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CITRUS HEALTH NETWORK, INC.

FINANCIAL STATEMENTS, INDEPENDENT AUDITORS' REPORT

AND SUPPLEMENTARY INFORMATION

FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

TABLE OF CONTENTS

INDEPENDENT AUDITORS’ REPORT . . . . . . . . . . . . . . . . . . . . . 1-2 FINANCIAL STATEMENTS

Statements of Financial Position. . . . . . . . . . . . . . . . . . . . . . . . . . . 3Statements of Activities and Changes in Net Assets . . . . . . . . . . . 4Statements of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-15

SUPPLEMENTARY INFORMATION

Statement of Functional Expenses and Cost Center Expenses Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16-17

Schedule of State Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Schedule of Revenues and Funding Sources . . . . . . . . . . . . . . . . . 19-20Schedule of Bed Day Availability Payments . . . . . . . . . . . . . . . . . 21Note to the Statement of Functional Expenses and Cost Center

Expense Schedule, Schedule of State Earnings, Revenues, Revenues and Funding Sources, and Bed Day Availability Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Schedule of State Financial Assistance . . . . . . . . . . . . . . . . . . . . . 23Schedule of Federal Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Notes to the Schedules of State Financial Assistance and Federal

Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25Report on Internal Control over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26-27Independent Auditor’s Report on Compliance for Each Major

Program and State Project and on Internal Control over Compliance Required by the Uniform Guidance and Chapter 10.650, Rules of the Auditor General. . . . . . . . . . . . . . . . . . . . . .

28-30Schedule of Findings and Questioned Costs - Federal Awards

Programs and State Financial Assistance Projects. . . . . . . . . . . .

31-33

INDEPENDENT AUDITORS' REPORT The Board of Directors of Citrus Health Network, Inc. Hialeah, Florida Report on the Financial Statements We have audited the accompanying financial statements of Citrus Health Network, Inc. (the "Center") (a nonprofit organization), which comprise the statements of financial position as of June 30, 2016 and 2015, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audit contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 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.

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Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Citrus Health Network, Inc. as of June 30, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, the statement of functional expenses and cost center expense schedule, the schedules of state earnings, revenues, revenues and funding sources, and bed availability payments as required by the Florida Department of Children and Families (the “Department”), Chapter 65E-14.003 Florida Administrative Code, and the schedule of state financial assistance as required by Rules of the Auditor General of the State of Florida, Chapter 10.650, 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 financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2016, on our consideration of the Center’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Center’s internal control over financial reporting and compliance.

CERTIFIED PUBLIC ACCOUNTANTS Coral Gables, Florida December 21, 2016

CITRUS HEALTH NETWORK, INC. STATEMENTS OF FINANCIAL POSITION JUNE 30, 2016 AND 2015

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2016 2015

CURRENT ASSETS

Cash 9,742,472$ 4,336,650$ Restricted cash 44,526 39,328 Grants receivable - federal and non-federal awards 4,995,645 4,869,061 Accounts receivable - patients and third-party payers, net of allowance 3,327,006 4,016,746 Prepaid expenses 292,266 147,938 Inventory 322,525 272,593 Promissory note - 654,864 Investments - 4,088,515

TOTAL CURRENT ASSETS 18,724,440 18,425,695

PROPERTY AND EQUIPMENT, net 9,520,225 10,037,255

OTHER ASSETSAdvances and loans to sponsored companies, net 202,110 198,995 Long term investments 316,000 316,000 Deposits and other assets 303,492 212,809

TOTAL OTHER ASSETS 821,602 727,804

TOTAL ASSETS 29,066,267$ 29,190,754$

CURRENT LIABILITIES

Accounts payable and accrued expenses 3,781,013$ 5,021,513$ Installment, line of credit, non-recourse mortgage and other obligations including capital leases, current portion 634,330 704,584

TOTAL CURRENT LIABILITIES 4,415,343 5,726,097

Installment and other obligations, including capital leases 5,710,454 6,257,738

TOTAL LIABILITIES 10,125,797 11,983,835

NET ASSETSUnrestricted net assets 17,500,470 15,696,919 Temporarily restricted net assets 1,440,000 1,510,000

TOTAL NET ASSETS 18,940,470 17,206,919

TOTAL LIABILITIES AND NET ASSETS 29,066,267$ 29,190,754$

ASSETSASSETS

LIABILITIES AND NET ASSETS

The accompanying notes are an integral part of this financial statement.

CITRUS HEALTH NETWORK, INC. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

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UnrestrictedTemporarily Restricted Total Unrestricted

Temporarily Restricted Total

SUPPORT AND REVENUEPUBLIC SUPPORT

Federal, State, and Local grants 32,840,973$ -$ 32,840,973$ 33,279,280$ -$ 33,279,280$ TOTAL PUBLIC SUPPORT 32,840,973 - 32,840,973 33,279,280 - 33,279,280

COMMUNITY SUPPORT

United Way 409,553 - 409,553 223,756 - 223,756Contributed services 125,358 - 125,358 98,440 - 98,440

TOTAL COMMUNITY SUPPORT 534,911 - 534,911 322,196 - 322,196

TOTAL SUPPORT 33,375,884 - 33,375,884 33,601,476 - 33,601,476

REVENUEPatient services, net 32,783,728 - 32,783,728 28,525,045 - 28,525,045In-kind and other revenues 1,276,894 - 1,276,894 825,527 - 825,527

TOTAL REVENUE 34,060,622 - 34,060,622 29,350,572 - 29,350,572

TOTAL SUPPORT AND REVENUE 67,436,506 - 67,436,506 62,952,048 - 62,952,048

EXPENSESProgram services 57,051,961 - 57,051,961 51,704,063 - 51,704,063Support services 8,699,591 - 8,699,591 10,003,359 - 10,003,359

TOTAL EXPENSES 65,751,552 - 65,751,552 61,707,422 - 61,707,422

1,684,954 - 1,684,954 1,244,626 - 1,244,626

Forgiveness of non-recourse debt 45,000 - 45,000 45,000 - 45,000

Unrealized gain on investment - - - 2,930,809 - 2,930,809

Realized gain on net sale of investments 3,597 - 3,597 171,000 - 171,000

NET ASSETS RELEASED FROM RESTRICTIONS 70,000 (70,000) - 70,000 (70,000) -

CHANGE IN NET ASSETS 1,803,551 (70,000) 1,733,551 4,461,435 (70,000) 4,391,435

NET ASSETS AT BEGINNING OF YEAR 15,696,919 1,510,000 17,206,919 11,235,484 1,580,000 12,815,484

NET ASSETS AT END OF YEAR 17,500,470$ 1,440,000$ 18,940,470$ 15,696,919$ 1,510,000$ 17,206,919$

2016 2015

Change in net assets before realized and unrealized gain on investment, gain from sale of property and forgiveness of debt


CITRUS HEALTH NETWORK, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

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2016 2015

CASH FLOWS FROM OPERATING ACTIVITIESChange in unrestricted net assets 1,733,551$ 4,391,435$ Adjustments to reconcile change in net assets to net

cash provided by operating activities: Depreciation and amortization 949,312 1,046,769 Unrealized gain of investments - (2,930,809) Change in allowance for doubtful accounts (1,214,083) 722,842

(Increase) Decrease in assets:Grants receivable (126,584) 419,659 Accounts receivable 1,903,823 (915,352) Prepaid expenses (144,328) 22,062 Advances and loans to sponsored companies, Net (3,115) (19,609) Inventory (49,932) 21,313 Deposits and other assets (90,683) (73,632)

Decrease in liabilities:Accounts payable and accrued expenses (1,240,500) (823,788)

Total adjustments (16,090) (2,530,545) NET CASH PROVIDED BY OPERATING ACTIVITIES 1,717,461 1,860,890

CASH FLOWS FROM INVESTING ACTIVITIESProperty and equipment acquisitions (183,193) (122,827) Proceeds from sale of investments 4,088,515 -

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,905,322 (122,827)

CASH FLOWS FROM FINANCING ACTIVITIESInstallment and other obligations including capital leases, net (891,802) (6,004,855) Proceeds from refinancing of long term debt - 5,700,000 Proceeds on line of credit 25,175 25,175 Repayment (Issuance) of promissory note 654,864 (654,864) Non-recourse mortgages - (45,000)

NET CASH USED IN FINANCING ACTIVITIES (211,763) (979,544)

NET INCREASE IN CASH 5,411,020 758,519

CASH AT BEGINNING OF YEAR 4,375,978 3,617,459

CASH AT YEAR END, including restricted cash 9,786,998$ 4,375,978$

CASH 9,742,472$ 4,336,650$ RESTRICTED CASH 44,526 39,328

TOTAL CASH 9,786,998$ 4,375,978$

SUPPLEMENTAL DISCLOSURES:2016 2015

Interest paid 283,725$ 382,583$

Debt incurred to purchase equipment 249,089$ 195,759$


CITRUS HEALTH NETWORK, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Citrus Health Network, Inc. (the "Center") was incorporated in the State of Florida on October 2, 1978 as a not-for-profit corporation for the purpose of providing behavioral health services. In 2004, the Health Resources and Services Administration (HRSA) designated Citrus Health Network, a Federally Qualified Health Center (FQHC). Citrus currently provides comprehensive primary health and behavioral health care services. Basis of Accounting The Center prepares its financial statements on the accrual basis of accounting principles generally accepted in the United States of America (“GAAP”). The Center prepares its financial statements in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”). The Center is required to report information regarding its financial position and activities according to three classes of net assets. Accordingly, net assets of the Center and changes therein are classified and reported as follows:

Unrestricted Net assets which are free of donor-imposed restrictions; all revenues, expenses, gains, and losses that are not changes in permanently or temporarily restricted net assets. Temporarily Restricted Net assets whose use by the Center is limited by donor-imposed stipulations that either expire by passage of time or that can be fulfilled or removed by actions of the Center pursuant to those stipulations. Permanently Restricted Net assets whose use by the Center is limited by donor-imposed stipulations that neither expire with the passage of time nor can be fulfilled or otherwise removed by actions of the Center.

Restricted Contributions Whose Restrictions Are Met in the Same Reporting Period Donor restricted contributions whose restrictions are met in the same reporting period, are reported as unrestricted within the unrestricted fund. Property and Equipment Property and equipment are recorded at cost. Depreciation, including the amortization of capitalized leases is provided for on the straight-line method over the estimated useful lives of the assets. Cost of major additions and improvements are capitalized and expenditures for maintenance and repairs which do not extend the useful life of the assets are expensed. Donated equipment is recorded at fair market value at the date of the gift. Impairment of Long-Lived Assets Management evaluates the recoverability of the investment in long lived assets on an ongoing basis and recognizes any impairment in the year of determination. Long-lived assets were tested for impairment as of June 30, 2016 and 2015, and in the opinion of management, there was no impairment. It is reasonably possible that relevant conditions could change in the near term and necessitate a change in management’s estimate of the recoverability of these assets.


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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Contributed Services Contributed services are reflected in the financial statements at the fair value of the services received. The contributions of services are recognized if the services received (a) create or enhance nonfinancial assets, or (b) require specialized skills that are provided by the individual possessing those skills and would typically need to be purchased if not provided by donation. Use of 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 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. Income Taxes The Center is exempt from income tax under Section 501(c) (3) of the Internal Revenue Code and therefore, has made no provision for federal income taxes in the accompanying financial statements. In addition, the Center qualifies for the charitable contribution deduction under Section 170 (b) (1) (A) and has been classified as an organization other than a private foundation under Section 509 (a) (2). There are no reserves held for uncertain tax positions at June 30, 2016 and 2015, respectively. Tax years that are open under the statute of limitations remain subject to examination by the IRS. The Center is generally no longer subject to U.S. Federal or State examinations by tax authorities for years before 2013. Accounts Receivable Accounts receivable are stated at the amount the Center expects to collect. The Center maintains allowances for doubtful accounts and for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. If the financial condition of the Center’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Center provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Center has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Cash and Cash Equivalents The Center considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Third-Party Reimbursements Net patient service revenue is reported at the estimated net realizable amounts from third-party payors. The Center participates in the Medicare Part A Partial Hospitalization Program. In connection with this program, the Center is required to file a Medicare cost report. In addition, because the Center is a federally qualified health center, the Center must prepare a FQHC cost report. Both reports are subject to audit. Any adjustments to the cost report are recorded in the year they become known.


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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Credit Risk The Center may, from time to time, be subject to credit risk to its cash and cash equivalent investments, which are placed with high credit-quality financial institutions. Allocation of Administrative & Indirect Costs Professional Support Services are allocated based on amounts budgeted by senior management and by way of analysis as to expenditures for each program. Main building costs are allocated by the square footage of each program. Pharmacy costs are allocated by prescriptions prescribed per program. Fair Value of Financial Instruments Unless otherwise indicated, the fair values of all reported assets and liabilities that are financial instruments approximate the carrying values of such amounts. NOTE 2 – GRANTS AND ACCOUNTS RECEIVABLE Grants and accounts receivable from awards, patients, and third-party payers consist of the following:

2016 2015Grants receivable 4,995,645$ 4,869,061$

Accounts receivable 5,592,012 7,495,835 Less: allowance for doubtful accounts (2,265,006) (3,479,089)

3,327,006$ 4,016,746$

During 2015, the Center wrote off a significant amount of accounts receivable against the allowance for doubtful accounts and reduced the allowance accordingly. NOTE 3 – RELATED PARTIES/ ADVANCES AND LOANS TO SPONSORED COMPANIES The amounts recorded as advances and loans to sponsored companies represent expenses paid on behalf of two affiliated organizations. The Center and these affiliated organizations share the same management and board of directors. There is no conflict of interest between the Center and these organizations since they operate within the same mission of Citrus Health Network. These advances will be repaid from future operations of the sponsored companies when funds are available and they obtain approval from the U.S. Department of Housing and Urban Development ("HUD"). The Center sponsors Buena Vista of Northwest Dade, Inc. ("Buena Vista"), a non-profit organization that owns and operates a housing facility for elderly and handicapped persons under HUD Section 202. As of June 30, 2016 and 2015, the Center had an outstanding balance of $234,598 and $220,685 due from Buena Vista used to fund operations. For the year ended June 30, 2016, Buena Vista had $828,895, and $566,713 in total assets and net assets. In addition, Buena Vista had $73,044 and $69,707 in total revenues for the years then ended June 30, 2016 and 2015, respectively.


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NOTE 3 – RELATED PARTIES/ ADVANCES AND LOANS TO SPONSORED COMPANIES (Continued) The Center also sponsors Northwest Dade Adult Residential Treatment Systems, Inc. ("NWDARTS"), a non-profit organization that owns and operates a multifamily residential apartment project for eligible families under HUD Section 202. At June 30, 2016 and 2015, the amount due to the Center aggregated $241,023 and $251,821, respectively, which has been fully allowed for. For the year ended June 30, 2016, NWDARTS had total assets of $366,157 and an accumulated deficit of $220,786. In addition, NWDARTS had $172,088 and $155,005 in total revenues for the years then ended June 30, 2016 and 2015, respectively.

2016 2015

Due from Buena Vista 234,598$ 220,685$ Due from NWDARTS 241,023 251,821

475,621 472,506 Less: allowance for doubtful accounts (273,511) (273,511)

202,110$ 198,995$

NOTE 4 – PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following:

Estimated Useful Life 2016 2015

Land 1,874,192$ 1,874,192$ Building and improvements 30 Years 12,502,161 12,476,116 Furniture, equipment and vehicles 5 Years 6,756,908 6,506,354 Leasehold improvements 5 Years 1,222,422 1,194,434

22,355,683 22,051,096 Less: accumulated depreciation and amortization (12,835,458) (12,013,841) Property and equipment, net 9,520,225$ 10,037,255$

Property and equipment serve as collateral on installment and mortgages payable as indicated in Note 5. Depreciation and amortization expense as of June 30, 2016 and 2015 was $949,312 and $1,046,769, respectively.


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NOTE 5 – INSTALLMENTS, MORTGAGES AND NOTES PAYABLE, LINE OF CREDIT AND CAPITAL LEASES Installments and other obligations consist of the following: Installments and Other Obligations 2016 2015Various notes payable with interest at 6.50% maturing through March2016, collateralized by vehicles. 13,451 15,744

On October 2014, the Center entered into a promissory note with afinancial institution in the amount of $5,700,000. The Note bearsinterest at a rate of 4.5% for the first five year period thereafter for aperiod of five years interest will be charged at the greater of Prime plus1.25% or 4.5%. The note requires 120 monthly consecutive principaland interest payments of $31,895 with a 25 year amortization. Allunpaid interest and principal is due on October 2024. 5,393,488 5,606,024

On October 2014, the Center entered into a line of credit agreement witha financial institution with a maximum borrowing amount of$2,500,000. The line of credit charges interest at the greater of Primeplus 1.25% or 4.5% with a floor interest rate of 4.5%. - 25,175

$ 5,406,939 $ 5,646,943 Less current portion (148,170) (125,145)Long term portion $ 5,258,769 $ 5,521,798

Both the promissory note and the line of credit are collateralized by substantially all the assets of the Center as well as any future lease receipts within its properties. Both the promissory note and the line of credit have certain restrictive covenants some of which require audited financial statements within a prescribed time after fiscal year end as well as a specific debt to service ratio. Non-Recourse Mortgages

2016 2015Non-Recourse mortgages to Miami-Dade County, interest at 1.0%,which provide for the forgiveness of 20% of outstanding principal andinterest annually during 2011 to 2016, subject to the Center's compliancewith the conditions and requirements of the mortgage, collateralized byreal property and assignment of rents. -$ 45,000$

Less current portion - (45,000) Long term portion -$ -$


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NOTE 5 – INSTALLMENTS, MORTGAGES AND NOTES PAYABLE, LINE OF CREDIT AND CAPITAL LEASES (Continued) Principal payments are due as follows:

Fiscal years ending June 30,2017 $ 148,170 2018 141,825 2019 148,010 2020 154,278 2021 162,094

Thereafter 4,652,562 Total $ 5,406,939

Capital Leases The Center has acquired equipment under the provisions of long-term leases. For financial reporting purposes, minimum lease payments relating to the equipment have been capitalized and included in equipment on the balance sheet. The leased equipment under capital leases as of June 30, 2016 has a cost of approximately $2,500,000. Amortization of the leased equipment is included in depreciation expense. The following is a schedule of future minimum lease payments under the capital leases:

Year Ended June 30, Amount

2017 523,796$ 2018 333,840 2019 102,813 Total 960,449

Less: Amount Attributable to Interest (2-5%) (51,363)

Total 909,086 Less: Current Portion (486,160)

Long-term Portion 422,926$

NOTE 6 – SUPPORT AND REVENUES Approximately 49% and 52% for the Center’s revenue is derived from federal, state and local government grants for the years ended June 30, 2016 and 2015, respectively. The current level of the Center’s operations and program services may be impacted or segments discontinued, if the funding is not renewed. The Center is dependent upon government support for its operation and the timeliness in which the grants are collected is essential to meet the normal cash flow needs of the Center. For financial statements purposes, grant revenue is recognized based on expenses incurred. The Center provides primary care and behavioral health services to residents of Miami-Dade County. Most of these patients are classified as indigent and/or are covered by Medicaid.


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NOTE 7 – COMMITMENTS AND CONTINGENCIES The Center has various non-cancelable operating leases for office equipment which expire at various dates through 2016 in the amount of approximately $81,000. Rent expense for the year ended June 30, 2016 and 2015 was approximately $7,000,000 and $5,700,000, respectively. A substantial portion (approximately $5,300,000 and $4,400,000, respectively) of the expense was payments that the Center paid on behalf of the individuals serviced by the Center. NOTE 8 – CONTRIBUTED SERVICES Contributed services recognized for the year ended June 30, 2016 and 2015, in the amount of approximately $125,000 and $98,000, respectively, represents in-kind services received from Miami-Dade School Board at no charge to support the Center's residential and day treatment programs. NOTE 9 – STATE EXCLUDED COSTS State excluded costs in the accompanying schedule of functional expenses totaled approximately $320,000 and $204,000 for the year ended June 30, 2016 and 2015, respectively. NOTE 10 – FAIR VALUE MEASUREMENTS For the year ended June 30, 2016 and 2015, the Center adapted FASB ASC, Fair Value Measurements, which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority, Level 2 inputs consist of observable inputs other than quoted prices for identical assets, and Level 3 inputs have the lowest priority. The Center uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, the Center measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3 inputs were used only when Level 1 or Level 2 inputs were not available. FASB ASC establishes a three-level valuation hierarchy for measurement and disclosure of fair value. The valuation hierarchy is based upon the transparency of inputs used to measure fair value. The three levels are as follows:

Level 1 – asset value is based on actual quoted prices in active markets for identical securities (mark-to-market). Level 2 – other significant observable inputs are used to arrive at fair value (including yield, quality, coupon rate, maturity, issue type, quoted prices for similar securities, prepayment speeds, trading characteristics, etc.). Level 3 – significant unobservable inputs (including management’s own assumptions in determining the fair value of investments).


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NOTE 10 – FAIR VALUE MEASUREMENTS (Continued) The Center’s investments are reported at fair value in the accompanying statements. June 30, 2016

Quoted Prices in Active

Markets for Identical Assets

Significant Other

Observable Inputs

Significant Unobservable

Inputs

Fair Value (Level 1) (Level 2) (Level 3)

Investment 316,000$ $ - -$ $ 316,000

316,000$ $ - -$ 316,000$

Fair Value Measurements Using:

June 30, 2015

Quoted Prices in Active

Markets for Identical Assets

Significant Other

Observable Inputs

Significant Unobservable

Inputs

Fair Value (Level 1) (Level 2) (Level 3)

Investment 4,404,515$ $ 4,088,515 -$ $ 316,000

4,404,515$ $ 4,088,515 -$ 316,000$

Fair Value Measurements Using:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

InvestmentBalance at June 30, 2015 316,000$ Total Gains - Purchases - Balance at June 30, 2016 316,000$

Investments are recorded at cost. The Center’s management believes that the fair value of these investments approximate its cost.


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NOTE 11 – INVESTMENTS The Center holds interest in several Companies: Prestige Health Choice, Inc., (“PHC”) Pediatric and Family Urgent Care Centers of South Florida Inc., Citrus Health Holding, Inc. and Florida Premier, Inc.

Prestige Health Choice, Inc. PHC is a managed care organization that has been authorized by the State of Florida and is owned by Health Choice Network, Inc. The Center purchased an interest in PHC in order to be eligible to participate in the managed care organization upon its evolvement. PHC commenced operations in 2007. During 2014, PHC converted from a Limited Liability Company to a C-Corporation. The Center received an ownership interest of 2.597% and total number of shares of 25,974. On June 30, 2014, the Center purchased 9,108 additional shares, at $33 par value. At June 30, 2014, the Center has 35,082 total numbers of shares, including 9,108 shares with an effective date of July 1, 2014, with a market value $1,157,706. For the year ended June 30, 2014, the Center received proceeds from PHC of approximately $410,000. In June of 2015, the Center entered into an agreement with an independent third party to sell their interest in Prestige Health Choice, L.L.C. for $4,088,515 but did not close until subsequent to the year then ended June 30, 2015. As the Fair Market value was determinable the investment as of June 30, 2015 was adjusted accordingly reflecting an unrealized gain of $2,930,809 for the year ended June 30, 2015. The cash proceeds where collected during the fiscal year needed June 30, 2016. As part of the agreement of the sale of Prestige Health Choice, L.L.C. the Organization has the potential to receive additional funds for the four consecutive years based on a formula where Prestige meets certain performance metrics. As of June 30, 2016 and 2015 the future amounts to be received are indeterminable and therefore not recorded. For the year ended June 30, 2016 and 2015, the Center received proceeds from PHC of approximately $0, and $169,000 respectively. Health Choice Care, LLC In 2015, the Center entered into a membership interest purchase agreement with Health Choice Care (“HCC”). HCC was formed as an Accountable Care Organization to contract with the Centers for Medicare and Medicaid services. The Center has an investment of 1,000 units in the amount of $100,000 during fiscal year ended June 30, 2016 and 2015. Citrus Health Holdings, Inc. and Florida Premier The Center has investments in Citrus Health Holding, Inc. and Florida Premier, Inc. for $50,000, for the years ended June 30, 2016 and 2015. Pediatric and Family Urgent Care Centers of South Florida, Inc. and Pediatric Family Clinics The Center has an investment in Pediatric and Family Urgent Care Centers of South Florida, Inc. and Pediatric Family Clinics in the amount of $150,000 as of June 30, 2016 and 2015.

At June 30, 2016 and 2015, respectively, total investments amounted to $316,000 and $4,405,515, which includes Pediatric and Family Urgent Care Centers of South Florida, Inc., Citrus Health Holding, Inc., Florida Premier, Inc. and Health Choice Care, LLC.


15

NOTE 12 – LITIGATION Counsel for the Center has indicated that there are several litigation cases pending against the Center. Counsel and management have indicated that the cases are covered by insurance. Management of the Center has indicated that an adjustment is not needed to these financial statements because any loss contingency would be covered by the Center’s liability insurance. NOTE 13 – SUPPORT FROM OUTSIDE AGENCIES The Center receives a substantial amount of its support from federal, state, and local government grants and contracts. Accordingly, the Center is subject to audit examination by its funding sources to determine compliance with grant conditions. In the event that expenditures would be disallowed, repayment may be required.

NOTE 14 – TEMPORARILY RESTRICTED NET ASSETS In prior years, the County contributed $2,000,000 towards the acquisition of a building, with the condition that the Center continues operating as a facility benefiting the public for at least 25 to 30 years. Accordingly each year, $70,000 of the $2,000,000 will be released from restriction. The balance in the temporarily restricted net assets at June 30, 2016 and 2015 is $1,440,000 and $1,510,000, respectively and the assets are classified under property and equipment in the Statements of Financial Position. NOTE 15 – NOTES RECEIVABLE During 2015, the Center entered into three separate promissory notes receivables with Prestige Health Choice, LLC for a total principal amount of $631,476 and accrues interest at 8%. As of June 30, 2015 the total outstanding note receivable was $654,864. The note was paid in full in October 2015.

SUPPLEMENTARY INFORMATION

CITRUS HEALTH NETWORK, INC. STATEMENT OF FUNCTIONAL EXPENSES AND COST CENTER EXPENSES SCHEDULEFOR THE YEAR ENDED JUNE 30, 2016

Comprehensive

Expense Categories Community Program

Case Community Service Crisis Crisis Foster Health Housing Medical Sub

Management C-Cat Support Team Stabilization Support DJJ Fact Team Care Connectors Programs MAI Services Outpatient Pharmacy Total

A. Personnel Expenses

(1) Salaries 1,381,213$ 449,800$ 2,066,497$ 749,192$ 4,255,239$ 1,305,176$ 476,978$ 1,301,314$ 2,449,186$ 79,930$ 2,463,480$ -$ 8,517,240$ 228,896$ 499,888$ 26,224,029$

(2) Fringe benefits 233,332 89,171 366,866 170,293 717,759 247,493 96,349 260,381 484,044 21,790 521,003 367 1,342,070 66,295 87,551 4,704,764

Total Personnel Expenses 1,614,545 538,971 2,433,363 919,485 4,972,998 1,552,669 573,327 1,561,695 2,933,230 101,720 2,984,483 367 9,859,310 295,191 587,439 30,928,793

B. Other expenses

(1) Building occupancy 88,845 6,020 476,109 17,673 8,137 12,884 2,350 14,716 30,622 1,818 400,906 200 427,158 2,315 4,877 1,494,630

(2) Professional services - - 2,088 - 11,585 - - - 100,987 2,000 - - 31,121 7,280 16,519 171,580

(3) Travel 3,341 15,024 4,372 11,647 3,342 12,796 769 1,017 30,481 426 45,413 415 30,671 15 2,617 162,346

(4) Equipment 18,665 2,572 34,247 4,195 19,119 8,716 1,234 1,744 4,820 - 21,673 - 116,510 2,269 16,010 251,774

(5) Food Services 1,089 800 330,090 827 320,731 1,616 175 6,984 8,696 100 510 - 24,716 3,430 359 700,123

(6) Medical & Pharmacy - 899 2,437 - 167,384 - 459 4,523 33 - 29,970 - 263,748 11,635 1,010,120 1,491,208

(7) Subcontracted Services 13 - 182,321 - 1,722 302,956 - - 1,244,675 42,672 2,752 - 164,431 29,475 40,818 2,011,835

(8) Insurance 20,124 11,847 18,512 2,960 49,629 14,101 2,744 27,478 9,902 237 31,241 34 40,617 2,520 1,352 233,298

(9) Interest 155 - 45 - - - - - - - - - 21,465 - - 21,665

(10) Operating Supplies 9,423 5,901 34,909 1,887 105,404 6,515 751 7,824 7,906 1,851 20,152 3 85,646 741 5,030 293,943

(11) Other Expense - Client Cost 72,375 22,012 94,530 92,749 56,971 1,279 - 482,302 37,953 - 5,177,902 - 7,212 470 - 6,045,755

(12) Other Expense - E.H.R. 10,898 11,919 11,184 10,277 6,865 3,788 2,869 2,516 12,340 365 9,916 - 597,198 420 562 681,117

(13) Other Expense - Miscellaneous 3,729 1,849 17,395 1,577 21,581 3,738 1,915 1,454 19,143 173 15,352 - 68,367 4,685 3,995 164,953

(14) Other Expense - Transportation 27,475 1,685 36,969 32,365 12,049 19,300 3,467 60,954 75,487 - 39,285 - 2,886 - - 311,922

(15) In-Kind 1,150 - 245,376 - 31,896 - - - - - - - - - 515,284 793,706

(16) Unallowable Costs 4,986 - 2,837 2,797 8,933 1,704 - 3,967 9,709 - 2,600 - 8,897 - 85 46,515

-

Total Other Expenses 262,268 80,528 1,493,421 178,954 825,348 389,393 16,733 615,479 1,592,754 49,642 5,797,672 652 1,890,643 65,255 1,617,628 14,876,370

Total Personnel and Other Expenses 1,876,813 619,499 3,926,784 1,098,439 5,798,346 1,942,062 590,060 2,177,174 4,525,984 151,362 8,782,155 1,019 11,749,953 360,446 2,205,067 45,805,163

C. Distributed Costs

Main Building Costs 25,971 13,954 12,267 11,960 539,931 81,632 13,954 66,413 56,715 - - - 296,456 - 31,625 1,150,878

Other Support 103,764 34,573 202,859 55,258 305,229 102,299 31,109 115,172 238,106 7,980 352,513 54 633,446 4,568 91,369 2,278,299

Administration 155,353 46,310 308,965 86,248 450,447 150,970 45,910 169,967 351,390 11,777 683,561 91 934,820 6,741 134,840 3,537,390

Total Distributed Indirect Costs 285,088 94,837 524,091 153,466 1,295,607 334,901 90,973 351,552 646,211 19,757 1,036,074 145 1,864,722 11,309 257,834 6,966,567

Total Operating Expenses 2,161,901 714,336 4,450,875 1,251,905 7,093,953 2,276,963 681,033 2,528,726 5,172,195 171,119 9,818,229 1,164 13,614,675 371,755 2,462,901 52,771,730

D. Unallowable Costs 4,986 - 2,837 2,797 8,933 1,704 - 3,967 9,709 - 2,600 - 8,897 - 85 46,515

Allowable Operating Expenses 2,156,915 714,336 4,448,038 1,249,108 7,085,020 2,275,259 681,033 2,524,759 5,162,486 171,119 9,815,629 1,164 13,605,778 371,755 2,462,816 52,725,215

E. Capital Expenditures -$ -$ 10,100$ -$ 1,960$ -$ -$ 28,030$ -$ -$ -$ -$ 57,980$ -$ 9,396$ 107,466$

16

Program Services

CITRUS HEALTH NETWORK, INC.STATEMENT OF FUNCTIONAL EXPENSES AND COST CENTER EXPENSES SCHEDULEFOR THE YEAR ENDED JUNE 30, 2016

Residential Screening Short-term UW Other

Tx. School Follow Up & Residential Mental Program Support

Expense Categories Prevention Residential Center Ryan Health Early Tx. Center Health Sub Program General and Other Services Combined

Intervention Level II Licensing White Programs Intervention Licensing Collaboration Total Total Buildings Administrative Support Total Totals

A. Personnel Expenses

(1) Salaries 242,191$ 528,099$ 3,206,561$ 107,614$ 1,417,021$ 557,802$ 1,441,516$ 205,114$ 7,705,918$ 33,929,947$ 248,045$ 3,438,872$ 186,433$ 3,873,350$ 37,803,297$

(2) Fringe benefits 41,910 111,087 529,064 27,636 235,321 129,861 212,263 36,439 1,323,581 6,028,345 50,780 763,747 30,556 845,083 6,873,428

Total Personnel Expenses 284,101 639,186 3,735,625 135,250 1,652,342 687,663 1,653,779 241,553 9,029,499 39,958,292 298,825 4,202,619 216,989 4,718,433 44,676,725

B. Other expenses

(1) Building occupancy - 95,058 341,235 - 9,525 73,742 127,169 3,275 650,004 2,144,634 607,707 144,431 - 752,137 2,896,771

(2) Professional services - 1,000 5,305 - 2,000 - 1,000 - 9,305 180,885 1,500 388,196 - 389,696 570,581

(3) Travel 1,643 3,684 1,849 - 831 31 460 4,527 13,025 175,371 358 52,711 469 53,538 228,909

(4) Equipment 881 15,555 26,965 567 12,864 4,243 6,808 1,297 69,180 320,954 48,872 458,135 1,502 508,509 829,463

(5) Food Services 283 59,536 180,154 225 1,189 248 100,759 137 342,531 1,042,654 1,183 23,055 150 24,388 1,067,042

(6) Medical & Pharmacy - 18,431 57,690 50,399 26,066 - 2,831 - 155,417 1,646,625 100 - - 100 1,646,725

(7) Subcontracted Services - (76) 38,005 - - 26,400 - - 64,329 2,076,164 33,120 333,186 - 366,306 2,442,470

(8) Insurance 630 23,094 27,238 338 4,032 1,659 9,458 649 67,098 300,396 20,489 40,382 524 61,395 361,791

(9) Interest - 525 45 - - - 45 - 615 22,280 42,931 218,513 - 261,444 283,724

(10) Operating Supplies 9,741 19,786 109,357 2,103 14,828 5,779 35,744 5,921 203,259 497,202 53,879 109,312 1,185 164,376 661,578

(11) Other Expense - Client Cost - 3,799 158,316 60,523 - 122 5,385 - 228,145 6,273,900 - 40 - 40 6,273,940

(12) Other Expense - E.H.R. 381 2,835 5,933 35 1,462 15,233 - 2,568 28,447 709,564 16,779 546,225 135 563,139 1,272,703

(13) Other Expense - Miscellaneous 1,273 7,355 12,237 30 3,668 2,949 11,609 3,571 42,692 207,645 14,156 516,736 484 531,376 739,021

(14) Other Expense - Transportation 1,100 46,546 14,213 - 1,380 17,808 3,961 1,200 86,208 398,130 17,783 26,247 - 44,030 442,160

(15) In-Kind - 76,968 168,166 - - - - - 245,134 1,038,840 - - - - 1,038,840

(16) Unallowable Costs - 2,218 4,037 - 2,837 - 115 2,703 11,910 58,425 85 259,420 1,178 260,683 319,108

Total Other Expenses 15,932 376,314 1,150,745 114,220 80,682 148,214 305,344 25,848 2,217,299 17,093,669 858,942 3,116,589 5,627 3,981,158 21,074,827

Total Personnel and Other Expenses 300,033 1,015,500 4,886,370 249,470 1,733,024 835,877 1,959,123 267,401 11,246,798 57,051,961 1,157,767 7,319,208 222,616 8,699,591 65,751,552

C. Distributed Costs

Main Building Costs - - - - 6,804 - - - 6,804 1,157,682 (1,157,682) - - (1,157,682) -

Other Support 15,818 74,347 257,406 13,153 91,219 44,069 103,282 13,955 613,249 2,891,548 - - (2,891,548) (2,891,548) -

Administration 23,344 57,004 379,872 19,410 134,618 65,036 152,421 20,595 852,300 4,389,690 - (4,389,690) - (4,389,690) -

Total Distributed Indirect Costs 39,162 131,351 637,278 32,563 232,641 109,105 255,703 34,550 1,472,353 8,438,920 (1,157,682) (4,389,690) (2,891,548) (8,438,920) -

Total Operating Expenses 339,195 1,146,851 5,523,648 282,033 1,965,665 944,982 2,214,826 301,951 12,719,151 65,490,881 85 2,929,518 (2,668,932) 260,671 65,751,552

D. Unallowable Costs - 2,218 4,037 - 2,837 - 115 2,703 11,910 58,425 85 259,420 1,178 260,683 319,108

Allowable Operating Expenses 339,195 1,144,633 5,519,611 282,033 1,962,828 944,982 2,214,711 299,248 12,707,241 65,432,456 - 2,670,098 (2,670,110) (12) 65,432,444

E. Capital Expenditures -$ 9,400$ -$ -$ -$ -$ 2,500$ -$ 11,900$ 119,366$ 33,800$ 287,480$ -$ 321,280$ 440,646$

17

Program Services Support Services

CITRUS HEALTH NETWORK, INC.SCHEDULE OF STATE EARNINGSFOR THE YEAR ENDED JUNE 30, 2016

South Florida Behavioral

Health Network1. Total Expenditures 65,751,558$

2. Less Other State and Federal Funds (46,095,813)

3. Less Non-Match SAMH Funds (5,710,382)

4. Less Unallowable Costs Per 65E-14, FAC (319,110)

5. Total Allowable Expenditures(Sum of lines 1,2,3, and 4) 13,626,253

6. Maximum Available Earnings(Line 5 times 75%) 10,219,690

7. Amount of State Funds Requiring Match 6,547,789

8. Amount Due to Department(Subtract line 7 from line 6) -$

See accompanying note to the statement of functional expenses and cost center expenses,schedules of state earnings, revenues, and funding sources, and bed day availability.

18

CITRUS HEALTH NETWORK, INC.SCHEDULE OF REVENUES AND FUNDING SOURCESFOR THE YEAR ENDED JUNE 30, 2016

Prevention - Substance Total for State Total for Non-StateFunding Sources/Revenues Case Crisis Crisis Intervention Outpatient Universal Abuse Incidental FACT Short-term CCST - Supportive SAMH Funded SAMH Funded Total SAMH Non-SAMH

Management Stabilization Support - Individual - Individual Outreach Direct Detox Expenses Team Residential Tx. Individual Housing Cost Centers Cost Centers Cost Centers Cost Center TotalSECTION I STATE SAMH FUNDSAdult Mental Health $ 223,070 $ 2,020,951 $ 600,000 $ - $ 561,965 $ 186,345 $ - $ - $ 550,050 $ 1,861,609 $ 2,232,915 $ - $ 3,627 $ 8,240,532 $ - $ 8,240,532 $ - $ 8,240,532 Children Mental Health - 1,220,499 745,077 - - - - - 16,485 - - 790,197 - 2,772,258 - 2,772,258 197,661 2,969,919 Adult Substance Abuse - - - - - 23,040 - - - - - - - 23,040 - 23,040 - 23,040 Children Substance Abuse - - - 77,298 - - 291,420 1,010,336 - - - - - 1,379,054 - 1,379,054 - 1,379,054

TOTAL STATE SAMH FUNDING 223,070 3,241,450 1,345,077 77,298 561,965 209,385 291,420 1,010,336 566,535 1,861,609 2,232,915 790,197 3,627 12,414,884 - 12,414,884 197,661 12,612,545 SECTION II OTHER GOV FUNDSOther State Agency Funding - - - 154,291 - - - - - 22,500 - - - 176,791 427,311 604,102 2,034,859 2,638,961 Medicaid 1,455 1,603,861 203,971 53,795 108,424 - - - - 65 229 245,648 - 2,217,448 11,216,859 13,434,307 12,550,747 25,985,054 Local - 2,358 64,946 - - - - - - - - - - 67,304 6,016,234 6,083,538 4,047 6,087,585 Federal Grants and Contracts - 39,519 - - - - - - - - - - - 39,519 8,869,945 8,909,464 2,474,752 11,384,216

TOTAL OTHER GOV FUNDS 1,455 1,645,738 268,917 208,086 108,424 - - - - 22,565 229 245,648 - 2,501,062 26,530,349 29,031,411 17,064,405 46,095,816 SECTION III ALL OTHER REVENUESFirst & Second Party Payments 74 507,745 53,732 74,524 80,324 - - - - - 3,784 - - 720,183 4,264,536 4,984,719 117,281 5,102,000 Third Party Payments - 31,000 - - 3,345 - - - - - - 648 - 34,993 588,605 623,598 375 623,973 Medicare - 38,592 - - 1,964 - - - - - - - - 40,556 1,493,791 1,534,347 - 1,534,347 Contributions and Donations - - - - - - - - - - - - - - 70,856 70,856 - 70,856 Other - 1,000 - - - - - - - 85 - - 1,085 405,074 406,159 567 406,726 In Kind - 29,516 - - - - - - - - - - - 29,516 592,252 621,768 417,072 1,038,840

TOTAL ALL OTHER REVENUES 74 606,853 54,732 74,524 85,633 - - - - - 3,869 648 - 826,333 7,415,114 8,241,447 535,295 8,776,742

REVENUES FROM PROGRAMS $ 224,599 $ 5,494,041 $ 1,668,726 $ 359,908 $ 756,022 $ 209,385 $ 291,420 $ 1,010,336 $ 566,535 $ 1,884,174 $ 2,237,013 $ 1,036,493 $ 3,627 $ 15,742,279 $ 33,945,463 $ 49,687,742 $ 17,797,361 $ 67,485,103

Total Revenues from Administration,and Other Support 3,299,259

TOTAL FUNDING $ 70,784,362


19

CITRUS HEALTH NETWORK, INC.SCHEDULE OF REVENUES AND FUNDING SOURCESFOR THE YEAR ENDED JUNE 30, 2016

Prevention - SubstanceCase Crisis Crisis Intervention Outpatient Universal Abuse Incidental FACT Short-term CCST - Supportive Total for Non State Total for All

EXPENSE CATEGORIES Management Stabilization Support - Individual - Individual Outreach Direct Detox Expenses Team Residential Tx. Individual Housing SAMH Funded Funded SAMH SAMH Funded Non-SAMH Other Support Administration Grand TotalA. Personnel Expenses (1) Salaries 152,654$ 3,603,888$ 1,222,192$ 218,355$ 659,416$ 194,341$ 242,191$ 651,351$ -$ 1,301,314$ 1,441,516$ 533,211$ -$ 10,220,429$ 14,035,209$ 24,229,543$ 9,674,309$ 1,327,699$ 2,545,651$ 37,803,297$ (2) Fringe Benefits 26,075 606,663 234,974 46,949 112,960 33,275 41,910 111,096 - 269,514 212,263 123,024 - 1,818,703 2,475,457 4,289,722 1,734,184 328,380 516,703 6,873,425 Total Personnel Expenses 178,729 4,210,551 1,457,166 265,304 772,376 227,616 284,101 762,447 - 1,570,828 1,653,779 656,235 - 12,039,132 16,510,666 28,519,265 11,408,493 1,656,079 3,062,354 44,676,722

B. Other expenses (1) Building occupancy 2,584 7,267 12,884 1,200 2,091 575 - 869 - 14,716 127,169 14,223 - 183,578 1,027,842 1,211,420 933,212 720,900 31,237 2,896,769 (2) Professional services - 11,585 - - - - - - - - 1,000 - - 12,585 60,035 72,620 108,264 153,895 235,802 570,581 (3) Travel 3,607 2,980 3,546 806 5,223 1,438 1,643 361 - 1,017 460 3,026 - 24,107 89,378 113,485 61,886 9,806 43,737 228,914 (4) Equipment 181 15,680 8,663 1,234 482 133 881 3,439 - 3,621 6,808 1,523 - 42,645 191,013 233,658 87,299 488,722 19,787 829,466 (5) Food Services 14 278,201 1,616 100 38 11 283 42,530 - 7,284 100,759 464 - 431,300 92,282 523,582 519,071 3,276 21,112 1,067,041 (6) Medical & Pharmacy - 145,432 - 459 - - - 21,953 - 4,523 2,831 - - 175,198 1,412,351 1,587,549 59,075 100 - 1,646,724 (7) Subcontracted Services - 1,722 66,499 - - - - - - - - - - 68,221 395,115 463,336 1,612,828 50,302 316,004 2,442,470 (8) Insurance 420 41,526 13,781 2,070 410 113 630 8,103 - 27,478 9,458 2,283 - 106,272 106,622 212,894 87,500 58,755 2,640 361,789 (9) Interest - - - - - - - - - - 45 - - 45 21,991 22,036 245 93,474 167,971 283,726 (10) Operating Supplies 220 88,613 6,375 237 363 100 9,741 16,791 - 7,824 35,744 1,289 - 167,297 161,942 329,239 167,966 123,647 40,730 661,582 (11) Other Expense - Client Cost 6,743 55,509 1,279 - - 408 - 1,462 566,535 - 5,385 3,606 3,432 644,359 5,394,295 6,038,654 235,246 - 40 6,273,940 (12) Other Expense - E.H.R. 2,545 5,966 3,012 2,869 2,787 - 381 899 - 2,516 - 6,670 - 27,645 628,868 656,513 53,050 509,846 53,293 1,272,702 (13) Other Expense - Miscellaneous 155 18,824 3,650 1,801 172 47 1,273 2,756 - 1,454 11,609 1,292 - 43,033 119,629 162,662 44,980 155,581 375,794 739,017 (14) Other Expense - Transportation 256 10,586 17,500 3,467 681 188 1,100 1,464 - 60,954 3,961 31,240 - 131,397 109,405 240,802 157,328 17,783 26,247 442,160 (15) In-Kind - 7,762 1,704 - - - - 1,171 - 3,967 115 2,797 - 17,516 19,431 36,947 21,479 8,499 252,184 319,109 (16) Unallowable Costs - 21,264 - - - - - 10,632 - - - - - 31,896 592,252 624,148 414,692 - - 1,038,840 Total Other Expenses 16,725 712,917 140,509 14,243 12,247 3,013 15,932 112,430 566,535 135,354 305,344 68,413 3,432 2,107,094 10,422,451 12,529,545 4,564,121 2,394,586 1,586,578 21,074,830

Total Personnel and Other Expenses 195,454 4,923,468 1,597,675 279,547 784,623 230,629 300,033 874,877 566,535 1,706,182 1,959,123 724,648 3,432 14,146,226 26,933,117 41,048,810 15,972,614 4,050,665 4,648,932 65,751,552

C. Distributed Indiret Costs Other Support 10,842 707,990 157,801 28,690 14,735 3,043 15,818 126,421 - 181,585 103,282 48,977 278 1,399,462 1,692,177 3,091,639 950,526 (4,042,165) - - Administration 16,000 382,468 124,175 21,717 21,745 4,490 23,344 67,979 - 171,596 152,421 59,328 410 1,045,673 2,109,471 3,155,144 1,241,580 - (4,396,724) - Total Distributed Indirect Costs 26,842 1,090,458 281,976 50,407 36,480 7,533 39,162 194,400 - 353,181 255,703 108,305 688 2,445,135 3,801,648 6,246,783 2,192,106 (4,042,165) (4,396,724) -

Total Operating Expenses 222,296 6,013,926.0 1,879,651 329,954 821,103 238,162 339,195 1,069,277 566,535 2,059,363 2,214,826 832,953 4,120 16,591,361 30,734,765 47,295,593 18,164,720 8,500 252,215 65,751,559

D. Unallowable Costs - 8,933 1,704 - - - - - - 3,967 115 2,797 - 17,517 19,431 36,948 21,479 8,500 252,215 319,142

Allowable Operating Expenses 222,296 6,004,993 1,877,947 329,954 821,103 238,162 339,195 1,069,277 566,535 2,055,396 2,214,711 830,156 4,120 16,573,844 30,715,334 47,258,645 18,143,241 - (0.05) 65,432,417

E. Capital Expenditures - 1,960 - - - - 28,030 2,500 - - - 80,556 - 10,100 292,398 28,882 444,425

20

CITRUS HEALTH NETWORK, INC.SCHEDULE OF BED DAY AVAILABILITY PAYMENTSFOR THE YEAR ENDED JUNE 30, 2016

Total Units ofService Paid

for by 3rdParty Maximum # of

Contracts, Units EligibleState Total Units of Local Govt. or for Payment Amount Paid for Maximum $

Contracted Service Other State by Services by the Value of Units Amount OwedProgram Cost Center Rate Provided Agencies Department Department in Column F to Department

(G-H or $0, whichever is

(D-E) (F x C) greater)A B C D E F G H I

Children's Mental Health Crisis Stabilization Unit 376.71$ 8,408 2,306 6,102 1,220,499$ 2,298,684$ -$ Adult Mental Health Crisis Stabilization Unit 376.71$ 8,784 1,884 6,900 1,572,467$ 2,599,299$ -$

Total Amount Owed to Department = -$


21

CITRUS HEALTH NETWORK, INC. NOTE TO THE STATEMENT OF FUNCTIONAL EXPENSES AND COST CENTER EXPENSE SCHEDULE, SCHEDULE OF STATE EARNINGS, REVENUES, REVENUES AND FUNDING SOURCES, AND BED DAY AVAILABILITY PAYMENTS FOR THE YEAR ENDED JUNE 30, 2016

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General The Statement of Functional Expenses and Cost Center Expense Schedule, Schedule of State Earnings, Revenues, Revenues and Funding Sources, and Bed Day Availability Payments were prepared in accordance with the requirements in the South Florida Behavioral Network Contract ME-225-6-08 and ME-225-5-08.

CITRUS HEALTH NETWORK, INC.SCHEDULE OF STATE FINANCIAL ASSISTANCEFOR THE YEAR ENDED JUNE 30, 2016

State State Transfer State Agency / Pass-Through Grantor CSFA Contract toProgram Title Number Number Expenditure Subrecipients

Department of Children and FamiliesCommunity Action Teams 60.150 KH227 748,334$ -$

Department of Juvenile JusticeBehavioral Health Services Other N/A 32,050 - Level of Care Assessments Other N/A 122,241 -

Our KidsOut-of-Home Supports 60.074 N/A 2,231 - Independent Living Program 60.112 N/A 193,941 - CBC-Sexually Exploited Children 60.138 N/A 823,779 -

South Florida Behavioral NetworkForensic Services and Competency Restoration Training 60.114 KH225 38,203 - SAMH- Crisis Prevention and Stabilization Services 60.155 KH225 455,000 -

2,415,779$ -$

See accompanying note to the schedules of statefinancial assistance and federal awards.

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CITRUS HEALTH NETWORK, INC.SCHEDULE OF FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30, 2016 Federal Grantor/ Federal Transfer Pass-through Grantor/ CFDA Contract toProgram Title Number Number Expenditure SubrecipientsU.S. Department of Health and Human Services:

Consolidated Health Centers 93.224 H80CS04214 2,245,680$ $ - Substance Abuse and Mental Health 93.243 5 H79 SM062314-02 266,666

Pass-through Florida Department of Children and Families:Refugee and Entrant Assistance_Discretionary Grants 93.576 XK008/TA11 247,269 -

Pass-through South Florida Behavioral Health Network:Temporary Assistance for Needy Families 93.558 KH225 113,866 Block Grants for Community Mental Health Services 93.958 KH225 9,689,899 - Medical Assistance Program 93.778 KH225 477,701 -

93.104 KH225 238,119 Block Grants for Prevention and Treatment of Substance Abuse 93.959 KH225 1,402,095 -

Pass-through Miami-Dade County Department of Health and Human Services:Special Supplemental Nutrition Program for Women, Infants, and Children 10.557 N/A 63,256 -

Pass-through Our Kids of Miami-Dade/Monroe, Inc. Department of Health and Human Services:

Temporary Assistance for Needy Families 93.558 401.0481/401.0482/401.0483 7,814 - Stephanie Tubbs Jones Child Welfare Services Program 93.645 401.0481/401.0482/401.0483 2,566 - Promoting Safe and Stable Families 93.556 401.0481/401.0482/401.0483 520,640 - Foster Care - Title IV-E 93.658 401.0481/401.0482/401.0483 211,897 - Adoption Assistance 93.659 401.0481/401.0482/401.0483 3,437 - Social Services Block Grant 93.667 401.0481/401.0482/401.0483 104,308 - Chafee Foster Care Independence Program 93.674 401.0481/401.0482/401.0483 100,630 - Child Abuse and Neglect Discretionary Activities 93.670 401.0481/401.0482/401.0483 400 -

Pass-through Early Learning Coalition of Miami-Dade/Monroe:Child Care and Development Block Grant 93.575 C14-110 & C13-104 871,699 -

Pass-through Childnet:Foster Care - Title IV-E 93.658 JJ212 115,002 - Social Services Block Grant 93.667 JJ212 2 - Block Grants for Community Mental Health Services 93.958 CIT15RAP 62,755 -

U.S. Department of Housing and Urban Development:Community Development Block Grants/Entlement Grants 14.231 2015-16 37,243 -

Pass-through Miami Dade County:Emergency Solutions Grant Program 14.231 FY 2014 180,060 - HIV Emergency Relief Project Grants 93.914 BU034 & BU0325 146,155 -

Pass-through Miami-Dade County Homeless Trust:Continuum of Care Program 14.267 15,591 - Supportive Housing Program 14.267 FL0176L4D001407 518,433 -

Supportive Housing Program 14.267FL0214L4D001306 &

FL214L4D001407 905,893 -

Supportive Housing Program 14.267FL0227L4D001306 &

FL0227L4D001407 389,699 - Supportive Housing Program 14.267 FL0431LL4D0031302 & 1,691,296 - Supportive Housing Program 14.267 FL0184L4D001407 203,317 - Supportive Housing Program 14.267 FL0195L4D001407 322,120 - Supportive Housing Program 14.267 FL0226L4D001306 169,124 - Supportive Housing Program 14.267 FL023224D001306 & 56,141 - Supportive Housing Program 14.267 FL0187L4D001306 80,145 - Supportive Housing Program 14.267 FL0180L4D001306 & 346,819 - Supportive Housing Program 14.267 FL0495L4D001300 & 267,464 -

Pass-through Better Way of Miami Supportive Housing, Inc:Supportive Housing Program 14.235 6,748 -

Pass-through Lutheran Services of Florida:Continuum of Care Program 14.267 FL0218L4D1205 & 103,591 - Continuum of Care Program 14.267 FL0168L4D1306 72,220 -

Pass-through City of Hialeah:Emergency Solutions Grant Program 14.231 K2014-004 154,491 - Emergency Solutions Grant Program 14.231 K2015-078 170,590 -

Pass-through City of Miami:Emergency Solution Grant Program 14.231 FY2013-2016 166,812 -

Pass-through Health Choice of Network:Cancer Cause and Prevention Research 93.393 48,565 - Cancer Centers Support Grants 93.397 32,185 -

U.S. Department of Transportation:Pass-through Department of Transportation:

Enhanced Mobility of Seniors and Individuals with Disabilities 20.513 N/A 50,762 -

U.S. Department of Veteran Affairs:Pass-through The Advocate Program

VA Supportive Services for Veteran Families Program 64.033 N/A 126,091 -

23,007,256$ -$

See accompanying note to the schedules of statefinancial assistance and federal awards.

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Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances

CITRUS HEALTH NETWORK, INC. NOTES TO THE SCHEDULES OF STATE FINANCIAL ASSISTANCE AND FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2016

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1. General

The accompanying Schedules of State Financial Assistance and Federal Awards (the "Schedules") presents the activity of all state and federal award programs of Citrus Health Network, Inc for the year ended June 30, 2016. All federal and state awards received directly from federal and state agencies, as well as federal and state awards received from other government agencies are included in the Schedules. The information in these schedules is in accordance with U.S. Office of Management and Budget Circular A-133, Audits of States, Local Government, and Non-Profit Organizations and Chapter 10.650, Rules of the Auditor General.

2. Basis of Accounting

The accompanying Schedules are presented on the accrual basis of accounting.

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 The Board of Directors of Citrus Health Network, Inc. Hialeah, Florida

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Citrus Health Network, Inc. (the “Center”) (a nonprofit organization), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Center’s basic financial statements, and have issued our report thereon dated December 21, 2016.

Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Center’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Center’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Center’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Compliance and Other Matters As part of obtaining reasonable assurance about whether the Center’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE AND CHAPTER 10.650, RULES OF THE AUDITOR GENERAL Board of Directors Citrus Health Network, Inc. Hialeah, Florida Report on Compliance for Each Major Federal Program and State Project We have audited Citrus Health Network, Inc.’s (the “Center”), compliance with the types of compliance requirements described in the OMB Compliance Supplement, and the requirements described in the Department of Financial Services’ State Projects Compliance Supplement, that could have a direct and material effect on each of the Center’s major federal programs and state projects for the year ended June 30, 2016. The Center’s major federal programs and state projects are identified in the summary of auditors’ 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 and state projects. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the Center’s major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and Chapter 10.650, Rules of the Auditor General 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 or state project occurred. An audit includes examining, on a test basis, evidence about the Center’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the Center’s compliance. Opinion on Each Major Federal Program and State Project In our opinion, the Center 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 and state projects for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of the Center is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Center’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program and state project 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 state project and to test and report on internal control over compliance in accordance with The Uniform Guidance and Chapter 10.650, Rules of the Auditor General, 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 the Center’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 or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program and state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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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 and Chapter 10.650, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose.


CITRUS HEALTH NETWORK, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL AWARDS PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE YEAR ENDED JUNE 30, 2016

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SECTION I - SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issued: Unmodified

Internal control over financial reporting:

Material weakness(es) identified? XXX yes XXX no

Significant deficiency(ies) identified? XXX yes XXX none reported

Noncompliance material to financial statements noted? XXX yes XXX no

Federal Awards

Type of auditor’s report issued on compliance for major programs:

Unmodified

Internal control over major programs:

Material weakness(es) identified? XXX yes XXX no

Significant deficiency(ies) identified? XXX yes XXX none reported

Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133?

XXX yes XXX no

Identification of major programs:

Federal Program or Cluster CFDA Number Expenditures Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances

93.104

$ 238,119

Consolidated Health Centers 93.224 $ 2,245,680 Promoting Safe and Stable Families 93.556 $ 520,640 Temporary Assistance for Needy Families 93.558 $ 121,680 Stephanie Tubbs Jones Child Welfare Services Program 93.645 $ 2,566 Foster Care- Title IV-E - ARRA 93.658 $ 326,899 Adoption Assistance 93.659 $ 3,437 Social Services Block Grant 93.667 $ 104,310 Child Abuse and Neglect Discretionary Activities 93.670 $ 400 Chafee Foster Care Independence program 93.674 $ 100,630 Medical Assistance Program 93.778 $ 477,701 Block Grants for Community Mental Health Services 93.958 $ 9,752,654 Block Grants for Prevention and Treatment of Substance Abuse

93.959

$ 1,402,095

Dollar threshold used to distinguish between type A and type B programs:

$ 750,000

Auditee qualified as low-risk auditee? XXX yes X X no

CITRUS HEALTH NETWORK, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL AWARDS PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE YEAR ENDED JUNE 30, 2016

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SECTION I - SUMMARY OF AUDITOR'S RESULTS (Continued) State Financial Assistance Type of auditor's report issued on compliance for major projects:

Unmodified

Internal control over major projects: Material weakness(es) identified? XXX yes XXX no Significant deficiency(ies)? XXX yes XXX none reported Any audit findings disclosed that are required to be reported in accordance with Chapter 10.650 "Rules of the Auditor General?"

XXX yes XXX no

Identification of major projects:

Name of State Project or Cluster CSFA Number Expenditures Out-of-Home Supports 60.074 $ 2,231 Independent Living Program 60.112 $ 193,941 Forensic Services and Competency Restoration Training

60.114

$ 38,203

CBC-Sexually Exploited Children 60.138 $ 823,779 Community Action Teams 60.150 $ 748,334 SAMH-Crisis Prevention and Stabilization Services 60.155 $ 455,000 Dollar threshold used to distinguish between type A and type B projects.

$ 300,000

CITRUS HEALTH NETWORK, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS - FEDERAL AWARDS PROGRAMS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE YEAR ENDED JUNE 30, 2016

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SECTION II - FINANCIAL STATEMENT FINDINGS

None SECTION III - FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARDS PROGRAMS

None SECTION IV - FINDINGS AND QUESTIONED COSTS - MAJOR STATE FINANCIAL ASSISTANCE PROJECTS

None SECTION V - OTHER ISSUES

1. A management letter was issued on December 21, 2016. 2. No Summary Schedule of Prior Audit Findings is required because there were no prior audit

findings related to Federal awards programs or State financial assistance projects.

3. No Corrective Action Plan is required because there were no findings required to be reported under the Federal or Florida Single Audit Acts.

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