72083475 - louisianaapp1.lla.la.gov/publicreports.nsf/cba22df1db2cbe2b...%^i]^ association for...

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ASSOCIATION FOR RETARDED CITIZENS/OUACHITA

Financial Statements For the Year Ended June 30,2008

Jnder provisions of state law, this report is a public document. Acopy of the repost has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the LegislativeAuditorand, where appropriate, at the office of the parish clerk of court.

Release Date ^ / _ i / ^


JUNE 30, 2008

TABLE OF CONTENTS

Page

Independent Auditors' Report 1

FINANCIAL STATEMENTS

Statements of Financial Position June 30,2008 4 June 30, 2007 5

Statements of Activities For the Year Ended June 30,2008 6 For the Year Ended June 30, 2007 7

Statements of Functional Expenses For the Year Ended June 30, 2008 8 For the Year Ended June 30, 2007 10

Statements of Cash Flows 12

Notes to Financial Statements 13

OTHER SUPPLEMENTARY DATA

Schedule 1 - Combining Schedule of Financial Position 20

Schedule 2 - Combining Schedule of Activities 22

SUPPLEMENTARY INFORMATION-GRANT ACTIVITY

Schedule of Expenditures of State Awards 27

Notes to Schedule of Expenditures of Federal and State Awards 28

Independent Auditors' Report over Financial Reporting and on Compliance And Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 29

Schedule of Findings 31

Summary Status of Prior Year Findings 33

Î UFPEY, HuFI?MAN, RAGgPAÎ E & SoiGNlER

John L. Luffey, MBA, CPA (1963-2002) Francis t. Huffman, CPA PhiiipA. Ragsdaie. CPA David Ray Soignier, CPA, MBA

(A PROFESSIONAL AccouNTrNG CORPORATION)

CERTIFIED PUBIIC ACCOUNTANTS

John Herman, CPA Lynn Andries, CPA Estlier Atteberry, CPA Sandra Harrington, CPA

INDEPENDENT AUDITORS' REPORT

The Board of Directors The Association for Retarded Citizens/Ouachita Monroe, Louisiana

We have audited the accompanying statement of fmancial position of The Association for Retarded Citizens/Ouachita (a nonprofit organization - the Association) as of June 30,2008 and June 30,2007, and the related statements of activities, functional expenses and cash flows forthe years then ended. These fmancial statements are the responsibility of the Association's management. Our responsibility is to express an opinion on these fmancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the Louisiana Governmental Audit Guide published by the Society of Louisiana Certified Public Accountants and the Louisiana Legislative Auditor. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are fi-ee of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the fmancial statements referred to above present fairly, in all material respects, the financial position ofthe Association as of June 30,2008 and June 30,2007, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

fii accordance with Government Auditing Standards, we have also issued our report dated February 6, 2009, on our consideration of the Association's intemal 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 intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

1100 North 18th Street Monroe, Louisiana 71201 Tel: {318)387-2672 • Fax: (318)322-8866 • Website: www.afulisen/icecpafirm.com

MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

http://www.afulisen/icecpafirm.com

The Board of Directors of Association for Retarded Citizens/Ouachita

Our audit was made for the purpose of forming an opinion on the fmancial statements taken as a whole. The information included as "Other Supplementary Data" and "Supplementary Information -Grant Activity" in the Table of Contents is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Association. Such information has been subjected to the auditing procedures applied in the audit ofthe basic fmancial statements and, in our opinion, is fairly stated in all material respects in relation to the basic fmancial statements taken as a whole.

(A Professional Accounting Corporation)

February 6, 2009

A £ ^

FINANCIAL STATEMENTS

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA STATEMENTS OF FINANCIAL POSITION

June 30,2008

Unrestricted

ASSETS

Temporarily Restricted Total

Cash Accounts Receivable

Memberships Services United Way

Prepaid Expenses Land, Building and Equipment Accumulated Depreciation Other Deposits

TOTAL ASSETS

416,192 $ 95,960 $ 512,152

95,079

200,695

-

1,465

523,061

(402,580)

4,725

838,637 $

-

-

157,875

-

135,719

(83,789)

5,000

310,765 $

95,079

200,695

157,875

1,465

658,780

(486,369)

9,725

1,149,402

LIABILITIES AND NET ASSETS

Liabilities Accounts Payable Accrued Payroll Accrued Taxes Notes Payable

Total Liabilities

69,444 63,848 4,697

44,821

69,444 63,848 4,697

44,821 182,810 182,810

Net Assets Unrestricted Temporarily Restricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS $

655,827 -

655,827

838,637 $

-

310,765

310,765

310,765 $

655,827

310,765

966,592

1,149,402

The accompanying notes are an integral part of these statements.

4

June 30, 2007

Temporarily Unrestricted Restncted Tota!

275,680 $ 95,000 $ 370,680

25,222

301,341

-

8,235

531,923

(441,722)

6,426

707,105 $

-

-

152,588

-

132,388

(62,553)

11,303

328,726 $

25,222

301,341

152,588

8,235

664,311

(504,275)

17,729

1,035,831

66,497 $ - $ 66,497 48,446 - 48,446

72,747, - . 72,747

187,690 - 187,690

519,415 -

519,415

707,105 $

-

328,726

328,726

328,726 $

519,415

328,726

848,141

1,035,831 ;.;=!

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA STATEMENTS OF ACTIVITIES

F O R THE YEARS ENDED

Support and Revenue Intergovemmental Charges for Services United Way Allocation Contributions and Grants Membership Dues Contributions and Net Revenue from

Special Events: Contributions Costs of Direct Benefits to Donors

Other Revenues

Unrestricted

3,318,104 290,420

-160,284 76,994

234,921 (66,271) 14,315

June 30, 2008 Temporarily Restricted

$ 25,210 $ -

163,478 -'

_

-960

Total

3,343,314 290,420 163,478 160,284 76,994

234,921 (66,271) 15,275

Total 4,028,767 189,648 4,218,415

Net Assets Released from Restrictions 207,609 (207,609)

Total Support and Revenue 4,236,376 (17,961) 4,218,415

Expenses Program Services

Supported Employment Vocational Rehabilitation Supported Work Contracts Supported Living Community Home:

Mallard Home Early Intervention

Total Program Services Supporting Services

Management and General Fund Raising

Total Supporting Services

Total Expenses

Increase (Decrease) in Net Assets

Net Assets at Beginning of Year

NET ASSETS AT END OF YEAR $


6

613,073 23,514

228,301 2,031,586

327,215 309,242

3,532,931

464,544 102,489 567,033

4,099,964

136,412

519,415

655,827 $

-

-

-

-

-

(17,961)

328,726

310,765 $

613,073 23,514

228,301 2,031,586

327,215 309,242

3,532,931

464,544 102,489 567,033

4,099,964

118,451

848,141

966,592

Unrestricted

$ 3,020,349 280,916

-25,478 77,218

153,240 (58,950) 39,981

June 30, 2007 Temporarily Restricted

$ 18,200 $ -

153,286 87,960

-

.

--

Total

3,038,549 280,916 153,286 113,438 77,218

153,240 (58,950) 39,981

3,538,232 259,446 3,797,678

171,555 (171,555) -̂

3,709,787 87,891 3,797,678

$

632,072 12,937

222,786 1,866,629

321,840 331,002

3,387,266

405,745 100,932 506,677

3,893,943

(184,156)

703,571

519.415 $

-

-

-

-

-

87,891

240,835

328,726 $

632,072 12,937

222,786 1,866,629

321,840 331,002

3,387,266

405,745 100,932 506,677

3,893,943

(96,265)

944,406

848,141

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA STATEMENTS OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED JUNE 30, 2008

PROGRAM SERVICES

Salaries Payroll Taxes Pension

Total Salaries and Related Expenses

Dues and Subscriptions Food Insurance Interest Licenses and Inspections Maintenance Medical Miscellaneous Office Supplies and Postage Professional Fees Public Awareness Rent Supplies Telephone Training Transportation Travel Utilities

Tota!

Depreciation of Buildings and Equipment

TOTAL FUNCTIONAL EXPENSES

Allocation of Central Office Overhead to Programs

TOTAL FUNCTIONAL EXPENSES AFTER ALLOCATION OF CENTRAL OFFICE OVERHEAD

Supported Employment

$ 412,301 $ 33,679 4,975

450,955

1,835 934

58,351 982

1.369 2,172 1,085 1.132 1,889 1,341

839 13,348

1,721 9,106 4.435

28,894 8,685 6,031

595,104

17,969

613.073

71.013

$ 684.086 $

Vocational Rehabilitation

16,135 $ 1.289

195

17,619

72 37

2,161 38 54 85 43 42 74 53 33

522 69

356 174

1,131 340 236

23.139

375

23.514

2.761

26.275 $

Supported Work

Contracts

102,992 $ 260

-

103,252

-

1,226 8.262

-10

14.237 -

2,586 785

-4,429

41,400 23,083 3.310

-16,494

-7,607

226,681

1,620

228,30!

-

228.301 $

Supported Living

1,545,715 S 125.110

16,502

1,687,327

5.572 1,787

179,225 952

3,946 4,329 2,796 1,622 4,452

15.298 3.216

12,705 6.549 4,633 4,677 3,465

76,006 9.690

2,028.247

3,339

2,031,586

227,398

2,258,984 $

Mallard Home

122,292 9,917

730

132,939

1,035 12,127 32,951

2,82! 1,597

10,886 5,122

30,592 1,271 9,384 1,756 1.049 8,866 1,918

52.217 2,217 1,085 8,918

318.751

8.464

327,215

38.264

365,479

The accompanying notes aie an integral part of these statements.

SUPPORTING SERVICES

Early Intervention

$ 172,147 $ 13,670 2,604

188,421

1,159 1,147

10,912 66

275 7.548

293 3,417 4,179

27,009 1,099

32,080 1.438 4.462 4,177 1,345 7,816 5,511

Total Program Services

2,371,582 $ 183,925 25,006

2.580,513

9,673 17,258

291,862 4,859 7,251

39,257 9,339

39,391 12,650 53,085 11,372

101,104 41.726 23,785 65,680 53,546 93,932 37,993

Management and General

233,292 $ 17,412 5,504

256,208

2,680 2,649

29,779 180 119

18,123 694

11,654 16,855 57,765 13,813 30,455 2,244 6.049 1,471

-947

5,919

Fund Raising

58,993 $ 4,268

767

64,028

152 411

9,410 13 1

2,703 15

576 5,861 2,489 1,508

11,199 380

1,044 658

-243

1,545

Total Supporting

Services

292,285 $ 21,680

6,271

320,236

2.832 3,060

39,189 193 120

20,826 709

12,230 22,716 60,254 15,321 41,654 2,624 7,093 2,129

-1,190 7,464

Total Expenses

2,663,867 205.605 31,277

2.900,749

12,505 20.318

331,051 5,052 7,371

60,083 10,048 51.621 35,366

113.339 26,693

142,758 44.350 30,878 67,809 53,546 95,122 45,457

302,354 3,494,276 457,604 102,236 559,840 4,054,116

6,888 38,655 6,940 253 7,193 45,848

309,242 3,532,931 464,544 102,489 567,033 4,099,964

39,903 379,339 (379,339) (379,339)

349,145 $ 3,912.270„$ 102,489 $ 187,694 $ 4,099,964

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA STATEMENTS OF FUNCTIONAL EXPENSES


PROGRAM SERVICES

Salaries Payroll Taxes Pension

Total Salaries and Related Expenses

Dues and Subscriptions Food Insurance Interest Licenses and Inspections Maintenance Medical Miscellaneous Office Supplies and Postage Professional Fees Public Awareness Rent Supplies Telephone Training Transportation Travel Utilities

Total

Depreciation of Buildings and Equipment


$ 412,138 S 32,489

5.213

449,840

430 1,374

50,246 1,198

968 2,454 2,371 1,588 2,252 2,718 2,249

13,371 955

n,632 3,632

37,768 11,358 6,344

602,748

29,324

Vocational Rehabilitation

; 8,663 $ 683

no 9,456

9 29

1,056 25 20 52 50 33 47 57 47

281 20

244 76

794 239 133

12,668

269

Supported Work

Contracts

92,323 $ 8 -

92,331

-354

25,123 -

75 16,571

-1,374

754 -

4,060 40,429 24,015 3,806

-9,537

-2,516

220,945

1,841

Supported Living

1,423,532 $ 111,091

14,895

1.549,518

222 854

158,010 944

3,139 4,437 7,419 2,823 4,300

17,009 8,885

13,013 3,411 4.461

10.212 1.198

64,136 9,268

1,863,259

3,370

Mallard Home

119,478 9,259 1,817

130,554

176 12,509 25,836 2,505 1,161 7,302 8,968

32,419 1,001

10,368 308 958

10,090 1,979

52,270 4,313 1,210 8,233

312,160

9,680

TOTAL FUNCTIONAL EXPENSES 632,072 12,937 222,786 1,866,629 321,840

Allocation of Central Office Overhead to Programs 65,339 1,368 200,774 34,549

TOTAL FUNCTIONAL EXPENSES AFTER ALLOCATION OF CENTRAL OFFICE OVERHEAD 697,411 $ 14,305 $ 222,786 $ 2,067,403 $ 356,389


10

SUPPORTING SERVICES

Early Intervention

$ 165.881 $ 12,725 2,890

181.496

1,137 2,600 8,757

72 832

5,498 498

4,822 2,239

49,311 3,264

39.160 1,066 5,271 4,072

446 13,729 5,806

Total Program Services

2,222.015 $ 166,255 24,925

2.413.195

1.974 17.720

269,028 4,744 6,195

36,314 19,306 43,059 10,593 79,463 18,813

107,212 39,557 27,393 70,262 54,056 90,672 32,300

Management and General

231,069 $ 17,125 6,297

254,491

2,015 4,091

24,333 293 114

11,492 (613)

5,970 8,266

42,930 5,110

20.435 2,126 3,769 2,724

-1,324 6,071

Fund Raising

55,335 $ 3,992

777

60,104

320 366

4,344 256

2 1,987

10 4,530

10,653 1,872 1,959

10.034 262

1,231 795

-66

1.648

Total Supporting

Services

286,404 $ 21,117 7,074

314,595

2,335 4,457

28,677 549 116

13,479 (603)

10,500 18.919 44,802 7,069

30,469 2,388 5,000 3.519

-1,390 7,719

Total Expenses

2,508,419 187,372 31,999

2,727,790

4,309 22,177

297,705 5,293 6,311

49,793 18,703 53,559 29,512

124,265 25,882

137,681 41,945 32,393 73.781 54,056 92,062 40,019

330,076 3,341,856 394,941 100,439 495.380 3,837,236

926 45,410 10,804 493 1L297 56,707

331,002 3,387,266 405,745 100,932 506,677 3,893,943

36,830 338,860 (338,860) (338,860)

367.832 $ 3,726,126 $ 66,885 $ 100,932 $ 167,817 $ 3,893.943

n

A S S O C I A T I O N F O R R E T A R D E D C I T I Z E N S / O U A C H I T A

S T A T E M E N T S O F C A S H F L O W S

Cash Flows From Operating Activities Increase (Decrease) in Net Assets Adjustments to reconcile increase in net

assets to net cash provided (used) by operating activities: Depreciation Gain on sale of assets Donation of fixed asset Changes in assets and liabilhies

Accounts receivable Other assets Accounts payable and accrued expenses Conditional Transfers

Total Adjustments Net cash provided (used) by operating activities

Cash Flows From Investing Activities Purchases of fixed assets Retirements of fixed assets ; Proceeds from sales of assets

Net cash provided (used) by investing activities

Cash Flows From Financing Activities Payments on notes payable Borrowings on line of credit Repayments on line of credit

Net cash provided (used) by financing activities

Net Increase (Decrease) in Cash

Cash at Beginning of Year

CASH AT END OF YEAR

For the Years I June 30,

2008

; 118,451 $

45,848 (900)

(7,600)

25,502

14,775

23,046

100,671 219,122

(50,624)

900 (49,724)

(27,926)

(27,926)

141,472

370,680

512,152 $

Cnded

2007

(96,265)

56,707 (57)

(2,500)

(57,099) (7,636) 13,017

(43,980) (41,548)

(137.813)

(22.750) 43 100

(22.607)

(16,953) 7,400 (7,400)

(16,953)

(177,373)

548,053

370,680

Supplemental Disclosures: Cash paid for interest

Non-Cash Investing & Financing Activities: Refinancing of existing notes payable Vehicle acquired by issuance of note payable


12

5,053

-

$

$

$

5,293

58,446

16,428

THE ASSOCIATION FOR RETARDED CITIZENS/OUACHITA NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2008

Note 1 - Description of Organization

The Association for Retarded Citizens/Ouachita (the Association) dba ARCO was established in 1954 to promote the general welfare of all persons with developmental disabilities within its service area which generally includes the Northeast portion of Louisiana. Their programs are designed to assist and train clients to become independent citizens within their service area. The principal programs consist of vocational training, residential living and early intervention.

Note 2 - Summary of Significant Accounting Policies

A. Basis of Presentation

The financial statements have been prepared on an accrual basis and in confonnity with the standards promulgated by the American Institute of Certified Public Accountants in its Audit Guide for Not-For-Profit Organizations.

The fmancial statements of the Association are presented as recommended by the Financial Accoimting Standards Board in Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Association 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 pennanently restricted net assets. At June 30,2008, the Association had no permanently restricted net assets.

B. Contributions

The Association has also adopted SFAS No. 116, Accounting for Contributions Received and Contributions Made. In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. At June 30, 2008 the Association had a receivable of $157,875 representing United Way contributions awarded during fiscal year ending June 30, 2008 that will be received during the subsequent fiscal year. Under SFAS No 116, such contributions are required to be reported as temporarily restricted support and are then reclassified to unrestricted net assets upon expiration ofthe related time restrictions.

13


C Donated Services

Members, agencies, business firms, volunteers and others contribute substantial services toward the fulfillment of projects initiated by the Association. No amounts have been recognized in the Statement of Activities because the criteria for recognition of such volunteer effort under SFAS No 116 have not been satisfied.

D. Land, Buildings and Equipment

Land, buildings and equipment are stated at cost. All donated capital assets are recorded at fair market value on the date ofthe donation. The Association capitalizes all property value at $ 1,000 or more and an estimated useful life of one year or more. Depreciation is computed on a straight-line basis over the useful lives ofthe assets using the following estimated lives:

Years Buildings 15-30 Furniture and Equipment 3-10 Vehicles 5

E. Compensated Absences

ARCO's vacation policy does not provide for the carryover of vacation to the subsequent year. The financial statements do not include an accrual since all vacation was used during the year ended June 30, 2008. Sick days may be accumulated to a maximum of 15 days; however, employees are not paid for any unused sick days upon termination and therefore an accrual for sick leave is not reflected in the fmancial statements.

F. Functional Expenses

Expenses that can be identified with a specific program and support service are allocated directly according to their natural expenditure classification. Other expenses that are common to several functions are allocated by various statistical bases.

G. Programs

The Association's principal programs and primary funding sources are:

Supported Employment - The Aduh Habilitation's income is derived from the Louisiana Department of Health and Hospitals, Community Development Block Grants, and the United Way. These funds are used to train clients in vocational and

14

THE ASSOCIATION FOR RETARDED CITIZENS/OUACHITA NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30,2008

prevocational activities and supportive services. Service fees charged to Mallard Home clients for training in the amount of $22,566 are included in charges for services.

Vocational Rehabilitation - Vocational Rehabilitation's income is derived fi-om the Department of Social Services, Office of Louisiana Rehabilitative Services. This program provides vocational training support to clients placed in jobs within the conimunity.

Supported Work Contracts - Supported Work Contract's income is derived from cleaning and document destruction services by clients and the operations of the SassyKats clothing store.

Supported Living - Supported Independent Living's income is derived from the Louisiana Department of Health and Hospitals, United Way, and Ouachita Council of Govemments. This program, similar to Community Homes, helps the individual clients become more independent by providing support and training in their residences within the community.

Mallard Home - Mallard Home's income is derived from the Louisiana Department of Health and Hospitals. Clients pay a pro-rata share of the costs based on their income. This program provides clients with a home environment within the connnunity and helps them become more independent citizens. Clients in Mallard Home are trained in the Supported Employment program. Included in the expense is $51,388 for this service.

Early Intervention - Early Intervention's income is derived from the Louisiana Department of Health and Hospitals, United Way and charges for therapeutic services (private insurance). This program provides training and therapeutic services to disabled infants, ages 0-3 years.

H. Tax-Exempt Status

The Association is exempt from income tax under Section 501(c)(3) ofthe Internal Revenue Code and, therefore, has no provision for Federal income taxes. Contributions to the Association are tax deductible within the limitations prescribed by the Code.

I. Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Association considers demand deposits, time deposits and certificates of deposit with an original maturity of three

15


months or less to be cash equivalents.

J. Accounting Estimates

The preparation of fmancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 3 - Land, Building and Equipment

Land, Building and Equipment consisted ofthe following at June 30, 2008:

Buildings and Improvements $ 193,624 Fumiture and Equipment 137,854 Vehicles 289,165 Land 38,138 Less: Accumulated Depreciation (486,370)

Net Land, Building and Equipment $ 172,411

Included in vehicles above are five vehicles that cost a total of $135,719 that were acquired through Federal grants. The Association retains the use of those vehicles as long as they are kept, maintained and used for the Association's designated purpose. Those vehicles are not to be sold or disposed of either during their useful lives (5 years or 100,000 miles) or without the state's permission; therefore, these vehicles less the related accumulated depreciation of $83,789 are shown as temporarily restricted.

Note 4 - Notes Payable

Notes payable consisted of two notes at June 30,2008, as follows:

Ouachita Independent Bank $ 19,953 Ouachita Independent Bank 24,868 TOTAL $ 44,821

16

THE ASSOCIATION FOR RETARDED CITIZENS/OUACHITA NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30,2008

Both ofthe notes with Ouachita Independent Bank are mortgage notes with fixed interest rates of 8.25% and 8.75% respectively. They are secured by real estate and mature in January and March, 2012, respectively. The monthly installments are $539 and $664 respectively, including interest.

A letter of credit in the amount of $ 100,000 was issued by Capital One Bank. It is secured by all funds on deposit with them and provides a variable simple interest rate to be adjusted monthly to one percent (1 %) over the Wall Street Joumal prime rate. There was no outstanding debt on tliis line of credit at June 30,2008 and nothing has been advanced to the Organization since then. The line of credit is subject to annual renewal in December of each year.

Payments of principal on notes payable outstanding at June 30,2008 for the remainder of the notes are as follows:

2009 2010 2011 2012

$ 10,498 11,958 13,026 9,339

$ 44,821

Note 5 - Temporarily Restricted Net Assets

The following summarizes net assets that are temporarily restricted as of Jime 30,2008:

Cash Accounts Receivable - United Way (Note 2-B) Vehicles-DO'lD Less: Accumulated Depreciation Deposit on Building

Total

$

—

$ _

95,960 157,875 135,719 (83,789)

5,000

310,765

During a prior year, the Kitty DeGree Foundation pledged and paid a matching grant of $50,000 for ARCO's Building Program. Those funds were to be eamed based on other donations that are received and dedicated to the Building Program. Sufficient matching funds were received, qualifying the pledge for recognition as temporarily restricted support.

17


Note 6 - Disclosures About Concentrations

The Association's cash and cash investments are on deposit with three Federally-insured financial institutions. The amounts on deposit totaled $524,289 of which $308,572 was not insured at June 30, 2008.

The Association's contracts are primarily with government agencies; therefore, a majority of its revenue and accounts receivable are derived from that source.

Note 7 - Operating Leases

Total rent expense for the year was $142,758. The Association has several lease commitments. However, these leases are either on a month-to-month basis or contain "funding-out" clauses which allow the agreements to be cancelled.

Note 8 - Commitments and Contingencies

The Association receives the majority of its revenue based on contracts with various Federal and state agencies. These contracts are subject to review by the respective agencies which could result in disallowed costs. Additionally, funding levels are subject to review on a periodic basis by the grantor agencies, which could result in changes in funding levels.

Note 9 - Related Party Transactions

The matching grant from the Kitty DeGree Foundation, described in Note 5 above, is a related party transaction since Ms. Kitty DeGree serves on the Board of Directors ofthe Association.

Note 10 - Tax Deferred Annuity Plan

The Association offers its employees a tax deferred annuity plan qualified under Section 403(b) of the Internal Revenue Code. The plan covers full-rime employees of the Association. ARCO will match up to 3% of gross salaries of qualified employees who elect to participate in the plan. Employees may make contributions to the plan up to the maximum amount allowed by the Intemal Revenue Code. ARCO contributed $31,277 on behalfofthe participants for the year ended June 30,2008.

18

OTHER SUPPLEMENTARY DATA

19


COMBINING SCHEDULE OF FINANCIAL POSITION

JUNE 30, 2008

ASSETS

Cash Accounts Receivable:

Memberships Services United Way

Due From Other Funds Land Building and Equipment Accumulated Depreciation Prepaid Expenses Other Deposits

TOTAL ASSETS

SCHEDULE 1

General Fund

$ 511,772

41,682 -

157,875 224,189 30,138

317,923 (230,060)

1,344 7,975

$ 1,062,838

$

^_


- $

-27,124

---

117,055 (107,198)

121 -

37,102 $

Supported Work

Contracts

200' $

39,754 ---

8,100 (6,075)

-1,050

43,029 $

Supported Living

_

106,164 ---

41,338 (41,338)

--

106,164

LIABILITIES AND NET ASSETS

Liabilities

Accounts Payable Due to Other Funds Accrued Taxes Accrued Payroll Notes Payable

Total Liabilities

Net Assets

Unrestricted Temporarily Restricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

$

$

E=

7,748

4,697 63,848 19,953 96,246

655,827 310,765 966,592

1,062,838

$

$

11,796 $ 25,306

37,102

-

37,102 $

7,154 $ 35,875

43,029

-

43,029 $

31,076 75,088

106,164

-

106,164

20

Mallard Early Total Home Intervention AH Funds

180 $ - $ 512,152

27,653 --

-

113,869 (94,209)

--

47,493 $

53,397 -

--

-

30,357

(7,489) -

700

76,965 $

95,079 200,695

157,875 224,189 30,138

628,642

(486,369) 1,465

9,725

1,373,591

6,947 $

15,678 --

24,868

4,723 $ 72,242

--

-

69,444

224,189 4,697

63,848 44,821

47,493 76,965 406,999

-

-

47,493 $

-

-

76,965 $

655,827 310,765 966,592

1,373,591

21


COMBINING SCHEDULE OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2008

WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2007 SCHEDULE 2

General Fund


Supportive Work

Contracts Supported

Living

Support and Revenue Intergovernmental Charges For Services Contributions and Grants United Way Allocation Membership Dues Contributions and Net Revenues from

Special Events Contributions Costs of Direct Benefit to Donors

Other Revenues Total support and revenue

594 23,913

163,478 76.994

234,921 (66,271) 14,219

447,848

606,472 23,866 15,905

920

" $ 207,030

6,500

33

2,318,943 13,501 7,735

647,163 213.563 2,340,179

Expenses Depreciation and Amortization Dues and Subscriptions Food Insurance Interest Licenses and Inspections Maintenance Medical Miscellaneous Office Supplies and Postage Payroll Taxes Pension Professional Fees Public Awareness Rent Salaries Supplies Telephone Training Transportation Travel Utilities

Total Expenses

1,527 1,455 2,970

16,053 (89) 87

4,166 599

3,867 10,607 6,701 1.179 4,662

10,248 26,378 90,758

1,049 1,593 1,113

-373

2,399 187,695

19,459 2,178

989 64,992

1,075 1,429 5,531 1,150 2,812 4,346

37,866 6,154

12,319 1,871

16,827 467,451

2,098 10,543 4,805

30,025 9,186 7,254

710,360

1.620 „

1,226 8,262

-10

14,237 -

2,586 785 260

--

4,429 41,400

102,992 23,083

3,310 -

16,494 -

7,607 228,301

6,696 6,388 1,841

193,277 1,119 3,966

14,215 2,861 6,600

11,629 134,126

19,571 48,288

6,222 21,893

1,666,946 7,487 7,897 5,289 3,465

76,490 12,718

2,258,984

Excess (Deficiency) of Revenues Over Expenses 260,153 (63,197) (14,738) 81,195

22

Mallard Home

323,691 27,246

20O -

-

--

Early Intervention

$ 94,208 $ 18,183

106,031 --

-103

Total June 30 2008

3,343,314 290,420 160,284 163,478 76,994

234,921 (66,271) 15,275

$

2007

3.088,774 230,691 113,438 153,286 77,218

153,240 (58,950) 39,981

351,137 218,525 4,218,415 3,797.678

9,042 1.175

12,136 35,279 2,850 1,600

12,582 5,133

31,441 2,505

11,421 1,240

15,043 2.273 2,584

142,537 9,026 2,478

52,319 2,217 1,168 9,430

365,479

7.504 1,309 1,156

13,188 97

279 9,352

305 4,315 5,494

15,231 3,133

33,027 1,650

33,676 193,183

1,607 5,057 4,283 1,345 7.905 6,049

349,145

45,848 12,505 20,318

331,051 5,052 7,371

60,083 10,048 51,621 35,366

205,605 31,277

113,339 26,693

142,758 2,663,867

44,350 30,878 67,809 53,546 95,122 45,457

4,099,964

56,707 4,310

22.178 297,704

5.293 6,311

49,794 18,703 53,554 29,512

187,372 32,000

124,266 25,884

137,683 2,508.414

41,946 32,393 73,781 54,056 92,062 40,020

3,893,943

(14,342) (130,620) 118,451 (96,265)

(Continued)

23

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA COMBINING SCHEDULE OF ACTIVITIES (CONCLUDED)

FOR THE YEAR ENDED JUNE 30,2008 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2007

SCHEDULE 2

Supportive Supported/ General Supported Work Independent Fund Employment Contracts Living

Other Financing Sources (Uses) Operating Transfers In Operating Transfers (Out)

Total Other Financing Sources (Uses)

Increase (Decrease) in Net Assets

Net Assets at Beginning of Year

NET ASSETS AT END OF YEAR

(96,163)

(96.163)

163,990

802,602

$ 966,592 $

17,658

17,658

(45,539)

45,539

- $

14,738

14,738

- $

(81,195)

(81,195)

24

Mallard Early Total June 30 Home Intervention 2008 2007

14,342 130,620 177,358 368.756 - ^ (177,358) (368,756)

14,342 130,620

118,451 (96,265)

848,141 944,406

$ 966,592 $ 848,141

25

SUPPLEMENTARY INFORMATION GRANT ACTIVITY

26

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA SCHEDULE OF EXPENDITURES OF STATE AWARDS


Grantor Program/Program Title

Louisiana Department of Health and Hospitals

• Office for Citizens With Developmental Disabilities:


Grant Assistance

I.D. Number (OCDD#)

608642 5

State Award

Amount

; 581,262 $

Expenditures

581,262

Supported Living 609521 32,463 32,463

TOTAL STATE AWARDS

See Notes to Schedule of Expenditures of State Awards

$ 613,725 $ 613,725

27

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA NOTES TO SCHEDULE OF EXPENDITURES OF STATE AWARDS


L General

The Schedule of Expenditures of State Awards present the activity of all state awards programs of The Association for Retarded Citizens/Ouachita (ARCO).

2. Basis of Accounting

The Schedule of State Awards is presented using the accrual basis of accounting which is more iully described in Note 2 to the Association's fmancial statements.

3. Relationship to Combining Schedules of Activities

State and local government awards revenue and fees for service are included in intergovernmental revenue on the Statement of Activities. This revenue is further detailed on Schedule 2. Intergovemmental revenue consists ofthe following:

Supported Employment Mallard Home Supported Living Early Intervention TOTALS

Federal Awards

25,210 $

25,210 $

State Awards 581,262

32,463

613,725

Fees for Services

S 323,691

2,286,480 94,208

$ 2,704,379

Total Inter-

govemmental Revenue

$ 606,472 323,691

2,318,943 94,208

$ 3,343,314

28

IÛI^FEY, HuTTAîAN, R A G S D A X E & ÔIGNIER

John L. Luffey, MBA, CPA (1963-2002) Francis I. Huffman, CPA Philip A. Ragsdaie, CPA David Ray Soignier, CPA, MBA

(A PROFESSIONAI. ACCOUNTING C O R P O R A T I O N )

CERTIFIED PUBLIC ACCOUNTANTS

John Herman, CPA Lynn Andries, CPA Esther Atteberry, CPA Sandra Harrington, CPA

INDEPENDENT AUDITORS' REPORT OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCLVL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

The Board of Directors The Association for Retarded Citizens / Ouachita Monroe, Louisiana

We have audited the fmancial statements of The Association for Retarded Citizens/Ouachita (the Association) as of and for the years ended June 30,2008 and June 30, 2007, and have issued our report thereon dated February 6, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Louisiana Governmental Audit Guide, issued by the Louisiana Society of Certified Public Accountants and the Louisiana Legislative Auditor.

Internal Control over Financial Reporting

In planning and performing our audit, we considered the Association's intemal control over fmancial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements^ but not for the purpose of expressing an opinion on the effectiveness of the Association's intemal control over fmancial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe Association's intemal control over financial reporting.

A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or • report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement ofthe entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiency described in the accompanying Schedule of Findings listed as finding 08-01 to be a significant deficiency in the intemal control over financial reporting.

1100 North 18th Street Monroe, Louisiana 71201 Tel: (318)387-2672 • Fax: (318)322-8866 • Website: www.afullservicecpafirm.com

MEMBERS OF THEAMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Page 29

http://www.afullservicecpafirm.com

The Association of Retarded Citizens/Ouachita Monroe, Louisiana

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the fmancial statements will not be prevented or detected by the entity's intemal control.

Our consideration of intemal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, we consider the significant deficiency listed in finding 08-01 to be a material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Association'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 an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described as finding 08-02.

We noted a certain matter that we reported to management and those charged with govemance ofthe Association in a separate letter dated Febmary 6, 2009.

The Association's responses to the findings identified in our audit are described in the accompanying Schedule of Findings. We did not audit the Association's responses and, accordingly, we express no opinion on them.

This report is intended for the information of management of the Association, awarding agencies and pass-tlu-ough entities, other entities granting funds to the Association and the Legislative Auditor for the state of Louisiana and is not intended to be used and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document


February 6,2009

30

ASSOCIATION FOR RETARDED CITIZENS/OUACHITA Monroe, Louisiana

Schedule of Findings For the Year Ended June 30, 2008

08-01 General Ledger Accounting

Finding: A sound system of internal control would require a review and a reconciliation of all accounts to ensure proper recording of all transactions. Our audit procedures disclosed the following:

For the year ended June 30, 2008, various accounts receivable accounts were overstated by approximately $98,600 resulfing in an overstatement of revenues of approximately $77,700.

At June 30, 2008, the cash suspense account had a balance of $5,531. Entries to this account as generated by the general ledger software and the account balance should be zero at all times. During the fiscal year, a malfimction in the software caused some entries to be duplicated

The prepaid insurance account had a balance of approximately $21,300. This v̂ âs a result of an entry made in June 2007 which should have been amortized throughout 2008 to recognize insurance expense. Failure to amortize this account resulted in an overstatement of prepaid expenses and an understatement of expenses.

In addifion, t̂ wo payroll liability accounts had debit balances totaling approximately $13,000. These were primarily the result of transacfions applicable to the subsequent year being recorded in the year ended June 30,2008.

During the year, ARCO changed Business Directors and changed software used in the billing process which contributed to the misstatements.

The effect of these items could cause the financial statements to be misstated.

Recommendation: All accounts on the Statement of Net Assets should be reviewed monthly to ensure accurate recording of all transacfions. The cash suspense account should be reviewed and any balances should be investigated and appropriate entries made to zero out the accoimt

Management's Corrective Action Plan: Beginning in March, 2009 ail accounts will be reviewed monthly to ensure all transacfions have been accurately recorded. The cash suspense account will be reviewed monthly and any balances will be investigated and appropriate entries will be made to zero out the account.

31


Schedule of Findings For the Year Ended June 30,2008

08-02 Financial Statements Not Filed Timely

Finding: Louisiana Revised Statute 24:513 requires that the Associafion prepare and submit its audited financial statements to the Louisiana Legislative Auditor no later than six months after the end of the most recent fiscal year. Due to the condifions described in Finding 08-01, the financial statements were not in a condifion to be audited within the time frame prescribed by law.

Recommendation: We recommend that the Association maintain their books and records whereby the financial statements will be ready for audit so that the audit is completed and submitted to the Legislative Auditor within the prescribed time period.

Management's Corrective Action Plan: We have addressed all ofthe items described in Finding 08-01 and in the future we will have the books and records in a condition whereby the audit can be submitted within the fime period prescribed by law.

32


Summary Status of Prior Year Findings For the Year Ended June 30,2008

The following Is a summary ofthe status ofthe prior year management letter included in the Luffey, Huffman & Monroe, (APAC) audit report dated December 27, 2007 in cormection with the audit of the fmancial statements of the Association of Retarded Citizens / Ouachita for the year ended June 30,2007.

Current Documentation of Internal Control

For management and those charged with governance to properly discharge their responsibility to establish and maintain intemal control, there must exist a level of documentation of internal control sufficient to allow them to assess operating effecfiveness and design, not just at a point in fime, but over a period of fime. As personnel, processes and/ or circumstances change, the documentafion of internal control should be updated to reflect the current operating environment.

Status

This finding remains unresolved and is included in the current year management letter dated Febmary 6, 2009.

33

LuEEEY, HUFFMAN, RAGSDAIE & SOIGNIER (A PROFESSIONAL ACCOUNTING CORPORATION)

CERTIFIED PUBLIC ACCOUNTANTS

John L. Luffey. MBA, CPA (1963-2002) Francis i. Huffman, CPA Philip A. Ragsdaie, CPA David Ray Soignier, CPA, MBA

John Herman, CPA Lynn Andries, CPA Esther Atteberry, CPA Sandra Harrington, CPA

MANAGEMENT LETTER

The Board of Directors The Association for Retarded Citizens / Ouachita Monroe, Louisiana

In planning and performing our audit of the financial statements of The Association for Retarded Citizens/Ouachita (the Association) as of and for the year ended June 30, 2008, we considered its intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effecfiveness ofthe Association's intemal control over financial reporting or overall compliance with laws and regulations.

However, during our audit we became aware of a certain matter that is an opportunity for strengthening internal controls and the overall enviromnent for compliance with laws and regulations. This letter will summarize our comments and suggestions regarding that matter. This letter does not affect our report dated Febmary 6, 2009 on the fmancial statements of the Associafion.

Finding: Current Documentation of Internal Control

Management of the Association is charged with estabhshing and maintaining intemal control and to assess intemal control for effectiveness in design and operation. Those components are outlined in the Committee of Sponsoring Organizations of the Treadway Commission Report (commonly referred to as the COSO Report, or COSO) and consist of the Control Environment; Risk Assessment; Control Activities; Informafion and Communicafion; and Monitoring. While certain elements of the components of intemal control exist and have been documented by the Association, the documentation has not been kept up-to-date for changes in personnel, processes and/or circumstances.

For management and those charged with governance to properly discharge their responsibility to establish and maintain internal control̂ there must exist a level of documentation of intemal control sufficient to allow them to assess operating effectiveness and design, not just at a point in time, but over a period of time. As personnel, processes and/ or circumstances change, the documentafion of internal control should be updated to reflect the current operating environment.

1100 North 18th Street Monroe, Louisiana 71201 Tel- {318)387-2672 • Fax: (318)322-8866 • Website: www.afullservicecpafirm.com

MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

http://www.afullservicecpafirm.com

The Association for Retarded Citizens / Ouachita Monroe, Louisiana Management Letter Page 2 of 2

Recommendation: We recommend that management update the existing documentation of intemal control and expand their documentation of the intemal control over fmancial reporting as might be required using the COSO framework or such other framework as might prove useful in order that they may more easily discharge their responsibility to design and implement controls and monitor those controls for effectiveness over time.

Management's Corrective Action Plan: Agency Management is aware of the need to maintain intemal controls over agency activities and has historically maintained an Intemal Control Document as well as Policy and Procedure Manuals. As stated the two are in need of being updated. Agency Management is in agreement that these tools will be updated prior to June 30,2009.

In addition, management will research the COSO report requirements in regard to the areas of Control Environment, Risk Assessment, Information and communication. Monitoring, and Control Activities. A cost/benefit analysis will be presented to the agency Finance Committee/Board of Directors to determine the extent such imdertaking of developing a framework will be effective for the agency. A determination or plan to develop a fi-amework (or pieces of a framework) will be made prior to June 30, 2009.


February 6, 2009

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