Financial Statements and Independent Auditors Report June 30, 2014 and 2013
Table of Contents Page Independent Auditors Report 1-3 Financial Statements Statements of Financial Position 4 Statements of Activities 5-6 Statements of Functional Expenses 7-8 Statements of Cash Flows 9 Notes to Financial Statements 10-16 Single Audit Schedule of Expenditures of Federal Awards 17 Notes to the Schedule of Expenditures of Federal Awards 18 Independent Auditors 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 19-20 Independent Auditors Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133 21-22 Schedule of Findings and Questioned Costs 23-26 Summary Schedule of Prior Year Audit Findings 27
Independent Auditors Report To the Board of Directors of Enlace Comunitario Report on the Financial Statements We have audited the accompanying financial statements of Enlace Comunitario (Enlace) (a nonprofit organization), which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatements 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. (505) 293-5009 Fax (505) 293-3597 6721 Academy NE, Suite D Albuquerque, NM 87109 www.loftisgroup.net 1
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant 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 position of Enlace Comunitario as of June 30, 2014 and 2013, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 18, 2014, on our consideration of Enlace s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and on compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. 2
That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Enlace s internal control over financial reporting and compliance. Albuquerque, New Mexico November 18, 2014 3
Financial Statements
Statements of Financial Position June 30, 2014 2013 Assets Current assets Cash and cash equivalents $ 190,476 $ 222,019 Contributions receivable 68,394 117,894 Grants receivable 212,174 144,943 Prepaid expenses 1,885 10,977 Total current assets 472,929 495,833 Property, furniture, and equipment, net 650,937 681,897 Total assets $ 1,123,866 $ 1,177,730 Liabilities and Net Assets Current liabilities Accounts payable $ 36,288 $ 36,765 Accrued expenses 85,909 88,829 Total current liabilities 122,197 125,594 Net assets Unrestricted 526,501 566,067 Temporarily restricted 475,168 486,069 Total net assets 1,001,669 1,052,136 Total liabilities and net assets $ 1,123,866 $ 1,177,730 The accompanying notes are an integral part of these financial statements. 4
Statement of Activities For the Year Ended June 30, 2014 Temporarily Unrestricted Restricted Total Support and Revenue Grants and contributions $ 1,598,011 $ 119,264 $ 1,717,275 Child care 21,515-21,515 In-kind 44,167-44,167 Fundraising 8,470-8,470 Miscellaneous 8,126-8,126 Interest 1,421-1,421 Net assets released from restriction 130,165 (130,165) - Total support and revenue 1,811,875 (10,901) 1,800,974 Expenses Program services 1,578,606-1,578,606 General and administrative 166,004-166,004 Fundraising 106,831-106,831 Total expenses 1,851,441-1,851,441 Change in net assets (39,566) (10,901) (50,467) Net assets, beginning of year 566,067 486,069 1,052,136 Net assets, end of year $ 526,501 $ 475,168 $ 1,001,669 The accompanying notes are an integral part of these financial statements. 5
Statement of Activities For the Year Ended June 30, 2013 Temporarily Unrestricted Restricted Total Support and Revenue Grants and contributions $ 1,423,216 $ 49,500 $ 1,472,716 Child care 27,905-27,905 In-kind 45,018-45,018 Fundraising 12,864-12,864 Miscellaneous 7,301-7,301 Interest 1,561-1,561 Net assets released from restriction 127,271 (127,271) - Total support and revenue 1,645,136 (77,771) 1,567,365 Expenses Program services 1,512,941-1,512,941 General and administrative 198,764-198,764 Fundraising 71,874-71,874 Total expenses 1,783,579-1,783,579 Change in net assets (138,443) (77,771) (216,214) Net assets, beginning of year 704,510 563,840 1,268,350 Net assets, end of year $ 566,067 $ 486,069 $ 1,052,136 The accompanying notes are an integral part of these financial statements. 6
Statement of Functional Expenses For the Year Ended June 30, 2014 General and Program Administrative Fundraising Total Salaries and wages $ 799,874 $ 117,572 $ 57,538 $ 974,984 Client housing and utility assistance 252,574 - - 252,574 Contractual services 167,232 8,624 4,251 180,107 Employee benefits 151,543 6,121 4,389 162,053 Payroll taxes 59,911 8,732 4,328 72,971 Travel 27,635 6,613 34 34,282 Depreciation 28,882 1,306 772 30,960 Supplies 24,012 3,100 814 27,926 In-kind 14,810 2,001 27,356 44,167 Occupancy 16,364 900 900 18,164 Insurance 8,267 2,079 382 10,728 Telephone 6,225 1,757 261 8,243 Advertising and promotions 3,251 779 3,346 7,376 Office 2,983 2,548 1,229 6,760 Dues and subscriptions 4,408 1,313 463 6,184 Staff training 3,482 704 105 4,291 Repairs and maintenance 3,033 983 173 4,189 Equipment rentals 2,964 148 148 3,260 Miscellaneous 1,156 724 342 2,222 Total expenses $ 1,578,606 $ 166,004 $ 106,831 $ 1,851,441 The accompanying notes are an integral part of these financial statements. 7
Statement of Functional Expenses For the Year Ended June 30, 2013 General and Program Administrative Fundraising Total Salaries and wages $ 844,030 $ 122,470 $ 29,890 $ 996,390 Client housing and utility assistance 125,258 - - 125,258 Contractual services 148,551 24,525 9,484 182,560 Employee benefits 142,847 7,510 2,249 152,606 Payroll taxes 68,313 2,466 2,517 73,296 Travel 39,759 3,990 13 43,762 Depreciation 25,632 3,645 1,680 30,957 Supplies 39,053 5,478 2,936 47,467 In-kind 14,349 10,421 20,248 45,018 Occupancy 14,394 1,817 840 17,051 Insurance 5,820 3,269 970 10,059 Telephone 7,937 1,481 345 9,763 Advertising and promotions 7,639 1,057 109 8,805 Office 3,964 1,407 72 5,443 Dues and subscriptions 2,956 2,951 50 5,957 Staff training 7,918 1,670 126 9,714 Repairs and maintenance 3,229 1,444 179 4,852 Equipment rentals 10,152 156 156 10,464 Miscellaneous 1,140 1,817 10 2,967 Interest and fees - 1,190-1,190 Total expenses $ 1,512,941 $ 198,764 $ 71,874 $ 1,783,579 The accompanying notes are an integral part of these financial statements. 8
Statement of Cash Flows For the Year Ended June 30, 2014 2013 Cash flows from operating activities Cash received from grants and contributions $ 1,708,014 $ 1,537,255 Cash received for child care and other 31,062 37,631 Cash paid to employees (1,209,918) (1,222,292) Cash paid to suppliers (560,701) (490,116) Cash paid for interest - (1,190) Net cash used by operating activities (31,543) (138,712) Cash flows from investing activities Purchase of property and equipment - (9,933) Net decrease in cash and cash equivalents (31,543) (148,645) Cash and cash equivalents, beginning of year 222,019 370,664 Cash and cash equivalents, end of year $ 190,476 $ 222,019 Reconciliation of change in net assets to net cash used by operating activities Change in net assets $ (50,467) $ (216,214) Adjustments to reconcile change in net assets to net cash used by operating activities Depreciation 30,960 30,957 Changes in assets and liabilities Contributions receivable 49,500 74,174 Grants receivable (67,231) (21,635) Prepaid expenses 9,092 (223) Accounts payable and accrued expenses (3,397) (5,771) Total adjustments 18,924 77,502 Net cash used by operating activities $ (31,543) $ (138,712) The accompanying notes are an integral part of these financial statements. 9
Notes to Financial Statements June 30, 2014 and 2013 1) Organization Enlace Comunitario (Enlace), a nonprofit organization, was founded in New Mexico on August 2, 2000. Enlace is a social justice organization led by Latina immigrants in Central New Mexico. The mission of Enlace is to work to eliminate domestic violence in the Latino immigrant community and to promote healthy families through comprehensive domestic violence intervention services in Spanish, preventative community education, policy advocacy and leadership development. Enlace s continuum of direct services for both victims of domestic violence and their children includes safety planning; assessment; individual and group counseling; parenting and life skills classes; legal advocacy and representation; crisis intervention; and referrals to housing, legal, health and financial services. Enlace participates in public policy formulation, community education and outreach and has an active leadership development project that trains former Enlace youth and adult clients to be leaders in the domestic violence prevention movement. The organization sponsors presentations about immigrant rights, domestic violence, and healthier ways of relating. Enlace disseminates information regarding services, programs and alternatives to violence through a quarterly bilingual newsletter, Spanish language radio spots, and other mass media strategies including billboards and TV ads which are created in conjunction with youth and adult leaders. During the years ended June 30, 2014 and 2013, Enlace provided linguistic and culturally appropriate and comprehensive direct services to over 1,050 individuals. In addition, thousands more were educated about domestic violence and immigrant rights through outreach and community education. Enlace s major programs and sources of funding are as follows: Domestic Violence Intervention Services This program provides crisis intervention; referral to services; legal advocacy and representation; individual and group counseling; life skills training; and parenting and financial literacy classes. The program is supported by grants from the Victims of Crime Act (VOCA), Civil Legal Services Commission, the State of New Mexico Children Youth and Family Department, Pathways to a Healthy Bernalillo County Program, the City of Albuquerque, the McCune Foundation, Bernalillo County, the Department of Justice Office on Violence Against Women, the Avon Foundation and the United Way. Transitional Housing for Domestic Violence Survivors In addition, Enlace also has a transitional housing rental assistance program that is funded by the New Mexico Mortgage Finance Authority and the Department of Justice Office on Violence Against Women program. 10
Notes to Financial Statements June 30, 2014 and 2013 1) Organization continued Domestic Violence Prevention and Leadership Development This program provides in-service training, leadership development, and community education and outreach, and media campaigns. This program is supported by the New Mexico Community Foundation, the Department of Justice Office on Violence Against Women, the Kellogg Foundation, the Verizon Foundation and the Robert Wood Johnson Foundation. Services provided by Enlace are also supported by the Hispanics in Philanthropy Foundation, individual and corporate donations, in-kind donations and fundraising events. Enlace is governed by a board of directors which has the responsibility for determining policy and execution and evaluation of programs and activities conducted by the organization. The board shall consist of no less than three members and is currently made up of ten members. Board members include individuals from both the public and private sectors. The term of each board member is one year. 2) Summary of Significant Accounting Policies Basis of Accounting The financial statements of Enlace have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. Basis of Presentation Enlace is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted net assets. Enlace only has unrestricted and temporarily restricted net assets at June 30, 2014 and 2013, respectively. Grants Receivable Grants receivable represent the amount expended during the grant period but reimbursed by the grantor after year-end. When revenues are received in the next year, the receivable is reduced. Grants receivable were deemed to be fully collectible, therefore no allowance has been recorded. 11
Notes to Financial Statements June 30, 2014 and 2013 2) Summary of Significant Accounting Policies continued Property, Furniture and Equipment Purchased property, furniture and equipment are stated at cost. Property received by donation is recorded at the 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 are reported as restricted support. Absent donor stipulations regarding how long donated assets must be maintained, Enlace reports the expiration of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. Enlace reclassifies restricted net assets to unrestricted net assets at that time. Purchased or donated property in excess of $1,000 is capitalized. Depreciation is calculated on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over their estimated useful lives, which range from three to forty years. Fair Value of Financial Instruments Enlace believes the carrying amount of cash and cash equivalents, contributions and grants receivable (net of allowances, if any), prepaid expenses, accounts payable, and accrued expenses approximates fair value due to their short maturity. Support Enlace reports contributions of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets or specify the time period for which the assets may be expended. When a donor restriction expires, restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restriction. Donor restricted contributions whose restrictions are met in the same reporting period are reported as unrestricted support. Donated Furniture, Equipment and Services Donations of furniture and equipment are recorded as contributions at fair value at the date of donation. Such donations are reported as increases in unrestricted net assets 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 contributions. 12
Notes to Financial Statements June 30, 2014 and 2013 2) Summary of Significant Accounting Policies continued Donated Furniture, Equipment and Services - continued Donated services are recognized as contributions if the services (a) create or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those skills, and would otherwise be purchased by Enlace. Donated materials and services were approximately $44,000 and $45,000 during the years ended June 30, 2014 and 2013, respectively. Additionally, the organization had over 60 volunteers who donated approximately 1,200 hours of services during each of the years ending June 30, 2014 and 2013. The value of the volunteer services were not recognized as contributions since the recognition criteria were not met. Income Taxes Enlace is a nonprofit organization and qualifies as a tax exempt organization under Section 501(c)(3) of the Internal Revenue Code. Enlace regularly evaluates activities as it relates to its tax exempt status. If Enlace activities are determined to be outside of its tax exempt status the potential exists for tax liabilities on those unrelated activities. Currently, Enlace engages in no activities that would be taxed as unrelated business income. Accordingly, no provision for income taxes has been reflected in Enlace s financial statements. Enlace s income tax filings are subject to audit by various taxing authorities. Enlace has adopted the provisions of FASB ASC 740-10 Accounting for Uncertainty in Income Taxes. Enlace has not recognized any changes to its financial statements for uncertain tax positions resulting from this adoption. Cash and Cash Equivalents Enlace considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported changes in net assets. Actual results could differ from those estimates. Functional Allocation of Expenses Expenses are charged directly to program and supporting services based on specific identification, when possible. Costs benefiting more than one service are allocated based on measures such as management s estimates of time spent, square footage, etc. 13
Notes to Financial Statements June 30, 2014 and 2013 2) Summary of Significant Accounting Policies continued Subsequent Events Subsequent events were evaluated through November 18, 2014, which is the date the financial statements were available to be issued. Legal Matters Enlace, in the normal course of business, is subject to claims and litigation. Management believes that there are no outstanding claims or assessments which would be subject to a material unfavorable outcome that would not be covered by insurance. 3) Grants Receivable Grants receivable consist of the following at June 30: 2014 2013 Office on Violence Against Women Legal assistance for victims grant $ 87,216 $ - CLSSP grant 45,061 35,030 Men's grant - 37,201 Housing grant 9,255 20,320 Civil Legal Services 17,375 - City of Albuquerque 15,864 15,853 University of New Mexico Pathways 11,235 10,348 Victims of Crime Act 8,724 5,537 New Mexico Mortgage Finance Authority 8,399 13,431 Bernalillo County 6,359 1,376 Sexual assault nurse examiner grant 1,888 2,584 NM Coalition Against Domestic Violence 543 1,068 NM Children, Youth & Families Department 255 - Violence Against Women Act - Legal - 2,195 4) Prepaid Expenses $ 212,174 $ 144,943 Prepaid expenses represent amounts paid in advance for insurance coverage that extends beyond the fiscal year. Prepaid insurance was approximately $1,900 and $11,000 at June 30, 2014 and 2013, respectively. 14
Notes to Financial Statements June 30, 2014 and 2013 5) Property, Furniture and Equipment Property, furniture and equipment consists of the following at June 30: 2014 2013 Building $ 536,000 $ 536,000 Land 134,000 134,000 Building improvements 155,640 155,640 Furniture and equipment 59,624 59,624 Total property, furniture and equipment 885,264 885,264 Less accumulated depreciation (234,327) (203,367) Net property, furniture and equipment $ 650,937 $ 681,897 The land and buildings, with a carrying amount of $670,000, were partially acquired with grant funds in the amount of $470,000 received from the City of Albuquerque. Under the terms of this contract, Enlace agrees to utilize the property to provide social service programs to immigrant victims of domestic violence and their children for a minimum of thirty (30) years from the date of execution of the grant. In the event Enlace fails to utilize the property in accordance with this restrictive covenant, Enlace shall remit the amount of funds authorized under the grant plus an equity share of appreciation of the property to the City of Albuquerque. 6) Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes at June 30: 2014 2013 Unamortized time restriction on building $ 352,510 $ 368,175 General operations 68,394 117,894 Programs 54,264 - $ 475,168 $ 486,069 7) Net Assets Released From Restrictions Net assets released from restriction for the years ended June 30, 2014 and 2013, were approximately $130,000 and $127,000, respectively, and were related to the United Way contribution, the Robert Wood Johnson Foundation contribution and the time restriction on use of the land and building. 15
Notes to Financial Statements June 30, 2014 and 2013 8) Concentration of Risk Enlace maintains its cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. At June 30, 2014 and 2013, Enlace had no uninsured cash balances. Support from the New Mexico Children, Youth and Family Department comprised 15% and 17% of Enlace s total support for the years ended June 30, 2014 and 2013, respectively. In addition, government grants, which include support from the New Mexico Children, Youth and Family Department, comprised 75% and 74% of Enlace s total support for the years ended June 30, 2014 and 2013, respectively. 9) Retirement Plan Enlace participates in a SIMPLE IRA plan through American Funds. For the SIMPLE IRA, a qualified employee is one who has completed one year of employment and who has received at least $5,000 in compensation from Enlace in the preceding calendar year. Participants may defer a portion of their salary (up to federal limits) to the plan on a pre-tax basis. Enlace will match participant s bi-weekly deferrals 100% up to a limit of 3% of their compensation per calendar year. Employer contributions to the plan were approximately $20,000 for each of the years ended June 30, 2014 and 2013, respectively. 10) Related Party Transactions During the year-ended June 30, 2014, Enlace subcontracted with the New Mexico Immigrant Law Center (NMILC) for approximately $65,000. Funds were passed through from two Department of Justice Office on Violence Against Women grants and were used to pay a portion of salaries, benefits and supplies of an NMILC attorney and para-legal to provide immigration-related direct legal representation to immigrant victims of domestic violence and sexual assault that were served at Enlace Comunitario. During the year-end June 30, 2014, Enlace subcontracted with La Plaza de Encuentro (La Plaza) for $10,000. Funds were used to assist Enlace in carrying out its transitional housing assistance grant by assisting with planning and developing a financial literacy curriculum. In addition, twenty-eight financial literacy classes were provided to Enlace s transitional housing assistance grant clients as well as other Enlace clients. 16
Schedule of Expenditures of Federal Awards
Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2014 Pass-through Federal Grantor Number/or Federal Grantor/Pass-through CFDA Other Identifying Federal Grantor/Program or Cluster Title Number Number Expenditures U.S. Department of Justice - Office on the Violence Against Women Culturally & Linguistically Specific Services Program 16.016 2012-UW-AX-0006 $ 162,801 Engaging Men in Preventing Sexual Assault, Domestic Dating Violence, and Stalking 16.014 2011-WM-AX-K029 9,608 Legal Assistance for Victims 16.524 2011-WM-AX-K029 107,442 Transitional Housing and Supportive Services for Immigrant Victims of Domestic Violence 16.736 2012-WH-AX-0040 157,035 436,886 Pass-through Agencies (State of New Mexico) Violence Against Women Act - Crime Victim Assistance 16.575 2012-VA-GX-0011 119,834 Violence Against Women Act - Sexual Assault Nurse Examiner 16.588 9,860 129,694 Total U.S. Department of Justice 566,580 U.S. Department of Health and Human Services Pass-through Agencies (State of New Mexico) Family Violence Prevention and Services - Grants for Domestic Violence Shelters and Supportive Services 93.671 13-690-14969 35,400 Total U.S. Department of Health and Human Services 35,400 U.S. Department of Housing and Urban Development Pass-through Agencies (New Mexico Mortgage Finance Authority) Home Investment Partnerships Program 14.239 12-01-ENC-RAP-01 76,719 Emergency Solutions Grant Program 14.231 2010004991 12,569 Total U.S. Department of Housing and Urban Development 89,288 Total Expenditures of Federal Awards $ 691,268 17
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2014 1) General The accompanying schedule of expenditures of federal awards presents the activity of the federal programs of Enlace Comunitario (Enlace). Enlace s reporting entity is defined in Note 1 to the financial statements. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the financial statements. 2) Basis of Accounting The accompanying schedule of expenditures of federal awards is presented using the accrual basis of accounting, which is described in Note 2 to Enlace s financial statements. 3) Reconciliation of Schedule of Expenditures of Federal Awards to the Financial Statements The following is a reconciliation of the expenditures reported on the schedule of expenditures of federal awards to the expenditures reported in the financial statements: Expenditures according to the schedule of expenditures of federal awards $ 691,268 Expenses funded by other sources 1,160,173 Total expenses $ 1,851,441 4) Catalog of Federal Domestic Assistance Numbers Federal granting agencies are responsible for providing Enlace with the Catalog of Federal Domestic Assistance (CFDA) number for each grant or contract. In cases where a federal granting agency did not provide the CFDA number to Enlace, other identifying numbers are presented on the schedule of expenditures of federal awards, if available. In addition, for pass-through awards, the pass-through granting agencies are responsible for providing Enlace with pass-through grantor numbers. In cases where the pass-through granting agency did not provide this number to Enlace it is noted as NA (not available) on the schedule of expenditures of federal awards. 18
Independent Auditors 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 Enlace Comunitario 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 Enlace Comunitario (Enlace) (a nonprofit organization) which comprise the statement of financial position as of June 30, 2014, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated November 18, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Enlace 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 Enlace s internal control. Accordingly, we do not express an opinion on the effectiveness of Enlace s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. (505) 293-5009 Fax (505) 293-3597 6721 Academy NE, Suite D Albuquerque, New Mexico 87109 www.loftisgroup.net 19
Compliance and Other Matters As part of obtaining reasonable assurance about whether Enlace 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 or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on Enlace s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Enlace s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Albuquerque, New Mexico November 18, 2014 20
Independent Auditors Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133 To the Board of Directors Enlace Comunitario Report on Compliance for Each Major Federal Program We have audited Enlace Comunitario s (Enlace) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Enlace s major federal programs for the year ended June 30, 2014. Enlace s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of Enlace s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Enlace s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Enlace s compliance. Opinion on Each Major Federal Program In our opinion, Enlace complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2014. (505) 293-5009 Fax (505) 293-3597 6721 Academy NE, Suite D Albuquerque, New Mexico 87109 www.loftisgroup.net 21
Report on Internal Control Over Compliance Management of Enlace is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Enlace s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Enlace s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. Albuquerque, New Mexico November 18, 2014 22
Schedule of Findings and Questioned Costs June 30, 2014 Section I Summary of Auditors Results Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: Material weaknesses identified? No Significant deficiencies identified that are not considered to be material weaknesses? Noncompliance material to financial statements noted? None reported No Federal Awards Internal control over major programs: Material weaknesses identified? No Significant deficiencies identified that are not considered to be material weaknesses? None reported Type of auditors report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? Yes 23
Schedule of Findings and Questioned Costs - continued June 30, 2014 Section I Summary of Auditors Results continued Identification of major programs: CFDA Number Name of Federal Program or Cluster 16.016 Culturally & Linguistically Specific Services Program 16.575 Violence Against Women Act Crime Victim Assistance 16.736 Transitional Housing & Supportive Services for Immigrant Victims of Domestic Violence Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? No 24
Schedule of Findings and Questioned Costs June 30, 2014 Section II Financial Statement Findings None. 25
Schedule of Findings and Questioned Costs June 30, 2014 Section III Federal Award Findings and Questioned Costs None. 26
Summary Schedule of Prior Year Audit Findings For the Year Ended June 30, 2014 Section IV Summary Schedule of Prior Year Audit Findings None. 27