AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION JUNE 30, 2015
AUDITED FINANCIAL STATEMENTS JUNE 30, 2015 TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR S REPORT 1-2 FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION 3 STATEMENT OF ACTIVITIES 4 STATEMENT OF CASH FLOWS 5 STATEMENT OF FUNCTIONAL EXPENSES 6-7 NOTES TO FINANCIAL STATEMENTS 8 15 SUPPLEMENTAL INFORMATION INDEPENDENT AUDITOR S REPORT ON SUPPLEMENTAL INFORMATION 16 SCHEDULE OF STATE EARNINGS 17 SCHEDULE OF BED DAY AVAILABILITY PAYMENTS 18 SCHEDULE OF RELATED PARTY TRANSACTION ADJUSTMENTS 19 SCHEDULE OF PROGRAM/COST CENTER ACTUAL EXPENSES AND REVENUES 20-23 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 24 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 25 OTHER AUDITOR S REPORTS 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 26-27 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM 28 29 AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 30 31
STATEMENT OF FINANCIAL POSITION JUNE 30, 2015 (With summarized financial information as of June 30, 2014) Summarized 2015 2014 ASSETS Current Assets Cash and cash equivalents $ 1,026,956 $ 499,710 Accounts receivable, net 2,236,669 2,516,730 Inventories 39,788 89,889 Prepaid expenses 246,099 284,870 Total Current Assets 3,549,512 3,391,199 Property, plant and equipment, net 4,041,641 4,542,060 Other assets Deposits 3,212 11,606 Other assets, net 70,353 78,630 Investment in CRI 601,018 601,018 Total Other Assets 674,583 691,254 TOTAL ASSETS $ 8,265,736 $ 8,624,513 LIABILITIES AND NET ASSETS Current Liabilities Accounts payable $ 1,300,447 $ 990,471 Accrued liabilities 559,939 510,991 Capital leases - current portion - 25,276 Notes payable - current portion 55,717 129,897 Total Current Liabilities 1,916,103 1,656,635 Notes payable - long-term portion 1,529,243 3,093,052 Total Liabilities 3,445,346 4,749,687 Net Assets Unrestricted 4,820,390 3,871,455 Temporarily restricted - 3,371 Total Net Assets 4,820,390 3,874,826 TOTAL LIABILITIES AND NET ASSETS $ 8,265,736 $ 8,624,513 The accompanying notes are an integral part of these financial statements. -3-
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2015 (With summarized financial information for the year ended June 30, 2014) Summarized 2015 2014 Changes in Unrestricted Net Assets: Public Support and Revenues: Public Support: Federal and state awards and grants $ 12,145,655 $ 13,194,478 Other county and local awards and grants 1,403,290 1,167,019 Revenues: Patient service revenue (net of contractual allowance and discount) 987,178 1,439,774 Contributions 151,423 137,878 Interest - 342 Gain on sale of assets 1,424,887 - Other 24,953 325,292 Total Public Support and Revenues 16,137,386 16,264,783 Net Assets Released from Restrictions: Satisfaction of Restrictions 3,371 13,500 Total Unrestricted Revenues 16,140,757 16,278,283 Expenses: Program Services: Case Management 173,236 285,992 Crisis Support 580,027 692,768 Crisis Stabilization 3,441,532 3,182,985 Florida Assertive Community Treatment 4,050,471 4,377,235 In Home/On Site 180,173 206,739 Intervention 99,333 98,528 Outpatient 1,369,299 1,684,219 Outpatient medical 1,566,377 1,707,193 Outreach 239,733 244,253 Prevention 249,601 245,989 Residential level II 1,538,191 1,466,491 Residential level IV 122,363 95,385 Behavioral Health Fee - 98,102 Administration 1,556,486 1,794,790 Other Support Costs 25,000 25,000 Total Expenses 15,191,822 16,205,669 (Decrease) Increase in Unrestricted Net Assets 948,935 72,614 Changes in Temporarily Restricted Net Assets: Contributions - 3,371 Assets released from restriction (3,371) (13,500) (Decrease) Increase in Temporarily Restricted Net Assets (3,371) (10,129) Change in net assets before swap adjustment 945,564 62,485 Change in fair value of interest rate swap - 44,270 Net Assets at beginning of year 3,874,826 3,768,071 Net Assets at End of Year $ 4,820,390 $ 3,874,826 The accompanying notes are an integral part of these financial statements. -4-
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2015 (With summarized financial information for the year ended June 30, 2014) Summarized 2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets before swap adjustment $ 945,564 $ 62,485 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 340,270 421,999 (Gain)/Loss on sale of fixed assets (1,424,887) - (Increase) Decrease in assets: Accounts receivable 280,061 (457,829) Inventories 50,101 - Prepaid expenses 38,771 (18,499) Other current assets 16,671 (25,167) Increase (Decrease) in liabilities: Accounts payable 309,976 361,152 Accrued liabilities 48,948 (576,698) Net cash used by operating activities 605,475 (232,557) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (252,750) (25,941) Proceeds from sale of fixed assets 307,786 - Net cash used by investing activities 55,036 (25,941) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt and swap (107,989) (296,626) Payments on capital lease obligations (25,276) (60,646) Net cash used by financing activities (133,265) (357,272) Net change in cash and cash equivalents 527,246 (615,770) Cash and cash equivalents at beginning of year 499,710 1,115,480 Cash and cash equivalents at end of year $ 1,026,956 $ 499,710 SUPPLEMENTAL CASH FLOW DISCLOSURES Interest paid $ 127,967 $ 203,406 Non-Cash Financing Transactions: During 2015, the Organization sold a property and with the proceeds, paid down $1,530,000 of long term debt. The accompanying notes are an integral part of these financial statements. -5-
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2015 (With summarized financial information for the year ended June 30, 2014) Program Services Case Crisis Case Management Support Stabilization FACT PERSONNEL SERVICES: Salaries and wages $ 93,524 $ 372,583 $ 2,067,161 $ 2,164,648 Fringes 26,041 74,360 262,694 319,639 Total personnel services 119,565 446,943 2,329,855 2,484,287 OTHER EXPENSES: Building occupancy 14,007 27,071 179,458 173,223 Professional services 1,713 6,767 189,958 40,978 Travel 193 11 301 3,234 Equipment costs 7,235 24,004 144,390 250,981 Food service - 49 73,899 53 Medical and pharmacy 221 693 182,293 4,484 Subcontracted services 2,152 6,791 44,257 47,051 Insurance 2,801 34,129 88,182 121,740 Interest 590 1,977 13,158 17,810 Operating supplies and expenses 23,439 11,608 88,701 852,616 Depreciation 1,320 19,984 107,080 54,014 Total other expenses 53,671 133,084 1,111,677 1,566,184 TOTAL $ 173,236 $ 580,027 $ 3,441,532 $ 4,050,471
Outpatient IHOS Intervention Outpatient Medical Outreach Prevention $ 101,648 $ 55,917 $ 796,756 $ 1,035,882 $ 149,824 $ 161,154 16,295 11,590 145,181 128,250 22,475 26,677 117,943 67,507 941,937 1,164,132 172,299 187,831 16,123 8,748 66,217 28,040 18,120 13,806 1,781 982 13,537 16,735 2,370 2,468 1,858 201 5,033 12,673 3,351 387 7,542 3,920 68,891 63,886 12,775 13,143 2 2 8 1 129 1 357 134 59,911 88,611 267 114 3,320 3,674 18,857 76,338 938 2,509 11,007 5,319 72,904 30,731 5,136 9,630 614 338 5,269 9,782 834 851 16,840 7,108 85,070 50,298 21,466 15,982 2,786 1,400 31,665 25,150 2,048 2,879 62,230 31,826 427,362 402,245 67,434 61,770 $ 180,173 $ 99,333 $ 1,369,299 $ 1,566,377 $ 239,733 $ 249,601 The accompanying notes are an integral part of these financial statements. -6-
STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30, 2015 (With summarized financial information for the year ended June 30, 2014) Program Services Residential Residential Behavioral Health Level II Level IV Fee PERSONNEL SERVICES: Salaries and wages $ 798,833 $ 2,783 $ - Fringes 120,025 386 - Total personnel services 918,858 3,169 - OTHER EXPENSES: Building occupancy 85,132 6,579 - Professional services 15,206 2,318 - Travel 1,135 1 - Equipment costs 80,010 6,529 - Food service 80,870 - - Medical and pharmacy 674 29 - Subcontracted services 6,882 411 - Insurance 51,979 29 - Interest 62,318 14,427 - Operating supplies and expenses 154,132 77,922 - Depreciation 80,995 10,949 - Total other expenses 619,333 119,194 - TOTAL $ 1,538,191 $ 122,363 $ -
Summarized Financial Information Support Services 2015 2014 Total Other Total Total Program Support Costs Administration Agency Agency $ 7,800,713 $ - $ 1,236,583 $ 9,037,296 $ 9,078,099 1,153,613-157,133 1,310,746 1,859,153 8,954,326-1,393,716 10,348,042 10,937,252 636,524-1,057 637,581 705,768 294,813 25,000 42,950 362,763 732,371 28,378-13,257 41,635 55,809 683,306-37,208 720,514 506,287 155,014 - - 155,014 142,899 337,788 - - 337,788 289,900 213,180 - - 213,180 295,119 433,587 - - 433,587 323,609 127,968-8,276 136,244 273,075 1,405,182-60,022 1,465,204 1,521,581 340,270 - - 340,270 421,999 4,656,010 25,000 162,770 4,843,780 5,268,417 $ 13,610,336 $ 25,000 $ 1,556,486 $ 15,191,822 $ 16,205,669 The accompanying notes are an integral part of these financial statements. -7-
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND PURPOSE Coastal Behavioral Healthcare, Inc. ( the Organization ), is a not-for-profit Organization that provides comprehensive mental health and substance abuse services to the community of Sarasota and neighboring counties. The Organization has offices in Sarasota, North Port, North Fort Myers, Punta Gorda, and Arcadia, Florida. BASIS OF ACCOUNTING The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities. The Organization follows standards of accounting and financial reporting prescribed for voluntary health and welfare agencies. Federal, State, local government and other public grants are recorded as support when performance occurs under the terms of the grant agreement. The costs of providing the various programs and other activities have been detailed in the statement of functional expenses and summarized on a program basis in the Statement of Activities. Salaries and other expenses which are associated with a specific program are charged directly to that program. Salaries and other expenses which benefit more than one program are allocated to the various programs based on the relative benefit provided. Administrative expenses are allocated to the various programs based on the relevant program s costs to the total. FINANCIAL STATEMENT PRESENTATION Financial statement presentation follows the recommendations of the Financial Accounting Standards Board (FASB) in the Accounting Standards Codification (ASC) as it relates to financial statements of not-for-profit organizations. The Organization reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets, as applicable. CASH AND CASH EQUIVALENTS - For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents. INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. FAIR VALUE MEASUREMENTS - The FASB established 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 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The levels of the fair value hierarchy used to measure fair value are described as follows: Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Organization has the ability to access. - 8
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED FAIR VALUE MEASUREMENTS CONTINUED Level 2 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 by observable market data by correlation or other means Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. 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 used need to maximize the use of observable inputs and minimize the use of unobservable inputs. ACCOUNTS RECEIVABLE Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision based on its assessment of the current status of individual accounts and contracts. Balances that are still outstanding after management has used reasonable collection efforts are written off. PROPERTY AND EQUIPMENT The Organization capitalizes major additions of property and equipment with a value of $500 or greater and which have an estimated useful life of greater than one year. Property and equipment are recognized at cost when purchased. Donations of property and equipment are recorded as support at their estimated fair value on the date of donation. 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 Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies temporarily restricted net assets to unrestricted net assets at that time. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets ranging from two (2) to thirty-one (31) years. FINANCING COSTS The costs of obtaining debt is deferred and amortized on a straight line basis over the term of the related debt. Amortization of the financing costs for the year ended June 30, 2015 were $8,277. Future amortization for the next five years is expected to be $8,280 annually. - 9 -
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED CONTRIBUTIONS AND RECOGNITION OF DONOR RESTRICTIONS The Organization accounts for contributions received as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Support that is restricted by the 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 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. DONATED SERVICES The Organization receives donated services from time to time. No objective basis is available to measure the value of such services and these hours do not meet the requirements to be recorded as revenue and expenses under accounting principles generally accepted in the United States of America. CHARITY CARE The Organization is paid for services to clients who have no third party coverage on a sliding fee schedule based on federal poverty guidelines. This results in a significant amount of service at reduced or no charges. Because the Organization does not pursue collection of accounts determined to qualify as Charity Care, these amounts are not recorded as revenue. The Organization determines the costs of providing charity care by calculating a ratio of cost to gross charges and then multiplying that ratio by the gross uncompensated charges associated with providing charity care services. During 2015, the costs associated with providing charity care services were $8,434,936. The Organization received $5,905,334 in grant and contractual funding to offset its costs for providing charity care to patients. MEDICARE The Organization is paid for services on an outpatient basis to eligible beneficiaries based on a fee-for-service agreement. Any resulting contractual adjustments in amounts billed are reflected as adjustments to income. MEDICAID The Organization is paid for services to eligible beneficiaries on a fee-for-service. Any resulting contractual adjustments in amounts billed are reflected as adjustments to income. GRANT REVENUE - The Organization receives a substantial amount of its revenue in the form of Federal, State and local grants and contracts. The Organization recognizes revenue either based on the terms of the contract service period or to the extent that expenses have been incurred and the resulting revenue earned. ADVERTISING COSTS - Advertising costs are expensed as incurred. For the year ended June 30, 2015 advertising expense totaled $1,421. - 10
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED SUMMARIZED FINANCIAL INFORMATION - The financial statements include certain prior-year summarized comparative information in the financial statements and notes to the financial statements. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization s financial statements and notes for the year ended June 30, 2014, from which the summarized information was derived. INCOME TAXES The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization is not a private foundation. Accordingly, no provision has been made for income taxes in the accompanying financial statements. The Organization applies guidance issued by the FASB on accounting for uncertainty in tax positions. Management believes the Organization has no material uncertain tax positions, including any potential loss of its tax exempt status. The Organization has no ongoing federal, state or local tax audits; however, the Organization s tax returns for the previous three fiscal years remain open to examination. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. NOTE 2 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following at June 30, 2015: Land $ 89,400 Buildings 6,356,802 Leasehold improvements 1,374,203 Furniture/Fixtures/Equipment 4,358,056 Vehicles 99,497 12,277,958 Less accumulated depreciation (8,236,317) Net Property and Equipment $ 4,041,641 The depreciation expense for the year ended June 30, 2015 was $340,270. The Organization has certain facilities and property used in the course of providing services to the community. Should the Organization cease to occupy or utilize these facilities and/or properties, these facilities and properties would be subject to certain obligations pursuant to grant or contractual agreements. - 11 -
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 3 - LONG TERM DEBT Long-term debt at June 30, 2015, consisted of the following: Term loan payable to a bank in monthly installments of principal and interest of $10,959 at a rate of 4.95%, maturing December 2023. $ 1,584,960 Less Current Portion (55,717) Long-Term Debt $ 1,529,243 The future scheduled maturities of long-term debt are as follows: Year ending June 30: 2016 $ 55,717 2017 57,095 2018 59,986 2019 63,024 2020 66,215 Thereafter 1,282,923 $ 1,584,960 On December 23, 2013, the Organization entered into a loan agreement with a financial institution. The loan agreement refinanced a $4,000,000 term note. The loan is in the amount of $3,240,000. Interest is fixed at 4.95% per annum for the first five years of the loan. After year five the interest rate will reset and be no less than 4.95% and no greater than 8.25% per annum. The note matures in 2023 and is based on a twenty year amortization. The loan is secured by a portion of the Organization s real property assets as defined in the loan agreement. The note includes certain covenants, including financial covenants: debt service coverage ratio of 1.00 times measured annually; maintain a minimum tangible net assets of $3,000,000; and a maximum liability to tangible net assets ratio not exceeding 2.0. At June 30, 2015, the Organization was in compliance with the covenants. NOTE 4 LINE-OF-CREDIT The Organization entered into a revolving line-of-credit with a financial institution. The amount available under the line-of-credit is $250,000. Interest is payable at 1% above the Wall Street Journal Prime Rate, but not less than 4.75%. The line-of-credit is secured by real property. The line-of-credit requires the Organization to meet the same covenants as disclosed in Note 3. There was no amount outstanding on the line-of-credit at June 30, 2015. - 12
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 5 - OPERATING LEASES The Organization has operating leases primarily for various facilities and equipment, which expire at various dates through 2020. Rental expense for facilities was $202,902 for 2015. Rental expense for equipment was $203,478 for 2015. The following represents future minimum lease payments under operating leases that have remaining terms in excess of one year as of June 30, 2015 in the aggregate and for each of the remaining fiscal years: Year Ending June 30, Equipment Facilities Total 2016 $ 174,312 $ 174,612 $ 348,924 2017 $ 52,446 $ 176,909 $ 229,355 2018 $ 4,495 $ 179,274 $ 183,769 2019 $ 1,860 $ 99,259 $ 101,119 2020 $ 620 $ 43,829 $ 44,449 NOTE 6 CONCENTRATION OF CREDIT RISK Cash accounts at banks are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 for the current year. At times throughout the year, the Organization s cash balances may exceed insured limits. At June 30, 2015, cash deposits exceeded FDIC limits by $914,628. Management believes that it is not exposed to any significant credit risk on cash and cash equivalents. The Organization grants credit without collateral to its patients. A significant portion consists of local residents who may be insured under third-party payor agreements. However, receivables have been recorded at the amount management expects to collect. The reserve for uncollectible amounts was $7,292,365 as of June 30, 2015. The reserve is based on historical collections and management s estimate of the amount to be collected based on currently known facts. Due to inherent variability in this area, there is at least a reasonable possibility that recorded estimates will change by a material amount in the near term. The mix of receivables expected to be collected from patients and third-party payers, net of reserves, at June 30, 2015 were as follows: Total Medicare and Medicaid 99% Private Insurance 1% NOTE 7 - INVESTMENT - CRI During July 2001, the Organization entered into a joint venture with Renaissance Manor, Inc. ( Renaissance ) and formed Coastal Renaissance Behavioral Health Services, Inc. ( CRI ). The Organization s interest in the joint venture is 50%. The Organization purchased land and buildings jointly with Renaissance which are shown on the statement of financial position as the Organization s Investment in CRI. The Organization s only part in the joint venture was the purchase of the building, and does not participate in the operations. - 13
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 7 - INVESTMENT CRI - CONTINUED The following is a summary of 100% of the total assets, liabilities, and equity in the joint venture (results of operations is not material): Total Assets $ 1,202,036 Total Liabilities -0- Total Net Assets $ 1,202,036 NOTE 8 - SUPPORT FROM THE STATE OF FLORIDA WHICH REQUIRED MATCH During the year ended June 30, 2015, the Organization received support from the State of Florida, Department of Children and Families through Central Florida Behavioral Health Network, Inc. The income from these contracts is earned by providing services to patients. The contracts require a twenty-five percent local match for certain services. The Organization incurred and funded allowable program costs in excess of the required match during 2015. NOTE 9 - RETIREMENT PLANS The Organization has both a contributory and non-contributory defined contribution retirement plan, which covers eligible employees after one year of continuous full time employment. The Organization contributes a discretionary amount as approved by the Board of Directors each year. For 2015, no discretionary contribution was made by the Organization. NOTE 10 - COMMITMENTS AND CONTINGENCIES Insurance The Organization s current windstorm insurance policy contains various deductible clauses for named hurricanes and for other wind damage. The Organization s buildings are insured with a value of $6,567,234. As a result, the Organization s potential exposure for claims for a named hurricane would be $328,362. The Organization purchases professional and general liability insurance to cover medical malpractice claims. There are known claims and incidents that may result in the assertion of additional claims, as well as claims from unknown incidents that may be asserted arising from services provided to patients. Management is not aware of any pending claims in excess of insured amounts. Consequently, no provisions for any uninsured risks have been made. Self-Insured Health Plan The Organization participates in a self-insurance health program which pays claims on behalf of participating employees with stop-loss insurance policy for large claims over $90,000. The Organization has recorded provisions for estimated claims, which are based on the historical experience. - 14 -
NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 10 - COMMITMENTS AND CONTINGENCIES - CONTINUED The provision for estimated insurance deductibles for medical claims includes estimates of the ultimate costs for both reported claims and claims incurred but not reported. As noted above, the Organization purchased a stop-loss policy (re-insurance) to cover excessive medical claims. There are known claims and incidents that may result in the assertion of additional claims, as well as claims from unknown incidents that may be asserted arising from medical services provided to employees, which have been accrued for. Management is not aware of any pending claims in excess of insured amounts. Consequently, no provisions for any uninsured risks have been made. Public Support The Organization receives a significant amount of its income from public support through grants and contracts, which provide for reimbursement of actual costs incurred. These grants and contracts are subject to year-end adjustment and audit and retroactive adjustment by third-party payors. All known adjustments, affecting such grants and contracts, have been provided for in the financial statements. The ability to continue operating at the current level of service if the grants or contracts were lost or cancelled, is dependent upon the Organization s ability to generate other unrestricted revenue sources. The Organization from time to time is also involved in litigation arising in the course of business. After consultation with legal counsel, management estimates that any such matters will be either resolved without material adverse effect on the Organization s future financial position, or are too early in the process to evaluate the likelihood of an outcome. However, depending on the above and timing of such resolution, an unfavorable outcome of some or all of these matters could materially affect the Organization s future results of operations or cash flows in a particular period. NOTE 11 - SUBSEQUENT EVENTS The Organization has evaluated subsequent events through December 29, 2015 which is the date the financial statements were available to be issued. - 15 -
SUPPLEMENTAL INFORMATION
SCHEDULE OF STATE EARNINGS FOR THE YEAR ENDED JUNE 30, 2015 Total Expenditures $ 15,191,822 Less other State and Federal funds (124,740) Less non-match SAMH funds (6,695,257) Less unallowable costs per 65-E14, FAC (25,000) Total Allowable Expenditures (Sum of lines 1,2,3, and 4) 8,346,825 Maximum Available Earnings (Line 5 times 75%) 6,260,119 Amount of State Funds Requiring Match 5,716,744 Amount Due to Department (Subtract line 7 from line 6. If negative, the amount of the difference is due the department up to the amount of line 7). $ - -17-
SCHEDULE OF BED-DAY AVAILABILITY PAYMENTS FOR THE YEAR ENDED JUNE 30, 2015 Total Units of service paid for by Total units 3rd party Maximum # Amount of service contracts of units paid for Maximum State provided Local Govt. or eligible for Services $ Value Amount Cost Contracted (# of licensed other State payment by by the of units owed to Program Center Rate Beds X Days) Agencies Department Department in column F Department (G-H or $-0- whichever (D - E) (F x C) is greater) A B C D E F G H I AMH Crisis Stabilization $ 305.09 12,775 3,259 9,516 $ 2,590,384 $ 2,903,236 $ - -18-
SCHEDULE OF RELATED PARTY TRANSACTION ADJUSTMENTS FOR THE YEAR ENDED JUNE 30, 2015 THERE WERE NO RELATED PARTY TRANSACTIONS DURING THE YEAR ENDED JUNE 30, 2015. -19-
SCHEDULE OF PROGRAM/COST CENTER ACTUAL EXPENSES AND REVENUES FOR THE YEAR ENDED JUNE 30, 2015 Case Crisis Crisis EXPENSE CATEGORIES Management Support Stabilization FACT PERSONNEL EXPENSES Salaries $ 93,524 $ 372,583 $ 2,067,161 $ 2,164,648 Fringe benefits 26,041 74,360 262,694 319,639 Total personnel expenses 119,565 446,943 2,329,855 2,484,287 OTHER EXPENSES Building occupancy 14,007 27,071 179,458 173,223 Professional services 1,713 6,767 189,958 40,978 Travel 193 11 301 3,234 Equipment costs 7,235 24,004 144,390 250,981 Food service - 49 73,899 53 Medical and pharmacy 221 693 182,293 4,484 Subcontracted services 2,152 6,791 44,257 47,051 Insurance 2,801 34,129 88,182 121,740 Interest 590 1,977 13,158 17,810 Operating supplies and expenses 23,439 11,608 88,701 852,616 Depreciation 1,320 19,984 107,080 54,014 TOTAL PERSONNEL & OTHER EXPENSES 173,236 580,027 3,441,532 4,050,471 DISTRIBUTED INDIRECT COSTS Administration 9,306 77,495 413,909 463,523 Other support costs 328 1,079 6,242 7,471 TOTAL DISTRIBUTED INDIRECT COSTS 9,634 78,574 420,151 470,994 TOTAL ACTUAL OPERATING EXPENSES 182,870 658,601 3,861,683 4,521,465 UNALLOWABLE COSTS 328 1,079 6,242 7,471 TOTAL ALLOWABLE OPERATING EXPENSES $ 182,542 $ 657,522 $ 3,855,441 $ 4,513,994 CAPITAL EXPENDITURES $ - $ - $ 217,549 $ -
Outpatient IHOS Intervention Outpatient Medical Outreach Prevention $ 101,648 $ 55,917 $ 796,756 $ 1,035,882 $ 149,824 $ 161,154 16,295 11,590 145,181 128,250 22,475 26,677 117,943 67,507 941,937 1,164,132 172,299 187,831 16,123 8,748 66,217 28,040 18,120 13,806 1,781 982 13,537 16,735 2,370 2,468 1,858 201 5,033 12,673 3,351 387 7,542 3,920 68,891 63,886 12,775 13,143 2 2 8 1 129 1 357 134 59,911 88,611 267 114 3,320 3,674 18,857 76,338 938 2,509 11,007 5,319 72,904 30,731 5,136 9,630 614 338 5,269 9,782 834 851 16,840 7,108 85,070 50,298 21,466 15,982 2,786 1,400 31,665 25,150 2,048 2,879 180,173 99,333 1,369,299 1,566,377 239,733 249,601 12,867 7,742 125,891 128,050 20,757 22,251 332 185 2,535 2,886 444 462 13,199 7,927 128,426 130,936 21,201 22,713 193,372 107,260 1,497,725 1,697,313 260,934 272,314 332 185 2,535 2,886 444 462 $ 193,040 $ 107,075 $ 1,495,190 $ 1,694,427 $ 260,490 $ 271,852 $ - $ - $ 6,688 $ - $ - $ - -20-
SCHEDULE OF PROGRAM/COST CENTER ACTUAL EXPENSES AND REVENUES FOR THE YEAR ENDED JUNE 30, 2015 Residential Residential Behavioral Health EXPENSE CATEGORIES Level II Level IV Fee PERSONNEL EXPENSES Salaries $ 798,833 $ 2,783 $ - Fringe benefits 120,025 386 - Total personnel expenses 918,858 3,169 - OTHER EXPENSES Building occupancy 85,132 6,579 - Professional services 15,206 2,318 - Travel 1,135 1 - Equipment costs 80,010 6,529 - Food service 80,870 - - Medical and pharmacy 674 29 - Subcontracted services 6,882 411 - Insurance 51,979 29 - Interest 62,318 14,427 - Operating supplies and expenses 154,132 77,922 - Depreciation 80,995 10,949 - TOTAL PERSONNEL & OTHER EXPENSES 1,538,191 122,363 - DISTRIBUTED INDIRECT COSTS Administration 136,415 138,280 - Other support costs 2,812 224 - TOTAL DISTRIBUTED INDIRECT COSTS 139,227 138,504 - TOTAL ACTUAL OPERATING EXPENSES 1,677,418 260,867 - UNALLOWABLE COSTS 2,812 224 - TOTAL ALLOWABLE OPERATING EXPENSES $ 1,674,606 $ 260,643 $ - CAPITAL EXPENDITURES $ 1,284 $ - $ -
Total For All State Designated Other Total Cost Centers Support Costs Administration Agency $ 7,800,713 $ - $ 1,236,583 $ 9,037,296 1,153,613-157,133 1,310,746 8,954,326-1,393,716 10,348,042 636,524-1,057 637,581 294,813 25,000 42,950 362,763 28,378-13,257 41,635 683,306-37,208 720,514 155,014 - - 155,014 337,788 - - 337,788 213,180 - - 213,180 433,587 - - 433,587 127,968-8,276 136,244 1,405,182-60,022 1,465,204 340,270 - - 340,270 13,610,336 25,000 1,556,486 15,191,822 1,556,486 - (1,556,486) - 25,000 (25,000) - - 1,581,486 (25,000) (1,556,486) - 15,191,822 - - 15,191,822 25,000 - - 25,000 $ 15,166,822 $ - $ - $ 15,166,822 $ 225,521 $ - $ 27,229 $ 252,750-21-
SCHEDULE OF PROGRAM/COST CENTER ACTUAL EXPENSES AND REVENUES FOR THE YEAR ENDED JUNE 30, 2015 Case Crisis Crisis FUNDING SOURCES AND REVENUES Management Support Stabilization FACT TOTAL STATE SAMH FUNDING CFBHN $ 74,490 $ 710,264 $ 2,590,384 $ 4,718,804 Total SAMH Funding 74,490 710,264 2,590,384 4,718,804 OTHER GOVERNMENT FUNDING Other State Agency Funding - - 186,455 - Medicaid 17,735 (1,298) 573,732 - Local Government - 79,955 994,339 - Federal Grants and Contracts - - - - Total Other Government Funding 17,735 78,657 1,754,526 - ALL OTHER REVENUES 1st & 2nd Party Payments 2,526 1 (37,792) - 3rd Party Payments (except Medicare) - 119 (66,753) - Medicare - - 1,620 - Contributions and Donations - - - 500 Other - - - 173 In-kind - - - - Total All Other Revenues 2,526 120 (102,925) 673 TOTAL ACTUAL FUNDING $ 94,751 $ 789,041 $ 4,241,985 $ 4,719,477
Outpatient IHOS Intervention Outpatient Medical Outreach Prevention $ 127,426 $ 83,326 $ 1,011,597 $ 889,808 $ 173,938 $ 226,553 127,426 83,326 1,011,597 889,808 173,938 226,553 13,850 - - 37,680 - - (7,653) (616) 133,779 202,445 (1,371) - - - - 84,206 - - - - - 124,740 - - 6,197 (616) 133,779 449,071 (1,371) - 7,336 (4,230) 19,364 2,969 - - 7,050 345 7,843 15,073 - - - - 15,686 22,126 - - - - - 50 38,723 - - - - 47 - - - - 93,436 - - - 14,386 (3,885) 136,329 40,265 38,723 - $ 148,009 $ 78,825 $ 1,281,705 $ 1,379,144 $ 211,290 $ 226,553-22-
SCHEDULE OF PROGRAM/COST CENTER ACTUAL EXPENSES AND REVENUES FOR THE YEAR ENDED JUNE 30, 2015 Residential Residential Behavioral Health FUNDING SOURCES AND REVENUES Level II Level IV Fee TOTAL STATE SAMH FUNDING CFBHN $ 1,414,326 $ - $ - Total SAMH Funding 1,414,326 - - OTHER GOVERNMENT FUNDING Other State Agency Funding 6,805 - - Medicaid (240) - - Local Government - - - Federal Grants and Contracts - - - Total Other Government Funding 6,565 - - ALL OTHER REVENUES 1st & 2nd Party Payments (16,981) 64,537-3rd Party Payments (except Medicare) 29,827 - - Medicare - - - Contributions and Donations - - - Other - 1,424,887 - In-kind - - - Total All Other Revenues 12,846 1,489,424 - TOTAL ACTUAL FUNDING $ 1,433,737 $ 1,489,424 $ -
Total For All State Designated Other Total Cost Centers Support Costs Administration Agency $ 12,020,916 $ - $ - $ 12,020,916 12,020,916 - - 12,020,916 244,790 - - 244,790 916,513 - - 916,513 1,158,500 - - 1,158,500 124,740 - - 124,740 2,444,543 - - 2,444,543 37,730 - - 37,730 (6,496) - - (6,496) 39,432 - - 39,432 39,273-18,715 57,988 1,425,107-24,730 1,449,837 93,436 - - 93,436 1,628,482-43,445 1,671,927 $ 16,093,941 $ - $ 43,445 $ 16,137,386-23-
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2015 Federal/State Agency Contract/Entity Pass-Through Entity CFDA Identifying Federal Transfers to Federal Program Number Number Expenditures Subrecipients U.S. Department of Health and Human Services Indirect Programs Passed through Central Florida Behavioral Health Network, Inc. Children's Health Insurance Program 93.767 CF1258-1201 $ 187,280 $ - Medical Assistance Program 93.778 CF1258-1201 980,164 - Block Grants for Community Mental Health Services 93.958 CF1258-1201 745,569 - Block Grants for Prevention and Treatment of Substance Abuse 93.959 CF1258-1201 606,098 - Total U.S. Department of Health and Human Services 2,519,111 - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,519,111 $ - -24-
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2015 Notes: (1) The Schedule of Expenditures of Federal Awards includes federal and state grant activity presented on the accrual basis of accounting. However, the information in this schedule is in accordance with OMB Circular A-133, Audits of States and Local Governments. Therefore, some amounts presented in this schedule may be different from amounts presented in, or used in the preparation of the basic financial statements. (2) No federal awards were expended in non-cash assistance. -25-
OTHER AUDITOR S REPORT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2015 SECTION I - SUMMARY OF AUDITOR S RESULTS Financial Statements Type of auditor s report issued: Unmodified Internal Control over financial reporting: Material weakness(es) identified? No Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Significant deficiency(ies) identified that are not considered to be material weakness(es)? None reported Type of auditor s report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? Unmodified No Identification of Major Federal Programs: CFDA Number Children s Health Insurance Program 93.767 Block Grants for Community Mental Health Services 93.958-30
SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2015 SECTION I - SUMMARY OF AUDITOR S RESULTS - CONTINUED Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? Yes SECTION II FINANCIAL STATEMENT FINDINGS None Reported PRIOR YEAR AUDIT FINDINGS None Reported SECTION III - FINDINGS AND QUESTIONED COSTS FEDERAL PROGRAM None reported. - 31 -