, Inc. to be $0. The Organization held $124,196 in mutual fund investments at June 30, These investments are measured at fair value based on quoted market prices and have an original cost of $125,128. The following schedule summarizes the investment return for the year ended June 30, Unrestricted Realized loss $ (3,944) Unrealized gain 35,390 Dividends 5,085 Net investment gain $ 36,531 The following table set forth by level, within the fair value hierarchy, the Organization s investments as of June 30, 2010: Level 1 Level 2 Level 3 Total Assets: Mutual Funds $ 124,196 $ - $ - $ 124,196 Shares in City Water, Inc Total investment assets at fair value $ 124,196 $ - $ - $ 124,196 NOTE C - ACCRUED LIABILITIES Accrued liabilities consisted of the following as of June 30, 2010: Accrued payroll and related expenses $ 29,239 Accrued rent 2,028 Total accrued payroll and related expenses $ 31,266 10

13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE D - PROPERTY AND EQUIPMENT Property and equipment and accumulated depreciation at June 30, 2010 are summarized as follows: Building and improvements $ 431,613 Land 127,820 Equipment and furniture 93, ,682 Less: accumulated depreciation (343,095) Property and equipment, net $ 309,587 NOTE E - NOTES PAYABLE The Organization has a mortgage note payable to Bank First with monthly installments of $596 including principal and interest at 7.5%, secured by a building with final payment due March Maturities of the note for the two years succeeding June 30, 2010 are as follows: Fiscal years ending June 30, 2011 $ 6, ,202 $ 11,693 NOTE F - LEASES AND COMMITMENTS The Organization has entered into various non-cancelable operating lease agreements for the rental of office space and office equipment, expiring in 2014 and Future minimum lease payments under the operating leases as of June 30, 2010 are as follows: Fiscal years ending June 30, 2011 $ 73, , , , ,075 $ 235,025 During the year ended June 30, 2010, the Organization recorded $12,162 of lease expense as program equipment expense in the consolidated statement of activities and $64,855 of lease expense as occupancy costs. 11

14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2010 NOTE G - IN KIND DONATIONS Donated goods and services that are measurable are recorded as contributions at their fair values at the date of receipt by the Organization with a corresponding amount recorded as expense. During the year ended June 30, 2010, donations of goods in the amount of $16,385 were received from various donors. The value of contributed time is not reflected in these financial statements since it does not meet criteria for recognition. NOTE H - 401K PROFIT SHARING PLAN The Organization established a 401K plan effective for all qualifying employees. All employees over 21 years of age are eligible to participate in the plan following the completion of 1,000 hours of service. The Organization is required to match 100% of the first 5% of the employee s deferred contribution to the plan. The Organization provided matching contributions of $39,307 to the plan for the year ended June 30, Employees are immediately vested in their contributions and the matching contributions. 12

15 SUPPLEMENTAL INFORMATION

16 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 of We have audited the consolidated financial statements of Center for Independent Living in Central Florida, Inc. as of and for the year ended June 30, 2010, and have issued our report thereon dated September 30, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered s internal control over financial reporting as a basis for designing our auditing procedures 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 over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity s financial statements that is more than inconsequential will not be prevented or detected by the entity s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether Center for Independent Living in Central Florida, 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. 14

17 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 (CONTINUED) 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. This report is intended solely for the information and use of the management, Board of Directors, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. September 30, 2010 Winter Park, Florida 15

18 INDEPENDENT AUDITORS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Board of Directors of Compliance We have audited the compliance of (a nonprofit organization) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Center for Independent Living in Central Florida, Inc. s management. Our responsibility is to express an opinion on s compliance based on our audit. 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 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. Our audit does not provide a legal determination of s compliance with those requirements. In our opinion, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, Internal Control Over Compliance The management of is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, 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 Center for Independent Living in Central Florida, Inc. s internal control over compliance. 16

19 INDEPENDENT AUDITORS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 (CONTINUED) A control deficiency in an entity s internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the management, Board of Directors, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. September 30, 2010 Winter Park, Florida 17

20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2010 Section I Summary of Auditors Results Financial Statements Type of auditors report issued: Internal control over financial reporting: -Material weakness identified? -Significant deficiencies identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? Federal Awards Internal control over major programs: -Material weaknesses identified? -Significant deficiencies identified that are not considered to be material weaknesses? Types of auditors reports issued on noncompliance for major programs: Audit findings disclosed that are required to be reported in accordance with sections 510(a) of OMB Circular A-133? Unqualified No No No No No Unqualified No Identifications of major programs: Name of Federal Programs CFDA Number Independent Living Federal Grant A & A Rehabilitation Services Administration and Projects with Industry S Independent Living State Grant & Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? No Section II Financial Statement Findings None (no corrective action plan required) 18

21 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2010 Section III Federal Award Findings and Questioned Costs None (no corrective action plan required) Section IV Status of Prior Year Audit Findings 09-1 Eligibility for services Criteria: The Organization is required to maintain proper documentation for consumers to receive services under the Projects with Industry grant. Condition: Out of a sample of 14, we noted one instance in which the Organization did not have supporting documentation for consumer eligibility. Effect: The Organization is not in compliance with the grant eligibility requirement. Recommendation: We recommend that the Organization more closely follow its policies and procedures regarding maintenance of eligibility documentation. Status: Per testing of major program in the current year, no occurrence of missing eligibility documentation noted. 19

22 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2010 Pass-through/ Program Federal Grantor/Pass-through Grantor CFDA Contract Grant Award or Federal Transfer to Program Title Grantor Number Number Time Period Amount Expenditures Subreceipients Direct Programs: Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H132A /01/08-9/30/09 $ 232,496 $ 48,566 $ - Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H132A /01/09-9/30/10 247, ,407 - Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H132A /01/08-9/30/09 183,242 34,739 - Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H132A /01/09-9/30/10 193, ,062 - ARRA- Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H400A /14/09-12/14/14 373, ,001 - ARRA-Centers for Independent Living (Title VII, Part C) U.S. Department of Education A H400A /08/10-01/08/15 244,764 48,857 - Total Center for Independent Living Cluster 1,474, ,632 - Projects with Industry U.S. Department of Education S H234S /01/08-09/30/09 350,000 88,277 44,041 Projects with Industry U.S. Department of Education S H23S /01/09-09/30/10 350, , ,131 Total Projects with Industry 700, , ,172 Work Incentives Planning and Assistance Social Security Administration W /01/09-3/31/10 276, , ,280 Work Incentives Planning and Assistance Social Security Administration W /01/10-3/31/11 276,045 70,765 35,656 Total Work Incentives Planning and Assistance 552, , ,936 U.S. Dept. of Housing and Housing Counseling Urban Development HC /01/09-09/30/10 42,724 27,674 - Total direct programs 2,769,362 1,259, ,108 Pass-through programs from: State of Florida Department of Education Independent Living - State Grants U.S. Department of Education /01/09-6/30/10 539, ,080 - ARRA-State of Florida Department of Education Independent Living - State Grants U.S. Department of Education /01/09-09/30/10 75,924 40,820 - Total Independent Living-State Grants Cluster 615, ,900 - Florida Department of Community Affairs United States Department SB-7Q /1/08-09/30/09 18,600 4,444 - Community Services Block Grant of Agriculture SB-8B /01/09-09/30/10 65,000 20,761 - Total Florida Department of Community Affairs Community Services Block Grant 83,600 25,205 - Total indirect programs 698, ,105 - Total awards and expenditures of federal awards $ 3,467,966 $ 1,864,321 $ 379,108 NOTE: The schedule of expenditures of federal awards is prepared on the accrual basis of accounting. 20