EL HOGAR DEL NINO/CUIDAR FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011

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1 FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011

2 TABLE OF CONTENTS Independent Auditor s Report... 2 Financial Statements: Statement of Financial Position Statement of Activities Statement of Functional Expenses Statement of Cash Flows Notes to the Financial Statements Schedule of Expenditures of Federal Awards 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 with Requirements that Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings Illinois Department of Human Services Grant Report

3 INDEPENDENT AUDITOR S REPORT January 24, 2012 To the Board of Directors of El Hogar del Nino/Cuidar We have audited the accompanying statement of financial position of El Hogar del Nino/Cuidar (a nonprofit organization, the Organization ) as of June 30, 2011, and the related statements of activities, functional expenses and cash flows for the year then ended. These financial statements are the responsibility of the Organization s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of El Hogar del Nino/Cuidar as of June 30, 2011, and the changes in its net assets and its 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 January 24, 2012, 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, 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 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. The schedule of functional expenses is presented for purposes of additional analysis and is not a required part of the financial statements. The supplemental information contained on pages 18 and 19 ( Grant Report ) for the State of Illinois is presented for purposes of additional analysis as required by the Illinois Department of Human Services (IDHS), and is also not a required part of the financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also 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 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other 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 basic financial statements taken as a whole. 2 P age

4 STATEMENT OF FINANCIAL POSITION JUNE 30, 2011 Assets Temporarily Unrestricted Restricted Total Cash and Cash Equivalents $ 951,810 $ 4,000 $ 955,810 Prepaid Expenses and Other Assets 7,758-7,758 Accounts Receivable 715, ,695 Land, Property and Equipment, Net of Accumulated Depreciation of $3,070,389 3,117,422-3,117,422 Total Assets $ 4,792,685 $ 4,000 $ 4,796,685 Liabilities and Net Assets Liabilities Accounts Payable, Trade $ 128,415 $ - $ 128,415 Accrued Payroll, Vacation, Payroll Tax and Benefits 745,636 Other Current Liabilities 46,738 Mortgage Payable 2,090,159 Total Liabilities 3,010,948-3,010,948 Net Assets Unrestricted 1,781,737 Temporarily Restricted 4,000 Total Net Assets 1,781,737 4,000 1,785,737 Total Liabilities and Net Assets $ 4,792,685 $ 4,000 $ 4,796,685 The accompanying notes are an integral part of these financial statements 3 P age

5 STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2011 PUBLIC SUPPORT AND REVENUE: Temporarily Unrestricted Restricted Total PUBLIC SUPPORT: Grants $ 4,501,025 $ 4,000 $ 4,505,025 Contributions 116, ,495 Special Events 5,208-5,208 Total Public Support 4,622,728 4,000 4,626,728 REVENUE: Program Service and Insurance Fees 109, ,729 Other Income 53,211-53,211 Total Revenue 162, ,940 Total Public Support and Revenue 4,785,668 4,000 4,789,668 EXPENSES: Program Services 3,856,526-3,856,526 Management and General 220, ,803 Fundraising 18,755-18,755 Total Expenses 4,096,084-4,096,084 Change in Net Assets 689,584 4, ,584 TOTAL NET ASSETS: Net Assets, June 30, ,092,153-1,092,153 Net Assets, June 30, 2011 $ 1,781,737 $ 4,000 $ 1,785,737 The accompanying notes are an integral part of these financial statements 4 P age

6 STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2011 Program Services Family & Indv Preschool Toddler After School Counseling Home Da y Ca re Total Program Services Mgmt and General Fund Raising Total Salary and Wages $ 840,270 $ 683,060 $ 247,849 $ 276,063 $ 96,696 $ 2,143,938 $ 39,715 $ 14,167 $ 2,197,820 Employee Benefits 60,488 31,493 20,471 18,517 1, ,420 5, ,838 Payroll Taxes 86,822 71,246 32,969 23,353 7, ,079 29,415 2, ,666 Professional Fees 60,166 86,910 25,952 7,160 3, ,092 13, ,024 Advertising , ,609 Office Expense 10,260 6,924 3,650 3,095 1,402 25,331 4, ,098 Occupa ncy 49,472 38,426 16,664 11,693 3, ,792 15, ,518 Tra vel ,377 5, , ,146 Conferences & Meetings 5,074 4,153 1, ,100 3, ,956 Interest 46,359 37,203 19,109 12,552 4, ,293 50, ,356 Insurance 9,824 7,882 4,049 2, ,277 8,628-33,905 Supplies 139,458 82,627 68, , , ,763 Outs i de Contra ctor , ,916 1, ,079 Professional Dev 5,076 3,627 8, ,837 6, ,226 Equipment 4,156 3,342 1,714 8, ,485 1,501-19,986 Telecommunications 4,267 3,432 1,759 4, ,027 1,482-15,509 Other 2,116 1,203 2, ,403 2,394-8,797 Depreciation 94,788 75,273 39,030 25,091 8, ,546 36, ,788 Total Expenses $ 1,420,720 $ 1,137,949 $ 537,356 $ 400,414 $ 360,087 $ 3,856,526 $ 220,803 $ 18,755 $ 4,096,084 The accompanying notes are an integral part of these financial statements 5 P age

7 STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 693,584 Adjustments to reconcile change in net assets to cash provided (used) by operating activities: Depreciation and amortization 278,788 (Increase) Decrease in accounts and grants receivable (67,231) (Increase) Decrease in prepaid expenses and other assets (1,395) Increase (Decrease) in accounts payable (149,432) Increase (Decrease) in accrued expenses (97,313) Net Cash Provided (Used) by Operating Activities 657,001 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in property and equipment (104,827) Net Cash Provided (Used) by Investing Activities (104,827) CASH FLOWS FROM FINANCING ACTIVITIES: Net changes on mortgage liability (92,550) Net Cash Provided (Used) by Financing Activities (92,550) NET CHANGE IN CASH AND CASH EQUIVALENTS 459,624 CASH AND CASH EQUIVALENTS - June 30, ,186 CASH AND CASH EQUIVALENTS - June 30, 2011 $ 955,810 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 169,356 The accompanying notes are an integral part of these financial statements 6 P age

8 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, HISTORY AND NATURE OF ORGANIZATION El Hogar del Nino/Cuidar (the Organization ) is a nonprofit organization incorporated 1972 in the State of Illinois. The Organization provides child care services for preschool children, emergency assistance, and family and individual counseling. The Organization receives most of its support from government entities, private corporations, foundations, and individual contributions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Financial Statement Presentation The financial statements have been prepared on the accrual basis of accounting. The financial statement presentation follows the recommendation of the Financial Accounting Standards Board in its Accounting Standards Codification (FASB ASC) (formerly SFAS No. 117) Not-for Profit Entities, Presentation of Financial Statements. The Organization is required to report information regarding its financial position according to three classes of net assets: unrestricted nets assets, which represents the expendable resources that are available for operations at management s discretion; temporarily restricted net assets, which represents resources restricted by donors as to purpose or by passage of time; and permanently restricted net assets, which represents resources used by the organization is limited by donor imposed stipulations and conditions that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of the organization. Unrestricted net assets: Net assets not subject to donor-imposed restrictions and conditions. Temporarily restricted net assets: Net assets are subject to donor-imposed stipulations and conditions that may or will be met by actions of the Organization and/or passage of time. Permanently restricted net assets: Net assets are subject to donor-imposed stipulations and conditions that they be maintained by the Organization. Generally, the donors to these assets permit the Organization to use all or part of the income earned on related investments for general or specific purposes. The Organization did not maintain any permanently restricted net assets as of June 30, Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other liabilities are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets (i.e., the donor stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between applicable classes of net assets. 7 P age

9 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition, Deferred Revenue and Accounts Receivable The Organization has adopted FASB ASC (formerly SFAS No. 116), Not-for Profit Entities, Revenue Recognition. As prescribed by FASB ASC , contributions, including unconditional promises-to-give, are recognized as revenue in the period made. Conditional promises to give are not recognized as revenue until the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value. Contributions from unconditional promises to give that are to be received after one year are discounted at an appropriate discount rate based on an average Federal Funds rate. Granting agencies at their discretion may require the Organization to pay back funds as a result of not meeting statistical service expectations and requirements, or if the Organization engaged in activities that resulted in noncompliance with grants and contracts. Grants received from a governmental or similar unit under a contract are exchange transactions. Revenue is recognized when earned. Amounts received but not yet earned are reported as deferred revenue. Accounts receivable are stated at unpaid balances, less an allowance for doubtful accounts when applicable. The Organization provides for losses on accounts receivable using the allowance method. The allowance is based on experience, third-party contracts, and other circumstances, which may affect the ability of agencies and others to meet their obligations. Receivables are considered impaired if full principal payments are not received in accordance with the contractual terms. It is the Organization s policy to charge off uncollectible accounts receivable when management determines the receivable will not be collected. At June 30, 2011, accounts receivable are considered by management to be fully collectible within a year and accordingly, no allowance for doubtful accounts is determined to be necessary. Statement of Functional Expenses The costs of providing various program and supporting services have been summarized and allocated among programs and supporting services on a functional basis in the Statement of Functional Expenses. Cash and Cash Equivalents For the purpose of the Statement of Cash Flows, the Organization considers all highly liquid investments with an initial maturity of twelve months or less to be cash equivalents. 8 P age

10 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property, Equipment and Depreciation Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over a period of 3 to 40 years based on the estimated useful lives of the assets. The Organization generally capitalizes items costing $1,000 or more. Depreciation expense for the year ended June 30, 2011, amounted to $278,788. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Taxes The Organization is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. It qualifies for charitable contribution deductions under Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2). Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicated that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the excess of the assets carrying amount over the fair value of the asset. Fair value is based on market quotes, if available, or is based on valuation techniques. There was no impairment losses recognized during the year ended June 30, Compensated Absences and Sick Pay Compensated absences consist of accumulated unused vacation days. The total accrued compensated absences at June 30, 2011, amounted to $44,115. Compensated sick pay consists of accumulated unused sick days. The total accrued compensated sick pay amounted to $81,993 at June 30, P age

11 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, CERTAIN VULNERABILITIES AND CONCENTRATIONS The Organization s total revenue amounted to $4,789,668 for the year ended June 30, Of this amount, $2,937,713 was attributed to grants, program fees and other amounts expended by the City of Chicago Department of Family Support Services (CCDFSS), which represented approximately 61% of the Organization s revenue. Of the Organization s total revenue, in excess of $4,505,025 or 94% was generated through government sources, either as contracts, grants or as service fees. Possible cuts in governmental funding for social service programs could result in a reduction of funding to the Organization. The Organization also maintained certain bank accounts insured by the Federal Deposit Insurance Corporation up to an aggregate amount of $250,000 for each depositor in each depository institution, with unlimited coverage on non-interest bearing accounts. At June 30, 2011, the Organization had two depository institutions that had balances. One institution had $980,482 on deposit, which did not exceed insured limits. Another institution had $350,000 on deposit, which exceeded the aggregate insured limit by $100,000, leaving that amount at risk. 4. LAND, PROPERTY AND EQUIPMENT Land, property and equipment at June 30, 2011, consists of the following: Land $ 46,569 Building improvements 5,878,973 Furniture & Equipment 262,269 Total at cost 6,187,811 Less: accumulated depreciation (3,070,389) Net property and equipment in service $ 3,117, FEDERAL TAX LIABILITY Accrued Payroll, vacation, payroll tax and benefits included a federal tax liability in the amount of $616,501 as of June 30, The Organization s real estate property commonly known as 1718 S Loomis is being held subject to the tax lien securing the federal tax liability. 10 P age

12 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, MORTGAGE PAYABLE Mortgage payable at June 30, 2011, is as follows: Mortgage $2,090,159 Monthly mortgage payments of principal and interest of $19,019 are required. Interest is charged at a variable rate (6.25% at June 30, 2011). The entire balance must be repaid by March 15, This note is collateralized by land and buildings located at and South Loomis. The loan maturity schedule is as follows: Years ending June 30: 2012 $ 97, , , ,779,353 Total $ 2,090, FAIR VALUE OF FINANCIAL INSTRUMENTS Financial Accounting Standards Board (FASB) Accounting Standards Code (ASC) Fair Value Measurements and Disclosures requires disclosure of an estimate of fair value of certain financial instruments. The Organization s significant financial instruments are cash, accounts receivable, marketable equity securities, and other short-term assets and liabilities. For these financial instruments, carrying values approximate fair value. 11 P age

13 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2011 PASS FEDERAL GRANT/PASS THROUGH CFDA THROUGH GRANT OR/PROGRAM TITLE NUMBER NUMBER EXPENDITURE U.S. Department of Health and Human Services: Pass-through City of Chicago Department of Family and Support Services: Child Care and Development Block Grant PO# $ 84,993 Child Care Mandatory and Matching Funds of the Child Care and Development Fund PO# ,015 ARRA - Head Start PO# ,285 ARRA - Early Head Start PO# ,810 19,095 Head Start PO# ,123 Early Head Start PO# , ,897 Youth Network Council ARRA - Strengthening Communities Fund SI ,200 1,684,200 U.S. Department of Education Pass-through Illinois State Board of Education: Preschool for All and Prevention Initiative ,000 U.S. Department of Agriculture Pass-through Illinois State Board of Education: Child and Adult Care Food Program P ,314 GRAND TOTAL FEDERAL EXPENDITURES $ 2,109,514 Notes to the Schedule of Expenditures of Federal Awards: 1. This Schedule was prepared on the accrual basis of accounting 2. There were no federal non-cash awards, insurance or loan guarantees in the year under audit 3. There were no sub-recipients for this organization 4. Program tested as major program was CFDA number There were no other A-133 audit reports for this organization for the year under audit. 12 P age

14 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 January 24, 2012 To the Board of Directors of El Hogar del Nino/Cuidar We have audited the financial statements of El Hogar del Nino/Cuidar (the Organization ) as of and for the year ended June 30, 2011, and have issued our report thereon dated January 24, 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 the Organization 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 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. Our consideration of internal control over financial reporting 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 deficiencies, 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. 13 P age

15 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) Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization s financial statements are free of material misstatements, we performed tests of its compliance with certain provision 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. This report is intended solely for the information and use of management, the board of directors, others within the Organization, 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. 14 P age

16 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 January 24, 2012 To the Board of Directors of El Hogar del Nino/Cuidar Compliance We have audited El Hogar del Nino/Cuidar (the Organization ) 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 each of the organization s major federal programs for the year ended June 30, The Organization s major federal programs are identified in the summary of 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 the Organization s management. Our responsibility is to express an opinion on the Organization 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 the Organization s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Organization s compliance with those requirements. In our opinion, the Organization complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, P age

17 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 (Continued) Internal Control Over Compliance Management of the Organization 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 the Organization s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance 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 the Organization s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. 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 deficiencies, 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 management, the board of directors, others within the Organization, 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. 16 P age

18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011 A. SUMMARY OF AUDIT RESULTS Type of report issued on the financial statements Unqualified Opinion Significant deficiencies in internal control over financial reporting, and material weaknesses, if any Noncompliance which is material to the financial statements None Reported None Significant deficiencies in internal control over major programs, and material weakness, if any - Type of report issued on compliance for major federal award programs - Audit findings disclosed by audit - None Reported Unqualified Opinion None Major programs tested Dollar threshold used to distinguish between Type A and Type B programs - Auditee qualified as a low risk auditee - Head Start CFDA No $300,000 Yes B. FINDINGS RELATED TO FINANCIAL STATEMENTS NONE C. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARDS NONE D. PRIOR AUDIT FINDINGS There were no reportable conditions, material weaknesses or instances of noncompliance reported related to federal awards that were reported in accordance with Circular A-133, Section 510(a) for the year ended June 30, P age

19 ILLINOIS DEPARTMENT OF HUMAN SERVICES GRANT REPORT for the period July 1, 2010 through June 30, 2011 Page 1of 2 Grant Allowable Cost Summary EL HOGAR DEL NINO/CUIDAR ILLINOIS DEPARTMENT OF HUMAN SERVICES GRANT REPORT YEAR ENDED JUNE 30, 2011 AGENCY NAME: EL HOGAR DEL NINO/CUIDAR FEIN: Program Name / Number / Contract Number / Other Identification DHS GRANT-FUNDED SERVICES Program 1 Total Family Case Management Chicago / 11GL IDHS All other Programs Mgmt & General Total A Direct Program exenses 400, ,414 3,474, ,803 4,096,084 B Allocate Management and General Costs (Note 1) 25,443 25, ,360 (220,803) - C SUBTOTAL A + B 425, ,857 3,670,227-4,096,084 D Subtract Unallowable - - E Add other approved uses (attach documentation) - - F TOTAL Allowable costs 425, ,857 3,670,227-4,096,084 G Special provisions (see instructions) - - H Interest Earned (see instructions) - - NOTE 1: Management and General cots are allocated based on : direct salaries, X total direct costs, other basis (explain) 18 P age

20 ILLINOIS DEPARTMENT OF HUMAN SERVICES GRANT REPORT (Continued) YEAR ENDED JUNE 30, 2011 ILLINOIS DEPARTMENT OF HUMAN SERVICES GRANT REPORT for the period July 1, 2010 through June 30, 2011 Page 2of 2 Grant Allowable Cost Summary AGENCY NAME: EL HOGAR DEL NINO/CUIDAR FEIN: Program Name / Number / Contract Number DHS GRANT-FUNDED SERVICES Program 1 Family Case Management Chicago / 11GL Unallowable Costs (see instructions) compensation of governing body entertainment association dues meeting and conventions fundraising bad debt charity and grants unallowable interest inventories depreciation on DHS-funded assets cost of production in-kind expenses alcoholic beverages personal automobiles fines and penalties personal use items lobbying unallowable relocation gratuities political contributions related party transactions costs where a conflict of interest exists Unallowable costs if Program is Federally funded or cost-restricted by Contract (See instructions) Explain: TOTAL UNALLOWABLE COSTS (to line D of - Grant Report) - See below if NONE If no unallowable costs are listed, sign and date as follows: I certified that no unallowable costs are included in either direct costs or allocated Management and General costs on the Grant Report Signature Date Printed Name and Title 19 P age