Coastal Georgia Area Community Action Authority, Inc.

Transcription

1 Coastal Georgia Area Community Action Authority, Inc. (Brunswick, Georgia EIN # ) Financial Statements, Supplementary Information, and Reports Required Under Uniform Guidance For the Year Ended June 30, 2016 (With Independent Auditor's Report Thereon)

2 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. ANNUAL FINANCIAL AND COMPLIANCE REPORT For the Year Ended June 30, 2016 T A B L E O F C O N T E N T S Schedule Page Independent Auditor's Report... 3 SECTION I FINANCIAL SECTION Statement of Financial Position... 6 Statement of Activities... 7 Statement of Changes in Net Assets... 8 Statement of Functional Expenses... 9 Statement of Cash Flows Notes to Financial Statements SECTION II SUPPLEMENTARY INFORMATION Statement of Actual Revenue and Expenses Compared to Budget Head Start Combined... No Head Start... No Early Head Start... No Community Services Block Grant... No Low Income Home Energy Assistance Program... No Weatherization HHS... No Weatherization DOE... No Weatherization DOE... No Weatherization Georgia Power Company... No McIntosh County Senior Center... No Liberty County Summer Lunch... No Child and Adult Care Food Program... No Aging Services Program... No Emergency Food and Shelter Program... No Georgia PreK... No Family, Friends & Neighbors... No McIntosh County Summer Lunch... No Medicaid... No Meals On Wheels... No Resource Services Ministries... No Camden County PSA... No United Way... No CQI Incentive... No Community Development Block Grant... No Donor... No

3 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. ANNUAL FINANCIAL AND COMPLIANCE REPORT For the Year Ended June 30, 2016 T A B L E O F C O N T E N T S Schedule Page Food Service... No SelfInsurance... No Administration... No Schedule of State Awards Expended... No Schedule of Audited Indirect and Administrative Costs... No SECTION III REPORT REQUIRED BY GAO GOVERNMENT AUDITING STANDARDS Independent Auditor's 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 SECTION IV REPORT REQUIRED BY UNIFORM GUIDANCE Independent Auditor's Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance 61 Schedule of Expenditures of Federal Awards and Other Financial Assistance Notes to Schedule of Expenditures of Federal Awards and Other Financial Assistance SECTION V SCHEDULE OF FINDINGS AND QUESTIONED COSTS Summary of Auditor's Results SECTION VI STATUS SCHEDULE OF PRIOR YEARS' AUDIT FINDINGS Summary Schedule of Prior Audit Findings and Corrective Action Plan... 68

4 INDEPENDENT AUDITOR S REPORT To the Board of Directors of Coastal Georgia Area Community Action Authority, Inc. Report on the financial statements We have audited the accompanying financial statements of Coastal Georgia Area Community Action Authority, Inc. ( the Authority, a nonprofit organization), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, changes in net assets, functional expenses, and cash flows for the year 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 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 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 opinion. Opinion In our opinion, the financial statements referred to previously present fairly, in all material respects, the financial position of the Authority as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards and other financial assistance, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, as shown on pages 63 64, is presented for purposes of additional analysis and is not a required part of the financial statements. The supplementary information included on pages is presented for purposes of additional analysis 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. 3

5 The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of federal awards and other financial assistance and other supplementary 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 December 16, 2016, on our consideration of the Authority 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 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 the Authority s internal control over financial reporting and compliance. December 16,

6 SECTION I FINANCIAL SECTION 5

7 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF FINANCIAL POSITION June 30, 2016 Temporarily Unrestricted Restricted Total ASSETS Cash (Note B) 888, ,671 1,252,837 Other receivable 195, ,440 Employee advances Due from grantors (Note G) 512, ,990 Total current assets 1,596, ,671 1,961,485 Property and equipment, less accumulated depreciation (Note E) 159, , ,441 Due from related party (Note S) 15,000 15,000 Investments (Note C, D and U) 832, ,144 Total noncurrent assets 174,518 1,050,067 1,224,585 Total Assets 1,771,333 1,414,737 3,186,070 LIABILITIES AND NET ASSETS Accounts payable 76,163 76,163 Accrued expenses 2,268 2,268 Accrued vacation (Note H) 64,667 64,667 Accrued salaries 393, ,391 Custodial account (Note I) 5,193 5,193 Deferred revenue (Note J) 128, ,120 Total current liabilities 541, , ,802 Deferred compensation (Note L) 10,000 10,000 Total longterm liabilities 10,000 10,000 Total Liabilities 551, , ,802 Net assets (Note P) 1,219,651 1,286,617 2,506,268 Total Liabilities and Net Assets 1,771,333 1,414,737 3,186,070 The accompanying notes are an integral part of these financial statements. 6

8 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF ACTIVITIES For the Year Ended June 30, 2016 Temporarily Unrestricted Restricted Total PUBLIC AND PRIVATE SUPPORT Intergovernmental Federal 10,255,369 14,226 10,269,595 Intergovernmental State 623, ,895 Intergovernmental Local 235, ,029 Other income 81, , ,957 Interest and dividend income ,655 19,006 Net realized and unrealized gains and losses on investments 1,459 1,459 Inkind (Note K) 2,013,977 2,013,977 Net assets released from restrictions 99,908 (99,908) Total Public and Private Support 13,309, ,274 13,537,917 EXPENSES Program Services (Note A1) Head Start 7,745,850 7,745,850 Early Head Start 1,960,514 1,960,514 Community Services Block Grant 421, ,739 Low Income Home Energy Assistance Program 1,092,952 1,092,952 Weatherization HHS 67,918 67,918 Weatherization DOE 132, ,206 Weatherization Georgia Power Company 29,327 29,327 McIntosh County Senior Center 59,282 59,282 Liberty County Summer Lunch 67,435 67,435 Child and Adult Care Food Program 854, ,570 Aging Services Program 11,964 11,964 Emergency Food and Shelter Program 8,735 8,735 Georgia PreK 565, ,643 Family, Friends, & Neighbors Meals On Wheels 2,575 2,575 McIntosh Summer Lunch Food 14,180 14,180 Camden County PSA 40,390 40,390 Medicaid 16,069 16,069 United Way 14,000 14,000 CQI Incentive 2,000 2,000 Community Development Block Grant 5,380 5,380 Resource Services Ministries 25,081 25,081 Total Program Services 13,138,495 13,138,495 Supporting Services Administrative services Food service (125,628) (125,628) Selfinsurance 275, ,467 Business interruption reserve funds 7,500 7,500 Donor 24,721 24,721 Depreciation 99,908 99,908 Total Supporting Services (1,000) 282, ,968 Total Expenses 13,137, ,967 13,420,463 Change in Net Assets 172,147 (54,693) 117,453 The accompanying notes are an integral part of these financial statements. 7

9 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF CHANGES IN NET ASSETS For the Year Ended June 30, 2016 Temporarily Unrestricted Restricted Total Beginning Net Assets 1,039,534 1,349,281 2,388,815 Reclass of net assets 7,971 (7,971) Beginning Net Assets, restated 1,047,504 1,341,311 2,388,815 Change in net assets 172,147 (54,693) 117,453 Ending Net Assets 1,219,651 1,286,617 2,506,268 The accompanying notes are an integral part of these financial statements. 8

10 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2016 PROGRAM SERVICES Low Child Community Income Weatherization McIntosh Liberty and Adult Early Services Home Georgia County County Care Aging Head Head Block Energy Weatherization Weatherization Power Senior Summer Food Services Page Start Start Grant Assistance HHS DOE Company Center Lunch Program Program Totals Salaries 3,508, , ,432 51,590 39,485 55,379 13,349 26,553 10, ,133 3,999 5,006,583 Salaries inkind 38,133 7,970 46,103 Fringe benefits 988, ,584 72,231 4,921 6,207 11,399 2,089 11, , ,382,433 Total Personnel Costs 4,535,208 1,138, ,663 56,511 45,692 66,777 15,438 37,800 10, ,312 4,397 6,435,118 Employee travel 64,681 11,717 9,222 1, ,396 3,436 94,974 Material and supplies 138,116 74,520 11, ,351 24,821 7,786 3,819 4,085 38,468 2, ,473 Food 5, ,565 45, ,980 2, ,670 Rent 23, ,703 10, , ,242 Utilities 139,818 36,007 11,579 1, ,363 2, , ,121 Contractual services 1,531 1,000 2,323 3,875 2,475 11,204 Allocated food purchases 87,509 42,570 9, ,996 Transportation Loss replacement insurance Indirect costs 673, ,142 37,085 9,703 7,163 10,046 2,422 4,814 1,950 34, ,324 Equipment and renovations 10,726 3,500 14,226 Repairs and maintenance 161,060 21,340 15, , ,245 11,184 1, ,958 Emergency assistance and client services 25,030 2,224 42,776 1,019,495 1,089,524 Insurance 116,407 28, ,109 8,755 1, , ,972 Advertising 1, ,159 Dues and subscriptions 11, ,440 Employee training 65,432 32,620 1,730 3, ,793 Other inkind 1,710, ,432 2,011,402 Other 24,022 3,258 3,658 1, ,490 9 Total Other Costs 3,259, , ,576 1,036,441 22,225 65,428 13,889 21,483 56, ,259 7,567 6,068,969 Program Expenditures Before Reduction for Inkind Expenditures and Capital Additions 7,794,709 1,968, ,239 1,092,952 67, ,206 29,327 59,282 67, ,570 11,964 12,504,087 Inkind expenditures (38,133) (7,970) (46,103) Capital additions (10,726) (3,500) (14,226) Program Expenditures After Reduction for Inkind Expenditures and Capital Additions 7,745,850 1,960, ,739 1,092,952 67, ,206 29,327 59,282 67, ,570 11,964 12,443,758 (Continued) The accompanying notes are an integral part of these financial statements.

11 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2016 PROGRAM SERVICES Emergency McIntosh Community Food and Family County Camden Development Resource Shelter Georgia Friends Summer County Meals United CQI Block Services Page Program PreK & Neighbors Lunch PSA Medicaid On Wheels Way Incentive Grant Ministries Totals Total Salaries 409,576 4,824 2, ,325 5,423,908 Salaries inkind 46,103 Fringe benefits 79, ,897 1,463,330 Total Personnel Costs 489,203 5,800 2, ,222 6,933,341 Employee travel ,641 Material and supplies 27, ,000 2, , ,954 Food 5,744 12,794 18, ,208 Rent 149,242 Utilities 199,121 Contractual services 23,900 23,900 35,104 Allocated food purchases 40,390 40, ,385 Transportation Loss replacement insurance Indirect costs 33, , ,476 Equipment and renovations 14,226 Repairs and maintenance 1, (35) 1, ,413 Emergency assistance and client services 8,492 4,000 5,380 17,872 1,107,397 Insurance 12, , ,278 Advertising 2,159 Dues and subscriptions 11,440 Employee training 1,894 1, ,687 Other inkind 2,575 2,575 2,013,977 Other , Total Other Costs 8,735 76, ,380 40,390 13,735 2,575 14,000 2,000 5,380 24, ,515 6,265,484 Program Expenditures Before Reduction for Inkind Expenditures and Capital Additions 8, , ,180 40,390 16,069 2,575 14,000 2,000 5,380 25, ,737 13,198,824 Inkind expenditures (46,103) Capital additions (14,226) Program Expenditures After Reduction for Inkind Expenditures and Capital Additions 8, , ,180 40,390 16,069 2,575 14,000 2,000 5,380 25, ,737 13,138,495 The accompanying notes are an integral part of these financial statements.

12 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2016 SUPPORTING SERVICES Business Total Administrative Food Interruption Supporting Services Service Selfinsurance Reserve Funds Donor Services Salaries 355,763 13, ,063 Salaries inkind Fringe benefits 78,345 1, ,746 Total Personnel Costs 434,108 15, ,809 Employee travel 26, ,046 Material and supplies 18,190 3,316 2,271 23,776 Food ,024 6,762 31,421 Rent 1,400 1,400 Utilities 47,697 5, ,520 Contractual services 219, , ,697 Allocated food purchases Transportation Loss replacement insurance Indirect costs 5,870 5,870 Equipment and renovations Repairs and maintenance 82,885 4, ,158 Emergency assistance and client services Insurance 54, , ,875 Advertising 1, ,874 Dues and subscriptions 14,206 7,128 1,020 22,354 Employee training 18, ,748 Depreciation 15,957 15,957 Other inkind Other 53, ,079 7,500 6,386 71, Total Other Costs 555,238 39,392 1,218,347 7,500 24,384 1,844,862 Total Support Costs Before Reduction for Capital Additions 989,345 54,757 1,218,347 7,500 24,721 2,294,671 Capital additions Total Support Costs Before Reduction for Program Allocations 989,345 54,757 1,218,347 7,500 24,721 2,294,671 Program allocations (989,345) (180,385) (942,880) (2,112,611) Support Costs in Excess of Program Allocations and Capital Additions (125,628) 275,467 7,500 24, ,060 The accompanying notes are an integral part of these financial statements.

13 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. STATEMENT OF CASH FLOWS For the Year Ended June 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Totals Change in net assets 117,453 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 115,865 Realized and unrealized (gain) loss on investments (12,614) (Increase)decrease in: Accounts receivable (129,240) Employee advances 2,505 Due from grantors 166,401 (Decrease)increase in: Accounts payable (5,118) Accrued expenses (14,453) Accrued vacation 8,633 Accrued salaries 51,605 Custodial account (2,406) Deferred revenue 71,345 Deferred compensation (60,000) Net Cash Provided by Operating Activities 309,978 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (79,226) Net Cash Used by Investing Activities (79,226) Net Increase (Decrease) in Cash 230,752 Cash at Beginning of the Year 1,022,085 Cash at End of the Year 1,252, The accompanying notes are an integral part of these financial statements.

14 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Nature of Activities The Coastal Georgia Area Community Action Authority, Inc. ( the Authority ) is a private nonprofit entity incorporated under the laws of the State of Georgia. The Authority is a county based community action authority established to help alleviate poverty in the Coastal Georgia area by providing sound intervention strategies and selected direct services. Currently, the Authority services nine (9) counties. The Authority s purpose is to plan and administer services that are needed to improve the community it serves. The Authority is funded primarily by Federal and State grants and local contributions. The central office of the Authority is One Community Action Drive, P.O. Box 2016, Brunswick, Georgia The Authority s Board of Directors is comprised of sixteen (16) representatives from member counties. 2. Description of Major Activities Coastal Georgia Area Community Action Authority, Inc. is a nonprofit corporation organized and operated to provide direction and control over various human and social programs. Below is a summary of the principal programs administered by the Authority: a. The Head Start program provides a preschool experience for children of lowincome families in the various counties served. b. The Community Services Block Grant provides emergency assistance and transportation for all programs administered by the Authority. c. The Weatherization grant provides weatherization for homes and financial emergency assistance to maintain the supply of energy for lowincome families. d. Energy Assistance Programs provide energy assistance to lowincome families. 3. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting and, accordingly, reflect all significant receivables, payables, and other activity. 4. Basis of Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board as codified at FASB ASC Under these standards, the Authority is required to report information regarding financial position and activities according to the following three classes of net assets: a. Unrestricted net assets Net assets that are not subject to grantor or donorimposed stipulations. b. Temporarily restricted net assets Net assets subject to donorimposed stipulations that may or will be met, either by actions of the Authority and/or passage of time. 13

15 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. c. Permanently restricted net assets Net assets subject to grantor or donorimposed stipulations that they be maintained permanently by the Authority to use all or part of the assets for general or specific purposes. As of June 30, 2016, there were no permanently restricted net assets. 5. Functional Expenses The costs of the Authority s programs and supporting services have been reported on a functional basis in the Statement of Activities and the Statement of Functional Expenses. Expenses are charged to each program based on direct expenses incurred. Any program expenses not directly chargeable to a program are allocated based on units of service. Administrative costs are allocated based on prescribed indirect costs allocations. 6. Income Tax Status The Authority is a taxexempt organization for both federal and state income tax purposes under Section 501(c)(3) of the Internal Revenue Code and applicable state law. The accounting standards on accounting for uncertainty in income taxes address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under that guidance, the Authority may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. Examples of tax positions include the taxexempt status of the Authority and various positions related to the potential sources of unrelated business taxable income (UBIT). The tax benefits recognized in the financial statements from a tax position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for fiscal year The Authority files its forms 990 with federal and state authorities, as applicable. The Authority is generally no longer subject to examination by the Internal Revenue Service for years before Property and Equipment It is the Authority s policy to capitalize property and equipment at cost. The threshold to determine whether purchases are to be capitalized or expensed varies depending on the funding source. Federal purchases over 5,000 and state and local/donor purchases over 1,000 are to be recognized as capital purchases. Lesser amounts are expensed. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated assets to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the organization reports expirations of donor restrictions 14

16 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued when the donated or acquired assets are placed in service as instructed by the donor. The Authority reclassifies temporarily restricted net assets to unrestricted net assets at that time. Property and equipment is depreciated using the straightline method. 8. Cash and Cash Equivalents For purposes of the statement of cash flows, the Authority consider s all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. 9. Support and Revenue The Authority receives a direct grant from the U.S. Department of Health and Human Services to perform activities necessary to operate the Head Start Program. The Authority also receives funding from the U.S. Department of Health and Human Services, passed the Georgia Department of Human Services, for other programs such as the Community Services Block Grant program and Low Income Home Energy Assistance Program. Other funding includes funds received from the U.S. Department of Energy, passed the Georgia Environmental Finance Authority, for Weatherization programs. 10. Investment Valuation and Income Recognition Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan s Investment Committee determines the Plan s valuation policies utilizing information provided by the investment advisers. See Note C for discussion of fair value measurements. Investments are made according to the investment policies adopted by the Authority s Board of Directors. These guidelines provide for a balanced diversified portfolio with investments in equities, fixed income and other securities with performance measured against appropriate indices. Outside parties are contracted by the Authority for the purpose of providing investment management. Purchases and sales of securities are recorded on a tradedate basis. Interest income is recorded on the accrual basis. Dividends are recorded on the exdividend date. Net appreciation includes the Plan s gains and losses on investments brought and sold as well as held during the year. NOTE B CASH ON DEPOSIT At June 30, 2016, the Authority had a total of 1,371,591 on deposit with the bank. The book balance was 1,252,837 (including petty cash of 300). The Authority maintained cash on deposit in the amount of 250,000 which was insured by federal depository insurance. The Authority had a balance in the amount of 1,121,591, which was collateralized by a financial institution. 15

17 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE C FAIR VALUE MEASUREMENTS The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of air value hierarchy under FASB ASC 820 are described as follows: Level 1: Level 2: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Authority has the ability to access. Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated market data by correlation or other means. If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurements. 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 value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at June 30, Mutual Funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Authority are openend mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds held by the Authority are deemed to be actively traded. 16

18 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE C FAIR VALUE MEASUREMENTS Continued Assets at Fair Value as of June 30, 2016 Description Level 1 Level 3 Total Money Market Funds 30,559 30,559 Bond 327, ,583 Fixed Income Funds 143, ,967 Common Stock 242, ,424 Equity Funds 75,265 75,265 Exchange Traded Funds 12,346 12,346 Total Assets at Fair Value 832, ,144 NOTE D INVESTMENTS The fair values of all of the Authority s investments are measured using Level 1 inputs (see Note C). The major components of investments as of June 30, 2016 were as follows: Description Cost Fair Value Money Market Funds 30,559 30,559 Bond 321, ,583 Fixed Income Funds 145, ,967 Common Stock 214, ,424 Equity Funds 75,300 75,265 Exchange Traded Funds 12,390 12,346 Total Investments 799, ,144 Net investment return for the year ended June 30, 2016 was comprised of the following: Description 2016 Interest and Dividends, net of investment expenses of 7, ,155 Net Realized and Unrealized Gains (Losses) (391) Total Net Investment Return 10,764 17

19 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE E PROPERTY AND EQUIPMENT At June 30, 2016, the costs and related accumulated depreciation (if applicable) of land, buildings and structures, furniture and equipment consisted of the following: Cost Accumulated Depreciation Net Land 61,785 61,785 Buildings and improvements 1,679,855 1,547, ,672 Vehicles 1,884,932 1,783, ,871 Furniture and equipment 1,341,742 1,260,629 81,113 Total 4,968,314 4,590, ,441 Fixed assets in the amount of 217,923 (net), presented as temporarily restricted, are vested with the Authority; however, these assets are purchased with state or federal funds. These assets are vested with the Authority as long as the Authority is granted the right to carry out the various programs for which such assets are acquired. When assets with a current per unit fair market value of 5,000 or more are no longer needed for a federal program, they may be retained or sold with the federal Authority having a right to a proportionate share of the current fair market value. Depreciation for the 2016 fiscal year for restricted and unrestricted property and equipment was 99,908 and 15,957, respectively. The combined total depreciation was 115,865. NOTE F COST ALLOCATION The Authority administers several specific programs to which common costs or indirect costs (costs incurred on behalf of all programs) are charged. The Authority currently utilizes an account(s) to capture charges which benefit all programs and then allocates such costs each month by using a percentage based on its indirect cost plan. The Authority has two cost allocation plans as noted below: a. Indirect cost allocation plan based on salaries and wages and fringe benefits. Depreciation expense of 15,957 related to unrestricted fixed assets has been included in the indirect cost pool of the Authority. Indirect costs allocated to programs have been adjusted based on the effective rate approved by the U.S. Department of Health and Human Services for the 2016 fiscal year. b. Food cost allocation program is based on computed average cost per meal served each month for those adults qualifying under various federal and state programs administered by the Authority and not covered by the Child and Adult Care Food Program or other program. The cost allocation methodology is approved by the board of directors and is applied consistently out the year. 18

20 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE G DUE FROM GRANTORS Amounts due from grantors represent unreimbursed expenses at June 30, The following summarizes the amounts due from grantor/programs: Grantor/Funding Amount Georgia Department of Human Services 34,294 U.S. Department of Health and Human Services 314,405 Georgia Environmental Finance Authority 72,239 Georgia Department of Early Care and Learning 19,430 Liberty County Board of Commissioners 36,104 Camden County 25,480 Georgia Department of Community Health 1,270 McIntosh County Board of Commissioners 9,768 Total 512,990 NOTE H COMPENSATED ABSENCES The Authority s policy for compensated absences is as follows: Accrued Vacation Vacation is earned based on time employed, employment status and pay rates in effect at the time the employee is absent for vacation leave. An employee can carry over no more than two weeks of accrued vacation into the next year, unless approved by the Authority s management. As of June 30, 2016, 100 employees accumulated hours for which management computed an obligation of 64,667. This obligation is accrued in the unrestricted fund and not charged to any program until such time as the expense is incurred. Shortterm Absences An employee receives a total of 7 days of shortterm leave annually. Shortterm absences are compensatory based upon approval; however, days not used cannot be carried over to the subsequent year. NOTE I CUSTODIAL ACCOUNT The Authority maintained funds on behalf of the Head Start parents for payments made to fund Head Start activities of which the balance of funds is recorded as a liability on the financial statements. The remaining balance as of June 30, 2016 was 5,

21 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE J DEFERRED REVENUE Deferred revenue in the temporarily restricted fund results from current year advances made to the Authority by various grantor agencies. The amount due to grantor consists of funds received from a grantor for a program that has not been spent within the program period. Deferred revenue consists of funds received for programs that close after the fiscal year end and are designated to be used during the fiscal year ending June 30, Deferred revenue at June 30, 2016 consisted of the following: Funding Source Amount Resource Service Ministries 128,120 Total 128,120 NOTE K INKIND SUPPORT The Authority, from timetotime, receives services from volunteers without compensation, supplies, and donated space. When the value of such donations received is ascertainable, it is reflected in the accompanying financial statements as revenue and expenses. Marketable securities and other noncash donations are recorded as contributions at their estimated fair values at the date of donation. Amounts for services donated to the Head Start program have been reflected as inkind donations in the financial statements, as specified by the Head Start grant agreement. For the 2016 fiscal year, the Authority had volunteer hours and other donated goods and space that totaled inkind of 2,060,080. The total amount reported in accordance with the requirements of FASB ASC is 2,013,977. NOTE L TAX DEFERRED ANNUITY AND DEFERRED COMPENSATION PLANS The Authority sponsors a taxdeferred annuity plan established pursuant to Section 403(b) of the Internal Revenue Code. The plan is administered by VOYA Financial, Inc. and GreatWest Trust Company, LLC. Under the plan, all fulltime employees with one year of completed fulltime service are eligible to participate in the plan. There are no age minimums or maximums. Employees can contribute any amount of their salary to the plan with the Authority matching employees contributions up to six (6) percent. Employees are vested at a rate of 20% on each anniversary date of the employee plan year and 100% vested after five years in all employer contributions and earnings. During 2016, the Authority contributed 115,634 to the plan as a matching contribution for all eligible employees. During the year, employees contributed 129,543 to the plan. The Authority has also established a nonqualified deferred compensation plan for the Authority s Chief Executive Officer (CEO). The Authority is required to contribute 10,000 each year the CEO is employed for the next three years. The value of the deferred compensation plan as of June 30, 2016 was 10,000. The Plan and assets of the Plan remain vested with the Authority. NOTE M HEALTH, LIFE AND OTHER CARE PLAN The Authority sponsors a flexible benefit plan for all eligible employees. The purpose of the plan is to provide employees of the Authority the choice of purchasing coverage for benefits under premium payment benefit plans (health, life, and other benefits). The plan was established pursuant to Section 125 of the Internal Revenue Code. 20

22 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE M HEALTH, LIFE AND OTHER CARE PLAN Continued Eligibility: All employees of the Authority who work at least 30 hours per week and have a completed Salary Reduction Agreement. Contribution: The plan agreements provide that the Authority remit monthly premium payments in specified amounts on behalf of employees participating in the applicable plan. The employees were entirely responsible for premium payments to the plan. Benefit Payments: All payments for and on behalf of members are paid by the insurance carrier (American Fidelity). The Authority is not obligated to make direct payments. NOTE N GROUP MEDICAL BENEFIT PLAN The Authority sponsors a selffunded welfare benefit plan that provides group medical and prescription drugs for all of it s covered and eligible employees the CIGNA network of providers. U.S. Fire Insurance Company is the underwriter of the Authority s stop loss insurance program. Under the plan, CGACAA, Inc. is named as Plan Sponsor and Plan Administrator. The Plan year ends on June 30 of each year. For the plan year ended June 30, 2016, Paragon Benefits was engaged as the Plan Administrative Service Agent, acting as claims paying agent. An employee becomes eligible for coverage provided by the Plan on the first day on the month following completion of a 90 day waiting period. Under the Plan, employees are required to contribute a small amount toward the cost of employee s coverage and dependents. Under the terms of the Plan, the Authority is required to selfinsure each covered employee up to a specific deductible of 35,000 plus an amount to fund a splitfunded liability not to exceed 250,000 in the aggregate with added selfinsurance for special longterm, high dollar care individuals (laser). During the year there were two individuals with a separate individual specific deductible. During the fiscal year, the Authority paid and accrued claims and other plan expenses and fees of approximately 1,218,347 (net claims for health and prescription drugs, reinsurance premiums, TPA fees, etc.) under the selfinsurance program and allocated 942,880 to the various programs of the Authority. The employees contributed approximately 293,472 towards the healthcare plan during the year. Total net assets of the plan as of June 30, 2016 totaled 236,550. The total cash reserved at June 30, 2016 held with the bank totaled 216,590. NOTE O SUBSEQUENT EVENTS The Authority has evaluated subsequent events December 16, 2016, in connection with the preparation of these financial statements which is the date the financial statements were available to be issued. 21

23 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE P COMPONENTS OF NET ASSETS Net assets reported in the June 30, 2016 financial statements consist of the following components: Description Unrestricted Temporarily Restricted Total Operating Surplus 1,060,133 1,060,133 Reserve for Selfinsurance Plan 236, ,550 Reserve for Business Interruption 832, ,144 Fixed Assets (Net) 159, , ,441 Net 1,219,651 1,286,617 2,506,268 NOTE Q USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. NOTE R RECONCILIATION OF TOTAL FEDERAL AWARDS AND OTHER FINANCIAL ASSISTANCE TO THE BASIC FINANCIAL STATEMENTS 2016 Total Federal Awards and Other Financial Assistance 15,493,495 Deductions: Program Cost Recovery Allocations Inkind Excluded Under FASB ASC Restricted Capital Additions Additions: Depreciation (restricted) (2,112,611) (46,103) (14,226) 99,908 Total Expenditures Reported in the Basic Financial Statements 13,420,463 NOTE S RELATED PARTY TRANSACTION During a prior fiscal year, the Authority loaned to the Community Action Development, Inc., a Georgia nonprofit corporation, 15,000 to establish and begin operations. The Community Action Development, Inc. was created by the Board of Directors of the Authority to serve as a qualifying vehicle to build low to moderate income homes within five designated counties in the Coastal Georgia area. This related party entity is in its development stages. Management believes that the amount advanced will be collected in the future. 22

24 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. NOTES TO FINANCIAL STATEMENTS June 30, 2016 NOTE T OPERATING LEASES The Authority maintains both office and classroom space as well as various office equipment items under separate operating leases. Rent expense incurred under these agreements totaled 150,642, during the year. Future minimum lease payments under operating leases that have remaining terms in excess of one year as of June 30, 2016 are: Year Ending Amount June 30, ,114 June 30, ,775 June 30, 2019 June 30, 2020 June 30, 2021 Thereafter Total 138,889 NOTE U BUSINESS INTERRUPTION Pursuant to Uniform Guidance 2 CFR , Cost Principles for Nonprofit Organizations, the Authority has established a business reserve fund to provide for selfinsured business interruption losses. Accumulated funds are held in a separate investment account and generally are not available for expenditures for normal operations. See Note D. The board of directors has established a policy governing funding of the business interruption reserve. The board of directors conducted a study based on average operating expenditures. This study was used to estimate the needed cash reserve to ensure the Authority s ability to meet its operating needs over two months of business interruption. This is to be funded over a ten year period for high risk and significant programs and is calculated based on a projected and estimated liability totaling approximately two months of operating expenses using a fiveyear average base. The board may choose to fund the reserve based on the availability of funding sources and present value of the estimated liability. During the 2016 fiscal year, the Authority did not fund the account due to prior year losses. The accumulated business interruption reserve as of June 30, 2016 was 832,144. The reserve is currently held in investments and only for the use in the event of business interruption. The cumulative investment earnings have amounted to 4,644. NOTE V EFFECT OF CURRENT ECONOMIC CONDITIONS ON CONTRIBUTIONS The Authority depends heavily on contributions and grants for its revenue. The ability of the Authority s contributors and grantors to continue giving amounts comparable to prior years may be dependent upon current and future overall economic conditions and the continued deductibility for income tax purposes of contributions and grants to the Authority. While the Authority s Board of Directors believes the Authority has the resources to continue its programs, its ability to do so and the extent to which it continues may be dependent on the above factors. 23

25 SECTION II SUPPLEMENTARY INFORMATION 24

26 SCHEDULE 1 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. Head Start Combined Grants #04CH4800/02 and #04CH4800/01 Statement of Actual Revenues and Expenses Compared to Budget For the Years Ended June 30, 2016 and BUDGET ACTUAL 1Jul15 1Apr16 1Jul14 1Apr15 1Apr15 1Apr15 VARIANCE FAVORABLE 31Mar16 30Jun16 Total 31Mar15 30Jun15 Total 31Mar16 31Mar16 (UNFAVORABLE) REVENUES: Federal grants 6,113,093 1,592,595 7,705,688 5,453,863 1,718,283 7,172,146 7,831,376 7,831,376 State grants Local grants Program income Inkind 1,610, ,283 2,057,505 1,428, ,901 1,699,102 1,852,844 1,881,123 (28,279) Transfer in (out) TOTAL SUPPORT 7,723,315 2,039,878 9,763,193 6,882,064 1,989,183 8,871,248 9,684,220 9,712,499 (28,279) P.A. 20 & 11: Training and technical assistance 82,448 15,603 98,052 97,475 26, , , , Employee travel Total Expenditures 82,448 15,603 98,052 97,475 26, , , , Salaries inkind Other inkind 20,612 3,901 24,513 24,369 6,545 30,914 27,324 27, Total Inkind 20,612 3,901 24,513 24,369 6,545 30,914 27,324 27, Total P.A ,061 19, , ,844 32, , , , P.A. 22 & 25: Salaries and wages 3,482, ,298 4,409,132 3,629, ,945 4,564,353 4,622,525 4,417, ,746 Fringe benefits 897, ,579 1,218, , , ,207 1,157,651 1,212,997 (55,346) Employee travel 59,183 17,216 76,399 48,108 10,290 58,397 65,950 69,473 (3,523) Materials and supplies 201,682 10, , ,782 50, , , ,039 (25,319) Food 4,035 1,219 5,254 4,035 (4,035) Rent 101,207 31, , ,831 33, , , ,182 5,518 Utilities 136,327 39, , ,475 40, , , ,015 3,820 Contractual services 1,500 1,031 2, ,303 2,803 2,433 3,803 (1,371) Allocated food purchases 165,119 (35,040) 130,079 85,673 28, , , ,800 (60,512) Transportation Loss replacement insurance Indirect costs 659, , , , , , , ,112 (36,650) Equipment and renovations 10,726 10,726 10,726 (10,726) Repairs and maintenance 138,020 44, , ,112 57, , , ,332 2,696 Emergency assistance and client services 23,717 3,537 27,254 25,074 7,490 32,564 60,266 31,207 29,059 Insurance 116,084 28, , ,560 14, ,305 92, ,829 (38,658) Advertising 1,164 1,164 1, , ,321 (421) Dues and subscriptions 8,365 3,075 11,440 5,329 3,187 8,516 9,889 11,551 (1,663) Employee training Other 23,170 4,110 27,280 24,736 6,375 31,112 21,261 29,546 (8,285) Total Expenditures 6,030,645 1,576,991 7,607,636 5,356,388 1,692,103 7,048,491 7,722,079 7,722,748 (669) Salaries inkind 32,073 14,030 46,103 31,141 8,191 39, ,500 40, ,236 Other inkind 1,557, ,352 1,986,889 1,372, ,164 1,628,855 1,673,020 1,813,701 (140,681) Total Inkind 1,589, ,382 2,032,992 1,403, ,356 1,668,188 1,825,520 1,853,966 (28,446) Total P.A. 22 7,620,255 2,020,374 9,640,629 6,760,220 1,956,459 8,716,679 9,547,599 9,576,714 (29,115) Total Expenditures P.A. 20 & 22 7,723,315 2,039,878 9,763,193 6,882,064 1,989,183 8,871,248 9,684,220 9,712,499 (28,279) EXCESS OF SUPPORT OVER (UNDER) EXPENSES 25

27 SCHEDULE 2 COASTAL GEORGIA AREA COMMUNITY ACTION AUTHORITY, INC. Head Start Grants #04CH4800/02 and #04CH4800/01 Statement of Actual Revenues and Expenses Compared to Budget For the Years Ended June 30, 2016 and BUDGET ACTUAL 1Jul15 1Apr16 1Jul14 1Apr15 1Apr15 1Apr15 VARIANCE FAVORABLE 31Mar16 30Jun16 Total 31Mar15 30Jun15 Total 31Mar16 31Mar16 (UNFAVORABLE) REVENUES: Federal grants 4,844,113 1,201,494 6,045,607 4,262,051 1,278,705 5,540,756 6,122,818 6,122,818 State grants Local grants Program income Inkind 1,359, ,744 1,749,103 1,096, ,040 1,324,109 1,530,705 1,587,398 (56,693) Transfer in (out) TOTAL SUPPORT 6,203,471 1,591,238 7,794,709 5,358,119 1,506,745 6,864,865 7,653,523 7,710,216 (56,693) P.A. 20: Training and technical assistance 55,105 10,327 65,432 66,268 21,036 87,305 76,188 76, Employee travel Total Expenditures 55,105 10,327 65,432 66,268 21,036 87,305 76,188 76, Salaries inkind Other inkind 13,776 2,582 16,358 16,567 5,259 21,826 19,047 19, Total Inkind 13,776 2,582 16,358 16,567 5,259 21,826 19,047 19, Total P.A ,881 12,908 81,790 82,836 26, ,131 95,235 95, P.A. 22: Salaries and wages 2,820, ,145 3,508,284 3,021, ,211 3,709,859 3,666,489 3,508, ,138 Fringe benefits 724, , , , , , , ,777 (32,539) Employee travel 50,092 14,590 64,681 26,766 8,764 35,530 45,835 58,856 (13,021) Materials and supplies 130,215 7, , ,744 32, , , ,496 16,974 Food 4,035 1,209 5,244 4,035 (4,035) Rent 16,712 6,627 23,339 17,011 3,203 20,214 15,213 19,915 (4,702) Utilities 108,642 31, , ,303 32, , , ,388 10,387 Contractual services 500 1,031 1, ,871 2,371 2,000 2,371 (371) Allocated food purchases 123,613 (36,104) 87,509 65,059 16,026 81,085 94, ,639 (44,851) Transportation Loss replacement insurance Indirect costs 531, , , , , , , ,447 (43,970) Equipment and renovations 10,726 10,726 10,726 (10,726) Repairs and maintenance 121,401 39, , ,091 51, , , ,642 3,590 Emergency assistance and client services 21,943 3,087 25,030 22,890 6,073 28,964 41,266 28,016 13,250 Insurance 95,562 20, ,407 90,518 9, ,334 67, ,378 (38,157) Advertising 1,049 1, ,049 (649) Dues and subscriptions 8,122 2,998 11,119 5,329 3,187 8,516 9,700 11,308 (1,608) Employee training Other 20,440 3,583 24,022 20,162 4,845 25,007 17,526 25,284 (7,758) Total Expenditures 4,789,008 1,191,167 5,980,175 4,195,782 1,257,669 5,453,451 6,046,630 6,046,677 (47) Salaries inkind 25,386 12,748 38,133 27,401 6,367 33, ,500 31, ,747 Other inkind 1,320, ,415 1,694,611 1,052, ,414 1,268,514 1,379,158 1,536,610 (157,452) Total Inkind 1,345, ,163 1,732,745 1,079, ,781 1,302,282 1,511,658 1,568,363 (56,705) Total P.A. 22 6,134,590 1,578,330 7,712,919 5,275,284 1,480,450 6,755,734 7,558,288 7,615,040 (56,752) Total Expenditures P.A. 20 & 22 6,203,471 1,591,238 7,794,709 5,358,119 1,506,745 6,864,865 7,653,523 7,710,216 (56,693) EXCESS OF SUPPORT OVER (UNDER) EXPENSES 26