luther speight & company, llc certified public …...$ 2,096,277 $ 481,223 $ 226,161 $ 2.803,661...

LUTHER SPEIGHT & COMPANY, LLC Certified Public Accountants and Consultants

NOLA BUSINESS ALLIANCE (A Nonprofit Organization)

FINANCIAL STATEMENTS AND DJDEPENDENT AUDITOR'S REPORT

DECEMBER 31,2015 AND 2014

New Orleans Office: 1100 Poydras Street, Suite 1225/New Orleans, LA 70163/(504)561-8600 Baton Rouge Office: 2900 Westfork Drive, Suite 401/Baton Rouge, LA 70827/(225)275-9100

TABLE OF CONTENTS

Page

INDEPENDENT AUDITOR'S REPORT 1-2

Financial Statements

Statements of Financial Position- Years Ended December 31, 2015 and 2014 3

Statements of Activities and Changes in Net Assets - Years Ended December 31, 2015 and 2014 4

Statements of Functional Expenses- Years Ended December 31, 2015 and 2014 5

Statements of Cash Flows- Years Ended December 31,2015 and 2014 6

Notes to Financial Statements

For Years Ended December 31, 2015 and 2014 7-13

Supplementary Information

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 14-15

Schedule of Findings and Responses 16-17

Status of Prior Findings 18

Schedule of Compensation. Benefits and Other Payments to Agency Head or Chief Executive Officer 19-20

LUTHER SPEIGHT & COMPANY, LLC Certified Public Accountants and Consultants

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of NOLA Brisiness Alliance New Orleans, Louisiana

We have audited the accompanying financial statements of NOLA Business Alliance (a nonprofit organization), which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are fiee from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 fmancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

New Orleans Office: 1100 Poydras Street, Suite 1225/New Orleans, LA 70163/ (504)561-8600 Baton Rouge Office: 2900 Westfork Drive, Suite 401/Baton Rouge, LA 70827/(225)275-9100

Opinion

In oui opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NOLA Business Alliance as of December 31, 2015 and 2014, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated April 29, 2016, on our consideration of the NOLA Business Alliance'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 NOLA Business Alliance's internal control over financial reporting and compliance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Compensation, Benefits and Other Payments to Agency Head or ChiefExecutive Officer is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the fmancial 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 feirly stated in all material respects in relation to the financial statements as a whole.

Luther Speight & Company CPAs

New Orleans, Louisiana April 29, 2016

NOLA BUSINESS ALLIANCE NEW ORLEANS, LOUISIANA

STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31,2015 AND 2014

2015 2014 ASSETS

LIABILITIES & NET ASSETS

Liabilities

Accounts Payable

Deferred Revenue

Payroll and Benefit Liabilities

Deferred Rent Liability

Total Liabilities

Unrestricted Temporarily Restricted

Total Net Assets

TOTAL LIABILITIES & NET ASSETS

Cash and cash equivalents $ 1,507,362 $ 1,369,312

Grant Receivable 89,934 317,468

Pledges Receivable, net of allowance 12,500 38,425

of $17,500 and $325 respectively

Prepaid Expenses 32,331 47,469

Fixed Assets, net 45,253 54,984

Deposits 6,785 6,785

Total Assets 1,694,165 1,834,443

143,416 336,763

400,000 622,141

79,456 59,707

9,540 11,963

632,412 1,030,574

952,078 714,194 109,675 89,675

1,061,753 803,869

$ 1,694,165 $ 1,834,443

The accompanying notes are an integral part of these financial statements. 3


STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2015 and 2014

2015 2014

Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total

REVENUE AND OTHER SUPPORT Grant Revenue $ 2,521,693 $ $ 2,521,693 $ 2,258,672 $ $ 2,258,672 Private Contributions 342,500 30,000 372,500 343,794 81,625 425,419 In-kind Contributions 125,906 - 125,906 61,371 - 61,371 Interest Income 10,494 - 10,494 Miscellaneous Revenue 30,952 - 30,952 21,638 - 21,638 Releases from Restrictions 10,000 (10,000) - 51,625 (51,625) -

Total Revenues and Other Support 3,041,545 20,000 3,061,545 2,737,100 30,000 2,767,100

EXPENSES Program Services 2,096,277 - 2,096,277 1,660,481 - 1,660,481 Management and General 481,223 - 481,223 505,378 - 505,378 Fundraising 226,161 - 226,161 280,951 - 280,951

Total Expenses 2,803,661 - 2,803,661 2,446,810 - 2,446,810

CHANGE IN NET ASSETS 237,884 20,000 257,884 290,290 30,000 320,290

Net assets, beginning of year 714,194 89,675 803,869 387,529 96,050 483,579 Net assset adjustment - - - 36,375 (36,375) -Net assets, end of year 952,078 109,675 1,061,753 714,194 89,675 803,869

The accompanying notes are an integi'al pail of these financial statements 4


STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMEBER 31,2015 AND 2014

Program Service

Management and General Fundraising 2015 Total 2014 Total

Salaries & related expenses $ 893,206 $ 333,559 $ 140,864 $ 1,367,629 $ 1,415,049 Professional services and fees 422,009 69,102 22,247 513,358 478,657 Sub-recipient expense 446,077 - - 446,077 100,881 Rent & parking 91,680 31,801 7,599 131,080 107,286 Repairs & maintenance - - - - 3,158 Conference & meeting expense 79,707 19,504 7,286 106,497 118,478 Marketing expense 47,488 1,032 - 48,520 -Uncollectible pledge provision - - 42,500 42,500 52,790 Travel expense 24,813 1,238 1,621 27,672 55,701 Database & research expense 25,296 - - 25,296 -Telephone & telecommunications 17,132 5,605 1,820 24,557 23,813 Depreciation 13,052 4,895 816 18,763 31,422 Insurance 11,820 4,399 733 • 16,952 15,712 Office supplies 8,863 3,102 379 12,344 4,326 Printing &, reproduction 4,499 1,248 208 5,955 6,434 Equipment leases - - - - 6,600 In-house publications 4,758 - - 4,758 -Staff development 1,430 2,332 - 3,762 7,819 Membership dues 2,692 322 54 3,068 5,577 Subscriptions 571 2,043 - 2,614 -Postage & delivery 726 206 34 966 1,851 Advertising 458 340 - 798 575 Office expense - 440 - 440 10,363 Bank charges - 40 - 40 280 Coiporation expense - 15 - 15 38

$ 2,096,277 $ 481,223 $ 226,161 $ 2.803,661 $ 2,446,810

The accompanying notes are an integral part of these financial 5

statements.

NOLA BUSINESS ALLIANCES NEW ORLEANS, LOUISIANA

STATEMENTS OF CASHFLOWS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

2015 2014 CASHFLOWS FROM OPERATING ACTIVITIES

Change in Net Assets $ 227,884 $ 320,290 Adjustments to reconcile Net Income to net cash provided by operations: Depreciation Expense 18,763 31,422 Provision for Uncollectible Pledges 17,500 52,790 Changes in Assets and Liabilities

Pledges and Grants Receivables 241,650 (248,362) Prepaid Expenses 15,137 (15,615) Accounts Payables (169,039) 306,250 Deferred Revenue (222,141) 97,141 Deferred Rent Liability (2,423) (2,424) Fringe Benefit Payables 19,750 (30,104)

Net cash provided by Operating Activities 147,081 511,388

CASHFLOWS FROM INVES IING ACllVITIES Purchases of Property and Equipment (9,031) (735) Net Cashflows From Investing Activities (9,031) (735)

NET CHANGE IN CASH AND CASH EQUIVALENTS 138,050 510,653

Cash and Cash Equivalents - Beginning of Period 1,369,312 858,659

Cash and Cash Equivalents - End of Period $ 1,507,362 $ 1,369,312

The accompanying notes are an Integral part of these financial statements.

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NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2015 and 2014

1, Nature of Activities

NOLA Business Alliance (NOLABA, or the Organization) is a 501(c) (3) exempt organization. NOLABA was incorporated in the State of Louisiana in 2010 and is the official non-profit organization tasked with leading the economic development initiative for the City of New Orleans. Operations of the Organization began in fiscal year 2011.

2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accordingly, revenues are recognized when earned and expenses are recorded when incurred. Contributions are recognized when received or unconditionally promised. In-kind donations are recognized at their fair market value when received.

Basis of presentation

In accordance with the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) as set forth in FASB ASC 958, which established standards for external financial reporting by not-for-profit organizations, the Organization classifies resources for accounting and reporting purposes into three net asset categories which are unrestricted, temporarily restricted, and permanently restricted net assets according to external (donor) imposed restrictions. A description of these three net asset categories is as follows;

• Unrestricted net assets include funds not subject to donor-imposed stipulations. The revenues received and expenses incurred in conducting the mission of the Organization are included in this category. The Organization has determined that any donor-imposed restrictions for current or developing programs and activities are generally met within the operating cycle of the Organization and therefore, their policy is to record those net assets as unrestricted.

• Temporarily restricted net assets include realized gains and losses, investment income and gifts and contributions for which donor-imposed restrictions have not been met.

• Permanently restricted net assets are contributions, which are required by the donor-imposed restriction to be invested in perpetuity and only the income, be made available for program operations in accordance with donor restrictions. Such income is reflected in temporarily restricted net assets until utilized for donor-imposed restrictions.

At December 31, 2015 and 2014, the Organization did not have any permanently restricted net assets.

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2. Summary of Significant Accounting Policies (continued)

Use of estimates

The preparation of financial statements in conformity with U.S. 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Deferred revenues

The Organization records revenues in the period the revenues are earned. As of December 31, 2015 and 2014, the Organization recorded deferred revenue of $400,000 and $622,141, respectively in the Statements of Financial Position.

Income taxes

The Organization is a non-profit corporation that is exempt from federal income tax under Section 501 (c) (3) of the Internal Revenue Code and qualifies as an organization that is not a private foundation as defined in Section 509 (a) of the Code. It is exempt fi'om Louisiana income tax under the Section 121 (5) of Title 47 of the Louisiana Revised Statues of 1950. The Organization paid no federal income tax for the years ended December 31, 2015 and 2014.

Accounting Standards Codification (ASC) Accounting for Uncertainty in Income Taxes policy, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements. It also clarifies the application of accounting for income taxes by defining a criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an entity's financial statements. The interpretation requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The adoption of the provisions of the interpretation had no material impact on the Organization's financial statements. The organization's tax returns for the years ended 2014, 2013, and 2012 remain open and subject to examination by taxing authorities. The organization's 2015 tax return has not yet been filed as of the report date and is on valid extension.


NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2015 and 2014


Cash and cash equivalents

For the purposes of reporting cash flows, cash consists of cash and cash equivalents. The Organization considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.

Grant receivable

Grant receivable is comprised of amounts due from the State of Louisiana-Department of Education, the Surdna Foundation and the U. S. Department of Commerce-Economic Development Agency (EDA). The total amounts of grant receivable as of December 31, 2015 and 2014 are $89,934 and $317,468, respectively. No allowance for doubtful accounts is recorded against this receivable.

Property and equipment

All acquisitions of property and equipment in excess of $500 and all expenditures for repairs, maintenance, renewals and betterments that materially prolong the useful lives of assets are capitalized. Property and equipment are recorded at cost when purchased. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and depreciated over the shorter of the life of the asset or the life of the lease. When items of equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss included in the statement of activities.

Impairment of long-lived assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized only if the carrying amount is not recoverable and exceeds its fair value. There were no impairments recognized during 2015 or 2014.

Contributions

Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support based on the existence and/or nature of any donor restrictions. Donor restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction.




In-kind contributions

In-kind contributions are recognized if the services create or enhance nonfmancial assets or require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization. Management has estimated the value of in-kind contributions to be $125,906 and $61,371 for the years ended December 31,2015 and 2014, respectively.

Promises to sdve Unconditional promises to give are recognized as revenues or gains in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized only when conditions on which they depends are substantially met and the promises become unconditional. The pledges receivables were recorded at $30,000 with an allowance for uncollectible pledges of $17,500 resulting in a net pledges receivable of $12,500. The net pledge receivable was determined to be collectible within a twelve (12) month period.

The organization provides for estimated uncollectible for pledges receivable based on management's analysis of specific promises made. Management recorded a provision for uncollectible pledges totaling $42,500 for 2015. This provision included a direct write-off of outstanding pledges totaling $25,000 with another $17,500 representing an allowance for uncollectible pledges. During the year ended December 31, 2014 the provision for imcollectible pledges was recorded at $52,790. Promises to give that are expected to be collected in future years are recorded at the present value of estimated future cash flows.

Advertising Advertising costs are expensed in the period in which the advertising occurs. During 2015 and 2014, advertising costs totaled $798 and $575, respectively.

Functional expenses

Generally, expenses are charged to each program or function based on direct expenditures incurred. Expenditures not directly chargeable are allocated to programs or functions based on the estimated percentage of time spent by the organization's employees or the space utilized.

10



Note 3: Property and Equipment The Organization records fixed assets based upon historical cost. Donated capital assets are recorded at fair value as of the date of donation. The Organization's policy is to capitalize all purchases of property and equipment with a cost exceeding $500 and having a useful life of more than one year. Depreciation is computed and recorded using the straight-line method.

Property and equipment consisted of the following at December 31,2015 and 2014: Asset Category Useful Lives 2015 2014

Furniture & Fixtures 7 years $ 19,727 S 19,727 Office Equipment 3-5 years 112,951 103,919 Leasehold improvements 7 years 30,257 30,256

Subtotal 162,935 153,902 Accumulated depreciation (117,682) (98,918)

$ 45,253 S 54,984

Depreciation expense for fiscal year ended December 31, 2015 and 2014 was $18,763 and $31,422, respectively.

Note 4: Commitments and CoDlingencies

Lease Commitments

The Organization leases office space. The office space lease is for seventy five months. As the lease agreement has an escalation clause, the Organization has accrued deferred rent to normalize the annual lease payments over the terms of the lease. Deferred rent at December 31, 2015 and 2014 is $9,540 and $11,963, respectively and is reflected on the accompanying statements of financial position. Future obligations under operating lease agreements are as follows at December 31, 2015:

Fiscal Years Amounts 2016 105,249 2017 106,667 2018 20,978

11



Note 5: Financial Instruments and Concentration of Credit Risk The Organization maintains cash balances at two financial institutions in New Orleans, Louisiana. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000 at each institution. Cash balances exceeding the FDIC limit are substantially collateralized by the financial institution's pledged securities. The Organization's uninsured cash balances in excess of FDIC insurance and pledged collateral totaled $167,536 at December 31, 2015.

Note 6: Cooperative Endeavor Agreement The Organization and the City of New Orleans entered into a cooperative endeavor agreement (CEA) effective April 1, 2011 for the Organization to provide strategic planning, business retention and expansion, business development and overall economic development to the City of New Orleans. In 2015, the organization renewed the agreement for the twelve month period beginning April 1,2015. The CEA provides for the City to fund $1,500,000 to the Organization as compensation for the economic development services to be provided over the term of one year. The Organization agrees to raise a minimum of $500,000 annually through fundraising activities. For the years ended December 31,2015 and 2014, the Organization recognized $1,500,000 of grant revenue fi:om the City in each year.

Note 7: Grants During 2012, the Organization received a grant fi-om the Department of Commerce Economic Development Administration (EDA) in the amoimt of $1,000,000. The EDA fimds will be used, over a period of 3 years, to create an economic development strategic plan and build the organizational capacity of the NOLABA. During 2015, total EDA grant fimds amounted to $213,286. Grant revenue at December 31,2015:

2015 Grant 2014 Grant Grantor Name Revenue Revenue

City of New Orleans State of Louisiana U.S. Dept. of Commerce EDA Kellogg Foundation Surdna Foundation U.S. Environment Protection Agency JP Morgan Chase Foundation Juma Ventures Greater New Orleans, Inc.

1,500,000 s 1,500,000 450,596 101,168 213,286 311,932 192,974 107,208 100,000 100,000 30,670 14,886 29,167 120,832 5,000 -

- 2,646

2,521,693 s 2,258,672

12



Note 8: Line of Credit During the 2012 fiscal year, the Organization entered into a line of credit with a financial institution. The maximum amount available on the line was $250,000 at December 31, 2015. The interest rate was 5% with a zero balance on the line of credit at year end. The line of credit has no expiration date.

Note 9: Net Asset Adjustment

The Organization's temporarily restricted net assets reflected releases from restrictions that included releases related to the prior year. Accordingly, the Organization recorded a net asset adjustment totaling $36,375 in 2014. The adjustment had no effect on total net assets, rather only represented an increase in unrestricted net assets and a corresponding decrease in temporarily restricted net assets.

Note 10: Subsequent Events

Management has evaluated subsequent events through the date that the financial statements were available to be issued, May 16, 2016 and determined that there were no other items for disclosure. This is the date the financial statements were available for issuance.

Note 11; Payroll and Benefit Liabilities

Management recorded payroll and benefit liabilities totaling $79,456 at December 31, 2015. This balance included a liability for compensated absences totaling $52,801.

Note 12: Contributed Services (In-kind)

The Organization received contributed services from various sources which were recorded as In-kind revenues totaling $125,906 and $61,371 for December 31, 2015 and 2014 respectively. These services were primarily comprised of a series of professional development seminars and stakeholder events which were hosted by other entities on a contributed basis. The revenues were recorded based upon the estimated fair value of the contributed services. The in-kind services furthered the unrestricted program activities of the Organization.

Note 13: Qualified Retirement Plan (401k')

The Organization has an Internal Revenue Service qualified employee retirement plan (401k). During the 2015 year the Organization recorded matching contributions totaling $21,677.

13

Cu-lchraiiiis: 25 yccir.i

LUTHER SPEIGHT & COMPANY, LLC Certified Public Ac.c.niintantR and Cnnsultantfi

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT' A UDITING STANDARDS

To the Board of Directors of NOLA Business Alliance

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 NOLA Business Alliance (a nonprofit organization), which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements, and have issued our report thereon dated April 29, 2016.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered NOLA Business Alliance's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the chcumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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.

New Orleans Office: 1100 Poydras Street, Suite 1225/New Orleans, LA 70163/ (504)561-8600 Baton Rouge Office: 2900 Westfork Drive, Suite 401/Baton Rouge, LA 70827/(225)275-9100

Compliance and Other Matters

As part of obtaining reasonable assurance about whether NOLA Business Alliance's financial statements are free from material misstatement, we performed tests of its compHance 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 instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and responses as finding #15-01.

NOLA Business Alliance's Response to Findings

NOLA Business Alliance's response to the finding identified in our audit is described in the accompanying schedule of findings and responses. NOLA Business Alliance's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Luther Speight & Company CPAs

New Orleans, Louisiana April 29, 2016

15

SCHEDULE OF FINDINGS AND RESPONSES


SCHEDULE OF FINDINGS AND RESPONSES DECEMBER 31,2015

FINDING #15-01: EMPLOYEE TRAVEL REIMBURSEMENTS INCLUDED INELIGIBLE GRANT FUNDED EXPENSES

CONDITION:

The Organization's procedures for review and approval of employee travel expenses were not adequate to assure that ineligible expenses were not included in the amounts reimbursed to employees and charged to grant program accounts. We examined a selection of nine (9) grant Rinded meal and entertainment expenses and noted that two (2) of the grant Rmded expenses included charges for ineligible expenses for alcoholic beverages. These expenses were included in reimbursements Rom the U.S. Department of Commerce Economic Development Assistance grant. The two (2) employee expense reimbursements were relatively minor in amount, totaling $58 and did not appear to be a pervasive occurrence.

CAUSE:

The Organization's policy and procedure manual included guidelines for travel expenses and meal reimbursements, but did not include specific guidance on prohibiting alcoholic beverages that are ineligible for grant funded expenses from employee expense reports. In addition, the review and approval process was not sufficiently detailed to identify the exceptions.

EFFECT:

The grant Rinded charges for alcoholic beverages were ineligible costs. These costs should be reimbursed to the grant accounts.

CRITERIA:

The U. S. Department of Commerce regulations prohibit the funding of grantee expenses that include alcoholic beverages.

RECOMMENDATION:

We recommend that NOLA Business Alliance update its policies and procedures to include guidance for business entertainment expenses that include alcoholic beverages. The implementing procedures should include controls and procedures to assure ineligible expenses are not reimbursed Rom grant program accounts. The applicable federal grant program should be reimbursed for the ineligible costs referenced above.

16

MANAGEMENT'S RESPONSE

NOLABA recognizes that the organization does have a strong internal control structure in place that all grant funding and disbursements are subject to. With that recognition, NOLABA understands that the auditor's finding was de minimis in amount, totaling $58, and not found to be pervasive in occuirence. That being said, to ensure we are in compliance with all grant requirements regardless of expenditure amount, we have revised our expense reporting procedures to identify potential ineligible expenditures, including alcoholic beverages, and have trained our staff on the updated policies and procedures now in place. The applicable federal grant program has been reimbursed for the ineligible costs referenced in the audit finding.

17


STATUS OF PRIOR FINDINGS AND RESPONSES DECEMBER 31,2015

Resolved Unresolved

FINDING #14-01 ENHANCED GRANT MONITORING

PROCEDURES NEEDED X

18

SUPPLEMENTARY INFORMATION


SCHEDULE OF COMPENSATION, BENEFITS, AND OTHER PAYMENTS TO AGENCY HEAD OR CHIEF EXECUTIVE OFFICER

FOR THE YEAR ENDED DECEMBER 31, 2015

Agency Head Name: MELISSA EHLINGER, served January 2015-June 2015

Purpose Amount

Salary 97,083

Benefits-insurance 2,812

Benefits-retirement 2,485

Benefits-executive parking 1,140

Car allowance

vehicle provided by government

Per diem

Reimbursements 806

Travel 860

Registration fees 35

Conference travel 656

Continuing professional education fees

Housing

Unvouchered expenses

Special meals


NOLA BUSINESS ALLIANCE NEW ORLEANS, LOUISIANA SCHEDULE OF COMPENSATION, BENEFITS, AND OTHER PAYMENTS

TO AGENCY HEAD OR CHIEF EXECUTIVE OFFICER FOR THE YEAR DECEMBER 31, 2015

Agency Head Name: Quentin L. Messer, Jr., served July 201S-December 2015

Purpose Amount

Salary $ 110,000

Benefits-insurance 12,809

Benefits-retirement

Benefits-executive parking 1,140

Car allowance 3,750

vehicle provided by government

Per diem

Reimbursements 1,253

Travel 213

Registration fees 1,648

Conference travel 2,417

Continuing professional education fees

Housing

Unvouchered expenses

Special meals


luther speight & company, llc certified public …...$ 2,096,277 $ 481,223 $ 226,161 $ 2.803,661...

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