AMikids, Inc. and Affiliates · AMikids, Inc. Report on the Financial Statements Carr. Riggs &...

AMikids, Inc. and Affiliates

COMBINED FINANCIAL STATEMENTS AND SCHEDULES

Year ended June 30, 2017 (With comparative information for 2016)

AMikids, Inc. and Affiliates Table of Contents

Year ended June 30, 2017 With comparative financial information for June 30, 2016

Page(s)

Independent Auditors' Report ..................................................................................................................... 1

Financial Statements

Combined Statement of Financial Position ................................................................................................... 4

Combined Statement of Activities ................................................................................................................ 5

Combined Statement of Functional Expenses .............................................................................................. 6

Combined Statement of Cash Flows ............................................................................................................. 7

Notes to Combined Financial Statements ............................................................................................... 8-30

Supplementary Information

Combining Schedule I- Statement of Financial Position ............................................................................ 31

Combining Schedule II- Statement of Activities .......................................................................................... 37

Schedule of Compensation, Benefits and Other Payments to Agency Head

or Chief Executive Officer .................................................................................................................................... .43

Compliance Information

Independent Auditors' Report on Internal Control over Financial Reporting ........................................... 44

and on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance with Government Auditing Standards

Independent Auditors' Report on Compliance for Each Major Program .................................................. 46

and on Internal Control Over Compliance Required By The Uniform Guidance

and Chapter 10.650, Rules of The Auditor General

Schedule of Expenditures of Federal Awards and State Financial Assistance ............................................ 48

Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance ............................. 51

Schedule of Findings and Questioned Costs ............................................................................................... 52

Other Information

Reports prepared by AMikids Internal Audit department

REPORT

dmahony

Typewritten Text

CRI C A R R RIGGS & INGRAM

INDEPENDENT AUDITORS' REPORT

Board of Trustees AMikids, Inc.

Report on the Financial Statements

Carr. Riggs & Ingram, LLC

2111 Drew Street

Clearwater, FL 33765

(727) 446-0504

(727) 461-7384 (fax)

www.crrcpa.com

We have audited the accompanying financial statements of AMikids Inc. and Affiliates (the "Organization"), which comprise the statement of financial position as of June 30, 2017, and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

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

Auditors' 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 audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 Auditors' 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 AMikids Inc. and Affiliates as of June 30, 2017, and the changes in its net assets and its functional expenses and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matter

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 and state financial assistance, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles (Uniform Guidance), and Audit Requirements for Federal Awards and Chapter 10.650, Rules of the Auditor General, 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 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 Matter- Other Information

Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a whole. The other information as labelled in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated September 22, 2017 on our consideration of AMikids Inc. and Affiliates' 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 AMikids Inc. and Affiliates' internal control over financial

reporting and compliance.

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Report on Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the finan cial statements as a whole. The supplemental schedules are presented for purposes of additional analysis and are not a

required part of the financial st atements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other record s 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 Ameri ca. In our opinion, the information is fairly stated in all material respects in relation

to the financial statements as a whole.

Report on Summarized Comparative Information

We have previously audited the AMikids Inc.'s 2016 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated September 20,

2016. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2016 is consistent, in all material respects, with the audited finan cial

statements from which it has been derived.

CARR, RIGGS & INGRAM, LLC

Clearwater, Florida

September 22, 2017

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FINANCIAL STATEMENTS

AMI kids, Inc. and Affiliates Combined Statement of Financial Position


2017 2016

Assets

Cash and Cash Equivalents $ 8,041,444 $ 9,211,459

Investments 7,185,981 7,027,138

Endowment Investments 461,903 263,234

Accounts Receivable:

Funding Agencies 5,019,332 5,011,635 Other 569,884 762,750

Prepaid Expenses and Other Assets 1,563,518 1,381,246

Assets Held for Sale 189,534 459,301

Boat Inventory 2,532,710 2,026,250

Boats Under Lease 9,572,586 10,581,017

Property and Equipment, Net 11,842,692 10,570,535

T ota I Assets $ 46,979,584 $ 47,294,565

Liabilities and Net Assets

Liabilities:

Lines of Credit $ 3,050,862 $ 1,077,000

Accounts Payable 2,384,260 2,215,091

Accrued Expenses 7,068,369 7,285,700

Accrued Pension 1,768,551 1,889,298

Deferred Revenues 1,523,891 2,177,300

Security Deposits 2,594,965 2,539,765

Notes Payable 1,930,389 1,381,295

Total Liabilities 20,321,287 18,565,449

Net Assets:

Unrestricted

Board Designated 433,952 238,234

Unrestricted 23,341,076 25,488,938

Tota I Unrestricted 23,775,028 25,727,172

Temporarily Restricted 2,798,228 2,919,854

Permanently Restricted 85,041 82,090

Total Net Assets 26,658,297 28,729,116

Total Liabilities and Net Assets $ 46,979,584 $ 47,294,565

The accompanying notes are an integral part of these combined financial statements. 4

AMI kids, Inc. and Affiliates Combined Statement of Activities


Totals

Temporarily Permanently

Unrestricted restricted restricted 2017 2016 Public support and revenue:

State support:

Florida $ 18,225,072 $ $ $ 18,225,072 $ 19,969,278

South Carolina 10,044,488 10,044,488 9,884,369

Louisiana 2,263,140 2,263,140 1,948,551

Texas 955,632 955,632 752,356

North Carolina 2,877,600 2,877,600 2,648,000

Missouri 1,024,622 1,024,622 717,274

Virginia 428,752 428,752

Georgia 965,628 965,628 904,829

Federal support 7,486,915 7,486,915 7,909,770

Regional support 8,911,457 8,911,457 8,880,358

Contributions 2,144,714 2,002,210 4,146,924 3,546,420 Total public support 55,328,020 2,002,210 57,330,230 57,161,205

Revenue:

Boat program (Note 1) 8,114,685 8,114,685 8,802,102

Investment income 258,160 12,986 271,146 72,168

Other 942,020 2,951 944,971 961,094

Total revenue 9,314,865 12,986 2,951 9,330,802 9,835,364

Net assets released from restrictions 2,136,822 (2,136,822)

Total public support and revenue 66,779,707 (121,626) 2,951 66,661,032 66,996,569

Expenses:

Program services 54,325,663 54,325,663 52,408,127

Boat program 7,875,250 7,875,250 7,590,726

Management and general 6,044,917 6,044,917 6,155,565

Fundraising 486,021 486,021 402,154 Total expenses 68,731,851 68,731,851 66,556,572

Change in net assets (1,952,144) (121,626) 2,951 (2,070,819) 439,997

Net assets, beginning of year 25,727,172 2,919,854 82,090 28,729,116 28,289,119

Net assets, end of year $ 23,775,028 $ 2,798,228 $ 85,041 $ 26,658,297 $ 28,729,116


Salaries

Employee benefits and payroll taxes

Commissions

Travel

Conferences and training

Office and other supplies

Rent and utilities

Insurance

Telephone

Professional fees

Postage

Student supplies and training

Community development

Equipment and maintenance

Dockage

Interest

Depreciation and amortization

Amortization of boats on charter

Impairment and other expenses

Costs of sales

Total Expenses

AMI kids, Inc. and Affiliates Combined Statement of Functional Expenses


Supporting Services

Management Total Totals

Program Boat and Support Services Program General Fundraising Services 2017 2016

$ 30,857,727 $ 514,364 $ 2,025,904 $ 275,040 $ 2,300,944 $ 33,673,035 $ 32,349,003

7,244,412 101,439 713,786 27,372 741,158 8,087,009 7,918,950

1,049,709 1,049,709 842,498

1,387,796 77,147 180,193 41,203 221,396 1,686,339 1,318,838

1,216,841 2,676 136,082 3,768 139,850 1,359,367 1,227,271

44,987 5,447 332,783 10,310 343,093 393,527 392,454

2,250,307 9,783 78,898 78,898 2,338,988 2,446,219

1,741,335 221,263 4,469 4,469 1,967,067 1,864,522

835,126 15,938 14,107 228 14,335 865,399 810,337

950,302 149,188 1,489,270 122,508 1,611,778 2,711,268 3,174,736

3,298 98,343 744 99,087 102,385 116,450

3,516,935 3,516,935 3,442,524

237,949 12,418 500,742 3,572 504,314 754,681 981,834

2,388,006 1,226,943 266,132 1,276 267,408 3,882,357 3,724,966

206,658 206,658 179,570

107,795 71,229 58,338 58,338 237,362 132,105

1,185,239 180,424 107,145 107,145 1,472,808 1,597,868

2,146,624 2,146,624 1,971,336

360,906 132,893 38,725 38,725 532,524 675,892

1,747,809 1,747,809 1,389,199

$ 54,325,663 $ 7,875,250 $ 6,044,917 $ 486,021 $ 6,530,938 $ 68,731,851 $ 66,556,572


AMI kids, Inc. and Affiliates Combined Statement of Cash Flows

Year ended June 30, 2017 (With comparative financial information for June 30, 2016)

2017

Cash flows from operating activities:

Change in net assets $ (2,070,819) $ Adjustments to reconcile change in net assets to net

cash provided by operating activities:

Depreciation and amortization 3,619,432

Net (gain) loss on disposal/impairment of property and

equipment and assets held for sale 76,388 Donated boat inventory (3,336,113)

Donated property and equipment (45,727)

Realized and unrealized (gains) losses on investments (160,170)

(Increase) decrease in:

Accounts receivable 185,169

Prepaid expenses and other assets (182,272)

Boats under Lease 1,691,460

Increase (decrease) in:

Accounts payable 169,169

Accrued expenses (217,331)

Accrued pension (120,747)

Deferred revenues (691,951)

Security deposits 55,200

Net cash and cash equivalents (used in) provided by operating activities (1,028,312)

Cash flows from investing activities:

Purchases of property and equipment (2,019,244)

Proceeds from sale of property and equipment

and assets held for sale 405,997

Proceeds from sale of investments 3,061,818

Purchases of investments (3,259,160)

Net cash and cash equivalents used in investing activities (1,810,589)

Cash flows from financing activities:

Net (repayments) borrowings on lines of credit 1,973,862

Proceeds from new borrowings from third parties 74,322

Payments on notes payable (379,298)

Net cash and cash equivalents provided by (used in) financing activities 1,668,886

Net increase (decrease) in cash and cash equivalents (1,170,015)

Cash and cash equivalents at beginning of year 9,211,459

Cash and cash equivalents at end of year $ 8,041,444 $

Cash paid for interest $ 237,362 $ Supplemental disclosure of noncash investing and financing activities:

Financed purchases of property and equipment $ 853,463 $ Other noncash additions of property and equipment 38,542


2016

439,997

3,569,204

133,028 (4,895,450)

(106,000)

73,878

(1,534,959)

221,801

1,028,818

302,084

(347,916)

(370,443)

1,605,028

642,940

762,010

(1,378, 714)

432,433

4,277,673

(3,463,090)

(131,698)

77,000

(288,768)

(211,768)

418,544

8,792,915

9,211,459

132,105

1,719

27,866

AMI kids, Inc. and Affiliates Notes to Combined Financial Statements


NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

AMikids, Inc. and affiliated member institutes and schools, non-profit corporations (collectively referred to as "AMikids" or the "Organization"), are engaged in the rehabilitation of troubled youth

by providing education, treatment and behavior modification as components of the AMikids Personal Growth Model©. These services are performed by AMikids through over forty affiliated, but independently governed member institutes and schools located in Florida, Georgia, Louisiana, Missouri, New Mexico, North Carolina, South Carolina, Texas and Virginia. The educational component of AMikids, Inc. and the affiliated institutes and schools is accredited by AdvancED~, a

global accrediting agency dedicated to advancing excellence in schools, universities, and educational agencies. AMikids' operating funds are primarily generated from state and federal contracts. AMikids, Inc. executes the majority of contracts, collects funds, coordinates the operations, and manages the recordkeeping of these member institutes and schools.

As part of the combined group, AMikids Foundation, Inc. supports the group in raising funds and investment management.

Continued operation of AMikids' rehabilitation programs is dependent on funding from state, federal and local agencies.

Use of Estimates

The preparation of financial statements in accordance 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 the 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 may differ from such estimates and such differences could be material.

Basis of Presentation

The combined financial statements include the accounts of AMikids, Inc., AMikids Foundation, Inc., and affiliated member institutes and schools. All significant intercompany balances and transactions have been eliminated. The accompanying combined financial statements are presented on the accrual basis of accounting. Assets are presented in the accompanying combined statement of financial position according to their nearness of conversion to cash, and liabilities according to the nearness of their maturity and resulting use of cash.

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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Presentation (Continued)

Unrestricted net assets consist of amounts that are available for use in carrying out the activities of AMikids. Temporarily restricted net assets represent those amounts which are not available until future periods or are donor restricted for specific purposes. Permanently restricted net assets result from gifts and bequests from donors who place restrictions on the use of the funds which mandate that the original principal be invested in perpetuity.

Cash and Cash Equivalents

Cash and cash equivalents represent cash and highly liquid investments with original maturities of three months or less.

Cash is maintained in bank deposit accounts, which at times may exceed federally insured limits.

AMikids believes it is not exposed to any significant credit risk in these accounts.

Investments and Investment Income

Investments are recorded at cost at the time of purchase. Donated securities are recorded at fair value at the time of donation. Subsequent changes in fair value, regardless of how an investment is obtained, are determined based on quoted market prices and values provided by the investment sponsors, and are recorded as unrealized gains and losses. Net appreciation (depreciation) of investments reflects the net realized and unrealized gains and losses of investments during the reporting period. Interest and dividends are recorded as earned. Dispositions of securities are reflected in the combined financial statements as of the trade date.

Endowment Investments

Endowment investments consist of funds held by the Southwest Florida Community Foundation ("Community Foundation"), an unrelated organization. The Community Foundation is an external investment pool, where the Institute has a beneficial interest in the investment pool and no individual securities. The Institute has no control over investment pricing or investment selection within the investment pool.

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Accounts Receivable

Accounts receivable consists primarily of receivables from federal and state agencies and county school boards. AMikids reviews outstanding receivables for collectability based on historical payment history from the payer and any known circumstances casting doubt over the collectability of accounts and reserves for amounts considered to be uncollectible. AMikids considers accounts receivable to be fully collectible and therefore no material allowance has been recorded. Amounts becoming uncollectible will be charged against the allowance for doubtful accounts when that determination is made.

Boat Inventory

Boat inventory represents boats held for lease which are valued at fair value less estimated selling expenses at the time of the donation. Boat inventory is recorded at net realizable value, as of June 30, 2017 and 2016, and was $2,532,710 and $2,026,250, respectively. Net realizable value is estimated based on third party appraisals, broker valuations, management's experience with the boat charter industry and estimated selling expenses are based on management's historical relationship with brokers. Net realizable values are reviewed quarterly by management and are reduced when necessary. Adjustments to net realizable values are recorded as a reduction in boat program revenue if the adjustment is made during the year of the donation and as an increase in boat program expense if made in subsequent years. Normal expenditures for repairs and maintenance of boats are expensed as incurred.

Boats under Lease

AMikids leases its boats to third parties under operating leases for periods of up to three years. The operating leases contain options to purchase the boat at the end of the charter period for the fair value estimated by management at lease inception, with all of the lease payments applied to the purchase price. Revenues are recognized as received except for security deposits, the option fee, and short-term lease payments, and an additional payment made for the one year period commencing on the lease commencement date. Security deposits are recorded as a liability and are recognized as revenue if and when the purchase option is exercised. The option fee and short-term lease payments are amortized over the life of the lease. If the purchase option is not exercised, the boat is returned to AMikids, Inc. and the security deposit is returned to the lessee after deducting all necessary expenses for the boat to be in the same condition as at time of initiation of the lease. Direct costs are deferred and amortized over the life of the lease.

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Boats under Lease (Continued)

Future minimum lease payments due under operating leases during fiscal years 2018, 2019 and 2020 are approximately $1,766,600, $937,518 and $277,723, respectively. At June 30, 2017 and 2016, the unexercised purchase options were approximately $4,771,225 and $4,830,000, respectively. The gross value and accumulated amortization on leased property as of June 30, 2017 was approximately $13,164,000 and $4,043,000, respectively. The net leased property of approximately $9,573,000 includes $452,000 of unamortized commission. The gross value and accumulated amortization on leased property as of June 30, 2016 was approximately $13,646,000 and $3,440,000, respectively. The net leased property of approximately $10,581,000 includes $375,000 of unamortized commission. Amortization of boats under lease amounted to approximately $2,147,000 and $1,971,000 for the years ended June 30, 2017 and 2016, respectively. Amortization does not include the book value of boats optioned or sold to buyers, which was approximately $1,748,000 and $1,389,000 for the years ended June 30, 2017 and 2016, respectively.

Property and Equipment

Property and equipment are stated at cost if purchased or at estimated fair value at date of receipt if donated. Property and equipment transferred to an institute or school by a funding agency are stated at estimated fair value at date of transfer. Property and equipment transferred or acquired with grant funds may revert to the funding agency should the institute or school no longer provide the services required by the contract. At the time property is retired, or otherwise disposed of, the asset and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in earnings. Repairs and maintenance are expensed when incurred. Depreciation and amortization is calculated using the straight-line method over the following estimated useful lives of the assets (shorter of estimated useful life or term of the lease as to leasehold improvements) as follows:

Permanent site improvements Buildings and leasehold improvements Furniture, fixtures and equipment Motor vehicles Boats, motors and trailers Swimming pools

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3-30 years 5-30 years

3-5 years 3-5 years

3 years 10 years




Assets Held for Sale

As of June 30, 2017 and 2016, the Organization intends to sell the following properties and has classified the net book value of the land, building and improvements as held for sale on the combined statement of financial position:

Institute Property held for sale 2017 2016

Crossroads Land $ 80,000 $ 80,000

Gainesville Land, buildings and improvements 69,301 69,301

Pinellas Land and improvements 40,233

WINGS Texas Land, buildings and improvements 310,000

$ 189,534 $ 459,301

Impairment of Long-Lived Assets and Assets Held for Sale

AMikids reviews all long-lived assets, which consist primarily of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the discounted cash flows. Recoverability of assets held for sale is measured by a comparison of the assets carrying value to its fair value and any excess of its carrying value over fair value is recorded as impairment.

Deferred Revenue

Deferred revenue is related to grant, short-term boat lease payments, and boat option fees collected in advance of revenue recognition.

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Use of Facilities

Facilities provided by a funding agency and other donors to an institute or school for use during the term of its contract are recorded as an in-kind contribution and rental expense in the financial

statements in the period in which the facilities are utilized by the institute or school. The amounts recorded in each period of use by the institute or school represent the difference between the fair rental value of the facilities and the stated amount of the rent payments. The stated amount of the rent payments is generally zero. In-kind rental contributions and the related rental expense were approximately $452,000 and $504,000 for the years ended June 30, 2017 and 2016, respectively, and are reflected as contribution revenue and rent and utilities expense, respectively, in the accompanying combined financial statements.

Public Support and Revenue

Public support is primarily from contracts with various federal, state and local agencies. Contracts with state and some federal agencies generally provide funding based on client service days. Regional support represents amounts received from local sources, including county school boards and United Way agencies. Other revenue is primarily special fundraising events and gain on sale of property and equipment.

A significant portion of AMikids' contracts are exchange transactions in which each party receives and sacrifices commensurate value. Funds from these exchange transactions are not considered contributions and, as such, are deemed to be earned and reported as revenue when such funds have been expended towards the designated purpose.

Contributions received are measured at their fair values and are reported as increases in net assets. AMikids reports contributions of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets, or if they are designated as support for future periods. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the combined statement of activities as net assets released from restrictions.

Donated Services

Amounts are reported in the financial statements for voluntary donations of services when those services create or enhance non-financial assets or require specialized skills provided by the individuals possessing those skills and would be typically purchased if not provided by donation. For the years ended June 30, 2017 and 2016, donated services were not material to the combined financial statements.

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Functional Allocation of Expenses

The costs of providing the various programs and other activities have been summarized on a functional basis. Accordingly, certain costs have been allocated among the program and supporting services benefited. Other expenses are allocated based on management's estimate of the benefit derived by each activity.

Income Taxes

AMikids, Inc. and affiliated member institutes and schools are exempt from income tax under Section 501(c)(3) of the Internal Revenue Code. There is minimal income tax associated with unrelated business income mainly from the sale of donated boats.

The Organization identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the combined statement of financial position. The Organization has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Organization would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Organization's tax years subject to examination by the Internal Revenue Service generally remain open for three years from the date of filing.

Recent Accounting Pronouncements

In May 2014, the Financial Standards Accounting Board ("FASB") issued an accounting standard which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. Under the new guidance the policy is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting the new guidance recognized at the date of adoption. The new standard allows for early adoption for annual periods beginning after December 15, 2016. In July 2015, the FASB voted to defer the effective date of the new standard for all entities by one year, or for the Organization, annual periods beginning after December 15, 2018.

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Recent Accounting Pronouncements (Continued)

The Organization is currently evaluating the impact of its pending adoption of the new revenue recognition standard on its combined financial statements and has not yet determined the method by which it will adopt the standard.

In February 2016, the FASB issued an accounting standard which requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of additional information about leasing arrangements. Under the new guidance, for all leases, interest expense and amortization of the right to use asset will be recorded for leases determined to be financing leases and straight-line lease expense will be recorded for leases determined to be operating leases. Lessees will initially recognize assets for the right to use the leased assets and liabilities for the obligations created by those leases. The new accounting standard must be adopted using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The accounting standard is effective for the Organization beginning with the year ended June 30, 2021, with early adoption permitted. The Organization is currently in the process of assessing what impact this new standard may have on its combined financial statements.

In August 2016, the FASB issued an accounting standard update to improve the consistency and usefulness of not-for-profit ("NFP") financial statements. Included in this update are changes to net asset classifications by requiring the use of only two net asset classifications, information presented in financial statements and the footnotes about a NFP's liquidity, financial performance and cash flows. This accounting standard update will not have any impact on total assets, liabilities, net assets, revenues or expenses. The Organization is currently in the process of assessing what impact the new standard will have on its combined financial statements.

Summarized Financial Information for 2016

The financial information for the year ended June 30, 2016 is presented for comparative purposes, and is not intended to be a complete presentation. Certain amounts for fiscal 2016 have been reclassified to conform to their presentation in the 2017 combined financial statements with no impact on total net assets or changes in net assets.

15



NOTE 2: ENDOWMENT INVESTMENTS

During 2016, AMikids Southwest Florida, Inc. created a board designated donor advised fund and a permanently restricted donor advised fund. The board designated fund was created with a contribution of $283,770. The fund is under the direction of the Southwest Florida Community Foundation (an unrelated entity) (the "Community Foundation") and will be for the benefit of qualified charitable organizations. The Institute has the ability to direct the Community Foundation as to distributions. The intent of the Institute is to direct all distributions to benefit the Institute. The permanently restricted donor advised fund was created with a donation of $25,000. The intent of this fund is to maintain the corpus into perpetuity and distributions to be made from investment appreciation.

Endowment investments had a fair value of $461,903 and $263,234, at June 30, 2017 and 2016, respectively, and had investment income, net of fees, of $27,039 and $4,464 for the year ended June 30, 2017 and 2016, respectively.

NOTE 3: FAIR VALUE MEASUREMENTS

The Organization reports its financial assets and liabilities using a three-tier hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Levell measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are described below:

• Level 1-Valuation based on unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2- Valuation based on observable quoted prices for similar assets and liabilities in active markets.

• Level 3- Valuation based on inputs that are unobservable and are supported by little or no market activity, therefore requiring management's best estimate of what market participants would use as fair value.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

16



NOTE 3: FAIR VALUE MEASUREMENTS (Continued)

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximates their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. The fair value of the lines of credit and notes payable are estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value.

Level 1 Fair Value Measurements:

Level 1 investments include pooled equity funds, pooled fixed income funds, equity securities and government securities valued based on quoted market prices.


Level 2 financial assets consist of corporate bonds (included in pooled fixed income funds in Note 2), and cash surrender value of insurance policies. Corporate bonds are valued based upon recent

bid prices. The cash surrender value of insurance policies is the quoted market prices of the underlying securities.


Level 3 assets consist of endowment investments managed by a third-party unrelated organization. The endowment investments are valued based on third-party pricing information without adjustment. The Institute does not develop nor are they provided with the quantitative inputs used to develop the fair market values. See activity of endowment investments in Note 2.

The following tables present the fair value of the investments recorded at fair value on a recurring basis, segregated amount the appropriate levels within the fair value hierarchy for the years ended June 30, 2017 and 2016, respectively:

17

AMikids, Inc. and Affiliates Notes to Combined Financial Statements



June 30~ 2017

Assets

Investments

Certificates of deposits Pooled equity funds

Pooled fixed income funds

Equity securities

Government securities

Cash surrender value of

insurance policies

Total investments

Endowment investments

Total Assets

June 30, 2016

Assets

Investments

Certificates of deposits

Pooled equity funds

Master limited partnerships

Pooled fixed income funds

Government securities


insurance policies

Total investments


Total Assets

Fair Value

$ 312,599

1,420,257

361,382

59,211

4,946,031

86,501

7,185,981

461,903

$ 7,647,884

Fair Value

$ 332,874

1,244,355

360,581

4,929,782

83,634

7,027,138

263,234

$ 7,290,372

Quoted Prices in

Active Markets

for Identical Assets (Levell)

$ 312,599

1,420,257

361,382

59,211

4,946,031

7,099,480

$ 7,099,480

Fair Value Measurements at

Reporting Date Using:

$

$

Significant

Other Observable

Inputs (Level 2)

86,501

86,501

86,501

$

$

Fair Value Measurements at

Reporting Date Using: Quoted Prices in Significant

Active Markets Other Observable for Identical Assets Inputs

(Levell) (Level 2)

$ 332,874 $ $ 1,244,355

360,581

4,929,782

83,634

6,943,504 83,634

$ 6,943,504 $ 83,634 $

18

Significant

Unobservable Inputs

(Level 3)

461,903

461,903

Significant

Unobservable

Inputs

(Level3)

263,234

263,234




A summary of changes in the fair value of level 3 assets is a follows:

Unrestricted,

Board Temporarily Permanently

Endowment investments Designated Restricted Restricted Total

June 30, 2015 $ $ $ $ Asset transfer 283,770 25,000 308,770

Distributions (50,000) (50,000)

Investment earnings 4,464 4,464

June 30, 2016 $ 238,234 $ $ 25,000 $ 263,234

Contributions 226,215 226,215

Distributions (54,585) (54,585)

Investment earnings 24,088 2,951 27,039

June 30, 2017 $ 433,952 $ $ 27,951 $ 461,903

NOTE 4: INVESTMENTS

Investments at June 30, 2017 and 2016 consist of:

2017 2016

Certificates of deposit $ 312,599 $ 332,874

Pooled equity funds 1,420,257 1,244,355

Pooled fixed income funds 361,382 360,581

Equity securities 59,211 75,912

Government securities 4,946,031 4,929,782


insurance policies 86,501 83,634

$ 7,185,981 $ 7,027,138

19



NOTE 4: INVESTMENTS (Continued)

Investment income was comprised of the following for the years ended June 30, 2017 and 2016:

2017

Interest and dividends $ 110,976 $

Net realized and unrealized gains (losses) 160,170

$ 271,146 $

NOTE 5: PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2017 and 2016 consist of:

2017

Land and permanent site improvements $ 3,481,181

Buildings and leasehold improvements 20,970,196

Furniture, fixtures and equipment 6,919,830

Motor vehicles 2,008,987

Boats, motors and trailers 1,187,362

Swimming Pools 465,433

Construction in progress 1,434,056

36,467,045

Less accumulated depreciation and amortization (24,624,353)

$ 11,842,692

$

$

2016

146,046

(73,878)

72,168

2016

3,370,508

21,830,024

7,595,444

2,088,938

1,227,573

465,433

384,111

36,962,031

(26,391,496)

10,570,535

Included in furniture, fixtures and equipment are assets recorded under capital leases with a cost and accumulated depreciation of $91,600 and $70,390, respectively, at June 30, 2017 and $138,331 and $80,926 respectively, at June 30, 2016.

Certain of AMikids' affiliated institutes and schools have purchased various assets with contract

funds. Under the terms of these contracts, the funding agency may require such assets to be returned upon termination of the contract or program.

20



NOTE 6: LINES OF CREDIT

Lines of credit at June 30, 2017 and 2016 consist of:

Entity

AMikids, Inc.

AMikids, Inc.

Space Coast

Beaufort

Line of Credit, maximum principal amount of $3,000,000,

bearing variable interest at 2.4% above the Sun Trust 30 Day LIBOR

(interest rate at June 30, 2017 was 3.45%), expiring February 9, 2018,

collateralized by government receivables

Line of Credit, maximum principal amount of $6,000,000,

bearing variable interest at 2.4% above the Sun Trust 30 Day LIBOR

(interest rate at June 30, 2017 was 3.45%), expiring February 9, 2018, collateralized by vessel inventory and lease receivables

Line of Credit, maximum principal amount of $100,000, interest rate tied to the WSJ Prime Rate plus 1.75% (interest rate at June 30, 2017 was 6%).

expiring December 17,2024, collateralized by real estate

Line of Credit, maximum available $100,000, interest at 2.6%

secured by separate security instruments of a donor, expiring December 18, 2020

2017 2016

$ 198,873 $

2,800,000 1,000,000

51,989 77,000

Total Lines of Credit $ 3,050,862 $ 1,077,000

The AMikids, Inc. lines of credit are cross-collateralized and are secured by the borrowing-base

assets disclosed above as well as other assets of AMikids, Inc.

At June 30, 2017, the Organization had a borrowing capacity of $9,200,000 under lines of credit

subject to availability based on asset levels. The actual amount available based on assets levels as of

June 30, 2017 in excess of the amount utilized was approximately $5,881,000. The AMikids, Inc.

lines of credit contain restrictive financial covenants related to liquidity to modified debt ratio and

the maintenance of minimum cash and marketable securities levels. The Organization was in

compliance with these restrictive covenants as of and for the years ended June 30, 2017 and 2016.

21



NOTE 7: NOTES PAYABLE

Notes payable at June 30, 2017 and 2016 consists of:

Entity 2017 2016

AMI kids, Inc. Mortgage payable bearing interest at 30 Day LIBOR index plus 2.1%;

monthly installments of $7,711 plus interest, paid in full during 2017,

collateralized by building $ $ 73,453

AMI kids, Inc. Mortgage payable bearing interest at 30 Day LIBOR index plus 2.1%;

monthly installments of $4,564 plus interest, paid in full during

2017, collateralized by building 45,641

Beaufort Note payable in monthly installments of $664, including interest

at 1.99%, due August 2018, collateralized by vehicle 7,788 16,181

Beaufort Note payable in monthly installments of $666, including interest

at 2.2%, due October 2018, collateralized by certificate of deposit 10,479 18,107

Baton Rouge Note payable in monthly installments of $162, including interest

at 8.47%, paid in full during 2017, collateralized by equipment under

capital lease 5,522

Baton Rouge Note payable in monthly installments of $169, including interest

at 8.00%, due February 2022, collateralized by equipment under

capital lease 7,906

Big Cypress Note payable in monthly installments of $324, including interest

at 8.00%, paid in full during 2017, collateralized by equipment under

capital lease 12,752

Caddo Note payable in monthly installments of $120, including interest

at 8.00%, due August 2021, collateralized by equipment under

capital lease 5,070

Caddo Note payable in monthly installments of $124, including interest

at 8.00%, due August 2021, collateralized by equipment under

capital lease 5,277

Sand Hills Note payable in monthly installments of $145, including interest

at 3.89%, due June 2019, collateralized by equipment under

capital lease 3,343 4,978

Crossroads Note payable in monthly installments of $256, including interest

at 7.94%, due January 2020, collateralized by equipment under

capital lease 6,945 9,360

22



NOTE 7: NOTES PAYABLE (Continued)

Entity

Emerald Coast Note payable in monthly installments of $299, including interest

at 11%, due September 2019, collateralized by equipment under

capital lease

Infinity Wake Note payable in monthly installments of $230, including interest

at 10%, due September 2019, collateralized by equipment under

capital lease

Jacksonville

Jacksonville

Orlando

Mortgage payable in monthly principal installments of$2,510 plus interest

of 3.5% overt he LIBOR rate, paid in full with re-financing during 2017,

secured by Institute premises and guaranteed by AMI kids, Inc.

Mortgage payable in monthly principal installments of$3,927 plus interest

of 4.15%, due March 2032, secured with real property, with carrying

value of$822,003, and guaranteed by AMI kids, Inc.

Mortgage payable in monthly installments of $1,370 including interest

at 7.25%, paid in full during 2017, collateralized by building

Panama City Note payable in monthly installments of $1,973, including interest

at 5.5%, paid in full during 2017; collateralized by equipment

Panama City Mortgage payable in monthly installments of $3,410,

Pensacola

Pensacola

Pinellas

YES

Various

including interest at 4.75% with balloon payment of approx. $259,300,

due January 2022, collateralized by land and buildings, with carrying

value of $307,803

Note payable in monthly installments of $536, including interest

at 4%, due October 2019, collateralized by vehicle

Mortgage payable due to board member in monthly installments of $966,

including interest at 3%, due June, 2019 with final balloon payment of

of approx. $54,500, collateralized by building.

Mortgage payable, with interest only payments through

August 2018, when full note is due; interest paid at rate of 4.5%;

collateralized by building, with carrying value of $805,475

Note payable in monthly installments of $273, including interest

at 8%, due August 2018, collateralized by equipment under

capital lease

Various notes payable, monthly installments from $57 to $137, various

interest rates, due various dates through May 2021, collateralized

by equipment.

Total Notes Payable

23

2017 2016

7,132 9,576

5,525 7,608

536,227

517,148

22,658

48,256

352,765 447,852

14,269 19,485

73,172 82,324

894,671

3,871 6,710

15,028 14,605

$ 1,930,389 $ 1,381,295



NOTE 7: NOTES PAYABLE (Continued)

Principal payments on notes payable for years subsequent to June 30, 2017 are as follows:

2018 $ 106,228

2019 1,033,803

2020 63,131

2021 60,580

2022 291,843

Thereafter 374,804

$ 1,930,389

NOTE 8: ACCRUED EXPENSES

Accrued expenses at June 30, 2017 and 2016 consist of:

2017 2016

Workers compensation self-funded reserve $ 3,344,003 $ 3,414,651

Vehicle and other self-funded reserve 383,126 283,198

Medical self-funded reserve 620,000 500,000

Accrued payroll 657,745 846,983

Accrued vacation 769,286 728,812

Accrued severance and unemployment 12,781 81,847

Accrued boat program payments 679,366 711,551

Other accruals 602,062 718,658

$ 7,068,369 $ 7,285,700

24



NOTE 9: RESTRICTIONS AND LIMITATIONS ON NET ASSETS

Temporarily restricted net assets consist of the following at June 30, 2017 and 2016:

2017 2016

Education I Scholarship $ 887,754 $ 548,010

Experiential Activities 337,712 803,375

Building I Equipment 409,639 578,716

Girls Initiative Program 428,086 425,878

Other 735,037 563,875

$ 2,798,228 $ 2,919,854

Permanently restricted net assets represent endowment funds invested in perpetuity. The income from the endowment funds is restricted to assist former students of AMikids' programs with educational or employment-related expense.

The State of Florida adopted the Florida Uniform Prudent Management of Institutional Funds Act ("FUPMIFA"), which establishes statutory law governing Florida not-for-profit Corporation's

management of investments.

The Board of Trustees of the Organization has interpreted FUPMIFA as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds, absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently restricted net assets: (a) the original value of the gift donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by FUPMIFA. In accordance with FUPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) The duration and preservation of the fund; (2) The purposes of the Organization and the donor-restricted endowment fund; (3) General economic conditions; (4) The possible effect of inflation and deflation; (5) The expected total return from income and the appreciation of investments; (6) Other resources of the Organization; (7) The investment policies of the Organization.

25



NOTE 9: RESTRICTIONS AND LIMITATIONS ON NET ASSETS (Continued)

Net assets were released from donor restrictions by occurrence of events specified by donors as

follows for the years ended June 30, 2017 and 2016.

2017 2016

Education I Scholarship $ 223,620 $ 285,574

Experiential Activities 585,104 494,350

Building I Equipment 796,375 207,776

Other 531,723 515,694

$ 2,136,822 $ 1,503,394

26

NOTE 10: NET ASSETS



The following reflects the separate components of net assets of AMikids, Inc., AMikids Foundation

and combined Member Institutes and Schools:

Temporarily Permanently

Unrestricted Restricted Restricted Total

AMikids, Inc.

Net Assets June 30, 2015 $ 19,383,171 $ 750,104 $ 50,000 $ 20,183,275

Change in Net Assets 1,586,025 (104,302) 1,481,723

Net Assets June 30, 2016 20,969,196 645,802 50,000 21,664,998

Change in Net Assets (712,315) 258,695 (453,620)

Net Assets June 30, 2017 20,256,881 904,497 50,000 21,211,378

AMikids Foundation

Net Assets June 30, 2015 106,641 1,020,128 7,090 1,133,859

Change in Net Assets 17,474 66,535 84,009

Net Assets June 30, 2016 124,115 1,086,663 7,090 1,217,868

Change in Net Assets 23,330 (81,490) (58,160)

Net Assets June 30, 2017 147,445 1,005,173 7,090 1,159,708

Member Institutes and Schools

Net Assets June 30, 2015 5,755,555 1,216,430 6,971,985

Asset transfer (25,000) 25,000

Change in Net Assets (1,096,694) (29,041) (1,125,735)

Net Assets June 30, 2016 4,633,861 1,187,389 25,000 5,846,250

Change in Net Assets (1,263,159) (298,831) 2,951 (1,559,039)

Net Assets June 30, 2017 3,370,702 888,558 27,951 4,287,211

Total Net Assets as of June 30, 2017 $ 23,775,028 $ 2,798,228 $ 85,041 $ 26,658,297

27



NOTE 11: COMMITMENTS AND CONTINGENCIES

A substantial portion of AMikids' public support is derived from programs supported by various funding agencies. Under the terms of the agreements with the funding agencies, AMikids' financial records are subject to audit by the appropriate governmental authorities. Depending on the results of these audits, if any, funds may be required to be refunded to the appropriate agency.

AMikids is subject to various claims and legal proceedings which arise in the ordinary course of business. AMikids does not believe that these matters will have a material adverse effect on its financial position or results of operations.

AMikids leases facilities under operating leases expiring in various years. Rent expense on these operating leases charged to operations for the years ended June 30, 2017 and 2016 was approximately $688,000 and $686,000, respectively. Based on the current operating leases, the annual lease expense is expected to remain consistent with 2017 expense over the next five years. Typically there are no operating leases with terms greater than five years.

AMikids receives donations of boats that are recorded at fair value less estimated selling expenses at the time of the donation. Management has estimated the net realizable value of the boat inventory at $2,532,710 and $2,026,250 at June 30, 2017 and 2016, respectively. Net realizable value is estimated based on third party appraisals, broker valuations, management's experience with the boat charter industry and estimated selling expenses are based on management's historical experiences with brokers. The actual net realizable value of the boats is not known until the boat is sold or leased.

AMikids has purchased high-deductible policies for workers compensation and for vehicle and other property and casualty insurance and is responsible for all claims below the deductible level. Management has accrued approximately $3,700,000 at June 30, 2017 and 2016 as an estimate of losses on unpaid claims under these insurance policies. These accruals are estimated based on current and historical claims experience. It is reasonably possible that these estimates will change and, if changed, could have a material impact on the Organization's financial position and results of operations.

Under AMikids' workers compensation and vehicle policies, the Organization has provided the insurance carrier a letter of credit for $600,000, which is collateralized by investments and cash and cash equivalents held by AMikids. There is also an additional $5,200,000 held in a secured collateralized account to support these policies. Total investments and cash and cash equivalents of $7,600,000 as of June 30, 2017 support the expected insurance commitments, including the required letters of credit and collateralized investment accounts.

28



NOTE 11: COMMITMENTS AND CONTINGENCIES (Continued)

AMikids is self-funded for group health insurance up to a maximum of $125,000 per employee. Management has accrued $620,000 and $500,000 at June 30, 2017 and 2016, respectively, for estimated claims, including known claims and claims which are estimated to have occurred but which have not yet been reported. This estimate is based on current and historical claims experience and other information obtained from AMikids' insurance provider. It is reasonably possible that these estimates will change and, if changed, could have a material impact on the Organization's financial position and results of operations. Adjustments to the estimated claims accrual are made when the need for such adjustments becomes apparent.

NOTE 12: RETIREMENT PLANS

AMikids maintains a noncontributory defined contribution pension plan covering all full-time employees who have completed two years of service and have attained the age of 20-1/2 years. Contributions to the Plan are based on a percentage of each employee's total compensation for the year. The pension expense for the years ended June 30, 2017 and 2016 was approximately $1,474,000 and $1,501,000, respectively, and is included in employee benefits and payroll taxes on the combined statement of functional expenses.

AMikids has a deferred compensation plan in place for certain key members of management, which is accrued for and included in accrued pension in the combined statement of financial position. The deferred compensation plan is generally funded on an annual basis and the related assets are included as a component of investments. The cost related to the deferred compensation plan for the years ended June 30, 2017 and 2016 was approximately $105,000 and $77,000, respectively.

NOTE 13: RELATED PARTY TRANSACTIONS

There were no related party transactions significant to the combined financial statements. AMikids has rigorous controls concerning related party transactions to ensure that all transactions are in the best interest of the mission. Details of related party transactions can be found in Form 990s which AMikids files annually with the Internal Revenue Service.

29



NOTE 14: INSTITUTE OPENINGS AND CLOSINGS

During the fiscal year ended June 30, 2017, AMikids opened AMikids Virginia, Inc., which provides service coordination for the state of Virginia by developing and overseeing the services delivered by subcontracting Direct Service Providers. AMikids reopened AMikids Manatee, a gender specific prevention and intervention day treatment program for boys.

Due to loss of funding, AMikids closed AMikids Big Cypress, Inc.

NOTE 15: SUBSEQUENT EVENTS

The Organization has evaluated events and transactions occurring subsequent to June 30, 2017 as

of September 22, 2017, which is the date the combined financial statements were issued. Subsequent events occurring after September 22, 2017 have not been evaluated by management.

No material events have occurred since June 30, 2017 that requires recognition or disclosure in the combined financial statements.

30

SUPPLEMENTARY INFORMATION

Assets

Cash and Cash Equivalents

Investments



Funding Agencies

Other

Prepaid Expenses and Other Assets

Due from Affiliates


Boat Inventory

Boats under Lease

Property and Equipment, Net

Total Assets


Uabilities:

Lines of Credit

Accounts Payable

Accrued Expenses

Accrued Pension

Due to Affiliates

Deferred Revenues

Security Deposits

Long Term Debt

Total Liabilities

Net Assets:

Unrestricted:

Board designated

Unrestricted

Total unrestricted

Temporarily Restricted

Permanently Restricted

Total Net Assets

Total Liabilities and Net Assets

s

AMikids

1, 743,503 $ 5,992,157

3,917,287

102,382

520,245

16,890,295

2,532, 710

9,572,586

2,033, 782

$ 43,304,947 $

$ 2,998,873 $ 865,097

10,517,052

726,593

3,092,549

1,298,440

2,594,965

22,093,569

20,256,881

20,256,881

904,497

50,000

21,211,378

$ 43,304,947 $

AMikids Foundation

AMikids Baton Rouge

2,726,160 $ 429,367

71,297

3,226,824 $

2,129

2,064,987

2,067,116

147,444

147,444

1,005,174

7,090

1,159, 708

s

3,226,824 $

96,878 $

12,144

49,742

27,042

412,122

597,928 $

15,565

36,203

401,332

7,906

461,006

113,835

113,835

23,087

136,922

s

597,928 $

AMI kids, Inc. and Affiliates Schedule I

Combining Schedule- Statement of Financial Position

June 30, 2017

AMikids Beaufort

139,008 $ 206,903

78,223

76,006

46,068

119,084

513,658

1,178,950 $

51,989 $ 136,114

42,567

18,598

18,266

267,534

818,844

818,844

92,572

911,416

1,178,950 $

AMikids Bennettsville

65,535 $

2,452

14,889

30,032

110,426

56,253

279,587 $

33,185

37,087

1,108,748

7,709

1,186, 729

(907,142}

(907,142}

(907,142}

s

279,587 $

AMikids Clay County

23,472 $

10,804

166

20,619

65,466

46,443

166,970 $

17,096

42,880

370,959

430,935

(263,965}

(263,965}

(263,965}

s

166,970 $

AMikids Crossroads

AMikids Emerald Coast

4,303 $

110,456

14,662

3,138

80,000

6,322

218,881 $

255

10,976

200,677

6,945

218,853

(7,427}

(7,427}

7,455

28

s

218,881 $

27,319 $

8,876

31,574

28,935

11,964

108,668 $

9,605

21,684

519,244

3,064

7,132

560,729

(512, 786}

(512, 786}

60,725

(452,061}

s

108,668 $

AMikids Gainesville

22,050 $

11,669

14,201

30,771

41,653

69,301

29,724

219,369 $

10,927

28,118

1,110,132

2,846

1,152,023

(938,134}

(938,134}

5,480

(932,654}

s

219,369 $

AMI kids Georgetown

218,140

4,409

25,049

31,811

178,514

447,006

904,929

36,669

38,761

1,930

77,360

809,131

809,131

18,438

827,569

904,929

See Independent Auditors' Report. 31

AMikids Greater AMikids Georgia Ft. Lauderdale

Assets Cash and Cash Equivalents 139,500

Investments


Accounts Receivable

Funding Agencies 7,580

Other 11,827

Prepaid Expenses and Other Assets 48,233

Due from Affiliates 24,624 67,809


Boat Inventory

Boats under Lease

Property and Equipment, Net 26,745

Total Assets 24,624 301,694

Liabilities and Net Assets Liabilities

Lines of Credit

Accounts Payable 26,324

Accrued Expenses 2,129 31,099

Accrued Pension

Due to Affiliates 747 420,138

Deferred Revenues

Security Deposits

Long Term Debt 5,224

Total Liabilities 2,876 482,785

Net Assets: Unrestricted

Board designated

Unrestricted 21,748 (313,734)

Total unrestricted 21,748 (313,734)

Temporarily Restricted 132,643


Total Net Assets 21,748 (181,091)

Total Liabilities and Net Assets 24,624 301,694

AMikids AMikids Jacksonville Miami-Dade

37,852 459,462

30,455 79,541

15,416 19,747

47,205 73,771

60,142 185,410

832,954 131,917

1,024,024 949,848

20,887 63,537

29,554 89,125

348,743 54,372

517,148 946

916,332 207,980

95,513 585,425

95,513 585,425

12,179 156,443

107,692 741,868

1,024,024 949,848



June 30, 2017

AMikids North AMikids Panama Carolina Family City Marine AMikids

Services AMikids Orlando Institute AMikids Pasco Pensacola AMikids Pinellas

56,860 73,661 207,903 174,040 20,407

9,592 10,716 31,459 6,572

7,046 6,495 3,440 8,473 8,200

112,656 31,615 120,111 77,862 76,261

791,556 71,717 71,432 241,048 74,049

40,233

27,375 49,337 459,560 110,000 334,093 949,036

988,447 242,968 876,217 113,440 866,975 1,174,758

45,899 17,412 32,718 66,198 60,737

64,144 30,236 55,646 25,000 96,845 25,792

37,818 412,724 37,387 244,713 229,292

2,131 7,953

352,765 95,441 894,671

147,861 462,503 486,469 25,000 503,197 1,210,492

840,586 (289,869) 353,139 59,295 321,181 (36,854)

840,586 (289,869) 353,139 59,295 321,181 (36,854)

70,334 36,609 29,145 42,597 1,120

840,586 (219,535) 389,748 88,440 363,778 (35,734)

988,447 242,968 876,217 113,440 866,975 1,174,758


AMikids AMikids Sand Piedmont Hills

Assets Cash and Cash Equivalents 197,141 33,755

Investments


Accounts Receivable

Funding Agencies 4,554 12,865

Other 16,800 10,699

Prepaid Expenses and Other Assets 31,206 32,528



Boat Inventory

Boats under Lease

Property and Equipment, Net 92,160 29,367

Total Assets 451,899 245,566


Lines of Credit

Accounts Payable 53,038 42,077


Accrued Pension

Due to Affiliates 22,180 613,437

Deferred Revenues 4,545

Security Deposits




Board designated

Unrestricted 342,142 (454,248)

Total unrestricted 342,142 (454,248)



Total Net Assets 346,723 (454,248)


AMikids

AMikids Southwest

Sandoval Florida

24,558 197,677

461,903

9,746 3,346

158,307 35,711

140,128 74,853

218,290 79,093

551,029 852,583

37,618 58,184

51,148 30,950

2,246,001 41,824

2,263

2,334,767 133,221

433,952

(1,786,495) 251,205

(1,786,495) 685,157

2,757 6,254

27,951

(1,783,738) 719,362

551,029 852,583



June 30, 2017

AMikids Space AMikids AMikids Virginia Coast AMikids St. Louis Tallahassee AMikids Tampa Wilderness AMikids Vol usia

200,063 15,609 16,088 20,093 52,419 33,103

89,919 42,440 26,551 103,174

11,635 9,315 32,899 6,000

45,429 33,793 29,140 37,098 42,518 41,413

158,718 78,645 47,995 98,214 48,408

487,183 17,878 118,647 268,526 162,059 6,041

992,947 145,925 263,625 450,482 393,069 134,965

167,986 7,193 18,962 29,685 21,918 14,693

53,905 21,316 29,696 39,342 50,698 21,987

42,801 84,127 90,683 485,994 1,588,397 402,694

5,295 4,545 82,528 2,539 3,192

269,987 112,636 143,886 637,549 1,663,552 442,566

644,039 33,289 119,739 (218,084) (1,270,483) (307,986)

644,039 33,289 119,739 (218,084) (1,270,483) (307,986)

78,921 31,017 385

722,960 33,289 119,739 (187,067) (1,270,483) (307,601)

992,947 145,925 263,625 450,482 393,069 134,965


AMikids White AMikids Pines Acadiana

Assets Cash and Cash Equivalents 457,316 89,037

Investments


Accounts Receivable

Funding Agencies 62,709

Other 18,199 13,565




Boat Inventory

Boats under Lease


Total Assets 927,138 377,201


Lines of Credit



Accrued Pension

Due to Affiliates 104,060 1,957,810

Deferred Revenues

Security Deposits

Long Term Debt

Total Liabilities 235,416 2,052,539


Board designated

Unrestricted 691,722 (1,685,406)

Total unrestricted 691,722 (1,685,406)



Total Net Assets 691,722 (1,675,338)


AMikids Big AMikids Family Cypress Services

5,170

5,170

4,009

4,009

1,161

1,161

1,161

5,170



June 30, 2017

AMikids Gadsden Center

for Academic AMikids Infinity AMikids Infinity AMikids AMikidsRio AMikids Discipline Marlboro Wake County Lafayette Grande Valley Sarasota County

9,587 9,079 25,295 21,839

12,374

6,818

15,628 19,235 18,795 27,988

27,065 9,779 92,386 143,359

465 4,855 5,541

$ 52,280 38,558 48,945 $ 166,946 143,359

16,409 2,863 4,712 29,161

8,777 10,301 13,698 30,783 70,000

16,473 29,208 11,999 2,037,891

5,260

5,525 859

41,659 42,372 35,934 2,103,954 70,000

10,621 (10,807) 9,816 (1,967,094) 73,359

10,621 (10,807) 9,816 (1,967,094) 73,359

6,993 3,195 30,086

10,621 (3,814) 13,011 (1,937,008) 73,359

52,280 38,558 48,945 166,946 143,359


AMikids

Savannah River AMikids YES

Assets Cash and Cash Equivalents 26,027 $ 88,556

Investments 557,554


Accounts Receivable

Funding Agencies 88,211 55,628

Other 8,568


Due from Affiliates 676 295,075


Boat Inventory

Boats under Lease


Total Assets 178,871 1,062,628


Liabilities

Lines of Credit



Accrued Pension

Due to Affiliates 782,899 33,948

Deferred Revenues 87,572

Security Deposits



Net Assets:

Unrestricted

Board designated

Unrestricted (667,417) 747,381

Total unrestricted (667,417) 747,381

Temporarily Restricted 11,271 60,253


Total Net Assets (656,146) 807,634 Total Liabilities and Net Assets 178,871 1,062,628

AMikids



June 30, 2017

South Carolina AMikidsNew AMikids South

AMikids Georgia Louisiana Wilderness Mexico Carolina AMikids Wings AMikids Caddo, AMikids AMikids Virginia,

Properties Properties Institute Properties

464,259

2,311,700 1,245,497 103,000

2,311,700 1,709,756 103,000

715 714 713

327,797 286,572 4,505

328,512 287,286 5,218

1,983,188 1,422,470 97,782

1,983,188 1,422,470 97,782

1,983,188 1,422,470 97,782 2,311,700 1,709,756 103,000


756,000

756,000

714

132

846

755,154

755,154

755,154 756,000

Statewide

1,603

$ 1,603

1,603

1,603 1,603

Texas '"' Manatee, Inc. Inc.

19,713 $ 140,846 $ 127,590

265,331

1,968 10

100 50,061 21,103 6,663

249 99,465 42,000

10,029 7,097 5,049

$ 100 $ 82,020 268,521 446,633

9,785 16,066 212,116

35,095 26,052 70,959

336,382 30,502 41,827

10,347

391,609 72,620 324,902

100 (309,589) 195,901 121,731

100 (309,589) 195,901 121,731

100 (309,589) 195,901 121,731 100 82,020 268,521 446,633

Assets Cash and Cash Equivalents $ Investments



Funding Agencies

Other Prepaid Expenses and Other Assets

Due from Affiliates


Boat Inventory

Boats under Lease

Property and Equipment, Net

Total Assets $


Liabilities:

Lines of Credit $ Accounts Payable

Accrued Expenses

Accrued Pension

Due to Affiliates

Deferred Revenues

Security Deposits

Long Term Debt

Total Liabilities

Net Assets: Unrestricted:

Board designated

Unrestricted

Total unrestricted

Temporarily Restricted


Total Net Assets

Total Liabilities and Net Assets $


Combining Schedule- Statement of Financial Position June 30, 2017

Total

Before

Eliminations Eliminations Total

8,041,444 $ $ 8,041,444

7,185,981 7,185,981

461,903 461,903

5,074,971 (55,639) 5,019,332

569,884 569,884

2,164,352 (600,834) 1,563,518

22,296,510 (22,296,510)

189,534 189,534

2,532, 710 2,532,710

9,572,586 9,572,586

11,842,692 11,842,692

69,932,567 $ (22,952,983) $ 46,979,584

3,050,862 $ $ 3,050,862

2,385,537 (1,277) 2,384,260

12,083,920 (5,015,551) 7,068,369

726,593 1,041,958 1,768,551

22,295,233 (22,295,233)

1,523,891 1,523,891

2,594,965 2,594,965

1,930,389 1,930,389

46,591,390 (26,270,103) 20,321,287

433,952 433,952

19,976,302 3,364,774 23,341,076

20,410,254 3,364,774 23,775,028

2,845,882 (47,654) 2,798,228

85,041 85,041

23,341,177 3,317,120 26,658,297

69,932,567 $ (22,952,983) $ 46,979,584


AMI kids AMikids Foundation

Public Support and revenue:

State support:

Florida s 1,862,437 s South Carolina 1,466,495

Louisiana 254,777

Texas 143,345

North Carolina 287,760

Missouri 109,780

Virginia 64,313

Georgia

Federal support 1,108,756

Regional Revenue

Contributions 1,062,640 938,644

Total Public Support 6,360,303 938,644

Revenue

Boat Program 8,114,685

Investment income (loss} 532,401 33,773

Other 1,752,430

Total revenue 10,399,516 33,773

Total public support and revenue 16,759,819 972,417

Expenses: Program Services 3,965,617 1,021, 778

Management and general 4,906,551 8,799

Fundraising 466,021

Boat Program 7,875,250

Total expense 17,213,439 1,030,577

Change in Net assets (453,620} (58,160}

Net assets (deficit}, beginning of the year 21,664,998 1,217,868

Net assets (deficit}, end of the year s 21,211,378 s 1,159,708

AMI kids, Inc. and Affiliates Schedule II

Combining Schedule- Statement of Activities Year ended June 30, 2017

AMikids Baton AMikids AMI kids AMikids Clay AMikids AMI kids Emerald AMikids AMI kids

s

s

Rouge Beaufort Bennettsville

s s 1,111,204 1,320,984

153,674 304,056 221,726

771,449 27,475

42,325 210,142 145,180

967,448 1,652,877 1,687,890

90 9,797

413,931 104,991 13,214

414,021 114,788 13,214

1,381,469 1, 767,665 1, 701,104

1,358, 735 1, 742,861 1,664,652

119,464 22,329 24,286

1,478,199 1, 765,190 1,688,938

(96, 730} 2,475 12,166

233,652 908,941 (919,308}

136,922 s 911,416 s (907,142}


County

s 637,137

225,558

3,614

866,309

866,309

966,426

15,871

982,297

(115,988}

(147,977}

s (263,965}

Crossroads Coast Gainesville Georgetown

s s 311,994 s 366,404 s 1,177,281

996,142 28,811 173,268 78,618

147,270 233,818 274,210

188,039 186,673 21,103 79,553

1,331,451 761,296 834,985 1,335,452

55 20 262

303,816 2,000 12,517

303,871 2,020 12,779

1,635,322 761,296 837,005 1,348,231

1,265,150 815,617 975,385 1,235,359

172,210 18,979 20,022 14,671

20,000

1,457,360 834,596 995,407 1,250,030

177,962 (73,300} (158,402} 98,201

(177,934} (378, 761} (774,252} 729,368

s 28 s (452,061} s (932,654} s 827,569

AMikids Georgia

Public Support and revenue: State support:

Florida $ South Carolina

Louisiana

Texas

North Carolina

Missouri

Virginia

Georgia

Federal support

Regional Revenue

Contributions

Total Public Support

Revenue

Boat Program

Investment income (loss) 81 Other

Total revenue 81 Total public support and revenue 81

Expenses: Program Services 588 Management and general 2,724

Fundraising

Boat Program

Total expense 3,312

Change in Net assets (3,231)

Net assets (deficit), beginning ofthe year 24,979

Net assets (deficit), end of the year $ 21,748


Combining Schedule- Statement of Activities

AMI kids North AMikids Greater AMikids AMI kids Carolina Family

Ft. Lauderdale Jacksonville Miami-Dade Services

$ 718,647 $ 582,329 $ 1,478,689 $

2,589,840

70,699 46,882 474,526

283,803 356,701 662,269

208,466 27,261 219,765 5,467

1,281,615 1,013,173 2,835,249 2,595,307

36 98 78 667 7,625 4,375 35,437 (1) 7,661 4,473 35,515 666

1,289,276 1,017,646 2,870,764 2,595,973

1,221,269 1,085,948 2,762,153 2,327,331

30,841 37,987 48,377 11,097

1,252,110 1,123,935 2,810,530 2,338,428

37,166 (106,289) 60,234 257,545 (218,257) 213,981 681,634 583,041

$ (181,091) $ 107,692 $ 741,868 $ 840,586


Year ended June 30, 2017

AMI kids Panama City Marine AMikids

AMI kids Orlando Institute AMikids Pasco Pensacola AMikids Pinellas

$ 634,695 $ 544,132 $ 1,013 $ 2,538,388 $ 831,120

21,682 233,318 (1,573) 198,998 13,392

320,249 667,424 11,593 234,916

29,231 365,442 350 71,147 47,839

1,005,857 1,810,316 (210) 2,820,126 1,127,267

82 28 48 3 9,118 66,958 1,770 33,254 37,239

9,200 66,986 1,770 33,302 37,242

1,015,057 1,877,302 1,560 2,853,428 1,164,509

975,376 1,670,914 (50,342) 2,652,584 1,215,325

36,733 33,123 4,062 31,992 36,108

1,012,109 1,704,037 (46,280) 2,684,576 1,251,433

2,948 173,265 47,840 168,852 (86,924)

(222,483) 216,483 40,600 194,926 51,190

$ (219,535) $ 389,748 $ 88,440 $ 363,778 $ (35,734)

AMikids AMikids Sand

Piedmont Hills


State support:

Florida $ $

South Carolina 1,177,282 1,323,002

Louisiana

Texas

North Carolina

Missouri

Virginia

Georgia

Federal support 181,292 126,553

Regional Revenue 4,300


Total Public Support 1,415,073 1,641,004

Revenue

Boat Program

Investment income (loss} 30

Other 57

Total revenue 87

Total public support and revenue 1,415,160 1,641,005

Expenses:

Program Services 1,444,176 1, 729,268

Management and general 23,457 38,041

Fundraising

Boat Program

Total expense 1,467,633 1, 767,309

Change in Net assets (52,473} (126,304}

Net assets (deficit}, beginning of the year 399,196 (327,944}

Net assets (deficit}, end of the year $ 346,723 $ (454,248}



AMI kids

AMikids Southwest AMikids Space

Sandoval Florida Coast

$ $ 665,593 $ 1, 761,363

1,565,089 33,767 196,715

350,551 343,590

17,833 259,016 142,725

1,582,922 1,308,927 2,444,393

35 27,644 73

85,667

35 27,644 85,740

1,582,957 1,336,571 2,530,133

2,242,571 1,242,670 2,594,128

39,320 29,556 46,314

2,281,891 1,272,226 2,640,442

(698,934} 64,345 (110,309}

(1,084,804} 655,017 833,269

$ (1, 783, 738} $ 719,362 $ 722,960


AMikids St. Louis

$

914,842

8,839

923,681

923,681

915,068

9,838

924,906

(1,225}

34,514

$ 33,289


AMikids AMikids Virginia

Tallahassee AMI kids Tampa Wilderness AMI kids Volusia

$ 491,868 $ 911,542 $ $ 521,667

27,921 12,675 255,681 35,912

104,666 136,204 642,692 263,327

15,310 30,930 28,106 6,140

639,765 1,091,351 926,479 827,046

44

92,127 390

92,171 390

639,765 1,183,522 926,869 827,046

865,090 1,408,445 1,701,918 844,451

33,532 28,043 166,433 18,992

898,622 1,436,488 1,868,351 863,443

(258,857} (252,966} (941,482} (36,397}

378,596 65,899 (329,001} (271,204}

$ 119,739 $ (187,067} $ (1,270,483} $ (307,601}

AMikids White AMI kids Pines Acadiana

Public Support and revenue: State support:

Florida $ $ South Carolina 2,468,240

Louisiana 2,008,363

Texas

North Carolina

Missouri

Virginia

Georgia

Federal support 377,149 272,500

Regional Revenue 190,540 Contributions 264,909 26,455


Revenue

Boat Program

Investment income (loss) 108 47 Other 206

Total revenue 314 47 Total public support and revenue 3,110,612 2,497,905

Expenses: Program Services 2,703,758 2,359,446


Fundraising

Boat Program Total expense 2,732,853 2,384,704

Change in Net assets 377,759 113,201 Net assets (deficit), beginning of the year 313,963 (1,788,539) Net assets (deficit), end of the year $ 691,722 $ (1,675,338)



Gadsden Center AMI kids Big AMikids Family for Academic

Cypress Services Discipline

$ 99,241 $ $ 318,794

15,057 (9,199)

4,771 4,220

109,870 323,014

10,021 (1,353)

10,021 (1,353)

119,891 (1,353) 323,014

160,542 1,550 390,499

10,622 20,662

171,164 1,550 411,161 (51,273) (2,903) (88,147)

52,434 2,903 98,768

$ 1,161 $ $ 10,621


AMikids Infinity

Marlboro

$

450,000 26,595

476,595

so 1,284

1,334

477,929

361,328

57,205

418,533

59,396 (63,210)

$ (3,814)


AMikids Infinity AMI kids AMI kids Rio AMikids Wake County Lafayette Grande Valley Sarasota County

$ $ $ $

812,287

48,711

427,860 53,884 430 27,239

428,290 942,121

48 1,025 8,273

8,321 1,025

428,290 950,442 1,025

364,359 886 1,018,459

58,067 24,162 376

422,426 886 1,042,621 376 5,864 (886) (92,179) 649 7,147 886 (1,844,829) 72,710

$ 13,011 $ $ (1,937,008) $ 73,359

AMI kids S~v~nn~h River AMI kids YES

Public Support ~nd revenue:

State support

Florida 2,059,921

South Carolina

Louisiana

Texas

North Carolina

Missouri

Virginia

Georgia 965,628

Federal support 214,918

Regional Revenue 221,535



Revenue

Boat Program

Investment income (loss) 92,187

Other 5,196 8,639

Total revenue 5,196 100,826

Total public support and revenue 1,179,294 2,645,384

Expenses:

Program Services 1,089,717 2,701,218


Fundraising

Boat Program

Total expense 1,250,442 2,739,210

Ch~nge in Net ~ssets (71,148) (93,826)

Net assets (deficit). beginning of the year (584,998) 901,460

Net assets (deficit), end of the year (656,146) 807,634



AMikids South C~rolin~ AMI kids New

AMikids Georgi~ Louisi~n~ Wilderness Mexico

$

Properties Properties Institute Properties

22,641

22,641

13,700 22,933

140,001

153,701 22,933

176,342 22,933

58,247 106,004 22,641

2,588 846 1,115 1,138

60,835 106,850 1,115 23,779

(60,835) 69,492 (1,115) (846)

2,044,023 1,352,978 98,897 756,000

1,983,188 1.422.470 97,782 755,154



AMI kids South

c~rolin~ AMikids Wings AMikids c~ddo, AMI kids AMI kids Virgini~.

St~tewide Tex~s '"' M~n~tee, Inc. Inc.

888,098 $

364,439

1,343,404 171,368

4,081 13,432

1,347,485 1,072,898 364,439

19,717 124

19,717 124

19,717 1,347,609 1,072,898 364,439

9,238 19,717 1,478,573 857,883 201,757

52 178,625 19,114 40,951

9,290 19,717 1,657,198 876,997 242,708

(9,282) (309,589) 195,901 121,731

10,885 100

1,603 100 (309,589) 195,901 121,731


State support:

Florida $ South Carolina

Louisiana

Texas

North Carolina

Missouri

Virginia

Georgia

Federal support

Regional Revenue

Contributions

Total Public Support

Revenue

Boat Program

Investment income (loss)

Other

Total revenue

Total public support and revenue

Expenses:

Program Services

Management and general

Fundraising

Boat Program

Total expense

Change in Net assets

Net assets (deficit), beginning of the year

Net assets (deficit), end of the year $

Total

Before

Eliminations

18,225,072 $ 10,044,488

2,263,140

955,632

2,877,600

1,024,622

428,752

965,628

7,486,915

8,911,457

5,256,855

58,440,161

8,114,685

735,452

3,169,023

12,019,160

70,459,321

57,766,333

6,698,345

486,021

7,875,250

72,825,949

(2,366,628)

25,707,805

23,341,177 $


Combining Schedule- Statement of Activities Year ended June 30, 2017

Eliminations Total

$ 18,225,072

10,044,488

2,263,140

955,632

2,877,600

1,024,622

428,752

965,628

7,486,915

8,911,457

(1,109,931) 4,146,924

(1,109,931) 57,330,230

8,114,685

(464,306) 271,146

(2,224,052) 944,971

(2,688,358) 9,330,802

(3,798,289) 66,661,032

(3,440,670) 54,325,663

(653,428) 6,044,917

486,021

7,875,250

(4,094,098) 68,731,851

295,809 (2,070,819)

3,021,311 28,729,116

3,317,120 $ 26,658,297


AMI kids, Inc. and Affiliates Schedule of Compensation, Benefits and Other Payments to Agency Head

Or Chief Executive Officer Year ended June 30, 2017

Agency Head Name: O.B. Stander

Purpose

Salary

Benefits-Insurance

Benefits-retirement

Reimbursements

Travel

Total

June 30, 2017

$ 200,481

$

8,939

131,940

26,935

52,724

421,019


COMPLIANCE INFORMATION


Independent Auditors' 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 AMikids, Inc. and Affiliates

Carr. Riggs & Ingram, LLC

2111 Drew Street

Clearwater, Fl33765

(727) 446-0504

(727) 461-7384 (fax)

www.crrcpa.com

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 AMikids, Inc. and Affiliates (the "Organization" ), which comprise the statement of fina ncial posit ion

as of June 30, 2017, 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 September 22, 2017.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Organization'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 t he Institute's

internal control. Accordingly, we do not express an opinion on the effectiveness of the Institute'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.

44

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Organization's financial statements

are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct

and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we

do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and

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

CARR, RIGGS & INGRAM, LLC

Clearwater, Florida September 22, 2017

45


INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE AND CHAPTER 10.650, RULES OF THE AUDITOR GENERAL

To the Board of Trustees AMIKids, Inc. Tampa, Florida

Report on Compliance for Each Major Federal Program and State Project

Carr, Riggs & Ingram. LLC

2111 Drew Street

Clearwater, FL 33765

(7271 446·0504

17271461-7384 (fax)

www.cncpa.com

We have audited the AMikids, Inc. and Affiliates's ("the Organization") comp liance 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 direct and material effect on each of the Organization's major federal programs and state projects for the year ended June 30, 2017. The Organization's major federal programs and state projects are identified in the summary of auditor's resu lts 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 op1n1on on compliance for each of the Organization'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; the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and Chapter 10.650, Rules of the Auditor General, Florida Single Audit Act Audits -Nonprofit and For-Profit Organizations. Those standards, Uniform Guidance and Chapter 10.650, 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 Organization'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 and state project. However, our audit does not provide a legal determination of the Organization's compliance.

46

Opinion on Each Major Federal Program and State Project

In our opinion, the AMIKids, Inc., complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state project for the year ended June 30, 2017.

Report on Internal Control over Compliance

Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Organization's internal control over compliance with requirements that could have a direct and material effect on a major federal program and state projects in order to determine our auditing procedures for the purpose of expressing our opinion on compliance with Uniform Guidance and Chapter 10.650, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliances. Accordingly, we do not express an opinion on the effectiveness of the Organization'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 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 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.

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 Uniform Guidance and Chapter 10.650. Accordingly, this report is not suitable for any other purpose.

CARR, RIGGS & INGRAM, LLC Clearwater, Florida September 22, 2017

47

AMikids, Inc. and Affiliates Schedule of Expenditures of Federal Awards and State Financial Assistance

For the Year Ended June 30, 2017

Grantor/Pass-Through Grantor/Program Title

FEDERAL AWARDS

U.S. DEPARTMENT OF AGRICUL lURE

Indirect Programs:

Child Nutrition Cluster

Passed thru Florida Dept. of Agriculture School Breakfast Program

National School Lunch Program (Note 2)

Passed thru Louisiana Dept. of Education:

School Breakfast Program


Passed thru New Mexico Dept. of Education:



Passed thru Texas Dept. of Agriculture:



Passed thru South Carolina Department of Education



Total Child Nutrition Cluster

TOTAL U.S. DEPARTMENT OF AGRICUL lURE

U.S. DEPARTMENT OF EDUCATION

Indirect Programs:

Passed thru Florida Dept. of Education

Title I Grants to Local Educational Agencies

Passed thru School Board of Charlotte County

Passed thru School Board of Oka I oosa County

Total Title I Grants to Local Educational Agencies

Title I State Agency Program for Neglected

and Delinquent Children and Youth

Passed thru School Board of Bay County

Passed thru School Board of Broward County

Passed thru School Board of Vol usia County

Passed thru Leon County School District

Passed thru School Board of Alachua County

Total Title I State Agency Program for Neglected

and Delinquent Children and Youth

CFDA

CSFA

Number

10.553

10.555

10.553

10.555

10.553

10.555

10.553

10.555

10.553

10.555

84.010

84.010

84.013

84.013

84.013

84.013

84.013

48

Pass-Through

Grant

Number

01-0233

01-0233

09-SFS-007

09-SFS-007

11008

11008

01198

01198

5697,5699,5713,5714,

5715,5716

5697,5699,5713,5714,

5715,5716

7401

2237B

$

(Note 1)

Amount of

Expenditures

147,487

320,282

25,604

51,689

9,857

18,534

14,139

28,412

101,345

224,269

941,618

941,618

976

10,000

10,976

25,000

9,247

6,264

10,816

51,327

$

Amount

Provided To

Subrecipients

(continued)



CFDA Pass-Through (Note 1) Amount

CSFA Grant Amount of Provided To

Grantor/Pass-Through Grantor/Program Title Number Number Expenditures Subrecipients

U.S. DEPARTMENT OF EDUCATION (CONTINUED)

Indirect Programs:

Passed thru South Carolina Dept. of Juvenile Justice

Title I State Agency Program for Neglected

and Delinquent Children and Youth 84.013 $ 172,139 $

TOTAL U.S. DEPARTMENT OF EDUCATION 234,442

U.S. DEPARTMENT OF LABOR

Direct Programs:

Reentry Employment Opportunities 17.270 YF-27300-15-60-A-12 2,909,568

TOTAL U.S. DEPARTMENT OF LABOR 2,909,568

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Indirect Programs:

Passed thru Florida Dept. of Children and Families

Social Services Block Grant

PassedthruSarasota Family YMCA 93.667 DAJ07 49,562

Passed thru Eckerd Circuit 6 and 13 93.667 DAJ07 7,085

Passed thru Children's Network ofSW FL 93.667 DAJ07 33,560

Passed thru Big Bend Community Based Care 93.667 DAJ07 19,605

Passed thru Brevard Family Partnership 93.667 DAJ07 14,153

Passed thru United For Families {Devereux) 93.667 DAJ07 12,788

Passed thru Partnership for Strong Families 93.667 DAJ07 20,943

Passed thru Community Partnership for Children 93.667 DAJ07 3,113

Passed thru Heartland for Children 93.667 DAJ07 1,636

Passed thru Our Kids Miami-Dade 93.667 DAJ07 13,019

Passed thru Community Based Care of Central Florida 93.667 DAJ07 17' 790

Passed thru Children's Home Society of Florida 93.667 DAJ07 1,458

Passed thru Family Support Services of North Florida 93.667 DAJ07 1,336

Passed thru Kids Centra I 93.667 DAJ07 3,078

Passed thru Kids First of Florida 93.667 DAJ07 4,050

Total Social Services Block Grant 203,176

Foster Care- Title IV-E

PassedthruSarasota Family YMCA 93.658 DAJ07 115,645

Passed thru Eckerd Circuit 6 and 13 93.658 DAJ07 16,532

Passed thru Children's Network ofSW FL 93.658 DAJ07 180,365

Passed thru Big Bend Community Based Care 93.658 DAJ07 45,745

Passed thru Brevard Family Partnership 93.658 DAJ07 33,097

Passed thru United For Families {Devereux) 93.658 DAJ07 71,587

Passed thru Partnership for Strong Families 93.658 DAJ07 61,947

Passed thru Community Partnership for Children 93.658 DAJ07 3,367

Passed thru Heartland for Children 93.658 DAJ07 3,372

{continued)

49



Grantor/Pass-Through Grantor/Program Title

Passed thru Florida Dept. of Children and Families

Foster Care- Title IV-E (Continued)

Passed thru Our Kids Miami-Dade

Passed thru Community Based Care of Central Florida

Passed thru Chi I dren's Home Society of Florida

Passed thru Family Support Services of North Florida

Passed thru Kids Central

Passed thru Kids First of Florida

Total Foster Care- Title IV-E

Total Passed thru Florida Dept. of Children and Families

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

TOTAL EXPENDITURES OF FEDERAL AWARDS

STATE FINANCIAL ASSISTANCE- FLORIDA

Florida Department of Education

Direct Projects:

School and Instructional Enhancement · Gads den, Pasco

Special Education Pilot, Vocational Expansion

Total Florida Department of Education

Florida Department of Highway Safety and Motor Vehicles

Direct Projects:

Horse Country Specialty License Plate- PCMI Properties

Total Florida Department of Highway Safety and Motor Vehicles

TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE- FLORIDA

CFDA

CSFA

Number

93.658

93.658

93.658

93.658

93.658

93.658

48.040

76.104

50

Pass-Through

Grant

Number

DAJ07

DAJ07

DAJ07

DAJ07

DAJ07

DAJ07

93Q-97495-6Q001

N/A

$

$

(Note 1)

Amount of

Expenditures

30,377

37,020

3,402

3,118

7,182

9,450

622,206

825,382

825,382

4,899,364

1,442,708

1,442,708

156,380

156,380

$

1,599,088 $

Amount

Provided To

Subrecipients

AMikids, Inc. and Affiliates Notes to Schedule of Expenditures of Federal Awards and State Projects

NOTE 1: BASIS OF PRESENTATION

The schedule of expenditures of federal awards and state financial assistance represents amounts expended from federal award programs and state projects during the fiscal year as determined on the modified accrual basis of accounting. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the Florida Department of Financial Services' State Projects Compliance Supplement. The amounts reported on the Schedule have been reconciled to and are in material agreement with amounts recorded in the Organization's accounting records from which the basic financial statements have been reported. Federal and State funds that are not subject to Uniform Guidance, Texas Single Audit, or Florida Single Audit are not included on this schedule.

The Organization has elected to use the 10 percent de minimis cost rate allowed under the Uniform Guidance for the year ended June 30, 2017.

The Organizations' federal awards do not have any loans or loan guarantees.

NOTE 2: NONCASH ASSISTANCE FOR NATIONAL SCHOOL LUNCH

Food donations from the United States Department of Agriculture represent the amount of donated food consumed during the fiscal year. Commodities totaling $24,966 were valued at fair value at the time of donation and included in the reported expenditures.

51

SUMMARY OF AUDITOR'S RESULTS

AMikids, Inc. and Affiliates Schedule of Findings and Questioned Costs


As required by United States Office of Management and Budget Uniform Guidance and Chapter 10.650, the following is a summary of the results of the audit of the Organization for the fiscal year ended June 30, 2017:

• The auditors' report expresses an unmodified opinion on the basic financial statements of the Organization.

• No significant deficiencies relating to the audit of the basic financial statements are reported in the 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 Auditing Standards.

• No instances of noncompliance material to the basic financial statements of the Organization which would be required to be reported in accordance with Government Auditing Standards were disclosed during the audit.

• No significant deficiencies relating to the audit of the major federal award programs or State projects are reported in the Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program or Project and Internal Control Over Compliance in Accordance with Uniform Guidance and Chapter 10.650.

• The auditors' report on compliance for the major federal award programs and state projects for the Organization is unmodified.

• There were no audit findings relative to the major federal award programs or major state project for AMikids, Inc. and Affiliates

• The programs tested as major programs included: o Federal: Reentry Employment Opportunities (CFDA 17.270) o State of Florida: School and Instructional Enhancement (CSFA 48.040)

• The threshold for distinguishing between Types A and B programs was: o Federal: $750,000 o State of Florida: $300,000

• The Organization qualified as a low-risk auditee, as defined in Uniform Guidance.

FINDINGS RELATED TO THE FINANCIAL STATEMENTS THAT ARE REQUIRED TO BE REPORTED

UNDER GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS (GAGAS)

• The results of our audit of the Organization did not disclose any findings required to be reported in accordance with GAGAS.

52

AMikids, Inc. and Affiliates Schedule of Findings and Questioned Costs


FINDINGS AND QUESTIONED COSTS FOR MAJOR FEDERAL AWARDS PROGRAMS AND STATE

PROJECTS

• The results of our audit of the Organization did not disclose any findings or questioned costs required to be reported under the provisions of Uniform Guidance and Chapter 10.650. No Summary of Prior Audit Findings is required because there were no prior audit findings related to federal awards programs or state projects.

OTHER ISSUES

• No management letter is required because there were no findings required to be reported in the management letter.

53

OTHER INFORMATION

Louisiana Legislative Auditor- Statewide Agreed-Upon Procedures

Introduction and General Comments

The Louisiana Legislative Auditor (LLA) has prescribed statewide agreed-upon procedures

(AUPs) below, which are intended to represent a minimum level of additional work to be

performed at those local entities (local governments and quasi-public organizations, including

nonprofits) that meet the legal requirement to have an audit under the Audit Law. Those local

entities that do not meet the legal requirement to have an audit under the Audit Law are exempt

from performing these AUPs. State entities that are included in the Comprehensive Annual

Financial Report of the State of Louisiana, or local entities subject to Act 77 4 of 2014 (St.

Tammany Parish), are likewise exempt from the AUPs below. These AUPs will be effective beginning with those entities that have a June 30, 2017, fiscal year end.

The A UPs are to be performed under the AICP A attest standards, and the AUP report must be

attached to the audit report that is submitted to the Legislative Auditor's office (i.e. one Adobe

pdf file submitted to the LLA rather than two). The A UPs are required to be performed by the

same firm that performs the annual audit; accordingly, a separate "engagement approval form"

for the statewide AUP engagement is not required.

The practitioner should consider these AUPs to be "complementary" rather than "additive" as

they may duplicate existing audit procedures. For example, if the AUP below indicates that 25

random transactions should be selected and the practitioner would otherwise plan to test 40

random transactions as part of the entity's audit, the practitioner may use 25 of the 40

transactions for both the audit and the AUP engagement. Also, the scope of the procedures

applies to the primary reporting entity and is not required to be extended to discretely presented

component units of the entity.

All exceptions are to be included in the AUP report with management's responses/corrective

actions. Management may either prepare a single overall response to the AUP report or may

respond after each procedure.

If the entity employs one or more internal auditors; the practitioner documents reliance upon the

internal audit function as part of the entity's audit; and the internal auditor performs one or more

of the specific procedures identified below (internal auditor is not required to perform procedures

under the attest standards), the practitioner does not have to include those specific procedures as

part of the scope of the AUP engagement or in the AUP report. In that situation, the practitioner

1 I f' '' r! e Last Updated: February 10,2017


should perform the remaining A UPs under the attest standards and document in the AUP report.

The practitioner must also include a copy of the internal auditor's procedures performed and

exceptions noted when submitting the audit report and AUP report to the LLA. In this situation,

all three reports should be submitted to the LLA as one Adobe pdf file, and all three reports will

be issued by the LLA as public documents.

Please note that the results of the A UPs do not change the practitioner's separate responsibility to

report significant deficiencies, material weaknesses, material noncompliance, etc., as part of the

regular audit engagement. However, the practitioner should not include the AUP exceptions or

internal auditor's exceptions (or a reference to the exceptions) in the audit report's schedule of

findings, unless an AUP or internal audit exception rises to the level of a significant deficiency

or material weakness and is included as a finding for purposes of the audit.

To avoid creating an undue burden on practitioners, the A UPs may be performed for a 12-month "fiscal period" that does not coincide with the entity's "fiscal year", as long as the 12-month

fiscal period is no more than 3 months prior to the end of the entity's fiscal year. For example,

the practitioner may perform A UPs for the fiscal period April I, 20 16 through March 31, 20 I 7

for an entity with a fiscal year ending June 30, 2017. All AUPs below will reference fiscal

period to mean the 12-months covered by the AUPs.

For nonprofit entities, only those A UPs relevant to public monies (and only to the extent that the

AUPs are applicable) are required to be included in the scope of the AUP engagement. For

example, if a nonprofit receives $10 million in non-public funds and also receives $600,000 in

public funds, only the $600,000 would be subject to these A UPs if the funds are not otherwise

commingled. In this example, if the nonprofit did not use the $600,000 in public funds for

payroll or travel expenses, the portions of the A UPs relating to these areas are not required to be

included in the scope of the AUP engagement or report.

Additional instructions concerning engagement approvals, report submission protocols, and the

availability of forms, examples, and tools related to these procedures will be communicated as

they are finalized.

Written Policies and Procedures

I. Obtain the entity's written policies and procedures and report whether those written policies and procedures address each of the following financial/business functions (or report that the entity does not have any written policies and procedures), as applicable:

a) Budgeting, including preparing, adopting, monitoring, and amending the budget



The budgeting process is executed by the Executive Director in concert with AM/kids Finance (Finance). The budget is then reviewed and approved by the Regional Director (RD) and the program's Board. Amendments to the budget can be initiated by the ED by AM/kids Finance and subsequently approved by the program's Board. See also Page VI of the Finance Manual.

b) Purchasing, including (I) how purchases are initiated; (2) how vendors are added to the vendor list; (3) the preparation and approval process of purchase requisitions and purchase orders; ( 4) controls to ensure compliance with the public bid law; and (5) documentation required to be maintained for all bids and price quotes.

See Chapter 6 of the Finance Manual

c) Disbursements, including processing, reviewing, and approving


d) Receipts, including receiving, recording, and preparing deposits

See Chapter 5 of the Finance Manual. Receipts are recorded by the Finance based upon receipt of a Daily Cash Receipts Log.

e) Payroll/Personnel, including (I) payroll processing, and (2) reviewing and approving time and attendance records, including leave and overtime worked.

All BM's are trained on PR processing and completion of time cards. The training document resides on the AM/kids Intranet. BM's enter hours worked per employee/supervisor signed time cards to the PETS system. The PETS system captures all hours worked and computes overtime hours for each pay period. A summary of the payroll as well as a report of all hours worked, including PR exceptions is sent to the ED for approval and then is electronically delivered to Finance PR for system input and payment preparation. In addition, the HR manual covers policy matters that impact PR processing (including leave administration).

f) Contracting, including (I) types of services requiring written contracts, (2) standard terms and conditions, (3) legal review, ( 4) approval process, and (5) monitoring process


g) Credit Cards (and debit cards, fuel cards, P-Cards, if applicable), including (I) how cards are to be controlled, (2) allowable business uses, (3) documentation requirements, ( 4) required approvers, and (5) monitoring card usage

See attached AM/kids finance manual pages 37-45; 62-6.~; 65-66

h) Travel and expense reimbursement, including (I) allowable expenses, (2) dollar thresholds by category of expense, (3) documentation requirements, and ( 4) required approvers

See attached AM/kids finance manual pages 45-52; 59-60

i) Ethics, including (I) the prohibitions as defined in Louisiana Revised Statute 42:1111-1121, (2) actions to be taken if an ethics violation takes place, (3) system to monitor

3 I ;· '' r! e

Last Updated: February 10,2017


possible ethics violations, and ( 4) requirement that all employees, including elected officials, annually attest through signature verification that they have read the entity's ethics policy. Note: Ethics requirements are not applicable to nonprofits.

Not applicable to AM/kids Baton Rouge (Program).

j) Debt Service, including (1) debt issuance approval, (2) EMMA reporting requirements, (3) debt reserve requirements, and (4) debt service requirements.

Not applicable as the program does not issue debt.

The AM/kids National Office Finance Department (Finance) establishes policy and procedure that programs follow for financial activities. The Finance Manual contains the policies and procedures that address Items b)-d); f), g) and h). See attached document.

~ Finance Manual 11202014.doc

Board (or Finance Committee, if applicable)

2. Obtain and review the board/committee minutes for the fiscal period, and:

a) Report whether the managing board met (with a quorum) at least monthly, or on a frequency in accordance with the board's enabling legislation, charter, or other equivalent document.

Program board meets monthly with the exception of July 2016 when the area

experienced a hurricane. A quorum was noted in each of the meetings reviewed. The

board approved the FY 2017 budget at its August 24, 2016 meeting.

Baton Rouge Meeting Minutes 08.24.16.doc

b) Report whether the minutes referenced or included monthly budget-to-actual comparisons on the General Fund and any additional funds identified as major funds in the entity 's prior audit (GAAP-basis).

~ If the budget-to-actual comparisons show that management was deficit spending during the fiscal period, report whether there is a formal/written plan to eliminate the deficit spending for those entities with a fund balance deficit. If there is a formal/written plan, report whether the meeting minutes for at least one board meeting during the fiscal period reflect that the board is monitoring the plan.

41 Page

Last Updated: February 10, 2017


The Board reviews various financial data at each meeting and identifies deficit spending resulting from hurricane damages and delayed school board payments. The board does have a plan to resolve the issues and monitors it monthly.

c) Report whether the minutes referenced or included non-budgetary fmancial information (e.g. approval of contracts and disbursements) for at least one meeting during the fiscal period.

The August 19, 2016 minutes contained evidence of the board approval on nonbudgetary financial information including authorization for one member to execute contracts for building repairs.

~ Baton Rouge Meeting Minutes 08.19.16.doc

Bank Reconciliations

3. Obtain a listing of client bank accounts from management and management's representation that the listing is complete.

The program has one bank account with Business First Bank of Baton Rouge.

4. Using the listing provided by management, select all of the entity's bank accounts (if five accounts or less) or one-third of the bank accounts on a three year rotating basis (if more than 5 accounts). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fund accounts may be excluded from selection if they are otherwise addressed in a separate audit or A UP engagement. For each of the bank accounts selected, obtain bank statements and reconciliations for all months in the fiscal period and report whether:

a) Bank reconciliations have been prepared;

Bank reconciliations were timely prepared for each month during the fiscal year.

b) Bank reconciliations include evidence that a member of management or a board member (with no involvement in the transactions associated with the bank account) has reviewed each bank reconciliation; and

Bank statements are mailed directly to the AM/kids Home Office Finance Department (Finance) for reconciliation by the assigned staff accountant. Reconciliations are reviewed by other staff accountants for accuracy, aged reconciling items, appropriateness of reconciling items and timely completion of the reconciliation.

c) If applicable, management has documentation reflecting that it has researched reconciling items that have been outstanding for more than 6 months as of the end of the fiscal period.

SI Page



Checks issued to vendors that do clear after one year are reversed by AM/kids Finance.

All other reconciling items are addressed with the program business manager and

resolved.

Collections

5. Obtain a listing of cash/check/money order (cash) collection locations and management"s representation that the listing is complete.

The program collects cash/checks/money orders at its office only. Collections typically consist of checks only. Receipt of actual cash is minimal and rare. Receipts are issued for any cash received at the school. Due to the immaterial amounts, formal testing of actual cash receipts processing is not performed by Internal Audit.

6. Using the listing provided by management, select all of the entity's cash collection locations (if five locations or less) or one-third of the collection locations on a three year rotating basis (if more than 5 locations). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fimds may be excluded from selection if they are otherwise addressed in a separate audit or AUP engagement. For each cash collection location selected:

a) Obtain existing written documentation (e.g. insurance policy, policy manual, job description) and report whether each person responsible for collecting cash is (1) bonded, (2) not responsible for depositing the cash in the bank, recording the related transaction, or reconciling the related bank account (report if there are compensating controls performed by an outside party), and (3) not required to share the same cash register or drawer with another employee.

(1) AM/kids Home Office carries Fiduciary and Crime Liability coverage for the program. In addition all employees must pass a criminal background screening prior to employment and again every 5 years thereafter.

(2) Cash collection (checks) can be received by both the program Business Manager (BM) and Executive Director (ED). All cash receipts are listed on a Daily Cash Receipts Log (DCRL), signed and approved by ED and submitted to Finance for posting to the GL. Submission to Finance includes a copy of the check, deposit receipt and any other pertinent documentation received with the check. As stated previous(y, bank statements are received directly from the financial institution at Finance for reconciliation.

(3) NA, programs do not have cash registers and receipt of actual cash at the program is rare and considered immaterial. If cash is received at the program, a cash receipt is issued with a copy retained by the program. A copy of the cash receipt is attached to the DCRL submitted to Finance.



b) Obtain extstmg written documentation (e. g. sequentially numbered receipts, system report, reconciliation worksheets, policy manual) and report whether the entity has a formal process to reconcile cash collections to the general ledger and/or subsidiary ledgers, by revenue source and/or agency fund additions, by a person who is not responsible for cash collections in the cash collection location selected.

See Procedure # 5 and #6A above.

c) Select the highest (dollar) week of cash collections from the general ledger or other accounting records during the fi scal period and:

);> Using entity collection documentation, deposit slips, and bank statements, trace daily collections to the deposit date on the corresponding bank statement and report whether the deposits were made within one day of collection. If deposits were not made within one day of collection, report the number of days from receipt to deposit for each day at each collection location.

);> Using sequentially numbered receipts, system reports, or other related collection documentation, verifY that daily cash collections are completely supported by documentation and report any exceptions.

IA reviewed the bank statements for the period 07101116-0613011 7 for deposit activity noting the statement for 11130117 to have the highest deposits totaling $251,504.26. This month was selected for testing. See the work performed in the test spreadsheet. Checks received at the program are not required to be date and time stamped, thus IA was unable to prove that cash receipts were deposited to the bank within one day of receipt as is required in the Finance ManuaL

IA Work Paper Updated for LA AUP testing.

~ Baton Rouge -

UpdatedAudit Test SPI

7. Obtain existing written documentation (e.g. policy manual, written procedure) and report whether the entity has a process specifically defined (identified as such by the entity) to determine completeness of all collections, including electronic transfers, for each revenue source and agency fund additions (e.g. periodic confirmation with outside parties, reconciliation to utility billing after cutoff procedures, reconciliation of traffic ticket number sequences, agency fund forfeiture monies confirmation) by a person who is not responsible for collections.

Amounts received are complete as all significant deposits tested (Finance, United Way, EBRSS) deposit amounts are supported by contracts, invoices or grants. See work paper.

Disbursements - General (excluding credit card/debit card/fuel card/P-Card purchases or

payments)

71 Page



8. Obtain a listing of entity disbursements from management or, alternately, obtain the general ledger and sort/filter for entity disbursements. Obtain management's representation that the listing or general ledger population is complete.

Attached below is a listing of all AP disbursements for FY 2016

f!j BRMI Disbursements

for FY 2017-Convertec

IA, in connection with its audit of the program as of 03131117 obtained a listing of AP disbursements by vendor directly from GL. Total disbursed during the period was $324,139.00.

9. Using the disbursement population from #8 above, randomly select 25 disbursements (or randomly select disbursements constituting at least one-third of the dollar disbursement population if the entity had less than 25 transactions during the fiscal period), excluding credit card/debit card/fuel card/P-card purchases or payments. Obtain supporting documentation (e.g. purchase requisitions, system screens/ logs) for each transaction and report whether the supporting documentation for each transaction demonstrated that:

a) Purchases were initiated using a requisition/purchase order system or an equivalent electronic system that separates initiation from approval functions in the same manner as a requisition/purchase order system.

b) Purchase orders, or an electronic equivalent, were approved by a person who did not initiate the purchase.

c) Payments for purchases were not processed without (1) an approved requisition and/or purchase order, or electronic equivalent; a receiving report showing receipt of goods purchased, or electronic equivalent; and an approved invoice.

IA selected 35 AP disbursements (net of the exclusions outlined above) totaling $185,199.27, or 57% of the dollars disbursed during the audit period. See the test spread sheet for work performed including tracing of amount disbursed to an invoice or other supporting documentation that was approved by the ED, and where necessary, by the Board. Exceptions noted were immaterial and do not indicate a break down in controls or pose additional risk to the program.

For the remaining 3 months of FY '17 not included in IA 's audit, we selected 9 vendor payments from the period 04101117-06130117 totaling $21,730.43 from the total disbursed during the period of $56,392.05. The sample represented 38.5% of the total dollars disbursed. No exceptions noted.

8I Page



~J Baton Rouge -

UpdatedAudit Test Sp1

Per the Finance Manual Purchase Orders (PO's) are to be prepared and approved by the ED for all purchases over $1,000 and further supported by three competitive bids for all non-routine/non-recurring expenditures. PO's are required to be two part forms with one part given to the vendor and one part retained by the program. PO copies are not submitted to Finance in connection with payment processing. PO's are not required for routine/recurring purchases. IA does not view PO's as a significant control. However, all AP disbursements require ED approval. Non-routine non-recurring AP disbursements over $2,500 require the additional approval of RD and Board of Directors.

IA does not test PO process as PO copies are not submitted and filed in the invoice files in the Finance Department. In addition, most all AP disbursements are routine or recurring in nature. IA does, however, ask to view bids for expenditures over $1,000 as part of the test process.

See the WP posted above for the work performed.

10. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the person responsible for processing payments ts prohibited from adding vendors to the entity 's purchasing/disbursement system.

The BM typically adds new vendors to the system which is considered to be an acceptable risk by Finance as the AP Web system will identifY on the Daily Report all new vendors added. This report is reviewed and approved by the ED prior to submission of the check run to Finance. In addition, the program over nights all invoices and AP Web Reports to Finance who compares the invoices to the AP submission received from the program. Any exceptions noted are resolved before Finance will release the report of checks to be printed to the school.

11. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the persons with signatory authority or who make the fmal authorization for disbursements have no responsibility for initiating or recording purchases.

ED's have check signing authority and can initiate purchases. However, the BM is responsible for AP input and as outlined in #1 0, above, all invoices must be sent to Finance for review prior to release of the check run. All purchases initiated by the ED require RD approval.

12. Inquire of management and observe whether the supply of unused checks is maintained in a locked location, with access restricted to those persons that do not have signatory authority, and report any exceptions. Alternately, if the checks are electronically printed on blank

9I Page



check stock, review entity documentation (electronic system control documentation) and report whether the persons with signatory authority have system access to print checks.

BM's maintain the unissued check stock in a locked filing cabinet in their office which is locked after hours. The ED, who has check signing authority, has access to the check supply. Finance considers this an acceptable risk as the ED may have to process AP's and issue disbursements during the absence of the BM. See mitigating controls above relative to Finance Staff Accountants reviewing/approving disbursements prior to release of the check run. Also, Staff Accountants reconcile the disbursing account.

13. If a signature stamp or signature machine is used, inquire of the signer whether his or her signature is maintained under his or her control or is used only with the knowledge and consent of the signer. Inquire of the signer whether signed checks are likewise maintained under the control of the signer or authorized user until mailed. Report any exceptions.

NA, all checks are manually signed.

Credit Cards/Debit Cards/Fuel Cards/P-Cards

14. Obtain from management a listing of all active credit cards, bank debit cards, fuel cards, and P-cards (cards), including the card numbers and the names of the persons who maintained possession of the cards. Obtain management ' s representation that the listing is complete.

Program has 4 credit cards- Chevron (4533) with total charges of $91.38, Home Depot (21 79) with total charges of $1,045.1 7, Office Depot (7036) with total charges of $1,375.25, and Sam 's Club (0495) with total charges of $2,913.85. Only the last four digits of the account numbers are presented. The list was provided to IA by program management and supported by review of payments posted to AP during the period. The check registers are presented below.

Chevron Converted Check Register.txt

Home Depot Converted Check Regi·

Office Depot Converted Check Regi·

Sam's Club Converted Check Register.txt

15. Using the listing prepared by management, randomly select 10 cards (or at least one-third of the cards if the entity has less than 10 cards) that were used during the fiscal period, rotating cards each year. If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner.

Obtain the monthly statements, or combined statements if multiple cards are on one statement, for the selected cards. Select the monthly statement or combined statement with the largest dollar activity for each card (for a debit card, select the monthly bank statement with the largest dollar amount of debit card purchases) and:

10 I Page Last Updated: February 10, 2017


Program has 4 card accounts with Sam's having 2 cards. Based on the above methodology, IA selected Sam's Club and Office Depot for testing as noted below:

Office Depot- 9121116 Ck # 23162- $670.82 Sam's Club- 6106117, Ck # 23511- $614.78

a) Report whether there is evidence that the monthly statement or combined statement and supporting documentation was reviewed and approved, in writing, by someone other than the authorized card holder. [Note: Requiring such approval may constrain the legal authority of certain public officials (e.g., mayor of a Lawrason Act municipality); these instances should not be reported.)]

Review of the invoices and related charge receipts noted charges were made by Program staff members and approved by the ED. Accounts are in the name of the Program.

b) Report whether finance charges and/or late fees were assessed on the selected statements.

The Office Depot invoice included $11.40 in finance charges and $39 in Late Fees. The Sam's Club invoice included 11.64 in finance charges, on(y.

16. Using the monthly statements or combined statements selected under #15 above, obtain supporting documentation for all transactions for each of the I 0 cards selected (i.e. each of the I 0 cards should have one month of transactions subject to testing).

a) For each transaction, report whether the transaction is supported by:

~ An original itemized receipt (i.e., identifies precisely what was purchased)

~ Documentation of the business/public purpose. For meal charges, there should also be documentation of the individuals participating.

~ Other documentation that may be required by written policy (e.g., purchase order, written authorization.)

All charges contained in the invoice tested were supported by an original itemized receipt and documentation of the business purpose. There no meal charges included in the reports tested.

b) For each transaction, compare the transaction's detail (nature of purchase, dollar amount of purchase, supporting documentation) to the entity's written purchasing/disbursement policies and the Louisiana Public Bid Law (i.e. transaction is a large or recurnng purchase requiring the solicitation of bids or quotes) and report any exceptions.

No exceptions noted. Items purchased were not subject to bids.

c) For each transaction, compare the entity's documentation of the business/public purpose to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. cash advances or non-business purchases, regardless whether

lllf'<1r!£0



they are reimbursed). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception. No exceptions noted.

Travel and Expense R eimbursement

17. Obtain from management a listing of all travel and related expense reimbursements, by person, during the fiscal period or, alternately, obtain the general ledger and sort/filter for travel reimbursements. Obtain management' s representation that the listing or general ledger is complete. lA pulled a report from the GL AP system listing all employee expense reimbursements for the year. See the attached report.

Employee Expenses Converted.txt

18. Obtain the entity ' s written policies related to travel and expense reimbursements. Compare the amounts in the policies to the per diem and mileage rates established by the U.S. General Services Administration (www.gsa.gov) and report any amounts that exceed GSA rates.

See the Finance Manual attached to this document for the program's policy on travel and expense reimbursements (Pages 45-52). The program does not have established per diem amounts in the policy and mileage is reimbursed at $.445 per mile. However, travel must be reasonable relative to geographic location. A maximum of three meals per day are reimbursed. Expense reports are reviewed and approved by the ED and then by Finance for reasonableness of amounts and adequacy of documentation prior to processing for payment. ED expense reports are also reviewed and approved by the respective Regional Director.

Per the GSA, per diem allowed in Baton Rouge is as follows:

Hotel expense is $59/night, excluding tax. Food and incidentals is $59/day. Mileage rate is $.535.

19. Using the listing or general ledger from # 17 above, select the three persons who incurred the most travel costs during the fiscal period. Obtain the expense reimbursement reports or prepaid expense documentation of each selected person, including the supporting documentation, and choose the largest travel expense for each person to review in detaiL For each of the three travel expenses selected:

Johnny Cooper Total Expense$1,962.41 Transaction Reviewed 03115117 $1004.92


http://www.gsa.gov


Nicole Jones Total Expense $2,304.55 Yahmani Adams Total Expense $2,238.05

Transaction Reviewed 06130117$1,602.47 Transaction Reviewed 04105117$784.14

a) Compare expense documentation to written policies and report whether each expense was reimbursed or prepaid in accordance with written policy (e.g., rates established for meals, mileage, lodging). If the entity does not have written policies, compare to the GSA rates (#18 above) and report each reimbursement that exceeded those rates.

No exceptions, food expenses did not exceed the GSA per diems established for food, there were no hotel charges in the sample.

b) Report whether each expense is supported by:

J> An original itemized receipt that identifies precisely what was purchased. [Note: An expense that is reimbursed based on an established per diem amount (e.g., meals) does not require a receipt.]

J> Documentation of the business/public purpose (Note: For meal charges, there should also be documentation of the individuals participating).

J> Other documentation as may be required by written policy (e.g., authorization for travel, conference brochure, certificate of attendance)

No exceptions noted.

c) Compare the entity's documentation of the business/public purpose to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. hotel stays that extend beyond conference periods or payment for the travel expenses of a spouse). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception.

No exceptions.

d) Report whether each expense and related documentation was reviewed and approved, in writing, by someone other than the person receiving reimbursement.

All expenses were reviewed and approved by the ED as evidenced by his signature or initials on the invoices attached to the expense reports or his signature on the report itself

Contracts

20. Obtain a listing of all contracts in effect during the fiscal period or, alternately, obtain the general ledger and sort/filter for contract payments. Obtain management's representation that the listing or general ledger is complete.



See below. 21. Using the listing above, select the five contract "vendors" that were paid the most money

during the fiscal period (excluding purchases on state contract and excluding payments to the practitioner). Obtain the related contracts and paid invoices and:

Per review of the AP disbursement files and statement from management received in connection IA 's 03131117 audit there were only two contract vendors, Sondra Hayes (Medicaid Services) and Elliot Peterson (Mental Health Services). These vendors rendered no services in FY 2017. Pass further work with respect to Steps a) through e) below.

a) Report whether there is a formal/written contract that supports the services arrangement and the amount paid.

b) Compare each contract ' s detail to the Louisiana Public Bid Law or Procurement Code. Report whether each contract is subject to the Louisiana Public Bid Law or Procurement Code and:

);> If yes, obtain/compare supporting contract documentation to legal requirements and report whether the entity complied with all legal requirements (e.g., solicited quotes or bids, advertisement, selected lowest bidder)

);> If no, obtain supporting contract documentation and report whether the entity solicited quotes as a best practice.

c) Report whether the contract was amended. If so, report the scope and dollar amount of the amendment and whether the original contract terms contemplated or provided for such an amendment.

d) Select the largest payment from each of the five contracts, obtain the supporting invoice, compare the invoice to the contract terms, and report whether the invoice and related payment complied with the terms and conditions of the contract.

e) Obtain/review contract documentation and board minutes and report whether there is documentation of board approval, if required by policy or law (e.g. Lawrason Act or Home Rule Charter).

Payroll and Personnel

22. Obtain a listing of employees (and elected officials, if applicable) with their related salaries, and obtain management' s representation that the listing is complete. Randomly select five employees/officials, obtain their personnel files, and:

IA selected 5 employees for review of HR files in connection with programs 3131117 audit. The document below is a listing (from Data Pro) of all employees that worked at the program.

~ BRMPR117

Modified.xlsx


14 I Page


a) Review compensation paid to each employee during the fiscal period and report whether payments were made in strict accordance with the terms and conditions of the employment contract or pay rate structure.

See the testing performed in the work paper below.

b) Review changes made to hourly pay rates/salaries during the fiscal period and report whether those changes were approved in writing and in accordance with written policy.

a) See IA 's audit WP, no exceptions.

Baton Rouge -UpdatedAudit Test Spt

b) There were no raises granted during the FY to the employees tested. Verified through review each employee's PR check registers for the FY.

Adams-Atterberry PR Atterberry PR Gill Check Register Gill Ck Reg 07-16 thru Jones 7-16 thru 12-16 Check Register 1-17 tl Register 7-16 thru 12-1-17 thru 6-17 Conve 12-16 Converted.txt Converted.txt

f!t r!i f!t Jones Register 1-17 Speed PR 7-16 thru Speed Ck Register

thru 6-17 Converted.o 12-16.txt 01-17 thru 6-17 ConvE

23. Obtain attendance and leave records and randomly select one pay period in which leave has been taken by at least one employee. Within that pay period, randomly select 25 employees/officials (or randomly select one-third of employees/officials if the entity had less than 25 employees during the fiscal period), and:

Per the report posted at #22, above there were 14 active employees as of 06130117, all were selected for testing.

a) Report whether all selected employees/officials documented their daily attendance and leave (e.g., vacation, sick, compensatory). (Note: Generally, an elected official is not eligible to earn leave and does not document his/her attendance and leave. However, if the elected official is earning leave according to policy and/or contract, the official should document his/her daily attendance and leave.)

b) Report whether there is written documentation that supervisors approved, electronically or in writing, the attendance and leave of the selected employees/officials.

#23 a) and b) - lA selected the 04/15/17 PR for testing, no exceptions noted.

m:. )-

BRM Time Cards.pdf



c) Report whether there is written documentation that the entity maintained written leave records (e.g., hours earned, hours used, and balance available) on those selected employees/officials that earn leave.

AMikids PR maintains records of accumulated PTO and is included in the PR system. In addition, the employee's pay stub also reflects the total Wellness Hours (PTO) accumulated for the year to date. Attached is a sample report for 6130117 of Accrued PTO for BRMI through the 6125117 PR and a sample pay stub for a BRMI employee.

EiDI }.

BRMI Accrued PTO [):)cs.pdf

24. Obtain from management a list of those employees/officials that terminated during the fiscal period and management's representation that the list is complete. If applicable, select the two largest termination payments (e.g. , vacation, sick, compensatory time) made during the fiscal period and obtain the personnel files for the two employees/officials. Report whether the termination payments were made in strict accordance with policy and/or contract and approved by management.

Per the employee list posted at #22, there were two terminated employees during FY 2017.

Melissa Durham- Terminated 12123116, attached document shows final pay 01115117 for accrued PTO.

113-)..

DJrham Termination.pdf

LaTafta Miles- Terminated 8125116, attached document final pay for 9115116 for accrued PTO.

Miles Termination.pdf

25. Obtain supporting documentation (e.g. cancelled checks, EFT documentation) relating to payroll taxes and retirement contributions during the fiscal period. Report whether the employee and employer portions of payroll taxes and retirement contributions, as well as the required reporting forms, were submitted to the applicable agencies by the required deadlines. IA obtained the quarterly filings for federal and state income taxes and FICA for the program for the fiscal year. Amounts per the filings were traced to remittance documentation and to the PR system for each quarter. There were no exceptions noted.



The program did not have any retirement withholdings employee paychecks processed during the fiscal year.

Ethics (excluding nonprofits)

26. Using the five randomly selected employees/officials from procedure #22 under "Payroll and Personnel"' above, obtain ethics compliance documentation from management and report whether the entity maintained documentation to demonstrate that required ethics training was completed.

NA

27. Inquire of management whether any alleged ethics violations were reported to the entity during the fiscal period. If applicable, review documentation that demonstrates whether management investigated alleged ethics violations, the corrective actions taken, and whether management's actions complied with the entity's ethics policy. Report whether management received allegations, whether management investigated allegations received, and whether the allegations were addressed in accordance with policy.

NA

Debt Service (excluding nonprofits)

28. If debt was issued during the fiscal period, obtain supporting documentation from the entity, and report whether State Bond Commission approval was obtained.

NA

29. If the entity had outstanding debt during the fiscal period, obtain supporting documentation from the entity and report whether the entity made scheduled debt service payments and maintained debt reserves, as required by debt covenants.

30. If the entity had tax millages relating to debt service, obtain supporting documentation and report whether millage collections exceed debt service payments by more than I 0% during the fiscal period. Also, report any millages that continue to be received for debt that has been paid off.

Other

31. Inquire of management whether the entity had any misappropriations of public funds or assets. If so, obtain/review supporting documentation and report whether the entity reported the misappropriation to the legislative auditor and the district attorney of the parish in which the entity is domiciled.

There were no misappropriations during the period.

17lf'<1r!£0



32. Observe and report whether the entity has posted on its premises and website, the notice required by R.S. 24:523.1. This notice (available for download or print at www.lla.la.gov/hotline) concerns the reporting of misappropriation, fraud, waste, or abuse of public funds.

lA did not look for the signage during its site visit. The program ED confirmed to lA that the notice is posted at the facility.

33. If the practitioner observes or otherwise identifies any exceptions regarding management' s representations in the procedures above, report the nature of each exception.

No exceptions.


http://www.lla.la.gov/hotline

Louisiana Legislative Auditor – Statewide Agreed-Upon Procedures

1 | P a g e Last Updated: February 10, 2017

AMIkids Caddo –All procedures performed below were performed by AMIkids internal audit department. See below for procedures performed and results of procedures for each step listed.

Introduction and General Comments The Louisiana Legislative Auditor (LLA) has prescribed statewide agreed-upon procedures (AUPs) below, which are intended to represent a minimum level of additional work to be performed at those local entities (local governments and quasi-public organizations, including nonprofits) that meet the legal requirement to have an audit under the Audit Law. Those local entities that do not meet the legal requirement to have an audit under the Audit Law are exempt from performing these AUPs. State entities that are included in the Comprehensive Annual Financial Report of the State of Louisiana, or local entities subject to Act 774 of 2014 (St. Tammany Parish), are likewise exempt from the AUPs below. These AUPs will be effective beginning with those entities that have a June 30, 2017, fiscal year end.

The AUPs are to be performed under the AICPA attest standards, and the AUP report must be attached to the audit report that is submitted to the Legislative Auditor’s office (i.e. one Adobe pdf file submitted to the LLA rather than two). The AUPs are required to be performed by the same firm that performs the annual audit; accordingly, a separate “engagement approval form” for the statewide AUP engagement is not required.

The practitioner should consider these AUPs to be “complementary” rather than “additive” as they may duplicate existing audit procedures. For example, if the AUP below indicates that 25 random transactions should be selected and the practitioner would otherwise plan to test 40 random transactions as part of the entity’s audit, the practitioner may use 25 of the 40 transactions for both the audit and the AUP engagement. Also, the scope of the procedures applies to the primary reporting entity and is not required to be extended to discretely presented component units of the entity.

All exceptions are to be included in the AUP report with management’s responses/corrective actions. Management may either prepare a single overall response to the AUP report or may respond after each procedure.

If the entity employs one or more internal auditors; the practitioner documents reliance upon the internal audit function as part of the entity’s audit; and the internal auditor performs one or more of the specific procedures identified below (internal auditor is not required to perform procedures under the attest standards), the practitioner does not have to include those specific procedures as part of the scope of the AUP engagement or in the AUP report. In that situation, the practitioner should perform the remaining AUPs under the attest standards and document in the AUP report.


The practitioner must also include a copy of the internal auditor's procedures performed and

exceptions noted when submitting the audit report and AUP report to the LLA. In this situation,

all three reports should be submitted to the LLA as one Adobe pdf file , and all three reports will

be issued by the LLA as public documents.

Please note that the results of the AUPs do not change the practitioner's separate responsibility to

report significant deficiencies, material weaknesses, material noncompliance, etc. , as part of the

regular audit engagement. However, the practitioner should not include the AUP exceptions or

internal auditor's exceptions (or a reference to the exceptions) in the audit report's schedule of

findings, unless an AUP or internal audit exception rises to the level of a significant deficiency

or material weakness and is included as a finding for purposes of the audit.

To avoid creating an undue burden on practitioners, the AUPs may be performed for a 12-month

"fiscal period" that does not coincide with the entity's " fiscal year", as long as the 12-month

fiscal period is no more than 3 months prior to the end of the entity's fiscal year. For example,

the practitioner may perform A UPs for the fiscal period April 1, 2016 through March 31 , 2017

for an entity with a fiscal year ending June 30, 2017. All AUPs below will reference fiscal

period to mean the 12-months covered by the AUPs.

For nonprofit entities, only those AUPs relevant to public monies (and only to the extent that the

AUPs are applicable) are required to be included in the scope of the AUP engagement. For example, if a nonprofit receives $10 million in non-public funds and also receives $600,000 in

public funds, only the $600,000 would be subject to these A UPs if the funds are not otherwise commingled. In this example, if the nonprofit did not use the $600,000 in public funds for

payroll or travel expenses, the portions of the A UPs relating to these areas are not required to be

included in the scope of the AUP engagement or report.

Additional instructions concerning engagement approvals, report submission protocols, and the availability of forms, examples, and tools related to these procedures will be communicated as

they are finalized.

Written Policies and Procedures

~ Finance Manual 11202014.doc

1. Obtain the entity's written policies and procedures and report whether those written policies and procedures address each of the following fmancial/business functions (or report that the entity does not have any written policies and procedures), as applicable:

21 Page



a) Budgeting, including preparing, adopting, monitoring, and amending the budget

The budgeting process is executed by the Executive Director in concert with AMikids Finance (Finance). The budget is then reviewed/approved by the Regional Director and the program's Board. Amendments to the budget can be initiated by the ED by AMikids Finance and subsequently approved by the program's Board. See also Page vi of the Finance Manual.

b) Purchasing, including (1) how purchases are initiated; (2) how vendors are added to the vendor list; (3) the preparation and approval process of purchase requisitions and purchase orders; ( 4) controls to ensure compliance with the public bid law; and (5) documentation required to be maintained for all bids and price quotes.

See attached AMikids finance manual Chapter 6

c) Disbursements, including processing, reviewing, and approving

See attached AMikids finance manual Chapter 6

d) Receipts, including receiving, recording, and preparing deposits

See Chapter 5 of the Finance Manual. Receipts are recorded by the Finance based upon receipt of a Daily Cash Receipts Log.

e) Payroll/Personnel, including (1) payroll processing, and (2) reviewing and approving time and attendance records, including leave and overtime worked.

All BM's are trained on PR processing and completion of time cards. The training document resides on the AMikids Intranet. BM's enter hours worked per employee/supervisor signed time cards to the PETS system. The PETS system captures all hours worked and computes overtime hours for each pay period. A summary of the payroll as well as a report of all hours worked, including PR exceptions is sent to the ED for approval and then is electronically delivered to Finance PR for system input and payment preparation. In addition, the HR manual covers policy matters that impact PR processing (including leave administration).

f) Contracting, including (1) types of services requiring written contracts, (2) standard terms and conditions, (3) legal review, ( 4) approval process, and (5) monitoring process

See attached AMikids Finance manual chapter 12

g) Credit Cards (and debit cards, fuel cards, P-Cards, if applicable), including (1) how cards are to be controlled, (2) allowable business uses, (3) documentation requirements, ( 4) required approvers, and (5) monitoring card usage

See attached AMikids finance manual pages 37-45, 62-63; 65-66

3 I ;· '' r! e



h) Travel and expense reimbursement, including (1) allowable expenses, (2) dollar thresholds by category of expense, (3) documentation requirements, and ( 4) required approvers

See attached AMikids finance manual pages 45-52; 59-60

i) Ethics, including (1) the prohibitions as defmed in Louisiana Revised Statute 42:1111-1121, (2) actions to be taken if an ethics violation takes place, (3) system to monitor possible ethics violations, and ( 4) requirement that all employees, including elected officials, annually attest through signature verification that they have read the entity's ethics policy. Note: Ethics requirements are not applicable to nonprofits. N/ A

j) Debt Service, including (1) debt issuance approval, (2) EMMA reporting requirements, (3) debt reserve requirements, and (4) debt service requirements. No debt servicing at the program level

Board (or Finance Committee, if applicable)

AMikids-Caddo_Boar d_Minutes_OS-10-16.

~ AMIKids Board

Minutes 01-18-17.dO<

Board Meeting Minutes 6-26-17.pdf

AMIKids Board Minutes 9-15-16.doo

~ AMIKids Board

Minutes 10-20-16.do<

~ -,: AMIKids Board Board Meeting

Minutes 02-28-17.do< Minutes 3-21-17.pdf

AMIKids Board AMIKids Board Minutes 11-17-16.do<Minutes 12-13-16.do<



2. Obtain and review the board/committee minutes for the fiscal period, and:

a) Report whether the managing board met (with a quorum) at least monthly, or on a frequency in accordance with the board' s enabling legislation, charter, or other equivalent document. Board meetings with a quorum held monthly

b) Report whether the minutes referenced or included monthly budget-to-actual comparisons on the General Fund and any additional funds identified as major funds in the entity' s prior audit (GAAP-basis). Yes financial budget information referenced in board meeting minutes

~ If the budget-to-actual comparisons show that management was deficit spending during the fiscal period, report whether there is a formal/written plan to eliminate the deficit spending for those entities with a fund balance deficit. If there is a formaVwritten plan, report whether the meeting minutes for at least one board meeting during the fiscal period reflect that the board is monitoring the plan. N/ A

c) Report whether the minutes referenced or included non-budgetary fmancial information (e.g. approval of contracts and disbursements) for at least one meeting during the fiscal

41 Page



period. Yes non-budgetary financial information referenced in board meeting minutes.

Bank Reconciliations

3. Obtain a listing of client bank accounts from management and management's representation that the listing is complete. One checking account ending in 2733

4. Using the listing provided by management, select all of the entity's bank accounts (if five accounts or less) or one-third of the bank accounts on a three year rotating basis (if more than 5 accounts). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fimd accounts may be excluded ji-om selection if they are otherwise addressed in a separate audit or AUP engagement. For each of the bank accounts selected, obtain bank statements and reconciliations for all months in the fiscal period and report whether:

a) Bank reconciliations have been prepared; Yes

b) Bank reconciliations include evidence that a member of management or a board member (with no involvement in the transactions associated with the bank account) has reviewed each bank reconciliation; and

Bank statements are received in home office, reconciled by primary staff accountant for program and approved by a peer staff accountant. Neither have any involvement in transactions associated with the bank account.

c) If applicable, management has documentation reflecting that it has researched reconciling items that have been outstanding for more than 6 months as of the end of the fiscal period.

Checks issued to vendors that do clear after one year are reversed by AMikids Finance. All other reconciling items are addressed with the program business manager and resolved.

Collections

5. Obtain a listing of cash/check/money order (cash) collection locations and management's representation that the listing is complete.

Collection locations: AMikids Caddo

Using the listing provided by management, select all of the entity's cash collection locations (if five locations or less) or one-third of the collection locations on a three year rotating basis (if more than 5 locations). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fimds may be excluded from selection if they are otherwise addressed in a separate audit orA UP engagement. For each cash collection location selected:

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a) Obtain ex1stmg written documentation (e.g. insurance policy, policy manual, job description) and report whether each person responsible for collecting cash is (I) bonded, (2) not responsible for depositing the cash in the bank, recording the related transaction, or reconciling the related bank account (report if there are compensating controls performed by an outside party), and (3) not required to share the same cash register or drawer with another employee.

(1) AMikids Home Office carries Fiduciary and Crime Liability coverage for the program. In addition all employees must pass a criminal background screening prior to employment and again every 5 years thereafter.

(2) Cash collection (checks) can be received by both the program Business Manager and Executive Director.

b) Obtain ex1stmg written documentation (e.g. sequentially numbered receipts, system report, reconciliation worksheets, policy manual) and report whether the entity has a formal process to reconcile cash collections to the general ledger and/or subsidiary ledgers, by revenue source and/or agency fund additions, by a person who is not responsible for cash collections in the cash collection location selected.

Staff accountants perform bank reconciliations and reconcile cash collected at program to general ledger. Staff accountants are not responsible for cash collection at location.

c) Select the highest (dollar) week of cash collections from the general ledger or other accounting records during the fiscal period and:

J> Using entity collection documentation, deposit slips, and bank statements, trace daily collections to the deposit date on the corresponding bank statement and report whether the deposits were made within one day of collection. If deposits were not made within one day of collection, report the number of days from receipt to deposit for each day at each collection location.

There is no requirement that programs maintain time-stamped envelopes as cash/checks are received by the program. Reference AMikids Finance Manual Chapter 5 attached above. All deposits are required to be made the next business day after receipt.

J> Using sequentially numbered receipts, system reports, or other related collection documentation, verity that daily cash collections are completely supported by documentation and report any exceptions.

Daily Cash Receipt logs are completed and sent to the staff accountant for the program. Copies of checks deposited and deposit receipts are sent with these logs.

6. Obtain existing written documentation (e.g. policy manual, written procedure) and report whether the entity has a process specifically defined (identified as such by the entity) to



determine completeness of all collections, including electronic transfers, for each revenue source and agency fund additions (e.g. periodic confirmation with outside parties, reconciliation to utility billing after cutoff procedures, reconciliation of traffic ticket number sequences, agency fund forfeiture monies confirmation) by a person who is not responsible for collections.

Staff accountants perform bank reconciliations and reconcile cash collected at program to general ledger. Staff accountants are not responsible for cash collection at location.

Disbursements - General (excluding credit card/debit card/fuel card/P-Card purchases or

payments)

caddo disburserrents

8. Obtain a listing of entity disbursements from management or, alternately, obtain the general ledger and sort/filter for entity disbursements. Obtain management' s representation that the listing or general ledger population is complete.

Complete disbursement list from general ledger attached above. Total disbursements from 7/1/16-6/30/17 $113,191.40

9. Using the disbursement population from #8 above, randomly select 25 disbursements (or randomly select disbursements constituting at least one-third of the dollar disbursement population if the entity had less than 25 transactions during the fiscal period), excluding credit card/debit card/fuel card/P-card purchases or payments. Obtain supporting documentation (e.g. purchase requisitions, system screens/ logs) for each transaction and report whether the supporting documentation for each transaction demonstrated that:

~ Caddo

Disburserrents Testin

39 total disbursements tested totaling $82,263.23 for 72.6% of total disbursements from 7/1/16-6/30/17.

a) Purchases were initiated using a requisition/purchase order system or an equivalent electronic system that separates initiation from approval functions in the same manner as a requisition/purchase order system.

Per the Finance Manual Purchase Orders (PO's) are to be prepared and approved by the ED for all purchases over $1,000 and further supported by three

71 Page



competitive bids for all non-routine/non-recurring expenditures. PO's are required to be two part forms with one part given to the vendor and one part retained by the program. PO copies are not submitted to Finance for payment processing. PO's are not required for routine/recurring purchases. IA does not test PO process as PO copies are not submitted and filed in the invoice files in the Finance Department. In addition, most all AP disbursements are routine or recurring in nature. IA does, however, ask to view bids for expenditures over $1,000 as part of the test process.

The lack of purchase orders in the AP process is not considered a significant control deficiency given the nature of the program's expenses. However, all AP disbursements require ED approval. Non-routine, non-recurring AP disbursements over $2,500 requires the additional approval of the RD and the Board of Directors.

b) Purchase orders, or an electronic equivalent, were approved by a person who did not initiate the purchase.

See above response to a)

c) Payments for purchases were not processed without (I) an approved requisition and/or purchase order, or electronic equivalent; a receiving report showing receipt of goods purchased, or electronic equivalent; and an approved invoice.

Paper invoices are approved by management prior to payment.

I 0. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the person responsible for processing payments 1s prohibited from adding vendors to the entity's purchasing/disbursement system.

The Business Managers add new vendors to the system which is considered to be an acceptable risk Finance as the AP Web system will identify on the Daily Report all new vendors added. Staff Accountants review all newly added vendors.

II. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the persons with signatory authority or who make the final authorization for disbursements have no responsibility for initiating or recording purchases.

ED's have check signing authority and can initiate purchases. However, the BM is responsible for AP input and as outlined in #10, above, all invoices must be sent to Finance for review prior to release of the check run. All purchases initiated by the ED require RD approval.

12. Inquire of management and observe whether the supply of unused checks is maintained in a locked location, with access restricted to those persons that do not have signatory authority, and report any exceptions. Alternately, if the checks are electronically printed on blank

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check stock, review entity documentation (electronic system control documentation) and report whether the persons with signatory authority have system access to print checks.

Check stock is maintained in a locked location. Executive Directors have access to check stock and do have signing authority. This is due to the need at times due to staffing situations the Executive Director may need to process accounts payable and issue disbursements. The staff accounts at home office have final approval of disbursements and generate the AP disbursement file to be used to print checks.

13. If a signature stamp or signature machine is used, inquire of the signer whether his or her signature is maintained under his or her control or is used only with the knowledge and consent of the signer. Inquire of the signer whether signed checks are likewise maintained under the control of the signer or authorized user until mailed. Report any exceptions. N/A

Credit Cards/Debit Cards/Fuel Cards/P-Cards

14. Obtain from management a listing of all active credit cards, bank debit cards, fuel cards, and P-cards (cards), including the card numbers and the names of the persons who maintained possession of the cards. Obtain management's representation that the listing is complete.

Program has no credit cards in use.

15. Using the listing prepared by management, randomly select 10 cards (or at least one-third of the cards if the entity has less than I 0 cards) that were used during the fiscal period, rotating cards each year. If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. N/ A

Obtain the monthly statements, or combined statements if multiple cards are on one statement, for the selected cards. Select the monthly statement or combined statement with the largest dollar activity for each card (for a debit card, select the monthly bank statement with the largest dollar amount of debit card purchases) and:

a) Report whether there is evidence that the monthly statement or combined statement and supporting documentation was reviewed and approved, in writing, by someone other than the authorized card holder. [Note: Requiring such approval may constrain the legal authority of certain public officials (e.g., mayor of a Lawrason Act municipality); these instances should not be reported.)] N/A

b) Report whether finance charges and/or late fees were assessed on the selected statements. N/A

16. Using the monthly statements or combined statements selected under #15 above, obtain supporting documentation for all transactions for each of the I 0 cards selected (i.e. each of the I 0 cards should have one month of transactions subject to testing).



a) For each transaction, report whether the transaction is supported by:

);> An original itemized receipt (i.e., identifies precisely what was purchased)

);> Documentation of the business/public purpose. For meal charges, there should also be documentation of the individuals participating.

);> Other documentation that may be required by written policy (e.g., purchase order, written authorization.)

N/A b) For each transaction, compare the transaction 's detail (nature of purchase, dollar amount

of purchase, supporting documentation) to the entity's written purchasing/disbursement policies and the Louisiana Public Bid Law (i.e. transaction is a large or recurnng purchase requiring the solicitation of bids or quotes) and report any exceptions.

N/A c) For each transaction, compare the entity's documentation of the business/public purpose

to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. cash advances or non-business purchases, regardless whether they are reimbursed). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception. N/A

Travel and Expense Reimbursement

17. Obtain from management a listing of all travel and related expense reimbursements, by person, during the fiscal period or, alternately, obtain the general ledger and sort/filter for travel reimbursements. Obtain management 's representation that the listing or general ledger is complete. All travel and related expense reimbursements for all employees pulled from General Ledger and complete.

18. Obtain the entity's written policies related to travel and expense reimbursements. Compare the amounts in the policies to the per diem and mileage rates established by the U.S. General Services Administration (www.gsa.gov) and report any amounts that exceed GSA rates.

Refer to AMikids finance manual above pages 45-52 for written policies regarding travel and expense reimbursement. The program does not have established per diem amounts in the policy and mileage is reimbursed at $.445 per mile. However, travel must be reasonable relative to geographic location. A maximum of three meals per day are reimbursed. Expense reports are reviewed and approved by the ED and then by Finance for reasonableness of amounts and adequacy of



documentation prior to processing for payment. ED expense reports are also reviewed and approved by the respective Regional Director.

AMikids does not exceed per diem rates and mileage rates established by GSA. No hotel expenses on selected expense reports.

Per diem rates Shreveport LA $91 Lodging and $51 M&IE

19. Using the listing or general ledger from # 17 above, select the three persons who incurred the most travel costs during the fiscal period. Obtain the expense reimbursement reports or prepaid expense documentation of each selected person, including the supporting documentation, and choose the largest travel expense for each person to review in detail. For each of the three travel expenses selected:

-,: -,: -,: Gwendolyn Harrilton Jarrile Errile ER. pdf Tim Lennear ER. pdf

ER.pdf

Three persons incurring the most travel and expense cost during the last 12 month as obtained by general ledger are attached above.

Jamile Emile: $4084.45 total expenses reimbursed 7/1/16-6/30/17 Timothy Lennear Jr.: $2426.39 total expenses reimbursed 7/1/16-6/30/17 Gwendolyn Hamilton: $1653.91 total expenses reimbursed 7/1/16-6/30/17

Jamile Emile: $1468.01 Largest expense reimbursement check #1144 paid 6/16/17 Timothy Lennear: $643.03 Largest expense reimbursement check #1095 paid 3/20/17 Gwendolyn Hamilton: $958.78 Largest expense reimbursement check #1057 paid 12/14/16

a) Compare expense documentation to written policies and report whether each expense was reimbursed or prepaid in accordance with written policy (e.g., rates established for meals, mileage, lodging). If the entity does not have written policies, compare to the GSA rates (#18 above) and report each reimbursement that exceeded those rates.

Expenses reimbursed for all employees comply with and reimbursed in accordance with AMikids written policy and procedures. See finance manual pages 45-52 for reference

b) Report whether each expense is supported by:

);> An original itemized receipt that identifies precisely what was purchased. [Note: An expense that is reimbursed based on an established per diem amount (e.g., meals) does not require a receipt.] Yes



~ Documentation of the business/public putpose (Note: For meal charges, there should also be documentation of the individuals participating). Yes

~ Other documentation as may be required by written policy (e.g., authorization for travel, conference brochure, certificate of attendance) Yes

c) Compare the entity's documentation of the business/public purpose to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. hotel stays that extend beyond conference periods or payment for the travel expenses of a spouse). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception.

No exceptions noted

d) Report whether each expense and related documentation was reviewed and approved, in writing, by someone other than the person receiving reimbursement.

All expense reports reviewed have approval in writing by someone other than the person receiving reimbursement.

Contracts

20. Obtain a listing of all contracts in effect during the fiscal period or, alternately, obtain the general ledger and sort/filter for contract payments. Obtain management's representation that the listing or general ledger is complete. N/ A No contracts exist

21. Using the listing above, select the five contract "vendors" that were paid the most money during the fiscal period (excluding purchases on state contract and excluding payments to the practitioner). Obtain the related contracts and paid invoices and:

a) Report whether there is a formal/written contract that supports the services arrangement and the amount paid.

N/ A No contracts exist

b) Compare each contract's detail to the Louisiana Public Bid Law or Procurement Code. Report whether each contract is subject to the Louisiana Public Bid Law or Procurement Code and:

~ If yes, obtain/compare supporting contract documentation to legal requirements and report whether the entity complied with all legal requirements (e.g., solicited quotes or bids, advertisement, selected lowest bidder)



).> If no, obtain supporting contract documentation and report whether the entity solicited quotes as a best practice.


c) Report whether the contract was amended. If so, report the scope and dollar amount of the amendment and whether the original contract terms contemplated or provided for such an amendment. N/ A No contracts exist

d) Select the largest payment from each of the five contracts, obtain the supporting invoice, compare the invoice to the contract terms, and report whether the invoice and related payment complied with the terms and conditions ofthe contract.


e) Obtain/review contract documentation and board minutes and report whether there is documentation of board approval, if required by policy or law (e.g. Lawrason Act or Home Rule Charter).


Payroll and Personnel

~ Caddo Payroll Testing.xlsx

22. Obtain a listing of employees (and elected officials, if applicable) with their related salaries, and obtain management 's representation that the listing is complete. Randomly select five employees/officials, obtain their personnel files, and:

a) Review compensation paid to each employee during the fiscal period and report whether payments were made in strict accordance with the terms and conditions of the employment contract or pay rate structure.

Pay rates agree to offer letter

b) Review changes made to hourly pay rates/salaries during the fiscal period and report whether those changes were approved in writing and in accordance with written policy.

N/A No changes made to hourly/salaries in selected sample of employees

23. Obtain attendance and leave records and randomly select one pay period in which leave has been taken by at least one employee. Within that pay period, randomly select 25 employees/officials (or randomly select one-third of employees/officials if the entity had less than 25 employees during the fiscal period), and: Pay Period Selected 10/26/16-11/10/16. 3 Employees on Paid Administrative Leave. Timecards below for all employees employed during the selected period.

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AMIKids-Caddo C. Willis 1irresheet 1irresheer Oct 26-No· for audit. pdf

a) Report whether all selected employees/officials documented their daily attendance and leave (e.g., vacation, sick, compensatory). (Note: Generally, an elected official is not eligible to earn leave and does not document his/her attendance and leave. However, if the elected official is earning leave according to policy and/or contract, the official should document his/her daily attendance and leave.) All attendance documented on timecards by employees

b) Report whether there is written documentation that supervisors approved, electronically or in writing, the attendance and leave of the selected employees/officials. All timecards approved by supervisor in writing on timecards.

c) Report whether there is written documentation that the entity maintained written leave records (e.g., hours earned, hours used, and balance available) on those selected employees/officials that earn leave.

AMikids PR maintains records of accumulated PTO and is included in the PR system. In addition, the employee's pay stub also reflects the total Wellness Hours (PTO) accumulated for the year to date. Attached is a sample report for 10/26/16-11/10/16 of Accrued PTO for Caddo.

Paid tirre off accrual Report Caddo. pdf

24. Obtain from management a list of those employees/officials that terminated during the fiscal period and management' s representation that the list is complete. If applicable, select the two largest termination payments (e.g. , vacation, sick, compensatory time) made during the fiscal period and obtain the personnel files for the two employees/officials. Report whether the termination payments were made in strict accordance with policy and/or contract and approved by management.

Termination payments were made in accordance with policy and approved by management.

-,: ~ Highest Check CADPR117.xlsx

Arrounts Terrrinated

25. Obtain supporting documentation (e.g. cancelled checks, EFT documentation) relating to payroll taxes and retirement contributions during the fiscal period. Report whether the



employee and employer portions of payroll taxes and retirement contributions, as well as the required reporting forms, were submitted to the applicable agencies by the required deadlines. IA obtained the quarterly filings for federal and state income taxes and FICA for the program for the fiscal year. Amounts per the filings were traced to remittance documentation and to the PR system for each quarter. There were no exceptions noted. There were no retirement withholdings for the program.

Ethics (excluding nonprofits)

26. Using the five randomly selected employees/officials from procedure #22 under "Payroll and Personnel" above, obtain ethics compliance documentation from management and report whether the entity maintained documentation to demonstrate that required ethics training was completed.

27. Inquire of management whether any alleged ethics violations were reported to the entity during the fiscal period. If applicable, review documentation that demonstrates whether management investigated alleged ethics violations, the corrective actions taken, and whether management's actions complied with the entity's ethics policy. Report whether management received allegations, whether management investigated allegations received, and whether the allegations were addressed in accordance with policy.

Debt Service (excluding nonprofits)

28. If debt was issued during the fiscal period, obtain supporting documentation from the entity, and report whether State Bond Commission approval was obtained.

29. If the entity had outstanding debt during the fiscal period, obtain supporting documentation from the entity and report whether the entity made scheduled debt service payments and maintained debt reserves, as required by debt covenants.

30. If the entity had tax millages relating to debt service, obtain supporting documentation and report whether millage collections exceed debt service payments by more than I 0% during the fiscal period. Also, report any millages that continue to be received for debt that has been paid off.

Other

31. Inquire of management whether the entity had any misappropriations of public funds or assets. If so, obtain/review supporting documentation and report whether the entity reported the misappropriation to the legislative auditor and the district attorney of the parish in which the entity is domiciled.



No known misappropriations of public funds or assets

32. Observe and report whether the entity has posted on its premises and website, the notice required by R.S. 24:523.1. This notice (available for download or print at www.lla.la.gov/hotline) concerns the reporting of misappropriation, fraud, waste, or abuse of public funds.

IA did not look for the signage during its site visit. An e-mail has been sent to ED to

confirm the signage is displayed at the program.

33. If the practitioner observes or otherwise identifies any exceptions regarding management's representations in the procedures above, report the nature of each exception.

No exceptions noted


http://www.lla.la.gov/hotline

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