NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER AUDITED FINANCIAL STATEMENTS
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER TABLE OF CONTENTS FINANCIAL SECTION Page Independent Auditor s Report 1 3 Statements of Financial Position 4 Statements of Activities 5 Statements of Functional Expenses 6 Statements of Cash Flows 7 Notes to Financial Statements 8 11 SINGLE AUDIT SECTION 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 12 13 Independent Auditor s Report on Compliance for Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 14 16 Schedule of Expenditures of Federal Awards 17 Notes to Schedule of Expenditures of Federal Awards 18 Schedule of Findings and Questions Costs: Section I Summary of Auditor s Results 19 Section II Financial Statement Findings 20 Section III Federal Program Findings and Questioned Costs 21 Summary Schedule of Prior Audit Findings and Questioned Costs as Prepared by Management 22 23
FINANCIAL SECTION
DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants Robert A. Gironda, CPA Robert G. Doria, CPA (N.J. & N.Y.) Frederick J. Tomkins, CPA, RMA Matthew A. Donohue, CPA 310 Broadway Bayonne, NJ 07002 (201) 437-9000 Fax: (201) 437-1432 E-Mail: dgd@dgdcpas.com Linda P. Kish, CPA, RMA Mark W. Bednarz, CPA, RMA Jason R. Gironda, CPA Mauricio Canto, CPA, RMA INDEPENDENT AUDITOR S REPORT To the Board of Directors National Sorority of PHI Delta Kappa, Inc. Alpha Chapter West Orange, New Jersey Report on the Financial Statements We have audited the accompanying financial statements of the National Sorority of PHI Delta Kappa, Inc. Alpha Chapter (the Organization ), which comprises the statements of financial position as of June 30, 2017, and the related statements of activities, functional expenses, and cash flows for the six month period 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 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. 1
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of the National Sorority of PHI Delta Kappa, Inc. Alpha Chapter as of June 30, 2017, and the changes in its net assets and its cash flows for the six month period then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedules of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and is derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion the schedule of expenditures of federal award is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2
Emphasis of Matter As described in Note 1, the Organization has changed its accounting period from a calendar year ending December 31 to a fiscal year ending June 30. In order to transition to the fiscal year, the Organization is presenting the financial statements for a six month period ending June 30, 2017 and is not presenting prior period financial statements for comparative purposes. Our opinion is not modified with respect to this matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 9, 2018, on our consideration of the Organization's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization s internal control over financial reporting and compliance. Bayonne, New Jersey August 9, 2018 DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants 3
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER STATEMENT OF FINANCIAL POSITION JUNE 30, 2017 ASSETS Current Assets: Cash and Cash Equivalents $ 38,508 Restricted Cash and Cash Equivalents 198,113 Grants Receivable 110,928 Total Assets $ 347,549 LIABILITIES AND NET ASSETS Liabilities: Current Liabilities: Accounts Payable $ 268,953 Payroll Liabilities 9,390 Total Current Liabilities 278,343 Total Liabilities 278,343 NET ASSETS Unrestricted Net Assets 69,206 Total Net Assets 69,206 Total Liabilities and Net Assets $ 347,549 See Accompanying Notes to Financial Statements. 4
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER STATEMENT OF ACTIVITIES REVENUES Federal Grants $ 954,409 Fundraising 32,583 Membership Dues 23,882 Miscellaneous 4,312 Charitable Donations 50 Total Revenues 1,015,236 EXPENSES Program Services: Sorority 35,031 Food Program 974,225 Support Services Management and General 84,151 Fundraising 11,933 Total Expenses 1,105,340 Change in Net Assets (90,104) Net Assets, January 1 159,310 Net Assets, December 31, $ 69,206 See Accompanying Notes to Financial Statements. 5
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER STATEMENT OF FUNCTIONAL EXPENSES Program Services Support Services Food Management Sorority Program and General Fundraising Total Food Service Program Management Program Monitor Food Service Workers Program Facilitator Program Director Conferences and Meetings Professional Fees Fundraising Expenses Travel Expense Payroll Expenses Miscellaneous Dues and Subscriptions Equipment Rental Rent Expense Office Supplies Charitable Contributions Utilities Repairs and Maintenance Computer Expense Meals and Entertainment Advertising Expense Postage Summer Interns Bank Service Charges Printing $ - $ 585,298 $ - $ - $ 585,298-238,000 - - 238,000-48,264 - - 48,264-44,778 - - 44,778-40,500 - - 40,500 - - 35,005-35,005 25,828 - - - 25,828 - - 13,150-13,150 - - - 11,933 11,933 - - 10,825-10,825-9,680 628-10,308 - - 9,075-9,075 5,778 - - - 5,778 - - 5,712-5,712-5,200 - - 5,200 - - 4,152-4,152 3,125 - - - 3,125 - - 2,465-2,465-2,306 - - 2,306 - - 1,841-1,841 - - 1,028-1,028 300 - - - 300 - - 175-175 - 150 - - 150 - - 95-95 - 49 - - 49 Total Expenses $ 35,031 $ 974,225 $ 84,151 $ 11,933 $ 1,105,340 See Accompanying Notes to Financial Statements. 6
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Assets $ (90,104) Adjust to Reconcile Increase in Net Assets to Net Cash Provided by Operating Activities: Decrease in Grants Receivable 137,874 Increase in Accounts Payable 109,585 (Decrease) in Payroll Liabilities (1,965) Net Cash (Used) Provided by Operating Activities 155,390 Net Change in Cash and Cash Equivalents 155,390 Cash and Cash Equivalents, January 1 81,231 Cash and Cash Equivalents, December 31 $ 236,621 Cash and Cash Equivalents as presented in the Statement of Financial Position Unrestricted $ 38,508 Restricted 198,113 $ 236,621 See Accompanying Notes to Financial Statements. 7
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER NOTES TO FINANCIAL STATEMENTS 1. NATURE OF ACTIVITIES The National Sorority of PHI Delta Kappa, Inc Alpha Chapter (the Organization ) is a not-forprofit founded as a sorority to encourage and support careers in education and also administers a food program to provide nutritional support to at risk students. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Organization have been prepared on the accrual basis. Basis of Presentation The Organization is required to report 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. The Organization s program services expenses are separated for sorority programs and food service program. The Organization s support services expenses are separated for general and management and fundraising. Cash and Cash Equivalents For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. Restricted Assets Restricted assets include cash and cash equivalents related to the food service program. When both restricted and unrestricted resources are available for use, it is the Organization s polity to use restricted resources first, then unrestricted resources as they are needed. Grants Receivable Grants receivable are stated at the amount the Organization expects to collect from outstanding balances from grantors. 8
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER NOTES TO FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Revenue received prior to the year to which they apply is not recognized as revenues until the year earned. Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the Statement of Activities and in the Statement of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Contributions Contributions received are recorded as increases in unrestricted, temporarily restricted, or permanently restricted net assets, depending on the existence or nature of any donor restrictions. All donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restriction. When a 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 statement of activities as net assets released from restrictions. Net Assets The classification of a non-profit organization s net assets is based on the existence or absence of donor imposed restrictions. It requires that the amounts for each of the classes of net assets unrestricted, temporary restricted, and permanently restricted be displayed in the statement of financial position and the amount of change in each of the classes of net assets be displayed in the statement of activities. Unrestricted The part of net assets that is neither permanently nor temporarily restricted by donor imposed stipulations. Temporarily Restricted Net assets resulting from grant awards and contributions and other inflows of assets used by Organization is limited by donor-imposed stipulations that either expired by passage of time or can be fulfilled and removed by actions of Organization pursuant to those stipulations. When such stipulations end or are fulfilled, such temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities. At June 30, 2017 the Organization did not have any temporarily restricted net assets. 9
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER NOTES TO FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Net Assets (Continued) Permanently Restricted Net assets resulting from contributions and other inflows of assets whose use by the Organization is limited by donor imposed stipulations that neither expire by passage of time nor can by fulfilled or otherwise remove by actions of the Organization. At June 30, 2017 the Organization did not have any permanently restricted net assets. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles includes the use of estimates that affect the financial statements. Accordingly, actual results could differ from those estimates. Change in accounting period The Organization has changed its accounting period from a calendar year ending December 31 to a fiscal year ending June 30. In order to transition to the fiscal year, the Organization is presenting the financial statements for a six month period ending June 30, 2017 and is not presenting prior period financial statements for comparative purposes. 3. CASH AND CASH EQUIVALENTS All cash and cash equivalents on deposit are partially insured by the Federal Deposit Insurance Corporation (herein referred to as FDIC ) up to $250,000 for each depository. At June 30, 2017 none of the Organization s deposits are in excess of FDIC insurance. 4. ADVERTISING The Organization uses advertising to promote its programs among the audiences it serves. The production costs of advertising are expensed as incurred. For the six month period ended June 30, 2017 the Organization s advertising costs were $300. 10
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER NOTES TO FINANCIAL STATEMENTS 8. INCOME TAX STATUS The Organization is classified as a Section 501(c)(3) Organization under the Federal Internal Revenue Code, except on net income derived from unrelated business activities. As a result, it has been determined to be exempt from federal income and state taxes. The Organization's Forms 990, Return of Organization Exempt from Income Tax are subject to examination by the IRS, generally for three years after they were filed. 9. CONTINGENCIES The Organization s food program receives a substantial amount of its support from federal grants. A significant reduction in the level of support, if this were to occur, could have an effect on the Organization s program. 10. EVALUATION OF SUBSEQUENT EVENTS The Organization has evaluated subsequent events through August 9, 2018, the date which the financial statements were available to be issued. 11
SINGLE AUDIT SECTION
DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants Robert A. Gironda, CPA Robert G. Doria, CPA (N.J. & N.Y.) Frederick J. Tomkins, CPA, RMA Matthew A. Donohue, CPA 310 Broadway Bayonne, NJ 07002 (201) 437-9000 Fax: (201) 437-1432 E-Mail: dgd@dgdcpas.com Linda P. Kish, CPA, RMA Mark W. Bednarz, CPA, RMA Jason R. Gironda, CPA Mauricio Canto, CPA, RMA 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 National Sorority of PHI Delta Kappa, Inc. Alpha Chapter West Orange, New Jersey 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 the National Sorority of PHI Delta Kappa, Inc. Alpha Chapter (the Organization ), which comprise the statement of financial position as of June 30, 2017, and the related statement of activities, functional expenses, and cash flows for the six month period then ended, and the related notes to the financial statements, and have issued our report thereon dated August 9, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Organization 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 the Organization s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization 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. 12
Our consideration of the 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings and questioned costs that we consider to be a significant deficiency as findings 2017-001. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization 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. The Organization s Response to Findings The Organization s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The Organization s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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. Bayonne, New Jersey August 9, 2018 DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants 13
DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants Robert A. Gironda, CPA Robert G. Doria, CPA (N.J. & N.Y.) Frederick J. Tomkins, CPA, RMA Matthew A. Donohue, CPA 310 Broadway Bayonne, NJ 07002 (201) 437-9000 Fax: (201) 437-1432 E-Mail: dgd@dgdcpas.com Linda P. Kish, CPA, RMA Mark W. Bednarz, CPA, RMA Jason R. Gironda, CPA Mauricio Canto, CPA, RMA INDEPENDENT AUDITOR S REPORT ON COMPLIANCE FOR MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors National Sorority of PHI Delta Kappa, Inc. Alpha Chapter West Orange, New Jersey Report on Compliance for Major Program We have audited National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on its major program for the six month period ended June 30, 2017. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its program. Auditor s Responsibility Our responsibility is to express an opinion on compliance for National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s major program 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance, 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 the major program occurred. An audit includes examining, on a test basis, evidence about National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 14
We believe that our audit provides a reasonable basis for our opinion on compliance for National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s major program. However our audit does not provide a legal determination of National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s compliance. Opinion on Compliance for Child and Adult Care Food Program In our opinion, the National Sorority of PHI Delta Kappa, Inc. Alpha Chapter complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major program for the six month period ended June 30, 2017. Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as finding 2017-002. Our opinion on the major federal program is not modified with respect to this matter. The National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of National Sorority of PHI Delta Kappa, Inc. Alpha Chapter is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing my audit of compliance, We considered National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s internal control over compliance with the types of requirements that could have a direct and material effect on its major program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for its major program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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 National Sorority of PHI Delta Kappa, Inc. Alpha Chapter s internal control over compliance. 15
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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Bayonne, New Jersey August 9, 2018 DONOHUE, GIRONDA, DORIA & TOMKINS, LLC Certified Public Accountants 16
NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (ACCOUNTS (ACCOUNTS FEDERAL STATE RECEIVIABE) FEDERAL RECEIVIABE) FEDERAL GRANTOR/PASS THROUGH CFDA FAIN PROJECT PROGRAM GRANT PERIOD DECEMBER 31, CASH EXPEND- JUNE 30 CUMULATIVE GRANTOR/PROGRAM OR CLUSTER TITLE NUMBER NUMBER NUMBER AMOUNT FROM TO 2016 RECEIVED ITURES 2017 EXPENDITURES U.S. DEPARTMENT OF AGRICULTURE PASSED-THROUGH STATE OF NEW JERSEY DEPARTMENT OF AGRICULTURE DIVISION OF FOOD AND NUTRITION Child and Adult Care Food Program (CACFP) 10.558 171NJ304N1099 052080 $ 889,659 07/01/17 06/30/18 $ - $ 786,257 $ (889,659) $ (103,402) $ 889,659 Child and Adult Care Food Program (CACFP) 10.558 16161NJ304N1099 052080 1,242,451 07/01/16 06/30/17 (231,922) 231,922 - - 1,242,451 Cash in Lieu of Commodities 10.558 171NJ304N1099 052100 64,750 07/01/17 06/30/18-57,224 (64,750) (7,526) 64,750 Cash in Lieu of Commodities 10.558 16161NJ304N1099 052100 31,381 07/01/16 06/30/17 (16,880) 16,880 - - 31,381 Total Child and Adult Care Food Program (248,802) 1,092,283 (954,409) (110,928) TOTAL FEDERAL AWARDS $ (248,802) $ 1,092,283 $ (954,409) $ (110,928) See Accompanying Notes to Schedule of Expenditures of Federal Awards. 17
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS NOTE 1 BASIS OF PRESENTATION The schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of National Sorority of PHI Delta Kappa, Inc. Alpha Chapter under programs of the federal government for the six month period ended June 30, 2017. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance and/or OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. NOTE 3 - INDIRECT COST RATE The Organization has elected to not use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. 18
Financial Statement Section NATIONAL SORORITY OF PHI DELTA KAPPA, INC ALPHA CHAPTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I - Summary of Auditor's Results A) Type of Auditors Report Issued: Unmodified B) Internal Control over Financial Reporting: 1) Material weakness(es) identified? Yes No 2) Significant deficiency(ies) identified? Yes None reported C) Noncompliance material to basic financial statements noted? Yes No Federal Program Section D) Internal Control over major program: 1) Material weakness(es) identified? Yes No 2) Significant deficiency(ies) identified? Yes None reported E) Type of auditor's report on compliance for major Program: Unmodified F) Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200 section.516(a) of? Yes No G) Indentification of major program: CFDA Number FAIN Number Name of Federal Program 10.558 171NJ304N1099 Child and Adult Care Food Program H) Dollar threshold used to distinguish between Type A and Type B Programs. $750,000 G) Auditee qualified as low-risk auditee? Yes No 19
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section II - Financial Statement Findings (This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statement for which Government Auditing Standards requires reporting in a Uniform Guidance audit.) Finding 2017-001 Significant Deficiency in Internal Control over Financial Reporting Condition: Accruals for revenue and expenses are not being performed in a timely manner. Criteria: Accruing revenue and expenses to proper period should be performed in a timely manner. Cause: Accruals for revenue and expenses are not prepared until time of the audit. Effect: Misstatements could have occurred that were not prevented or detected and corrected on a timely basis. Recommendation: Accruals for revenue and expenses should be prepared on a monthly basis and in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management has contracted an accountant to maintain accounting records on an accrual and monthly basis and in a timely manner. 20
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section III Federal Program Findings and Questioned Costs (This section identifies audit findings required to be reported by 2 CFR 200 Section.516 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) DEPARTMENT OF AGRICULTURE Finding 2017-002 Noncompliance - Reporting Child and Adult Care Food Program, CFDA No. 10.558 Pass through State of New Jersey Department of Agriculture Division of Food and Nutrition State Project No. 052080 and 052100 Condition: The Organization did not submit its required audit within nine months of the end of the audit period. Criteria: 2 CFR Section 200.512(a) of the Uniform Guidance states that required audits be submitted the earlier of 30 calendar days after the reports are received from the auditors or nine months after the end of the audit period. Cause and context: The Organization changed its audit period from a calendar year to a fiscal year after the deadline had already passed. Effect: The Organization did not undergo nor submit the audit within nine months of the end of the audit period and is not incompliance with the reporting requirements of the Uniform Guidance. Questioned Costs: None. Recommendation: The Organization must be submit required audits within nine months of the end of the audit period. Views of Responsible Officials: The Organization has changed its audit period to a fiscal year and will undergo and obtain audits within nine months of the end of the audit period. 21
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS AS PREPARED BY MANAGEMENT (This section identifies the status of prior findings related to the financial statement and federal program that are required to be reported in accordance with Chapter 6.12 of Government Auditing Standards and U.S. OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. (.511 (a)(b))) STATUS OF PRIOR FINDINGS FINANCIAL STATEMENTS Finding 2016-001 Significant Deficiency in Internal Control over Financial Reporting Condition: Credit card account reconciliations are not being performed in a timely manner. Current Period Status: The Organization is not using credit cards, whereby this finding is no longer applicable. Finding 2016-002 Significant Deficiency in Internal Control over Financial Reporting Condition: The Organization utilized a bank account held by another affiliated nonprofit to operate its food service program. Current Period Status: The finding has been corrected. 22
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS AS PREPARED BY MANAGEMENT STATUS OF PRIOR FINDINGS (Continued) FEDERAL PROGRAMS Finding 2016-003 Significant Deficiency in Internal Control over Compliance - Other Child and Adult Care Food Program, CFDA No. 10.558 Pass through State of New Jersey Department of Agriculture Division of Food and Nutrition State Project No. 052080 and 052100 Condition: As discussed in Finding 2016-002, the Organization utilized a bank account held by another affiliated nonprofit to operate its food service program. Programs must only be operated utilizing bank accounts held by the organization designated to operate such programs. The Organization s food service funds held in the affiliated nonprofit s bank account are not secure in ownership. Current Period Status: The finding has been corrected. 23
NATIONAL SORORITY OF PHI DELTA KAPPA, INC. ALPHA CHAPTER CORRECTIVE ACTION PLAN Finding Corrective Action Required Method of Implementation Persons Responsible for Implementation Planned Completion Date of Implementation Financial Statement Finding 2017-001 Significant Deficiency in Internal Control over Financial Reporting Accruals for revenue and expenses should be prepared on a monthly basis and in a timely manner. Management has contracted an accountant to maintain accounting records on an accrual and monthly basis and in a timely manner. Verna C. Sims Project Director; Elnardo J. Webster Manager/ Record Keeper September 1, 2018 Federal Program Finding 2017-002 Noncompliance - Reporting Child and Adult Care Food Program, CFDA 10.558 The Organization must be submit required audits within nine months of the end of the audit period. The Organization has changed its audit period to a fiscal year and will undergo and obtain audits within nine months of the end of the audit period. Verna C. Sims Project Director; Elnardo J. Webster Manager/ Record Keeper September 1, 2018 8/10/18 8/10/18 Sandra Webster Date Verna C. Sims Date Board President Project Director 8/10/18 Elnardo J. Webster Date Manager/Record Keeper