Providence House Shreveport, Louisiana

Financiat Statement

A.S of and for the Years Ended September 30,2013 artd 2012

Providence House

Table of Contents

Independent Auditore' Report

Financial Statements

Statements of Financial Position

Statements of Activities; For the Year Ended September 30, 2013 For the Year Ended September 30, 2012

Statements of Functional Expenses: For the Year Ended September 30, 2013 For the Year Ended September 30, 2012

Statements of Cash Flows

Notes to Financial Statements

Scheduie of Expenditures of Federal Awards

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

Report on Compliance on Each Major Federal Program and on Internal Control Over Compliance Required By OMB Circular A-133

Summary Schedule of Prior Audit Findings

Schedule of Findings and Questioned Costs

Summary Schedule of Audit Findings for the Louisiana Legislative Auditor

Page No.

1-2

4 5

6 7

8

9-15

16-17

18-19

20-21

22

22

23

COOK & MOREHART

Cefiijied Public Accountants 1215 HAWN AVENUE • SHREVEPORT, LOUISIANA 21107 • P.O. BOX 78240 • SHREVEPORT, LOUISIANA 71137-8240

TRAVIS H. MOREHART, CPA TELEPHONE/3I8> 222-5415 FAX (318) 222-5441 A EDWARD BALL, CPA VICKIE D CASE, CPA

MEMBER AMERICAN INSTITUTE

STUART L REEKS. CPA CERTIFIED PUBLIC ACCOUNTANTS

SOCIETV OF LOUISIANA CERTIFIEO PUBLIC ACCOUNTANTS

Independent Auditors' Report

To the Board of Directors Providence House

Report on the Financial Statements

We have audited the accompanying financial statements of Providence House(a nonprofit organization), v/hich comprise the statements of financial position as of September 30,2013 and 2012, 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 Resfsonsibifity for the Financia/ 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 interna) control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

A uditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether die 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 (he 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 effecfiveness 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.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Providence House as of September 30,2013, and 2012, 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, on pages 16 - 17, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-ProM Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of ftie financial stetements and certain addittonal 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, Wie schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Aadldng Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 18,2014, on our consideration of Providence House's internal control over financiai 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 Providence House's internal control over financial reporting and compliance.

Cook & Morehart Certified Public Accountants March 18, 2014

Providence House Statements of Financial Position September 30.2013 and 2012

Assets 2013 2012

Current assets; Cash and cash equivalents Investments Grant receivables Other receivaWes

$ 113,869 39,680

199,134 5,351

$ 69,248 17,836

170,898 650

Total current assets 358,034 258,632

Other assets: Cash restricted - resettlement funds 28,526 38,258

Total other assets 28,526 38,258

Property and equipment Accumulated depreciation

Net property and equipment

3,493,682 (1,477,916) 2,015,766

3,497,351 (1,345,807) 2,151,544

Total Assets $ 2,402,326 $ 2,448,434

Liabilities and Net Assets Cunent liabilities:

Accounts payable Accrued expenses

$ 40,886 83,046

$ 53,968 81,506

Total current liabilities 123,932 135,474

Escrowed resettlement funds 28,526 38,258 Total liabilities 152,458 173,732

Net assets; Unrestricted:

Operating Fixed assets Board designated

Total unrestricted

179,150 2,015,766

39,680

2,234,596

89,930 2,151,544

17,836

2,259,310

Temporarily restricted 15,272 15,392

Total net assets 2,249,868 2,274,702

Total Liabilities and Net Assets $ 2,402,326 $ 2,448,434

The accompanying notes are an integral part of the financial statements.

3

Providence House Statement of Activities

For the Year Ended September 30, 2013

Temporarily

Revenues and Other Support:

Contractual revenue - grants Donations and contributions Other income Interest and investment income Net assets released from restrictions:

Restrictions satisfied by expending funds for the purpose intended

$ 1,057,852 1,846,855

141,707 1,844

9,297

$ 9,177

(9,297)

$ 1,057,852 1,856,032

141,707 1,844

Total revenues and other support 3,057,555 (120) 3,057.435

Functional Expenses:

Program services General administration Fund raising

2,531,492 235,803 314,974

2,531,492 235,803 314,974

Total operating expenses 3,082,269 3,082,269

Change in net assets (24,714) (120) (24,834)

Net assets as of beginning of year 2.259,310 15,392 2,274,702

Net assets as of end of year $ 2,234,596 $ 15,272 $ 2,249,868

The accompanying notes are an integrai part of the finandai statements.

Providence House Statement of Activities

For the Year Ended September 30, 2012

Unrestricted Temporarily Restricted Total

Revenues and Other Support;

Contractual revenue - grants Donations and contributions Other Income Interest and investment income Net assets released from restrictions:

Restrictions satisfied by expending funds for the purpose intended

$ 1,257,429 1,730,623

163,379 22,469

28,131

$

(28,131)

$ 1,257,429 1,730,623

163,379 22,469

Total revenues and other support 3,202.031 (28,131) 3,173,900

Functional Expenses:

Program services General administration Fund raising

3,082,397 260,964 399,261

3,082,397 260.964 399,261

Total operating expenses 3,742,622 3,742,622

Change in net assets (540.591) (28,131) (568,722)

Net assets as of beginning of year 2,799,901 43,523 2,843,424

Net assets as of end of year $ 2,259,310 $ 15,392 $ 2,274,702

The accompanying notes are an integral part of the financial statements.

5

Providence House Statement of Functional Expenses

For the Year Ended September 30, 2013

The accornpanying notes are an integral part of the financial statements.

6

Program Sen/ices

General Administration

Fund Raising Total

Expenses;

Salaries and wages $ 1,208,731 $ 131,013 $ 211,576 $ 1,551,320 Employee benefits 148,506 11,316 19,830 179,652 Payroll taxes and workers compensation 135,021 11,962 15,988 162,971 Office expense 11,545 1,993 3,755 17,293 Legal and accounting 51,259 51,259 Telephone 20,304 425 438 21,167 Utilities 107,274 863 2,010 110,147 Printing 2,180 14,266 16,446 Insurance 53,890 7,096 3,698 64,684 Repairs and maintenance 50,022 662 1,391 52,075 Vehicles 49,161 1,522 55 50,738 Resident transportation program 4,355 4,355 Resident expenses 104,612 104,612 Resident graduation program 27,437 27,437 Offsite supportive housing 327,327 327,327 Work to learn program 81,043 81,043 Travel and training 2,863 2,216 896 5,975 Public relations and advertising 27,350 689 10,690 38,729 Computer maintenance 12,838 1,133 12,755 26,726 Other 11,966 3,972 4,873 20,811 Dues and subscriptions 10,188 571 815 11,674 Website design 2,827 2,827 Depreciation 134,879 9,111 9,111 153,101

Total expenses $ 2.531,492 $ 235,803 $ 314,974 $ 3,082,269

Providence House Statement of Functional Expenses

For the Year Ended September 30, 2012

Program General Fund Services Administration Raising Total

Expenses:

Salaries and wages $ 1.380,935 $ 131,013 $ 217,254 $ 1,729,202 Employee benefits 144,149 16,319 22,609 183,077 Payroll taxes and workers compensation 157,176 13,491 10,926 181,593 Office expense 32,827 3,865 5,281 41,973 Legal and accounting 62,368 62,368 Telephone 20,767 2,113 500 23.380 Utilities 157,063 945 1,893 159,901 Printing 11,116 71 19,559 30,746 Insurance 51,907 3,185 5,417 60,509 Repairs and maintenance 59,129 1,003 1,079 61,211 Vehicles 52,547 1,610 683 54,840 Resident transportation program 2,955 2,955 Resident expenses 101,383 101,383 Resident graduation program 36,211 36,211 Resident counseling program 1,370 1,370 Endowment campaign agreement 32,937 32,937 Work to learn program 111,711 111,711 Offsite supportive housing 568,352 568,352 Travel and training 8,558 4,016 4,596 17,170 Public relations and advertising 14,152 35,948 50,100 Computer maintenance 1,999 1,554 17,110 20,663 Other 17,423 9,623 10,934 37,980 Dues and subscriptions 10,539 851 1,210 12,600 Website design 2,388 2,388 Depreciation 140,128 8,937 8,937 158,002

Total expenses $ 3,082,397 $ 260,964 S 399,261 $ 3,742,622

The accompanying notes are an integral part of the financial statements.

7

Providence House Statements of Cash Flows

For the Years Ended September 30, 2013 and 2012

2013 2012

Operating Activities

Change in net assets Adjustments to reconcile change in net assets to

net cash provided by (used in) operating activities: Depreciation Net realized and unrealized (gains) and losses on investments (Increase) decrease in operating assets;

Grant receivables Other receivables

Increase (decrease) in operating liabilities; Accounts payable Accrued expenses

Net cash provided by (used In) operating activities

Investing Activities

Proceeds from sale of investments Purchase of investments Payments for furniture and equipment

Net cash provided by (used In) investing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents as of beginning of year

Cash and cash equivalents as of end of year

Suppiemental Disclosure

Cash paid during the year for interest expense

$ (24,834) $ (568.722)

153,101 158,002 (1.571) (16,264)

(28,236) 83,575 (4,701) (631)

(13,082) (48,391) 1,540 (6,738)

82,217 (399,169)

10,000 243,641 (30,273) (4,553) (17,323) (18,033) (37,596) 221,055

44,621 (178,114)

69,248 247,362

$ 113,869 $ 69,248

$ 203 $

The accompanying notes are an integral part of the financial statements.

8

Providence House Notes to Financia) Statements September 30, 2013 and 2012

(1) Summary ot Significant Accounting Policies

A, Nature of Activities

Providence House is a nonprofit corporation organized under the laws of the State of Louisiana. Providence House was established to provide housing services, training, employment and opportunities for breaking the cycle of homelessness. Providence House also provides housing, services, and other programs designed to assist domestic violence and sexual assault victims. The support for Providence House comes primarily from private donations and grants.

Approximately 35-40% of total revenues consist of contractual revenue of federal and state funds. A brief description of the programs - contracts which are funded with those federal and state funds are listed:

Emergency Shelter Grants Program - Provides funds to assist in maintaining a shelter for homeless families. Funding is provided by federal funds passed through the City of Shreveport and the City of Bossier City.

Emergency Food and Shelter - FEMA - Provides funds to assist in emergency shelter for homeless families. Funding is provided by federal funds passed through the local FEMA Board.

Children's Trust Fund - Provides funds to assist homeless children to aid in the prevention of child abuse and neglect. Specifically to implement a resource support system to provide emotional, medical, educational and recreational support services for homeless children. Funding is provided by federal and state funds passed through the State of Louisiana, Department of Children and Family Services.

Community Development Block Grant- Provides funds to provide shelter for the homeless and to assist families with breaking the cycle of homelessness. Specifically, to ensure that families will be allowed to move from a structured program to an unstructured, Independent program through a series of levels showing a proven responsibility and disciplined lifestyle. Funding is provided by federal and state funds passed through the City of Bossier City.

Supportive Housing Program - Transitional Living Program - Provides funds to facilitate the movement of homeless individuals and families to permanent housing. The temporary housing is combined with supportive services to enable homeless individuals and families to live as independently as possible. This program funds the education, counseling, housing and foltow-up programs for Providence House. Funding is provided by federal funds from the U.S. Department of Housing and Urban Development.

Supportive Housing Program - Project Next Step - Provides funds to facilitate the movement of homeless individuals and families to permanent housing. The funds will provide lease anangements for individuals and families along with supportive services to enable homeless individuals and families to break the cycle of homelessness. Funding is provided by federal funds from the U.S. Department of Housing and Urban Development.

TANF - Provides education and literacy services, employment training, life skills training, counseling, children's program, budgeting, housing)shelt6r, childcare, meals, transportation, and other services to enable adults and their children to begin again. Funding is provided by federal funds passed through the State of Louisiana, Department of Children and Family Services,

(Continued)

9

Providence House Notes to Financial Statements September 30, 2013 and 2012

(Continued)

CACFP - Provides a food service program to chiidren who are residents of the homeless shelter. Funding is provided by federal funds passed through the State of Louisiana, Department of Education.

Domestic Violence and Sexual Assault Program - This program offers confidential and free services to those coping with or fleeing violent relationships and sexual assault. Funding Is provided by donations, private grants and federal and state grants.

B. Basis of Accounting

The financial statements of Providence House have been prepared on the accrual basis of accounting in accordance with accounting principtes generally accepted in the United States of America.

C. Basis of Presentation

Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards. Under those standards, the Organization is required to report information regarding its financial position and activities acconding to three classes of net assets; unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

D. investments

Investments consist of money market funds and marketable securities. Money market funds are stated at cost, which approximates the market value. Marketable securities are stated at fair value. Realized and unrealized gains and tosses are included in the statement of activities.

E. Use of Estimates

Management uses estimates and assumpttons in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Actual results could differ from those estimates.

F. Cash and Cash Equivalents

Cash equivaients, as stated for cash flow purposes, consist of non-interest bearing bank accounts and short term highly liquid investments which are readily convertible into cash within ninety (90) days of purchase.

G. Property and Equipment

Property and equipment are carried at cost or, If donated, at the approximate fair value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful life of each asset. The funding sources and the federal government may have a reversionary interest in certain property purchased with those funds. Its disposition as well as the ownership of any proceeds therefrom is subject to certain funding source regulations. Expenditures for property and equipment of $1,500 or more are capitalized.

(Continued)

10

Providence House Notes to Financial Statements September 30. 2013 and 2012

(Continued)

H. Revenue and Support

Donations and contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions.

Contractual grant revenue is reported as unrestricted support due to the restrictions placed on those funds by the funding sources being met in the same reporting period as the revenue is earned.

Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires (that Is, >when a stipulated time restriction ends or purpose of restriction is accomplished) in the reporting period in which the support is recognized. A)! other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction.

When a restriction expires (that is, when a stipulated rime restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions.

I. Income Tax Status

Providence House is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. However, income from certain activities not directly related to the organizafion's tax-exempt purpose is subject to taxation as unrelated business income. Providence House had no such income during this audit period. The Form 990, "Return of Organization Exempt from Income Taxes", for Providence House for the years ended September 30, 2010,2011, 2012 and 2013 are subject to examination by the IRS, generally for three years after they were filed.

J. Retirement Plan

Providence House established a profit-sharing plan with a 401(k) option for eligible employees. The name of the plan is Providence House Retirement Plan. The plan shall cover only employees having completed at least one year of service and having attained age 21. The employer contribution amount Is determined by appropriate action of the Employer as of the time prescribed by law. The employer contribution amount paid by Providence House for the yeare ended September 30,2013 and 2012 was $20,973 and $17,825, respectively.

K. Donated Assets

Non-cash donations are recorded as contributions at their estimated fair value at the date of donation.

L. Donated Property and Equipment

Donations of property and equipment are recorded as contributions at their estimated fair market value at the date of donation. Such donations are reported as increases in unrestricted net assets unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions.

(Continued)

11

Providence House Notes to Financial Statements September 30, 2013 and 2012

(Continued)

M. Allocated Expenses

The costs of providing various programs and other activities have been summarized on a functional basis in the Statements of Activities and in the Statements of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

(2) Concentrations of Credit Risk

Financial instruments that potentially subject Providence House to concentrations of credit risk consist principally of temporary cash investments, and grant receivables.

Concentrations of credit risk with respect to grant receivables are limited due to these amounts being due from governmental agencies under contractual terms. As of September 30, 2013 and 2012, Providence House had no significant concentrations of credit risk in relation to grant receivables.

Providence House maintains cash balances at local financial institutions. Accounts at those institutions are insured by the Federal Deposit Insurance Corporation (FDIC). At September 30,2013 and 2012 there were no uninsured balances at those institutions.

(3) Investments

Investments stated at fair value as determined by market prices at September 30, 2013 and 2012 are as follows:

2013 2012 Mutual funds $ 8,344 Money Market funds 30,181 Common stocks and options 1.155

£ 39.680

$ 17,672 164

£ 17 fl3fi

Financial Accounting Standards, ASC 820-10-50, Fair Value Measurements, 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, and Level 3 inputs have the lowest priority. Providence House uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available. Providence House measures feir value using Level 1 inputs because they generally provide the most reliable evidence of fair value. No Level 2 inputs were available to Providence House, and Level 3 inputs were only used when Level 1 or Level 2 inputs were not available. The fairvalue of the investments were determined by quoted market prices and considered measured using Level 1 inputs.

Investment income for the years ended September 30, 2013 and 2012 consisted of the following;

2013 2Q12 Interest and dividend income Realized gain (loss) on sale on investments Unrealized gains on investments

$ 273 $ 4,553 7,334

1.571 10.582 $ j.m S 22 46.0

(Continued)

12

Providence House Notes to Financial Statements September 30, 2013 and 2012

(Continued)

(4) Grant Receivables

Various funding sources provide reimbursement of aJiowable costs under contracts or agreements. These balances represent amounts due from the funding sources at September 30,2013 and 2012 but not received until after that date.

(5) Restricted Cash - Resettlement Funds

The balance represents funds held by Providence House on behalf of the tenants of Providence House. Providence House has implemented a program whereby the tenants agree to escrow-deposit a certain percent of their support- wages into this account as they receive those funds. Upon graduation and/or leaving the shelter those funds will be distributed to the tenant or retained by Providence House. This amount is also shown as escrowed resettlement funds in the liability section on the statement of financial position.

(6) Fixed Assets

A summary of fixed assets as of September 30, 2013 follows;

Estimated Cost/ Accumulated IJRRful Life Basis Deoreciation

Land N/A $ 117,830 $ Buildings 15-30 years 1,125,795 460,404 Building improvements 7-25 years 1,869,861 731,797 Furniture & fixtures 5-10 years 110,419 109,777 Office equipment 3-7 years 63,547 39,156 Kitchen equipment 5-7 years 11,978 10,515 Playground equipment 5-10 years 100,882 38,401 Classroom computer lab 5 years 27,687 27,687 Vehicles 5-7 years 65.683 60.179

$ 3.493.682 ^ 1,477,916

Depreciation expense for the year ended September 30, 2013 was $153,101.

ummary of fixed assets as of September 30, 2012 follows:

Estimated Cost/ Accumulated I Iseful I ife Basis Deoreciation

Land N/A $ 117,830 $ Buildings 15-30 years 1,125,795 421,907 Building improvements 7-25 years 1,869,861 643,977 Furniture & fixtures 5-10 years 110,419 109,122 Office equipment 3-7 years 73,732 51,446 Kitchen equipment 5-7 years 11,978 9,840 Playground equipment 5-10 years 100,882 30,508 Classroom computer lab 5 years 27,687 27,687 Vehicles 5-7 years 59.167 51.320

$ 3.497.351 $ 1.345.807

Depreciation expense for the year ended September 30, 2012 was $158,002.

(Continued)

13

Providence House Notes to Financial Statements September 30,2013 and 2012

(Continued)

(7) Unrestricted Net Assets - Board Designated

Included in the unrestricted net assets are amounts designated by the Board for an internal endowment fund.

(8) Temporarily Restricted Net Assets

Temporarily restricted net assets consists of grants and donations received for specific purposes which were not expended as of September 30, 2013 and 2012 and detailed as follows:

2013 2012 Playground $ 9,177 $ Back to school 2,513 7,518 Other 3.582 7.874

(9) Contractual Revenue - Grants

Revenues shown as contracts with governmental agencies for the years ended Septemt?er 30,2013 and 2012 consist of the following:

2013 2012 City of Shreveport and Bossier City - ESG $ 114,420 $ 73,350 City of Shreveport and Bossier Ci^ - CDBG 10,655 13,466 FEMA 10,000 14,900 Childrens Trust Fund 11,859 14,250 U.S. Department of HUD Supportive Housing 253,765 253,009 Children and Aduit Care Food Program 75.488 77,877 TANF 276,623 393,870 Rapid Re-Housing Grants 73,513 Domestic Violence and Sexual Assault Grants 298,097 332,000 Child Care Assistance and vouchers 6.945 11,194

S 1.Q57.S52 $ 1.257.429

The continued existence of these funds is based on annual contract renewals with various funding sources.

(10) Accrued Expenses

An analysis of Providence House's accrued expenses at September 30, 2013 and 2012 is as follows:

2013 2012 Payroll taxes $ 3.967 $ 3,668 Salaries and wages 69,222 62,305 Vacation - leave 9.857 15,533

(Continued)

14

Providence House Notes to Financial Statements September 30, 2013 and 2012

(Continued)

(11) Leases

Providence House leases certain facilities under operating leases in conjunction with its supportive housing and domestic violence programs. The rental costs on these leases for the years ended September 30, 2013 and 2012 were $326,900 and $568,352, respectively. As of September 30, 2013, there were no obligations under these lease agreements in excess of one year.

Providence House leases certain office equipment and vehicles. The rental costs on these leases for the years ended September 30,2013 and 2012 were $52,096 and $49,663, respectively. As of September 30, 2013, obligations under leases in excess of one year are as follows:

Year Ended Amount 9/30/14 $ 32,754 9/30/15 8,504 9/30/16 763

$ 42.021

Providence House entered into an equipment leasing agreement to lease vehicles in May, 2010. The lease was a forty-eight month lease. At the end of the forty-eight months Providence House has guaranteed a residual value of $21,957.

(12) Line of Credit

Providence House obtained a line of credit for $350,000. The line of credit is secured by real estate and building owned by Providence House. Interest rate is prime rate as published in the Wall Street Journal. The loan matures July 15, 2014. Interest is to be paid monthly. Interest expense paid on the loan during the years ended September 30, 2013 and 2012 was $203 and $0 respectively. There were no amounts due on the line of credit as of September 30,2013 and 2012.

(13) Endowment Account with Community Foundation of North Louisiana

Providence House has entered into an agreement with the Communis Foundation of North Louisiana (CFNLA). The agreement establishes an Agency Endowment Fund at CFNLA called "Providence House Endowment-The Gift of a Lifetime Fund" (Fund). All property of the Fund belongs to CFNLA. The fund will be used for support of the charitable purposes of Providence House. Net income and capital appreciation of the Fund, as governed by CFNLA's Spending Policy, will be paid and distributed to Providence House at least annually, for as long as Providence House is a Qualified Charitable Organization.

During the years ended September 30, 2013 and 2012, $20,650 and $108,391, respectively was contributed to the endowment fund at the Community Foundation of North Louisiana. The feir market value of the fund at September 30. 2013 and 2012 was $939,953 and $882,241, respectively.

(14) Subsequent Events

Subsequent events have been evaluated through March 18, 2014, the date the financial statements were available to be issued.

15

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COOK & MOREHART

Certified Public Accountants 1115 HAWN AVENUE • SHREVCPORT, LOUISIANA 71197 • P.O. BOX 78240 • SHREVEPORT, LOUISIANA 71137-8240

TRAVfSH MOREHART.CPA TELEPHONE (JIS) 222-S415 FA.\ (318)222-5441 A. EDWARD BALL, CPA VICKIE D. CASE. CPA

MEMBER AMERICAN INSTITUTE

STUART L REEKS, CPA CERTIFIED PUBLIC ACCOUNTANTS

SOOETVOF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS

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

Indepencient Auditors' Report

To the Board of Directors Providence House Shreveport, Louisiana

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 Govemmenf Auditing Standards issued by the Comptroller General of the United States, the financial statements of Providence House, (a nonprofit organization), which comprise the statement of financial position as of September 30,2013, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 18, 2014.

internal Control Over Financial Reporting

In planning and performing our audit ofthe financial statements, we considered Providence House'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 Providence House's Internal control. Accordingly, we do not express an opinion on the effectiveness of Providence House's internal control.

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Providence House'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

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of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

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

Cook & Morehart Certified Public Accountarrts March 18, 2014

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COOK & MOREHART

Certified Public Accountants IZ15 HAWN AVENUE • SHREVEPORT, LOUISIANA 71107' P.O. BOX 78240 • SHREVEPORT, LOUISIANA 71137-8240

TRAVIS H. MOREHART. CPA TELEPHONE (318) 222-5415 FAX (318) 222-5441 A EDWARD BALL, CPA VICKIE D CASE. CPA

MEMBER AMERICAN INSTITUTE

STUART L. REEKS, CPA CERTIFIED PUBUC ACCOUNTANTS

SOCIETV OF LOUISIANA CERTimO PUBLIC ACCOUNTANTS

Report on Compliance on Each Major Federal Program and on Internal Control Over

Compliance Required by 0MB Circular A-133

Independent Auditors' Report

To the Board of Directors Providence House Shreveport, Louisiana

Report on Compliance for Each Major Federal Program

We have audited Providence House's, compliance with the types of compliance requirements described in the 0MB Ciivuiar A-133 Compliance Supplement that could have a direct and material effect on each of Providence House's major federal programs for the year ended September 30, 2013. Providence House's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditors' Responsibility

Our responsibility is to express an opinion on compliance for Providence House's major federal program 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 Govemmenf Auditing SfancCarO's, issued by the Comptroller General of the United States; and 0MB Circular A-133, Audits of States, Loca/Govemmenis, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Providence House's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Providence House's compliance.

Opinion on Each Major Federal Program

in our opinion, Providence House complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended September 30, 2013.

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Report on Internal Control Over Compliance

Management of Providence House is responsible for establishing and mainteining effective internal controi over compliance v/ith the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Providence House's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Providence House's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A materia/ weakness In internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonabie possibility that material noncompliance with a type of compliance requirement of a federal program wiH not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance Is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is (ess severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies In internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.

Cook & Morehart Certified Pubfic Accountants March 18, 2014

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Providence House Summary Schedule of Prior Audit Findings

September 30,2013

There were no findings or questioned costs for the prior audit period ending September 30,2012.

Schedule of Findings and Questioned Costs September 30, 2013

A. Summary of Auditors' Results

1. The auditor's report expresses an unmodified opinion on the financial statements of Providence House.

2. No significant deficiencies are reported in the 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.

3. No instances of noncompliance material to the financial statements of Providence House were disclosed during the audit.

4. No significant deficiencies relating to the audit of the major federal award program are reported in the Report on Compliance on Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133.

5. The auditor's report on compliance for the major federal award program for Providence House expresses an unmodified opinion.

6. There are no audit findings relative to the major federal award program for Providence House reported in Part C. of this Schedule.

7. The program tested as a major program was; TANF CFDA #93.558.

8. The threshold for distinguishing Type A and B programs was $300,000.

9. Providence House qualifies as a low-risk auditee.

B. Findings-Financial Statements Audit: None

C. Findings and Questioned Costs - Major Federal Award Programs Audit: None

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Providence House Summarv Schedule of Audit Findings for the

Louisiana Legislative Auditor September 30, 2013

Summarv Schedule of Prior Audit Findings

There were no findings or management letter comments for the prior year ended September 30, 2012.

Correcttve Action Plan for Current Year Audit Findmas

There are no current year findings or management letter comments for the year ended September 30,2013.

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