CASE - Calcasieu Association for Social Enrichment,...

CALCASIEU ASSOCIATION FOR SOCIAL ENRICHMENT, INC.

FINANCIAL STATEMENTSAND INDEPENDENT AUDITORS' REPORT

JUNE 30,2007

Under provisions of state law, this report is a publicdocument. A copy of the report has been submitted tothe entity and other appropriate public officials, Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date

CONTENTS

Page

Independent Auditors' Report 3

Financial Statements:Statement Of Financial Position 4

Statement Of Activities 5

Statement Of Functional Expenses 6

Statement Of Cash Flows 7

Notes To The Financial Statements 8-10

Independent Auditors' Report on Internal ControlOver Financial Reporting and Compliance and OtherMatters Based on an Audit of Financial StatementsPerformed in Accordance with Government AuditingStandards 11-12

Schedule of Findings 13

Schedule of Prior Year Findings 14

Management's Corrective Action Plan 15

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INDEPENDENT AUDITORS' REPORT

Board of DirectorsCalcasieu Association for SocialEnrichment, Inc.

We have audited the accompanying statement of financial position of Calcasieu Association for SocialEnrichment, Inc. (a non-profit organization) as of June 30, 2007 and the related statements of activities,functional expenses, and cash flows for the year then ended. These financial statements are theresponsibility of the Organization's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica 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 performthe audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Calcasieu Association for Social Enrichment, Inc. as of June 30, 2007, and the changesin its net assets and its cash flows for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated August 16, 2007,on our consideration of Calcasieu Association for Social Enrichment, Inc.'s internal control over financialreporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, andgrant agreements and other matters. The purpose of that report is to describe the scope of our testing ofinternal control over financial reporting and compliance and the results of that testing and not to provide anopinion on the internal control over financial reporting or on compliance. That report is an integral part ofan audit performed in accordance with Government Auditing Standards and should be read in conjunctionwith this report in considering the results of our audit

McMullen and Mancuso, CPAs, LLC

August 16, 2007

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STATEMENT OF FINANCIAL POSITION

June 30,2007

ASSETS

Current Assets:

Cash and Cash Equivalents

Prepaid Insurance

Total Current Assets

16,672

1,887

18,559

Fixed Assets:

Leasehold Improvements

Furniture and Equipment

Vehicle

Less: Accumulated Depreciation

Total Fixed Assets

7,155

103,348

13,760

124,263

(117,727)

6,536

Other Assets:

Utility Deposit

TOTAL ASSETS

LIABILITIES AND NET ASSETS

150

25,245

Current Liabilities:

Accounts Payable

Total Current Liabilities

Net Assets:

Unrestricted:

Operations

Fixed Assets

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

13,665

6,536

5,044

5,044

20,201

25,245

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

4


STATEMENT OF ACTIVITIES

For the Year Ended Jane 30,2007

SUPPORT:

Grants and Contracts

Use of Contributed Facilities

Contributions

Total Support

Net Assets Released From

Restrictions

TOTAL SUPPORT

EXPENSES:

Program Services:

Upward Bound Tutorial Program

Supporting Services:

General and Administrative

TOTAL EXPENSES

CHANGE IN NET ASSETS

NET ASSETS AT BEGINNING OF YEAR

NET ASSETS AT END OF YEAR

2007

Temporarily

Unrestricted Restricted

- $ 110,000 $

11,200

5,574

16,774 110,000

110,000 (110,000)

126,774

82,251

26,985

109,236

17,538

(20,021) 22,684

(2,483) $ 22,684 $

Total

110,000

11,200

5,574

126,774

126,774

82,251

26,985

109,236

17,538

2,663

20,201" "'^B



STATEMENT OF FUNCTIONAL EXPENSES

For the Year Ended June 30,2007

Salaries

Payroll Taxes

Worker's Compensation Insurance

Total Salaries and Related Expenses

Rent

Telephone

Utilities

Office / Program Supplies

Postage

Building Maintenance Supplies

SecurityCable/Internet

Membership Fees / Dues

Insurance

Auditing Fees

Program Activity

Equipment Repairs

New Equipment

Travel / Conference

Interest Expense

Auto Insurance

Total Expenses Before Depreciation

Depreciation of Fixed Assets

Total Expenses

Program

Services

(UBTP)

51,499

4,804

779

57,082

General

and Total

Administrative Expenses

12,501

1,201

195

13,897

64,000

6,005

974

70,979

8,9601,6762,7244192580237838531

1,529-

1,2392,292

6361-799

78,464

3,787

82,251 $

2,240186

6813,07018120195438

3823,500

-57316

641,427-

26,564

421

26,985 $

11,2001,8623,4053,489205

1,00347342839

1,9113,5001,2392,86579125

1,427799

105,028

4,208

109,236»•' ' ^



STATEMENT OF CASH FLOWS

For the Year Ended June 30,2007

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

Increase in Net Assets

Adjustments to Reconcile Change in Net Assets

to Net Cash Used for Operating Activities:

Depreciation

(Increase) Decrease in Prepaid Insurance

Increase (Decrease) in Accounts Payable

Increase (Decrease) in State Withholding Payable

Net Cash Provided by Operating Activites

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of equipment

Net Cash Used for Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on line of credit

Net Cash Used for Financing Activities

Net Increase in Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS - END OF YEAR

$ 17,538

4,208

(724)

4,746

(158)

(4.167)

(6,150)

25,610

(4,167)

(6,150)

15,293

1,379

$ 16,672

Disclosures:

Interest paid for the year ended June 30,2007 was $1,427.



NOTES TO FINANCIAL STATEMENTS

JUNE 30,2007

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Nature of Activities

Calcasieu Association for Social Enrichment, Inc. is a not-for-profit community outreachprogram, providing services to primarily under-privileged children and youth. It offersassistance in training for disenfranchised youth, and supplementary and tutorial services forstudents who have trouble succeeding in the traditional classroom, and others who needassistance.

2. Basis of Accounting

The financial statements have been prepared using the accrual basis of accounting and inconformity with the standards promulgated by the American Institute of Certified PublicAccountants in its audit guide for voluntary health and welfare organizations.

3. Financial Statement Presentation

| The financial statement presentation follows the recommendation of the Financial AccountingStandards Board in its Statement of Financial Accounting Standards (SFAS) No. 117,"Financial Statements of Not-for-Profit Organizations." Under SFAS 117, the Organization is

; required to report information regarding its financial position and activities according to threeclasses of net assets: unrestricted net assets, which represent the expendable resources thatare available for operations at management's discretion; temporarily restricted net assets,which represent resources restricted by donor's as to purpose or by the passage of time; and

j permanently restricted net assets, which represent resources whose use by the Organization is{ limited by donor-imposed stipulations that neither expire by passage of time nor can bej fulfilled or otherwise removed by actions of the Organization. The Organization did not have

any permanently restricted net assets this year.

4. Fixed Assets

Fixed Assets are stated at cost at the date of acquisition and any donated fixed assets arerecorded as support at their estimated fair value at the date of donation. Depreciation iscomputed by the straight-line method beginning in the year of acquisition, at rates based onthe following estimated useful lives:

YearsLeasehold Improvements 10Furniture and Fixtures 5 to 10Equipment 5 to 10Vehicle 4



TUNE 30, 2007

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4. Fixed Assets (Continued)

Depreciation expense for the year ended June 30, 2007, was $4,208 and is reported asprogram and supporting services in the statement of activities. The Organization follows thepractice of capitalizing all expenditures for all fixed assets.

Fixed assets acquired by Calcasieu Association for Social Enrichment, Inc. are considered tobe owned by Calcasieu Association for Social Enrichment, Inc. However, state fundingsources may maintain equitable interest in the property purchased with grant monies as wellas the right to determine the use of any proceeds from the sale of these assets. The State has areversionary interest in those assets purchased with its funds.

5. Contributed Facilities

Contributed facilities represent the estimated fair rental value of office and classroom spaceprovided. Contributed facilities are provided under a lease contract with the Calcasieu ParishSchool Board whereby they are allowed free use of the facilities for the lease contract periodfrom July 1, 2003 through June 30, 2008. The fair rental value of the contributed lease was$1 1,200 for the year ended June 30, 2007.

6. Income Tax Status

The Organization is exempt from Federal income taxes under Internal Revenue Code Section501(c)(3) and therefore has made no provision for Federal income taxes. They are consideredby the Internal Revenue Service to be a nonprivate foundation under the provision IRC

7. Functional Allocation of Expenses

The costs of providing the Organization's program and supporting services have beensummarized on a functional basis in the statement of activities. Accordingly, certain costshave been allocated among the program and supporting services benefited.

8. Cash and Cash Equivalents

For purpose of the statement of cash flows, the Organization considers all unrestricted, highlyliquid investments with initial maturities of three months of less to be cash equivalents.

9. Use of Estimates

The preparation of financial statements in conformity with generally accepted accountingprinciples requires the use of management's estimates and assumptions that affect the



JUNE 30,2007

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

9. Use of Estimates (Continued)

reported amounts of assets and liabilities and disclosures of contingent assets and liabilities atthe date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. Accordingly, actual results could differ from those estimates.

NOTE B - LINE OF CREDIT!

I As of June 30, 2007, the Organization had an unsecured line of credit with Capital One Bank,which has an amount available for borrowing up to $30,000. Borrowings under the line of creditare payable upon demand with interest payable monthly at 11.25%. As of June 30, 2007, thebalance on the line of credit was zero. The maturity on the line of credit is July 26,2007.

• i}I\ NOTE C - CONCENTRATION AND ECONOMIC DEPENDENCYi

Grant revenue received in the year ended June 30,2007 from the Department of Education, Officeof School and Community Support, of the State of Louisiana was $100,000, which comprised 91%of total grant funding. If that grant were not renewed, the Organization's ability to continue to

| function could be severely impacted.

I• 3

NOTE D - COMPENSATED ABSENCES

| The Organization has no policy providing for compensated absences.

• \

I NOTE E-FAIR VALUES OF FINANCIAL INSTRUMENTS1-

The following methods and assumptions were used by the Organization in estimating its fair valuedisclosures for financial instruments:

Cash, cash equivalents, short-term unconditional promises to give, and notes payable: Thecarrying amounts reported in the statement of financial position approximate fair values becauseof the short maturities of those instruments.

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REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS

Board of DirectorsCalcasieu Association for SocialEnrichment, Inc.

We have audited the financial statements of Calcasieu Association for Social Enrichment, Inc. (a nonprofitcorporation) as of and for the year ended June 30, 2007, and have issued our report thereon dated August16,2007. We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Calcasieu Association for Social Enrichment, Inc.'sinternal control over financial reporting as a basis for designing our auditing procedures for the purpose ofexpressing our opinion on the financial statements, but not for the purpose of expressing an opinion on theeffectiveness of Calcasieu Association for Social Enrichment, Inc.'s internal control over financialreporting. Accordingly, we do not express an opinion on the effectiveness of the Organization's internalcontrol over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in thepreceding paragraph and would not necessarily identify all deficiencies in internal control over financialreporting that might be significant deficiencies or material weaknesses. However, as discussed below, weidentified certain deficiencies in internal control over financial reporting that we consider to be significantdeficiencies.

A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detect misstatementson a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,that adversely affects the organization's ability to initiate, authorize, record, process, or report financialdata reliably in accordance with generally accepted accounting principles, such that there is more than aremote likelihood that a misstatement of the organization's financial statements that is more thaninconsequential will not be prevented or detected by the organization's internal control. We consider thedeficiency described in the accompanying schedule of findings to be a significant deficiency in internalcontrol over financial reporting (2007-1).

A material weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not be preventedor detected by the organization's internal control.

Our consideration of the internal control over financial reporting was for the limited purpose described inthe first paragraph of this section and would not necessarily identify all deficiencies in the internal controlthat might be significant deficiencies and, accordingly, would not necessarily disclose all significant

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deficiencies that are also considered to be material weaknesses. However, of the significant deficiencydescribed above, we consider item 2007-1 to be a material weakness.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Calcasieu Association for Social Enrichment,Inc.'s financial statements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts and grant agreements, noncompliance with which couldhave a direct and material effect on the determination of financial statement amounts. However, providingan opinion on compliance with those provisions was not an objective of our audit and, accordingly, we donot express such an opinion. The results of our tests disclosed no instances of noncompliance that are

,! required to be reported under Government Auditing Standards.iCalcasieu Association for Social Enrichment Inc.'s response to the finding identified in our audit isdescribed in the accompanying management corrective action plan. We did not audit Calcasieu Associationfor Social Enrichment Inc.'s response and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of the board of directors, management, and theLegislative Auditor and is not intended to be and should not be used by anyone other than these specifiedparties.

McMullen and Mancuso, CPAs, LLC

August 16, 2007

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Calcasieu Association For Social Enrichment, Inc.

SCHEDULE OF FINDINGS

Year Ended June 30,2007

We have audited the financial statements of The Calcasieu Association for Social Enrichment, Inc. as ofand for the year ended June 30, 2007, and have issued our report thereon dated August 16, 2007. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Our audit of the financial statements as of June 30,2007 resulted in an unqualified opinion.

Section I Summary of Auditor's Reports

a. Report on Internal Control and Compliance Material to the Financial Statements

Internal ControlMaterial Weaknesses | X | Yes [ ] No Other Conditions | | Yes | X ] No

Compliance

Compliance Material to Financial Statements | | Yes | X | No

Section II Financial Statement Findings

2007-1 We consider die following matter to be a material weakness. The Organization has only oneemployee who is responsible for all accounting and reporting functions. The size of theOrganization's accounting staff precludes certain internal controls that would be preferred if theoffice staff were large enough to provide optimum segregation of duties. This situation dictatesthat the Board of Directors remain involved in the financial affairs of the Organization to provideoversight and independent review functions.

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SCHEDULE OF PRIOR YEAR FINDINGS


SECHONI - INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL

STATEMENTS

2005-1 The Organization has only one employeewho is responsible for all accountingand reporting functions. Therefore, it isnot possible to have segregation ofduties consistent with appropriate

internal control objectives over allphases of accounting.

Unresolved.See current year finding 2007-1.

THIS SCHEDULE HAS BEEN PREPARED BY MANAGEMENT

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MANAGEMENT'S CORRECTIVE ACTION PLAN


SECTION I - INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE

FINANCIAL STATEMENTS

2007-1 The Organization has only one emplojee

who is responsible for aH accounting

and reporting functions. Therefore, it is

not possible to have segregation of

duties consistent with appropriate

internal control objectives over all

phases of accounting.

Management is aware of the internal control

problem and the Board takes an active

oversight of financial matters to nitigate the

cortrol weaknesses. However, due to the small

size of the Organization it is not possible to ha\e

appropriate segregation of duties

THIS SCHEDULE HAS BEEN PREPARED BY MANAGEMENT

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