CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK REPORT ON EXAMINATION OF FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015)
CONTENTS INDEPENDENT AUDITORS' REPORT... 1 FINANCIAL STATEMENTS Statement of Financial Position... 4 Statement of Activities... 5 Combined Statement of Cash Flows... 6 NOTES TO FINANCIAL STATEMENTS... 7 ADDITIONAL INFORMATION Schedule of Expenditures of Federal and State Awards... 16 Combining Statement of Activities... 17 Report on Internal Control Over Financial Reporting and on Compliance and Other Matter Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards... 18 Report on Compliance for Each Major Program and Report on Internal Control Over Compliance Required by the Uniform Guidance... 20 SCHEDULE OF FINDINGS AND QUESTIONED COSTS... 23
RANDOLPH SCOTT & COMPANY CERTIFIED PUBLIC ACCOUNTANTS, INC Board of Directors California Child Care Resource and Referral Network San Francisco, California May 19,2017 Report on the Financial Statements INDEPENDENT AUDITORS' REPORT We have audited the accompanying financial statements of California Child Care Resource and Referral Network, which comprise the statement of financial position as of December 31, 2016, and the related statements of activities, and cash flows for the year 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 audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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. NORTHERN CALIFORNIA- 1 COMMERCIAL BLVD., SUITE 101, NOVATO, CA 94949- (415) 883-8090 SOUTHERN CALIFORNIA- 9663 SANTA MONICA BLVD., BEVERLY HILLS, CA 90210-4303- (888) 471-1883 HTTP:/ /RSCOCPAS.COM Members of American Institute and California Society of Certified Public Accountants, The Center for Public Company Aurlit Firms and GovernmFmtal Audit Quality Center 1
Board of Directors California Child Care Resource and Referral Network May19,2017 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of California Child Care Resource and Referral Network, as of December 31, 2016, and the changes in its net assets and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matters 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 and state 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 (Uniform Guidance), and the combining statement of activities are presented for purposes of additional analysis and are 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 consolidated financial statements taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 19, 2017 on our consideration of California Child Care Resource and Referral Network's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 the Government Auditing Standards in considering California Child Care Resource and Referral Network's internal control over financial reporting and compliance. RANDOLPH SCOTT & COMPANY Members of American Institute and California Society of Certified Public Accountants and SEC Practice Section 2
Board of Directors California Child Care Resource and Referral Network May 19,2017 Report on Summarized Comparative Information We have previously audited the California Child Care Resource and Referral Network's December 31, 2015 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated June 20, 2016. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2015, is consistent, in all material respects, with the audited financial statements from which it has been derived. Certified Public Accountants, Inc. Novato, California RANDOLPH SCOTT & COMPANY Members of American Institute and California Society of Certified Public Accountants and SEC Practice Section 3
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2016 (With Comparative Totals for 2015) ASSETS Temporarily Total All Funds Unrestricted Restricted 12/31/2016 12/31/2015 CURRENT ASSETS: Cash and Cash Equivalents (Note A) $ 1,520,072 $ 158,881 $ 1,678,953 $ 1,358,916 Grants Receivable (Note D) 757,014 757,014 609,167 Accounts Receivable 1,260 1,260 43,852 Prepaid Expenses 48,919 48,919 43,616 TOTAL CURRENT ASSETS 2,327,265 158,881 2,486,146 2,055,551 PROPERTY AND EQUIPMENT (Note E) DEPOSITS 40,860 40,860 10,300 TOTAL ASSETS $ 2,368,125 $ 158,881 $ 2,527,006 $ 2,065,851 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts Payable $ 53,883 $ - $ 53,883 $ 76,805 Accrued Liabilities 70,247 70,247 44,578 Refundable Advances 579,861 579,861 257,207 TOTAL CURRENT LIABILITIES 703,991 703,991 378,590 COMMITMENTS AND CONTINGENCY (Note H) NET ASSETS Unrestricted Undesignated 1,664,134 1,664,134 1,432,557 Temporarily restricted 158,881 158,881 254,704 TOTAL NET ASSETS 1,664,134 158,881 1,823,015 1,687,261 TOTAL LIABILITIES AND NET ASS $ 2,368,125 $ 158,881 $ 2,527,006 $ 2,065,851 See Notes To Financial Statements. 4
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) Temporarily Total All Funds Unrestricted Restricted 12/31/2016 12/31/2015 SUPPORT AND REVENUE: California Department of Education $ 892,290 $ - $ 892,290 $ 846,782 Other Governmental Grants 703,043 703,043 735,424 Foundations & Community Programs 1,113,386 210,000 1,323,386 973,937 Dues and Fees 495,038 495,038 345,463 Conferences 52,203 52,203 88,638 Interest Income 685 685 161 Other 48,353 48,353 42,968 Contributions 4,715 4.715 9,725 Net Assets Released From Restrictions (Note C): Satisfaction of Program Restrictions 305,823 (305,823) Expiration of Time Restrictions Total Support and Revenue 3,615,536 (95,823) 3,519,713 3,043,098 EXPENSES: General Fund 327,522 327,522 399,553 CA Department of Education: CCIP Quality 768,914 768,914 758,894 Consumer Education Line 85,719 85,719 87,935 Trustline 40,684 40,684 CA Department of Social Services: Trustline 646,809 646,809 605,415 Other Programs 1,514,311 1,514,311 814,270 Total Expense 3,383,959 3,383,959 2,666,067 CHANGE IN NET ASSETS 231,577 (95,823) 135,754 377,031 NET ASSETS, Beginning of Year 1,432,557 254,704 1,687,261 1,310,230 NET ASSETS, End of Year $ 1,664,134 $ 158,881 $ 1,823,015 $ 1,687,261 See Notes To Financial Statements. 5
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK COMBINED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31,2016 (With Comparative Totals for 2015) Total All Funds CASH FLOWS FROM OPERATING ACTIVITIES: 12/31/2016 12/31/2015 Cash received from: Grants and Program Income $ 3,688,074 $ 2,503,724 Other Revenue 48,353 20,614 Cash paid to: Employees and suppliers (3,417,075) (2,604,389) Interest Income 685 507 Net Cash Provided by Operating Activities: 320,037 (79,544) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Equipment Net Cash Used by Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES: Net Cash Used by Financing Activities NET INCREASE I (DECREASE) IN CASH: 320,037 (79,544) Cash, Beginning of year I,358,916 I,226,727 Cash, End of year $ 1,678,953 $ I,147,183 RECONCILIATION OF CHANGE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Change in net assets $ 135,754 $ (51,022) Adjustments to reconcile increase in net assets to net cash provided (used) by operating activities Depreciation and Amortization 490 (Increase) Decrease in: Grants and Accounts Receivable (1 05,255) (25,047) Prepaid Expenses (5,303) (4,348) Deposits (30,560) (20) Increase (Decrease) in: Accounts Payable (22,922) (12,619) Accrued Liabilities 25,669 2,746 Refundable Advances 322,654 10,276 Net Cash Provided by Operating Activities: $ 320,037 $ (79,544) See Notes To Financial Statements. 6
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE A- GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General California Child Care Resource and Referral Network (The Network) is a 501 (c)(3) nonprofit corporation organized under the laws of the State of California. The California Child Care Resource and Referral Network, a nationally recognized non-profit membership organization, addresses the needs of parents and child care providers throughout California. Established in 1980, the Network provides leadership and vision for the continuous development and improvement of resource and referral services statewide, helping to build, support, and advocate for,. a quality child care system that supports the diversity of families and children in every community in California. Project Descriptions Child Care Initiative Proiect The California Child Care Initiative Project (CCIP) is designed to increase the supply of licensed, quality child care. Developed by Bank America Foundation, and funded by statewide and local public-private partnership, and the California Department of Education, Child Development Division the program recruits, trains, and retains family child care providers to help meet the great demand for child care services. Trustline The Network contracts with the California Department of Social Services (CDSS) to maintain the Trustline toll-free phone number, answer questions on the status of applicants and provide technical assistance to parents, child care providers, Child Care Resource and Referral programs, Alternative Payment Programs, County Welfare Departments and employment agencies. The Trustline program is a background check for license-exempt child care providers. All caregivers listed with Trustline have submitted their fingerprints to the California Department of Justice and have no disqualifying criminal convictions or substantiated child abuse reports in California. Research and Data Standardization The Network Research department continues to expand its role of addressing research, data, and technology issues within California's child care system through research projects and publications such as the California Child Care Portfolio which gathers and disseminates California's child care supply 13nd demand data and the California Workforce Census which helps define the child care workforce in California. The Network works to maintain its reputation as a reliable source of data and information on child care issues. 7
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE A- GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Project Descriptions - (Continued) Membership Services The Network maintains and organizational structure that facilitates the constant flow of information and assistance to its member agencies. Regional and Section meetings are held eight times a year to facilitate member participation. Full member meetings are held twice a year as well as specialized trainings such as the Director's Institute and our biannual R&R Day in the Capitol. Parent Voices The Network's Parent Voices project provides leadership and advocacy training for low income parents to support them in their efforts to be advocates for their children and child care needs. Currently there are 18 local Parent Voices Chapters. Public Policv Working toward the Network's mission of achieving a quality child care system that meets the need of all children and families requires extensive work at the local, state, and national level. The Network monitors state and federal policy issues; disseminates information and policy alerts to the local R&R's. Basis of Accounting The accounting records of the Network are maintained on the accrual basis. Fund Accounting To ensure observance of limitations and restrictions placed on the use of resources available to the Network, the accounts of the Network are maintained in accordance with the principals of fund accounting. Fund accounting is the procedures by which resources for the various programs are classified for accounting and reporting according to the activities and objectives specified by donors, grantors, officials, and governing boards. Separate accounts are maintained for each fund. Fair Values of Financial Instruments The following methods and assumptions were used to estimate the fair value of financial instruments: Cash and cash equivalents: The carrying amount reported in the Statement of Financial Position of cash and cash equivalents approximates its fair value. 8
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE A- GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Values of Financial Instruments- (Continued) Grants receivable and deferred revenue The carrying amounts of grants receivable and deferred revenue in the Statement of Financial Position approximates fair value. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net assets, and revenue and expenses for the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Network to concentrations of credit risk consist principally of uninsured cash balances. The Network places its cash deposits with high-credit, quality financial institutions. At times, balances in the Network's cash accounts may exceed the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 or Securities Investor Protection Corporation (SIPC) limit of $500,000. Uninsured balances at December 31, 2016 were approximately $835,000. For the year ended December 31, 2016, the Network received approximately 44% of its annual revenue from federal funds. The Network has not experienced any losses on its cash equivalents. Concentration of Revenue Sources During the year ended December 31, 2016, the Network had two major revenue sources that accounted for approximately 42% of the total revenue of the Network. California Department of Education accounted for approximately 25%, while the California Department of Social Services accounted for approximately 17% of the total revenue. Cash and Cash Equivalents Cash is defined as cash in demand deposit accounts as well as cash on hand. Cash Equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and investments so near their maturity that the risk of changes in value due to changes in interest rates is negligible. These are generally investments with maturity dates within three months of their acquisition date. Not included, as cash equivalents are funds restricted as to their use, regardless of liquidity or the maturity dates of investments. 9
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE A- GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Prepaid Expenses Prepaid expense balances are calculated and adjusted at year-end to properly charge funds in the period benefited. Property and Equipment The Network's policy is to capitalize assets with a per unit cost of $1,000 or greater. As further discussed in Note E, property and equipment purchased with unrestricted funds are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Fixed Assets and capital improvements funded by restricted grants are recorded as expenditures in the year of acquisition, in accordance with funding terms and conditions. These purchases are also capitalized in the equipment fund, and depreciated over their useful live. Depreciation on these restricted assets is shown as a reduction to the restricted fund balance. Retirements are reflected as decreases to the furniture and equipment account, with a corresponding reduction in the restricted fund balance. In accordance with funding terms and conditions, title to those assets is retained by the State. Accrued Vacation and Sick Leave Benefits Employee vacation benefits earned, but not used are recorded as liabilities of the Network, and are recorded in the program fund for which each employee works. Total accrued liability at December 31, 2016 was $57,006. The monthly accrual rate for each employee is determined by the employee's length of service with the Agency based on the following schedule: Year 1 and 2 Year 3 and 4 Year 5 through 9 Year 10 through 14 Year 15 or greater 8 Hours per month 1 0 Hours per month 12 Hours per month 14 Hours per month 16 Hours per month Sick leave benefits are earned and accumulated for each employee. However, accumulated sick leave benefits are not recognized as liabilities of the Network because the payment of such benefits is not probable or estimable. 10
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE A- GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued} Revenue Recognition Contributions and unconditional grants are recognized as support and revenues when they are received or unconditionally pledged. These contributions and gifts are shown as restricted support and revenues if they are subject to time or donor restrictions. Temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restrictions when a stipulated time restriction ends, purpose restriction is accomplished, or both. However, temporarily restricted contributions and grants are reported as unrestricted support and revenues if the restriction is met in the same year that the gift is received. Conditional contributions are not recorded as support and revenues until the conditions are met. Payments classified as exchange transactions (reciprocal transfers between two entities in which goods and services of equal value is exchanged) are not recorded as other support and revenue until allowable expenditures are incurred. Functional Allocation of Expenses The costs of operating the various programs and other activities have been summarized on a functional basis in the combining statement of activities. As further discussed in Note G, certain costs have been allocated among the programs benefited based upon the Network's cost allocation plan. Income Taxes The Network has received tax-exempt status under Section 501 (c)(3) of the Internal Revenue Code, and Section 23701 (d) of the State of California Revenue and Taxation Code. Generally accepted accounting principles provide accounting and disclose guidance about positions taken by an organization in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken by the Agency in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Agency's returns are subject to examination by federal and state taxing authorities, generally for three and four years, respectively, after they are filed. NOTE B- TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are part of the net assets of the Network resulting from contributions and other inflows of assets whose use by the Network in limited by donor imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the Network pursuant to those stipulations. 11
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31 I 2016 (With Comparative Totals for 2015) NOTE B- TEMPORARILY RESTRICTED NET ASSETS- (Continued) At December 31, 2016, temporarily restricted net assets consisted of the following support available for future years: General Support: Packard Foundation Bay Area Equal Voice 12/31/2016 $ 93,041 65,840 $ 158,881 NOTE C- NET ASSETS RELEASED FROM DONOR RESTRICTIONS Net assets are released from donor restrictions by incurring expenses satisfying or by occurrence of other events specified by donors. For the year ended December 31, 2016, $305,823 were released from donor restrictions. NOTED- GRANTS RECEIVABLE At December 31, 2016, grants receivable consisted of the following: California Department of Education California Department of Social Services First Five Other 12/31/2016 $ 495,535 76,220 62,979 122,280 $ 757,014 NOTE E- PROPERTY AND EQUIPMENT At December 31, 2016, property and equipment consisted of the following: Office Furniture Office Equipment Leasehold Improvements Accounting Software Subtotal Less: Accumulated Depreciation 12/31/2016 $ 46,667 62,671 13,222 18,873 141,433 141,433 $==== 12
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31 I 2016 (With Comparative Totals for 2015) NOTE F- CONTRIBUTORY RETIREMENT PLAN The Network maintains contributory retirement plan available for its employees which allows participants to make tax deferred investment contributions. The plan qualifies under the provisions of Section 403 (b) of the Internal Revenue Code of 1954, as amended. The Network makes contributions of 5% of the employee's annual compensation. The employee may make voluntary contributions of up to 10% of their annual compensation. For the year ended December 31, 2016, employer contributions were $47,197. NOTE G - COST ALLOCATION PLAN The Network updates its cost allocation plans annually or more frequently when there is a need due to changes in cost drivers. The Cost Allocation plan is reviewed by the Network's auditors for compliance with applicable laws and regulations. The Network obtains approval of the cost allocation plan from its Board of Directors. Its written cost allocation plan, including descriptions and percentages is on file in the Network's main accounting office. The Agency applies several methods for allocating costs: Direct Costs. Costs identified 100 percent to a specific program are charged directly to that program. Shared Costs Costs identified to specific multiple programs or activities are shared between the programs benefitting. Payroll costs are allocated using individual time sheets that report the actual time spent by employees in each program each day. Rent and associated utilities and maintenance are allocated using the square footage of building space occupied by each program, according to floor plans and/or room measurements. Common areas are shared based on the percentage of personnel costs charged to a specific program to the total personnel costs of the Agency. Office expenses such as supplies, telephone and postage and printing are allocated based on the percentage of personnel costs charged to a specific program to the total personnel costs of the Agency. NOTE H- COMMITMENTS AND CONTINGENCY Commitments The Network conducts its operations on leased premises. In addition, the agency leases certain equipment (copier machine & telephone/internet system) for use in its operations. 13
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for 2015) NOTE H- COMMITMENTS AND CONTINGENCY- {Continued) Commitments The following is a schedule of future minimum lease payments as of December 31, 2016: Year Ending December 31: Building Equipment TOTAL 2017 $ 163,863 $ 15,474 $ 179,337 2018 168,779 14,391 183,170 2019 173,842 14,391 188,233 2020 179,057 14,391 193,448 2021 106,255 7,196 113,451 Thereafter $ 791,796 $ 65,843 $ 857,639 Total rent expense for the year ended December 31, 2016 was $200,099. Contingency Grant awards require the fulfillment of certain conditions as set forth in the instruments of grant. Failure to fulfill the conditions could result in the return of the funds to the grantors. The Network deems this contingency remote since by accepting the grants and their terms it has accommodated the objectives of the Network to the provisions of the grants. The Network's management is of the opinion that the Network has complied with the terms of all grants. NOTEI-SUBSEQUENTEVENTS The Network has evaluated their financial position and activities from the December 31, 2016 year end of this report through May 19, 2017, which is the date that the financial statements were available to be issued. No material subsequent event items that required recognition or disclosure were identified. 14
ADDITIONAL INFORMATION
CALIFORNIA CHILD CARE RESOURCE & REFERRAL NETWORK SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS YEAR ENDED DECEMBER 31,2016 Grantor I Pass-Through Grantor I or Program Title Federal CFDA Number Entity Identifying Number Grant Award Amount Federal.~.;:stat~t: Total Expenditures or Earnings Federal State~;. Total U.S. Department of Health & Human Services: Pass-Through Program From: California Department of Education- Child Care and Development Block Grant Child Care Initiative Project- Quality Consumer Education Line Trustline California Department of Social Services Trustline Trustline 93.575 93.575 93.575 93.575 93.558 93.558 14869-Z624 $ 300,000 $ CN150109 776,843 CN150113 182,000 CN160192 216,922-14-3009 628,070 16-STD-00671 436,081 $ 3,316,759 $ $ 300,000 $ $ $ 776,843 768,914 768,914 182,000 85,719 85,719 216,922 37,657-37,657 628,070 550,000 550,000 436,081 48,706 48,706 $ 3,316,759 $ 1,490,996 $ $ 1,490,996 Total Federal and State Awards $ 3,316,759 $ - $ 3,316,759 $ 1,490,996 $ - $ 1,490,996 Note 1. Significant Accounting Policies: The accompanying schedule of expenditures of federal and state awards includes the federal and state grant activity of California Child Care Resource & Referral Network, and is presented on the accrual basis of accounting. The Federal information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 2. De Minimis Cost Rate: The Agency did not use the 10% de minimis cost rate within their financial statements. -->. <J)
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK COMBINING STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31.2016 California Dept. of Education Dept. of Social Services Trustline Trustline Total All General CCIP Quality Consumer Ed CN160192 Trustline 16-STD-00671 Other Funds Fund CN150109 CN150113 7/1/16-12/31/16 14-3009 1/1/16-6/30/16 Unrestricted 2016 REVENUE AND SUPPORT: California Department of Education $ $ 768,914 $ 85,719 $ 37,657 $ - $ $ $ 892,290 Other Governmental Grants 550,000 48,706 104,337 703,043 Foundations and Community Programs 30,000 - - 1,389,209 1,419,209 Dues and Fees 495,038 495,038 Conferences 52,203 - - - - 52,203 Interest Income 685-685 Other 48,353-48,353 Contributions 4,715 4,715 Total Revenue and Support 630,994 768,914 85,719 37,657 550,000 48,706 1,493,546 3,615,536 EXPENSES: Salaries and Wages 96,579 454,363 47,219 16,113 235,333 20,840 616,751 1,487,198 Payroll Tax & Employee Benefits 20,562 130,709 19,222 5,318 77,671 6,878 155,331 415,691 Total Personnel Costs 117,141 585,072 66,441 21,431 313,004 27,718 772,082 1,902,889 Subcontracts 60,198 9,829 143,554 12,713 331,965 558,259 Conferences & Meetings 57,133 32,625 114 47 685 61 104,920 195,585 Professional Services 27,294 26,660 2,584 1,292 18,875 1,672 171,788 250,165 Rent Expense 18,126 52,796 9,454 2,737 39,972 3,540 64,974 191,599 Supplies 2,676 18,364 467 383 5,587 495 6,092 34,064 Telephone 2,734 3,811 572 456 6,662 590 4,912 19,737 Travel 19,689 12,492 137 1,996 177 25,724 60,215 Depreciation Postage & Freight 1,774 648 13 2,790 40,750 3,609 1,006 50,590 Books, Subscriptions/Materials 2,084 47 7 2 28 3 57 2,228 Repairs & Maintenance 4,000 9,624 1,455 402 5,878 521 9,733 31,613 Copying & Printing 538 1,255 248 612 8,937 791 3,370 15,751 Capital Expenditures 632 6,057 865 63 918 81 3,852 12,468 Other Expenses 11,835 14,678 2,535 328 4,789 424 9,544 44,133 Advertising 271 496 328 21 300 27 718 2,161 Insurance 1,274 3,965 627 151 2,212 196 3,203 11,628 Employee Training & Development 123 324 9 3 40 4 371 874 Total Expense 327,522 768,914 85,719 40,684 594,187 52,622 1,514,311 3,383,959 CHANGE IN NET ASSETS $ 303,472 $ $ $ (3,027) $ (44,187) $ (3,916) $ (20,765) $ 231,577 -'- --.!
RANDOLPH SCOTT & COMPANY CERTIFIED PUBLIC ACCOUNTANTS, INC Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Board of Directors California Child Care Resource and Referral Network San Francisco, California May19,2017 Independent Auditors' Report We have audited, 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, the financial statements of California Child Care Resource and Referral Network, which comprise the statement of financial position as of December 31, 2016, 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 May 19, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered California Child Care Resource and Referral Network'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 California Child Care Resource and Referral Network's internal control. Accordingly, we do not express an opinion on the effectiveness of California Child Care Resource and Referral Network'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 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. NORTHERN CALIFORNIA 1 COMMERCIAL BLVD., SUITE 101, NOVATO, CA 94949 (415) 883-8090 SOUTHERN CALIFORNIA- 9663 SANTA MONICA BLVD., BEVERLY HILLS, CA 90210-4303- (888) 471-1883 HTTP:/ /RSCOCPAS.COM Members of American lnstrtute and California Society of Certified Public Accountants, The Center for Public Com pony Audit Firtli.S and Govemrnental Audit Quality Ccnh=;r 18
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 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether California Child Care Resource and Referral Network'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 the effectiveness of the entity'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 entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Certified Public Accountants, Inc. Novato, California 19 RANDOLPH SCOTT & COMPANY Members of American Institute and California Society of Certified Public Accountants and SEC Practice Section
RANDOLPH SCOTT & COMPANY CERTIFIED PUBLIC ACCOUNTANTS, INC Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance Board of Directors California Child Care Resource and Referral Network San Francisco, California May 19, 2017 Independent Auditors' Report Report on Compliance for Each Major Federal Program We have audited California Child Care Resource and Referral Network's compliance with the types of compliance requirements described in the Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of California Child Care Resource and Referral Network's major federal programs for the year ended December 31, 2016. California Child Care Resource and Referral Network'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 California Child Care Resource and Referral Network's major federal programs based on our audit of the type 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 a major federal program occurred. An audit includes examining, on a test basis, evidence about California Child Care Resource and Referral Network's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. NORTHERN CALIFORNIA 1 COMMERCIAL BLVD., SUITE 101, NOVATO, CA 94949 (415) 883-8090 SOUTHERN CALIFORNIA- 9663 SANTA MONICA BLVD., BEVERLY HILLS, CA 90210-4303 (888) 471-1883 HTTP:/ /RSCOCPAS.COM Members of American Institute and California Society of Certified Public Accountants, The Center for Public Company Audit Firms and Governmental Audit Quality Center 20
Report on Compliance for Each Major Federal Program; and Report on Internal Control Over Compliance Required by the Uniform Guidance 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 California Child Care Resource and Referral Network's compliance. Opinion on Each Major Federal Program In our opinion, California Child Care Resource and Referral Network 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 December 31, 2016. Report on Internal Control Over Compliance The management of California Child Care Resource and Referral Network 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, we considered California Child Care Resource and Referral Network's internal control over compliance with the types of requirements that could have a direct and material effect on a 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 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 California Child Care Resource and Referral Network'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 non compliance 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 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. RANDOLPH SCOTT & COMPANY Members of American Institute and California Society of Certified Public Accountants and SEC Pract1ce Section 21
Report on Compliance for Each Major Federal Program; and Report on Internal Control Over Compliance Required by the Uniform Guidance Our consideration of the 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. Certified Public Accountants, Inc. Novato, California RANDOLPH SCOTT & COMPANY Members of Amen can Institute and California Society of Certified Public Accountants and SEC Practrce Section 22
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2016 SECTION 1: SUMMARY OF AUDIT RESULTS Financial Statements Type of auditor's report issued: Internal control over financial reporting: * Material weakness(es) identified? * Significant deficiency(ies) identified? * Noncompliance material to financial statements noted? Unmodified yes X no yes X none reported yes X no Federal Awards Internal control over major programs: * Material weakness(es) identified? * Significant deficiency(ies) identified? Type of auditor's report issued: Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance? Identification of major programs: Department of Health & Human Services- Pass-Through from the California Dept. of Social Services: Trustline Pass-Through from the California Dept. of Education: Child Care and Development Block Grant Child Care Initiative Project- Quality Consumer Education Line Trustline yes ---'X:._: yes ---'X:_: yes ---'X'-"--- CFDA: 93.558 CFDA: 93.575 CFDA: 93.575 CFDA: 93.575 CFDA: 93.575 no none reported Unmodified no Dollar threshold used to distinguish Type A programs from Type B programs was $750,000. Auditee qualified as low risk auditee? X yes no 23
CALIFORNIA CHILD CARE RESOURCE AND REFERRAL NETWORK SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2016 SECTION II: FINANCIAL STATEMENTS FINDINGS PRIOR YEAR AUDIT FINDINGS AND RECOMMENDATIONS None. SIGNIFICANT DEFICIENCY(IES) None. SIGNIFICANT DEFICIENCY(IES)- NON-MATERIAL WEAKNESSES None. SECTION Ill: FEDERAL AWARD FINDINGS AND QUESTIONED COSTS PRIOR YEAR AUDIT FINDINGS AND RECOMMENDATIONS None. SIGNIFICANT DEFICIENCY(IES) None. SIGNIFICANT DEFICIENCY(IES)- NON-MATERIAL WEAKNESSES None. QUESTIONED COSTS None. 24