Alfred Saliba Family Services Center, Inc.

Transcription

1 Alfred Saliba Family Services Center, Inc. Financial Statements For The Year Ended September 30, 2010

2 Table of Contents September 30, 2010 Page INDEPENDENT AUDITORS REPORTS 1 5 FINANCIAL STATEMENTS Statement of Financial Position 6 Statement of Activities 7 Statement of Cash Flows 8 Notes to Financial Statements 9 14 SUPPLEMENTAL INFORMATION Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs 17

3 INDEPENDENT AUDITORS' REPORT Board of Directors Dothan, Alabama We have audited the accompanying statement of financial position of Alfred Saliba Family Services Center, Inc. (the Agency ) (a nonprofit organization) as of September 30, 2010, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the Agency'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, as of September 30, 2010, 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 June 30, 2011 on our consideration of 's internal control over financial reporting and 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 and should be considered in assessing the results of our audit. Our audit was performed for the purpose of forming an opinion on the basic financial statements of the Agency taken as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A- 133, "Audits of States, Local Governments, and Non-Profit Organizations and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. CARR, RIGGS & INGRAM, L.L.C. Certified Public Accountants June 30,

4 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 Board of Directors Dothan, Alabama We have audited the financial statements of (the Agency ) (a nonprofit organization) as of and for the year ended September 30, 2010, and have issued our report thereon dated June 30, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Agency'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 Agency s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Agency 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 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 significant deficiencies or material weaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. -2-

5 This report is intended for the information and use of the audit committee, management 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. CARR, RIGGS & INGRAM, L.L.C. Certified Public Accountants June 30,

6 INDEPENDENT AUDITORS' 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 Board of Directors Dothan, Alabama Compliance We have audited the compliance of (the Agency ) (a nonprofit organization) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, The Agency's major federal programs are identified in the summary of auditors 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 Agency's management. Our responsibility is to express an opinion on the Agency'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 Agency'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 on the Agency's compliance with those requirements. In our opinion, the Agency complied, in all material respects, with the requirements referred to above that could have a direct material and material effect on each of its major federal programs for the year ended September 30, Internal Control Over Compliance The management of the Agency 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 Agency'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 Agency's internal control over compliance. -4-

7 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, audit committee, management, federal awarding agencies, pass-through entities and others within the entity and is not intended to be and should not be used by anyone other than these specified parties. CARR, RIGGS & INGRAM, L.L.C. Certified Public Accountants June 30,

8 Statement of Financial Position September 30, 2010 Assets Current assets Cash $ 194,006 Accounts and grants receivable 137,641 Accrued support 102,798 Prepaid expenses 6,683 Deposits 8,000 Inventory 6,500 Total current assets 455,628 Property and equipment Land and buildings 1,409,665 Computer equipment and software 171,098 Furniture and fixtures 84,568 Renovations 182,956 Construction in Progress 255,388 2,103,675 Less: accumulated depreciation (598,956) Net property and equipment 1,504,719 Total assets $ 1,960,347 Liabilities and Net Assets Liabilities Accounts payable $ 180 Accrued liabilities 19,287 Deferred support 91,994 Total current liabilities 111,461 Net assets Unrestricted 1,846,629 Temporarily restricted 2,257 Total net assets 1,848,886 Total liabilities and net assets $ 1,960,347 See accompanying notes. -6-

9 Statement of Activities Year ended September 30, 2010 Unrestricted Net Assets Support Grants and contracts $ 2,137,195 Contributions 19,706 Fees 13,502 In-kind 28,329 Interest income 592 Rents 66,256 Increase in unrestricted net assets 2,265,580 Net Assets Released from Restrictions Restrictions satisfied by payments 568 Increase in unrestricted net assets and reclassifications 2,266,148 Expenses Program services Early head start 648,768 Early head start- expansion 187,392 Family preservation and support services 298,411 HIPPY 56,735 Family clinic 250,155 Family builders 24,854 Child and adult care feeding program 39,224 Community development block grant 29,928 MARS 82,087 Other family services 139,275 Support services Administration 269,593 Decrease in unrestricted net assets 2,026,422 Change in Unrestricted Net Assets 239,726 Temporarily Restricted Net Assets Net assets released from restrictions (568) Net Assets - Beginning of year (as originally reported) 1,635,251 Prior Period Adjustment (25,523) Net Assets- Beginning of year (as restated) 1,609,728 Net Assets - End of year $ 1,848,886 See accompanying notes. -7-

10 Statement of Cash Flows Year ended September 30, 2010 Cash Flows from Operating Activities Change in net assets $ 239,158 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 49,288 (Increase) decrease in operating assets: Accounts and grants receivable 73,977 Accrued support (94,347) Deposits (8,000) Increase (decrease) in operating liabilities: Accounts payable (9,920) Accrued expenses (43,944) Deferred support 66,668 Net cash provided by operating activities 272,880 Cash Flows from Investing Activities Purchases of property and equipment (275,455) Net Decrease in Cash and Cash Equivalents (2,575) Cash and Cash Equivalents - Beginning of year 196,581 Cash and Cash Equivalents - End of year $ 194,006 See accompanying notes. -8-

11 Notes To Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization (the Agency ) is a non-profit agency engaged in the administration of federal and state grants intended to provide assistance to families who are in need of comprehensive preventive and intervention services. The Agency is organized on a non-stock basis and is dependent on contributions and grants as its sources of funds. Basis of Reporting The Agency s financial statements are prepared using the accrual basis of accounting, which recognizes revenues when earned and expenses as incurred. Federal, state and local government and public grants are recorded as support when performance occurs under the terms of the grant agreements. Tax Exempt Status The Agency is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and is classified as an other-than-private foundation. Effective January 1, 2009, the Agency implemented the accounting guidance for uncertainty in income taxes using the provision of FASB ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions initially and subsequently need to be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Agency believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years (after 2006 for federal and state) based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. The adoption of FASB ASC 740 did not have a material impact on the Agency s financial statements. The Agency has concluded that there are no significant uncertain tax positions requiring disclosure, and there are no material amounts of unrecognized tax benefits. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Agency considers all unrestricted highly liquid investments with an initial maturity of three months or less to be cash equivalents. Inventory Inventory consists primarily of supplies and donated pharmaceuticals and is valued at the lower of cost or market on a first-in, first-out ( FIFO ) basis. The Agency regularly receives donations of pharmaceuticals which are typically at or near expiration. Due to the short shelf-life of these items, they are considered to have little or no fair market value and, for this reason, are typically not valued in the Agency s financial statements. -9-

12 Notes To Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment Property and equipment purchased with federal funds are reported as program expenses for purposes of reporting expenses for grantors reimbursement. For financial reporting, these assets are capitalized when cost exceeds $5,000. Title to these assets rests with the Agency and the grantor holds a reversionary interest. The only restriction on these assets is that they be used to benefit the program which purchased the asset. Depreciation is recorded on these assets using the straight-line basis over the estimated useful lives of the assets, primarily three to twenty years. Depreciation expense on these assets is charged as a program expense to the programs for which the asset was purchased. Property and equipment, with an acquisition cost in excess of $5,000, in which the Agency holds title are capitalized at the acquisition cost. Donated property and equipment is capitalized at market value at time of donation. Depreciation is computed using the straight-line method based on the estimated useful life of the asset. Compensated Absences Agency employees accrue Earned Time Off ( ETO ) which can be used for both personal leave and sick leave. The accrual rates are as follows: Years of Service Accrual Rate hours per pay period 4 or more 8 hours per pay period The maximum amount of ETO in which an employee can vest is 80 hours. Accrued ETO is not payable upon termination and, accordingly, is not included in accrued expenses. Grants All grants received are renewable on an annual basis and the Agency is dependent on these grants for continued activity. Recognition of Grantor/Donor Restrictions Support that is restricted by the grantor/donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other grantor/ donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Advertising Costs Advertising costs are expensed as incurred. -10-

13 Notes To Financial Statements NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Management Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ( GAAP ) 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements In June 2009, the Financial Accounting Standards Board ( FASB ) issued new guidance effective for financial statements issued for periods ending after September 15, The FASB Accounting Standards Codification (FASB ASC) establishes the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. On the effective date, the FASB ASC superseded all then-existing standards. Adoption of this guidance did not have a material impact on the Agency s financial statements. Subsequent Events The Agency has evaluated subsequent events through the date of issuance of these financial statements and has determined that no events occurring subsequent to year end warranted disclosure. NOTE 2 DEPOSITS The Agency maintains cash on deposit with three high quality banking institutions. At times, deposits may exceed Federal Deposit Insurance Corporation ( FDIC ) coverage. At September 30, 2010, the Agency s deposits did not exceed FDIC coverage. NOTE 3 ACCOUNTS AND GRANTS RECEIVABLE Accounts and grants receivable consist of: September 30, 2010 Department of Health and Human Services - FPSS $ 78,027 Geneva County Family Services Center 27,727 Early Head Start- Expansion Stimulus 26,729 Dale County Family Resource Center 1,672 State of Alabama- SEP Program 1,631 ARCH 1,855 $ 137,

14 Notes To Financial Statements NOTE 4 ACCRUED SUPPORT Accrued support consists of grant funds that are earned but not received as follows: September 30, 2010 Child Nutrition $ 4,675 MARS 20,750 Early Head Start 43,179 Early Head Start- Stimulus Expansion 34,194 $ 102,798 NOTE 5 DEFERRED SUPPORT Deferred support consists of grant funds that are received but unearned as follows: September 30, 2010 HIPPY $ 49,494 Wiregrass Foundation 42,500 Total deferred support $ 91,994 NOTE 6 TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the purchase of medicines for use in the family health clinic. Net assets totaling $568 were released from restrictions by incurring expenses associated with purchases of medicine for clinic use during the year ended September 30, NOTE 7 RENTAL OPERATIONS The Agency leases office space in its headquarters to various parties under operating leases with terms ranging from one month to five years. The Agency also occupies a portion of the building held for rent and net rental proceeds are used to supplement operations of the Agency s family health clinic. Gross rental income for the year ended September 30, 2010 totaled $66,256. Property under lease consisted of the following: September 30, 2010 Buildings $ 419,443 Less: accumulated depreciation (114,268) -12- $ 305,175

15 Notes To Financial Statements NOTE 8 DONATED SERVICES, MATERIAL, TRAVEL AND FACILITIES Significant services, materials, travel, and facilities are donated to the Agency by various individuals and organizations. Donated materials, professional services, travel and facilities were recorded at fair market value at the date of donation, and have been included in revenue and expenses in the Statement of Activities for the year. Donated non-professional services have not been recognized in the Statement of Activities because the criteria for recognition under FASB ASC 958, Not-for-Profit Entities have not been satisfied. This value is based on time sheets maintained on the volunteers, using reasonable rates. Donated services per grant are as follows: PY09 Early Head Start PY10 Early Head Start Family Preservation and Support Services Total Facilities $ 4,367 $ 318 $ 18,304 $ 22,989 Professional services and other 2,940 2,400-5,340 Donations reflected in statement of activities 7,307 2,718 18,304 28,329 Non-professional services 71,862 6,784-78,646 Total donations $ 79,169 $ 9,502 $ 18,304 $ 106,975 NOTE 9 LEASES The Agency is a party to various leases that are classified as operating leases. Total rent for all leases amounted to $7,122 for the year ended September 30, Future minimum lease payments under noncancelable operating leases with initial or remaining terms of one year or more are as follows: 2011 $ 7, , Total minimum future rental payments $ 13,

16 Notes To Financial Statements NOTE 10 RETIREMENT COSTS The Agency has established a 401(a) retirement plan for all full-time salaried employees. Employer contributions are discretionary and are determined by the Agency Board of Directors. The plan does not permit employee contributions. During the fiscal year ended September 30, 2010, the Agency incurred $38,936 in retirement costs. The Agency also offers a 403(b) plan through which all full-time salaried employees contribute 5% of their eligible compensation. NOTE 11 PRIOR PERIOD ADJUSTMENT During 2010, certain errors were noted which resulted in an understatement of accrued liabilities and an understatement of program service expenses in prior years. Correction of these errors resulted in a decrease net assets at October 1, 2010 of $25,

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18 Schedule of Expenditures of Federal Awards For the Year Ended September 30, 2010 Federal Grantor/Pass-Through Federal Pass-Through Program Grantor/Program Title CFDA No. Grantor No. Expenditures U.S. Department of Health and Human Services Direct programs: Early Head Start CH4593/09 $ 624,197 Early Head Start CH4593/10 43,179 ARRA - Head Start SE4593/01 23,122 ARRA - Early Head Start Expansion SA4593/01 484,035 Passed through State of Alabama Children's Trust Fund Temporary Assistance for Needy Families AFP ,681 Temporary Assistance for Needy Families TANF ,922 Passed through State of Alabama Department of Human Resources: Temporary Assistance for Needy Families N/A 33,104 Family Preservation Support Services FY10 366,332 Passed through Auburn University Healthy Marriage Promotion and Responsible Fatherhood ACHMI ,087 Total U.S. Department of Health and Human Services 1,695,659 U.S. Department of Housing and Urban Development Passed through the Alabama Rural Coalition for the Homeless: ARRA - Homeless Prevention and Rapid Re-Housing Program ,635 Passed through the City of Dothan Housing Authority: Community Development Block Grant ,928 Total U.S. Department of Housing and Urban Development 45,563 U.S. Department of Homeland Security Passed through the United Way: ARRA - Emergency Food and Shelter National Board Program ,811 Total U.S. Department of Homeland Security 2,811 -continued- -15-

19 Schedule of Expenditures of Federal Awards (continued) For the Year Ended September 30, 2010 U.S. Department of Agriculture Passed through State of Alabama Department of Education: Child and Adult Care Food Program A7D ,224 Total U.S. Department of Agriculture 39,224 U.S. Social Security Administration Passed through State of Alabama Department of Education Social Security Disability Insurance N/A 864 Total U.S. Social Security Administration 864 Total expenditures of federal awards $ 1,784,121 Note: This schedule was prepared on the modified accrual basis of accounting. This differs from the full accrual basis in that expenditures for fixed asset purchases are expended when incurred, rather than being capitalized and depreciated, which conforms to the basis of reporting to grantors for reimbursements under the terms of the Organization's federal grants. -16-

20 Schedule of Findings and Questioned Costs For The Year Ended September 30, 2010 I - Summary of Auditors' Results Financial Statements Type of auditor s report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified yes X no Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weakness(es)? yes X none reported Type of auditor s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? yes X no Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster Early Head Start ARRA- Head Start ARRA- Early Head Start Expansion Dollar threshold used to distinguish between type A and type B programs? $ 300,000 Auditee qualified as low-risk auditee? X yes no II - Findings Related To The Financial Statement In Accordance With GAGAS: No matters were reported. III Findings and Questioned Costs For Federal Awards No matters were reported. -17-