CATHOLIC COMMUNITY SERVICES OF LANE COUNTY, INC.

Transcription

1 FINANCIAL STATEMENTS AND SINGLE AUDIT INFORMATION For the Years Ended June 30, 2015 and 2014

2 FINANCIAL STATEMENTS AND SINGLE AUDIT INFORMATION For the Years Ended June 30, 2015 and 2014 TABLE OF CONTENTS Page Independent Auditor s Report 1-2 Financial Statements: Statements of Financial Position 3-4 Statements of Activities 5 Statements of Functional Expenses 6-7 Statements of Cash Flows 8 Notes to Financial Statements 9-14 Single Audit Information: Schedule of Expenditures of Federal Awards 15 Notes to Schedule of Expenditures of Federal Awards 16 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 Independent Auditor s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A Schedule of Findings and Questioned Costs 21

3 INDEPENDENT AUDITOR S REPORT To the Board of Directors Catholic Community Services of Lane County, Inc. Eugene, Oregon Report on the Financial Statements We have audited the accompanying financial statements of Catholic Community Services of Lane County, Inc. (a nonprofit organization), which comprise the statements of financial position as of June 30, 2015 and 2014, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Catholic Community Services of Lane County, Inc. as of June 30, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2016, on our consideration of Catholic Community Services of Lane County, Inc. s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Catholic Community Services of Lane County, Inc. s internal control over financial reporting and compliance. Jones & Roth, P.C. Eugene, Oregon January 15,

5 FINANCIAL STATEMENTS

6 STATEMENTS OF FINANCIAL POSITION June 30, 2015 and Assets Current assets Cash and cash equivalents (Note 2) $ 208,815 $ 315,707 Grants receivable (Note 3) 238, ,677 Prepaid expenses and other current assets 53,784 53,932 Total current assets 500, ,316 Property and equipment Buildings and improvements 1,168,902 1,103,885 Land 415, ,224 Equipment 205, ,572 Intangible assets 5,890 5,890 1,795,551 1,641,571 Accumulated depreciation (338,964) (283,985) Property and equipment, net 1,456,587 1,357,586 Total assets $ 1,957,371 $ 1,905,

7 Current liabilities Current portion of long-term debt (Note 4) $ 27,285 $ 20,129 Current portion of capital lease obligation (Note 5) - 2,272 Accounts payable and deposits 78,018 90,614 Accrued vacation 32,186 31,174 Accrued pension benefits 20,590 15,328 Accrued unemployment benefits (Note 10) 30,175 13,023 Total current liabilities 188, ,540 Non-current liabilities Liabilities and Net Assets Long-term debt, net of current portion (Note 4) 643, ,195 Total liabilities 831, ,735 Net assets Unrestricted 919, ,789 Temporarily restricted (Note 11) 206, ,378 Total net assets 1,125,804 1,095,167 Total liabilities and net assets $ 1,957,371 $ 1,905,902 The accompanying notes are an integral part of these statements

8 STATEMENTS OF ACTIVITIES For the Years Ended June 30, 2015 and Unrestricted net assets Revenue and other support: Contributions $ 695,626 $ 366,582 Catholic Charities 41,447 43,583 Client fees 5,535 3,635 Other income 851 4,127 Interest income Special events 62,537 77, , ,024 Net assets released from restrictions 3,546,151 3,204,932 Total revenue and other support 4,352,387 3,700,956 Expenses: Program services: Emergency assistance 3,192,003 2,702,001 Supported living 649, ,087 Support services: Management and general 339, ,978 Fundraising 166, ,694 Total expenses 4,347,743 3,644,760 Increase in unrestricted net assets 4,644 56,196 Temporarily restricted net assets Revenue and other support: Food for Lane County 1,851,889 1,767,441 Contributions 73, ,363 Government grants 1,646,950 1,255,860 3,572,144 3,137,664 Net assets released from restrictions (3,546,151) (3,204,932) Increase (decrease) in temporarily restricted net assets 25,993 (67,268) Change in net assets 30,637 (11,072) Net assets, beginning of year 1,095,167 1,106,239 Net assets, end of year $ 1,125,804 $ 1,095,167 The accompanying notes are an integral part of these statements

9 STATEMENTS OF FUNCTIONAL EXPENSES For the Years Ended June 30, 2015 and Emergency Supported Management Total Assistance Living and General Fundraising Expenses Salaries $ 413,456 $ 205,985 $ 146,057 $ 95,160 $ 860,658 Payroll taxes and benefits 95,543 69,298 50,374 32, ,937 Direct aid to individuals 633, , ,462 Food distribution 1,851, ,851,889 Professional fees 77,440 1,823 18,800-98,063 Office supplies 50,866 8,037 5,168 16,189 80,260 License and fees 1, , ,177 Depreciation and amortization ,979-54,979 Dues and subscriptions - - 4, ,464 Other 6,748 18,606 15,408 3,270 44,032 Insurance 10,756 6, ,874 Interest ,124-32,124 Promotional 4, ,916 17,773 Rent (5,232) 7,952 3,397 1,873 7,990 Repairs and maintenance 12,719 2,393 1, ,624 Communications 20,029 5,043 2,470 1,235 28,777 Utilities 19,234 3,715 2,019 1,692 26,660 Total functional expenses $ 3,192,003 $ 649,048 $ 339,713 $ 166,979 $ 4,347,

10 2014 Emergency Supported Management Total Assistance Living and General Fundraising Expenses $ 332,044 $ 214,158 $ 134,779 $ 97,108 $ 778,089 95,806 81,919 37,345 27, , , , ,707 1,767, ,767,441-3,282 19, ,555 17,993 5,621 9,248 17,671 50,533 1, , , ,644-42, , ,975 4,676 19,585 18,216 3,124 45,601 6,902 4, , ,816-29,816 4, ,562 20,368 (4,901) 11,188 2,933 1,759 10,979 10,723 4,074 2, ,012 8,319 6,585 3, ,730 14,148 4,634 2, ,364 $ 2,702,001 $ 471,087 $ 305,978 $ 165,694 $ 3,644,760 The accompanying notes are an integral part of these statements

11 STATEMENTS OF CASH FLOWS For the Years Ended June 30, 2015 and Cash flows from operating activities Change in net assets $ 30,637 $ (11,072) Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 54,979 42,644 (Increase) decrease in: Grants receivable (59,508) (4,017) Prepaid expenses and other current assets 148 (1,258) Increase (decrease) in: Accounts payable and deposits (12,596) 21,527 Accrued liabilities 23,426 14,477 Net cash provided by operating activities 37,086 62,301 Cash flows used by investing activities Purchase of property and equipment (120,385) (169,404) Cash flows used by financing activities Repayment of long-term debt (21,321) (22,150) Repayment of capital lease obligation (2,272) (3,520) Net cash used by financing activities (23,593) (25,670) Net decrease in cash and cash equivalents (106,892) (132,773) Cash and cash equivalents, beginning of year 315, ,480 Cash and cash equivalents, end of year $ 208,815 $ 315,707 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 32,124 $ 29,816 Schedule of noncash investing and financing activities Total purchase of property and equipment $ 153,980 $ - Amount financed with long-term debt (33,595) - Cash paid for property and equipment $ 120,385 $ - The accompanying notes are an integral part of these statements

12 NOTES TO FINANCIAL STATEMENTS 1. Nature of Business and Summary of Significant Accounting Policies Nature of Business Catholic Community Services of Lane County, Inc. (the Agency), is a Catholic Charities member agency that provides social services to needy residents of Lane County, Oregon. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America and, accordingly, reflect all significant receivables, payables, and other liabilities. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Public Support and Revenue Grants and other contributions of cash and other assets are reported as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Contributions of donated non-cash assets are recorded at their fair values in the period received, and are included in the support and expenses. Cash and Cash Equivalents For purposes of the statements of cash flows, the Agency considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. Investments Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the statements of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. Grants Receivable Grants receivable primarily consist of amounts due from the state of Oregon and Lane County for the balance of their contracts. The Agency periodically reviews receivable balances and charges off any amounts determined uncollectible. The Agency considers all receivables at June 30, 2015 and 2014 to be fully collectible, and therefore, no allowance for uncollectible receivables was recorded

13 NOTES TO FINANCIAL STATEMENTS 1. Nature of Business and Summary of Significant Accounting Policies, continued Property and Equipment Property and equipment is recorded at cost. Donations of property and equipment are recorded as support at their estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset 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 support. Absent donor stipulations regarding how long those donated assets must be maintained, the Agency reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Agency reclassifies temporarily restricted net assets to unrestricted net assets at that time. All significant acquisitions and renovations which increase the value of an asset are capitalized. Property and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 to 30 years. As of June 30, 2015 and 2014, property and equipment includes a building, parking lot and equipment, with a total net book value of $587,475 and $522,350, respectively, whose use is restricted by trust deeds. Financial Statement Presentation The Agency reports information regarding its financial position and activities according to two classes of net assets: unrestricted net assets and temporarily restricted net assets. Contributions Contributions received are recorded as unrestricted or temporarily restricted net assets depending on the absence or existence and nature of any donor restrictions. Income Taxes The Agency is a nonprofit organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code (IRC) and is not classified as a private foundation. The Agency files required information returns with both the U.S. federal jurisdiction and the state of Oregon. Accrued Unemployment Benefits The Agency self-funds unemployment benefits as provided by law. The Agency charges to expense and credits to unemployment reserves a determined percent of wages. As benefits are paid, the reserve is charged. No actuarial determination has been made to determine the adequacy of such a reserve. Functional Expenses Functional expenses have been allocated between program services and support services based on an analysis of personnel time and space utilized for the related activities

14 NOTES TO FINANCIAL STATEMENTS 2. Cash and Cash Equivalents As of June 30, cash and cash equivalents were composed of the following: Bank checking accounts $ 130,501 $ 87,420 Bank savings accounts 6,996 6,994 Certificates of deposit 50, ,074 Money market accounts 21,251 21,219 Total cash and cash equivalents $ 208,815 $ 315,707 The Agency maintains its cash balances at financial institutions that at times exceed the insured amount provided by the Federal Deposit Insurance Corporation of $250,000 per institution. At June 30, 2015 and 2014, the Agency had no cash balances in excess of federally insured limits. 3. Concentrations of Grants Receivable Grants receivable are composed of amounts due from the state of Oregon and Lane County, Oregon for social services performed on contracts. Some of the contracts are pass-through grants of federal grants. The balance also includes receivables for grants from Catholic Charities of Portland. 4. Long-term Debt As of June 30, long-term debt was composed of the following: Mortgage payable to Summit Bank, payable in monthly installments of $2,976, including a variable interest rate of the current LIBOR rate plus 3.25%, with a floor of 4.75%. At June 30, 2015 and 2014, the rate was 4.75%. The note is due November 2021 and is secured by real property. $ 475,152 $ 487,791 Mortgage payable to Summit Bank, payable in monthly installments of $1,281, including a variable interest rate of the current LIBOR rate plus 4.00%, with a floor of 4.75%. At June 30, 2015 and 2014, the rate was 5.78% and 5.70%, respectively. The note is due December 2020 and is secured by real property. 163, ,

15 NOTES TO FINANCIAL STATEMENTS 4. Long-term Debt, continued Note payable to Summit Bank, payable in monthly installments of $636, including a fixed interest rate of 5.00%. The note is due February 2020 and is secured by the Agency s assets. 31, , ,324 Current portion (27,285) (20,129) Long-term debt, net of current portion $ 643,313 $ 638,195 Maturities of long-term debt are as follows: Years Ending June 30, 2016 $ 27, , , , ,444 Thereafter 522,690 Total $ 670, Capital Lease Obligation The Agency had assets recorded under a capital lease for the year ended June 30, 2014 with a cost of $9,935. Minimum lease payments to TouchPoint Networks were payable in monthly installments of $348, including interest at 15.5 percent. The note matured in January Accumulated depreciation was $6,623 and $5,133 for the years ended June 30, 2015 and 2014, respectively. 6. Line of Credit The Agency had a line of credit with Summit Bank for $100,000 which accrued interest at 6.00 percent and expired on January 1, A new agreement for a $100,000 line of credit with Summit Bank was signed in January The line of credit has a maturity date of January 1, 2016, accrues interest at the variable rate of the current LIBOR rate plus 2.00 percent, with a floor of 5.25 percent, and is secured by the Agency s assets. As of June 30, 2015, the interest rate was 5.25 percent. There were no outstanding balances on these credit facilities as of June 30, 2015 and

16 NOTES TO FINANCIAL STATEMENTS 7. Donated Noncash Assets The Agency receives donations of noncash assets in the form of food from Food for Lane County. The food is then distributed as direct aid to individuals. The value of the food received for the years ended June 30, 2015 and 2014, was $1,851,889 and $1,767,441, respectively. 8. Simplified Employee Pension Plan The Agency established a simplified employee pension plan (SEP) for all employees who have worked in three of the previous five years. For fiscal years ended June 30, 2015 and 2014, the Agency contributed and allocated to the SEP participants 3 percent of each participant's compensation. The Agency contributed $13,116 and $13,555, for the years ended June 30, 2015 and 2014, respectively. Under a SEP, annual discretionary contributions are made directly to participants' individual retirement accounts (IRA s). After the funds have been distributed to the IRA's, the Agency has no fiduciary responsibility or control over the accounts. 9. Operating Leases and Service Agreements The Agency is invoiced for rental and service agreement costs on a monthly basis. Rental expense for the years ended June 30, 2015 and 2014 was $7,990 and $10,979, respectively. The Agency has a non-cancelable operating lease for a copier that expires in July 2017 and requires monthly payments of $237. Rental expense for the years ended June 30, 2015 and 2014 was $2,844 for each respective year. The Agency entered into a service agreement for a broadband bundle during 2012 which expired in November Total expense related to this service for the years ended June 30, 2015 and 2014 was $1,245 and $2,988, respectively. The commitments under these agreements are as follows: Years Ending June 30, 2016 $ 2, , Total $ 5,

17 NOTES TO FINANCIAL STATEMENTS 10. Accrued Unemployment Benefits As stated in Note 1, the Agency provides a reserve for unemployment benefits. Currently, there are 21 full-time and 9 part-time employees eligible for benefits. Each full-time and part-time employee is potentially eligible for weekly benefits of approximately $400 and $225, respectively, for 26 weeks. The maximum contingent liability is estimated to be $271,490. For the years ended June 30, the activity in accrued unemployment benefits was: Balance, beginning of year $ 13,023 $ 5,195 Net benefits accrued (paid) 17,152 7,828 Balance, end of year $ 30,175 $ 13, Temporarily Restricted Net Assets As of June 30, temporarily restricted net assets were available for the following purposes: Children's care $ 6,996 $ 6,994 CDBG trust deed building 73,440 91,800 CDBG trust deed parking lot 14,560 - CDBG trust deed freezer units 27,615 - CDBG trust deed warehouse remodel 27,000 - Development and volunteer grant 35,000 55,000 Young fathers program 2,000 8,500 SNAP grant 8,714 - Family support and connections program 6,831 8,768 Other program expenses 4,215 9,316 Total temporarily restricted net assets $ 206,371 $ 180, Subsequent Events Management evaluates events and transactions that occur after the statement of financial position date as potential subsequent events. Management has performed this evaluation through the date of the independent auditor s report

18 SINGLE AUDIT INFORMATION

19 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2015 Federal Federal CFDA Disbursement/ Federal Grantor/Program Title Number Expenditure U.S. Department of Housing and Urban Development Passed through Lane County Health and Human Services: Community Development Block Grant $ 56,347 Emergency Solutions Grant Program ,420 Continuum of Care Program ,846 Total passed through Lane County Health and Human Services 355,613 Passed through Catholic Charities: Housing Counseling Assistance Program ,539 Passed through City of Springfield: Community Development Block Grant ,615 Passed through City of Eugene: Community Development Block Grant ,000 Total U.S. Department of Housing and Urban Development 418,767 U.S. Department of Homeland Security Direct payments: Emergency Food and Shelter National Board Program ,000 U.S. Department of Health and Human Services Passed through Lane County Health and Human Services: Low-Income Home Energy Assistance ,118 Community Services Block Grant ,637 Total passed through Lane County Health and Human Services 329,755 Passed through Lane County Department of Children and Families: Social Services Block Grant ,500 Total passed through Lane County Department of Children and Families 1,500 Total U.S. Department of Health and Human Services 331,255 U.S. Department of Agriculture Passed through Food for Lane County: Emergency Food Assistance Program ,968 Total federal financial assistance $ 944,

20 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Catholic Community Services of Lane County, Inc. and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audit of States, Local Governments, and Non-Profit Organizations. 2. Subrecipients Of the federal expenditures presented in the schedule, Catholic Community Services of Lane County, Inc. provided federal awards to subrecipients, under the U.S. Department of Housing and Urban Development Emergency Solutions Grant Program, CFDA number , of $74,

21 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 To the Board of Directors Catholic Community Services of Lane County, Inc. Eugene, Oregon We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Catholic Community Services of Lane County, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2015, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated January 15, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Catholic Community Services of Lane County, Inc. s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Catholic Community Services of Lane County, Inc. s internal control. Accordingly, we do not express an opinion on the effectiveness of Catholic Community Services of Lane County, Inc. s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

22 Compliance and Other Matters As part of obtaining reasonable assurance about whether Catholic Community Services of Lane County, Inc. s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Jones & Roth, P.C. Eugene, Oregon January 15,

23 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 To the Board of Directors Catholic Community Services of Lane County, Inc. Eugene, Oregon Report on Compliance for Each Major Federal Program We have audited Catholic Community Services of Lane County, Inc. s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Catholic Community Services of Lane County, Inc. s major federal programs for the year ended June 30, Catholic Community Services of Lane County, Inc. s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of Catholic Community Services of Lane County, Inc. s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 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 Catholic Community Services of Lane County, Inc. s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Catholic Community Services of Lane County, Inc. s compliance.

24 Opinion on Each Major Federal Program In our opinion, Catholic Community Services of Lane County, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, Report on Internal Control Over Compliance Management of Catholic Community Services of Lane County, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Catholic Community Services of Lane County, Inc. s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Catholic Community Services of Lane County, Inc. s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Jones & Roth, P.C. Eugene, Oregon January 15,

25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2015 Summary of Auditor s Results (1) The independent auditor s report expresses an unmodified opinion on the financial statements of Catholic Community Services of Lane County, Inc. (2) No significant deficiencies or material weaknesses in internal control were disclosed by the audit of the financial statements. (3) No instances of noncompliance material to the financial statements, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. (4) No significant deficiencies in internal control were disclosed by the audit of the major federal award programs. (5) No instances of noncompliance with major federal award programs were disclosed during the audit. (6) The independent auditor s report on compliance for the major federal award programs for Catholic Community Services of Lane County, Inc. expresses an unmodified opinion. (7) There were no audit findings relative to the major federal award programs of Catholic Community Services of Lane County, Inc. (8) The following programs were tested as a major program: CFDA # CFDA # Continuum of Care Program Low-Income Home Energy Assistance Program (9) The threshold for distinguishing between Type A and Type B programs was $300,000. (10) Catholic Community Services of Lane County, Inc. qualified as a low-risk auditee. Findings Financial Statement Audit None. Findings and Questioned Costs Major Federal Award Programs Audit None. Prior Year Findings Major Federal Award Programs Audit None