JEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS

Financial Statements as December 31, 2012 and for the Year Then Ended

and Independent Audftor^s Report

JEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS

TABLE OF CONTENTS

Pajge

INDEPENDENT AUDITOR'S REPORT 1

FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED:

Statement of Financial Position 3 Statement of Activities 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 7

OTHER INDEPENDENT AUDITOR'S REPORT

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 12

SCHEUDLE OF FINDINGS AND QUESTIONED COSTS 14

BRENT A. SILVA, CPA A Professional Accounting Corporation

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors Jefferson Society for the Prevention of Cruelty to Animals Jefferson, Louisiana

Report on the Financial Statements

I have audited the aeeompanying financial statements of the governmental activities, of the Jefferson Society for the Prevention of Cruelty to Animals (the SPCA) as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the SPCA's basic financial statements as listed in the table of contents.

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 intemal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my 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 I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

2895 Highway 190, Suite 212, Mandeville, Louisiana 70471

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fmancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fi-aud or error. In making those risk assessments, the auditor considers intemal 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 intemal control. Accordingly, I 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.

T believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jefferson Society for the Prevention of Cruelty to Animals, as of December 31, 2012, and the respective changes in net assets and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards

In accordance with Governrnent Auditing Standards, 1 have also issued my report dated June 27, 2013 on my consideration of Jefferson SPCA's intemal control over financial reporting and on my 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 my testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on intemal 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 Jefferson SPCA's intemal control over financial reporting and compliance.

June 27, 2013

JEFFERSON SPCA STATEMENT OF FINANCIAL POSITION

DECEMBERS],2012

ASSETS CURRENT ASSETS

Cash and cash equivalents $ 565,996

565,996

PROPERTY AND BOUIPMENT

Furniture BTICI equipment, net of accumulated depreciation of $2,894 -

TOTAL ASSETS $ 56S.996

NET ASSETS Unrcslricled

Undcsisnaled S 149.602 Board dcsignan^ 230,269

Temporarily restricted 186.125

Total net assets 565,996

TOTAL LIABILITIES AND NET ASSbTS $ 505.9%

See accompanying independent auditor's report and notes lo financial statements. 3

Unrestricted

$ 11,508

101,641 11,861

1,276 455.936

Tqmp<.irarily

Restricted

$ 501,917 ----

(455.936)

Total

$ 501,917 11,508

101.641 11,861 1.276

-

JEFFERSON SPCA S'l'ATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31, 2U12

REVENUES AND OTHER SUPPORT Parish cwmract, net orreimburseinent of $35,275 Service fees Donations/granLs Fundraising Other Net ussels released from restrictions

Total revenues and other support 582.222 45.9S1 628,203

EXPENSES Pr(.ijjrani seA-ites Supporting services

Total expenses

CHANGES IN NET ASSETS

NET ASSETS, Beginning of year

NET ASSETS, End of year

419.155 20,981

440,136

142,086

237,785

S 379,871

--

45,981

140.144

$ 186,125 ;

419,155 20,981

440.136

188.067

377.929

£ 565,996

See accompanying independent audiuir's report and notes to financial statements. 4

.lEFFERSON SPCA STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED DECEMBER 31,2012

Contract services Professional services Veterinary care Utilities PAWty at the Lake PAWratcs of the Pontchartrain NSF cheeks Auto reimbursement Office and cleaning supplies Licenses and pennits Telephone Travel and meetings Pet photos Feed/medical supplies Advertising Postage and delivery Printing aiid copying Insurance Other

Program

Animal Services

S 346,937 -

31,653 ----

1.954 2.763

15.272 2,370

--

15,491

---

893 -

S 417.333

Services

Other ProgTiims

------------' ----

1,822

S 1,822

Supporting

Fundraising

S ---

5,564 667

-------------

$ 6,231

Services

Management and General

S 7,688

S

845 ----

260 -

2,784

--

368

--

195 672

1.786 -

152

14,750

Total

$ 354.625 845

31.653 -

5.564 667 260

1,954 5,547

15.272 2,370

368

-15,491

195 672

1.786 893

1,974

S 440,136

See accompanying independent auditor's report and notes to llnancial statements, 5

JEFFERSON SPCA S lATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,2012

CASH FLOWS FROM OPERATING ACTIVITIES Changes in net assets S 188,067 Adjustments to reconcile changes in net assets to

net cash provide*! by operating activities: Changes in operating assets and liaibilities:

Accounts receivable 62,525

Net cash provided by operating activities 250,592

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES ^

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 250.592

CASH AND CASH EQUIVALENTS - Beginning of year 315,404

CASH AND CASH EQUIVALENTS - End of year ^ ^^^-'^^1

See accompanying independent auditor's report and notes to linancial statements, 6

JEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Formation and Operations - The Jefferson Society for the Prevention of Cruelty to Animals (the SPCA) is a Louisiana not-for-profit corporation, was incorporated on July 16,1970 under the previous legal name of The Jefferson Parish Society tor the Prevention of Cruelty to Animals and changed to its current legal name on January 14, 1983.

The SPCA was established to prevent cruelty to animals and to aid in the relief of their suffering, and to promote humane education; to support the Jefferson Parish Animal Shelter; lo aid in the return of lost animals to their owners and/or find suitable homes for those animals without owners; to develop and/or support spay/neuter programs; lo secure by law^l means the arrest^ conviction and punishment of persons violating animal cruelty and welfare laws; lo promote the creation and passage of animal welfare legislation and to raise contributions and distribute contributions to other not-for-profit organizations organized for similar purposes tor which this corporation is organized.

Basis of Presentation - The financial statement presentation follows the requirements of the Financial Accounting Standards Board's Accounting Standards Codification (ASC) 958, Financial Statements of Not-for-Profit Organizations, Under ASC 958, the SPCA is required lo report information regarding its tlnancial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net asset, and permanently restricted net assets. There were no permanently restricted net assets at December 31, 2012,

Revenues and gains are classified based on the presence or absence of donor restrictions and reported in the following net asset categories:

Unrestricted undesignated net assets - Assets that arc not i^stricted by donors or for which there are no restrictions.

Unrestricted Board designated net assets - Assets that; have been designated by the Board of Directors for a specific use or purpose.

Temporarily restricted net assets - The portion of net assets that arise from contributions that are restricted by donors for specific purposes or time periods.

Permanently restricted net assets - A donation, grant, or contract that a portion is restricted by the donor or by law to be maintained by the SPCA in perpetuity. There were no permanently restricted net assets as of December 31,2012.

JEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Cash and cash equivalents - For purposes of the statement of cash flows, the SPCA considers all liighly liquid debt instmments purchased with an initial maturity of three months or less to be cash equivalents including bank repurchase agreements.

Property and equipment - Property and equipment are recorded at cost. Acquisitions of property and equipment are made with unrestricted assets. Depreciation is provided over the estimated useful lives of the respective assets, approximately five to 10 years, on a straight-line basis. Expenses for maintenance, repairs, and renewals of minor items are charged to earnings as incurred. Major renewals, improvements, and property costs over $500 are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected in operations for the period. There was no depreciation expense for the year ended December 31, 2012.

Restricted and Unrestricted Revenues and Other Support - Contributions received are recorded as unrestricted, temporarily restricted, or pennanently restricted support^ depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in umestrictcd net assets if the restrictions expire in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or puipose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Donated Assets and Services - The SPCA records noncash donations as contributions at its estimated fair value at the date of donation. The SPCA had no noncash donations for the year ended December 31, 2012.

Various functions of the SPCA are conducted by unpaid officers, board members, and volunteers. The value of this contributed time is not reflected in the accompanying financial statements since the volunteers' time does not meet the criteria necessary for recognition. The SPCA recognizes donated services, if significant in amount, which create or enhance non-flnancial assets or that require speciali/:ed skills tliat are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation.

Functional Expense Allocation - Functional expenses are allocated among the various program services and general and administrative categories based on actual use or management's best estimate.

JEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Income Taxes - Tlie SPCA is a not-for-profit corporation that is exempt from both federal and Tj^uisiana income taxes under Section 501(c)(3) of the Internal Revenue Code and R.S. 12:1201 of Louisiana statutes. The Board has evaluated its tax position and has determined that there are no uncertainties in income taxes that require adjustments to or disclosures in the financial statements.

Use of Estimates - The preparation of the SPCA's financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates,

NOTE B - CONCENTRATIONS OF CREDIT RISK

The SPCA has concentrated its credit risk by maintaining deposits in banks located within the same geographic region that may, at times, exceed amounts covered by insurance provided by the Federal Deposit Insurance Corporation up to $250,000. The SPCA's cash deposit balances were in excess of the FDIC insurance at December 31,2012. As of December 31,2012, the SPCA had $264,836 in cash deposit balances in excess of the FDTC insurance at December 31, 2012. The SPCA has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk to cash.

NOTE C - COOPERATIVE ENDEAVOR AGREEMENT

Effective May 31, 2012, the Jefferson Parish Council (the Council) and the SPCA entered into a cooperative endeavor agreement for two years, whereby the SPCA would provide services related to creating and administering a spay/neuter program, disposition of rabies vaccinations and license fees, and providing shelter for the homeless animals. The agreement requires the Council lo compensate the SPCA based on Ihc $10 for each altered animal, $15 for each unaltered animal's vaccination and license fee; $25 for each responsible breeder permit; and $900 for each breeder/dealer peraiit. The SPCA received $501,917 in temporarily restricted revenue from the Council during the year ended December 31, 2012. There was $455,936 of temporarily restricted net assets released for general operations of the SPCA for the year ended December 31,2012.

.TEFFERSON SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS NOTES TO FINANCIAL STATEMENTS

NOTE D - CONTRACT SERVICE AGREEMENT

As part of the Cooperative Endeavor Agreement, the SPCA entered into a contract service agreement with a Program Director to manage and direct the day to day administrative and organizational functions associated with programs and purposes of the SPCA in the amount of $43,600 annually. The agreement may be terminated by either party upon seven (7) days written notice.

NOTE E - RELATED PARTIES

During the year ended December 31, 2012, Jefferson Feed Sc Garden Supply Co., which the president of the SPCA is employed, provides office to the SPCA at no cost to the SPCA.

NOTE F - CONTRIBUTION

During 2009, the SPCA received a bequest from a charitable remainder trust in the amount of $230,269. The donor did not stipulate any restriction as lo the use of the proceeds, except for the general purposes detennined by the Board of Directors of the SPCA. The contribution is reflected as "board designated" as part of unrestricted net assets.

NOTE G - SUBSEQUENT EVENTS

The SPCA has evaluated subsequent events through the date the fmancial statements were available to be issued, June 14,2013, and determined that no events occurred that required disclosure. No subsequent events occurring after this date have been evaluated for inclusion in these financial statements.

10

OTHER INDEPENDENT AUDITOR'S REPORT

BRENT A. SILVA, CPA A Professional Accounting Corporation

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTIIER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors Jefferson Society for the Prevention of Cmelty to Animals Jefferson, Louisiana

T have audited, 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, the fmancial statements of Jefferson Society for the Prevention of Cruelty to Animals (the SPCA) as of and for the year ended December 31, 2012, and the related noted to the financial statements, which collectively comprise Jefferson Society for the Prevention of Cruelty to Animal's basic financial statements, and have issued my report thereon dated June 27, 2013.

Internal Control Over Financial Reporting

In planning and performing my audit of the financial statements, I considered Jefferson SPCA's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Jefferson SPCA's intemal control. Accordingly, I do not express an opinion on the effectiveness of Jefferson SPCA's intemal 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 ftinctions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in intemal 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.

2895 Highway 190, Suite 212, Mandeville, Louisiana 70471

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

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Jefferson SPCA's financial statements are free from material misstatement, I 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 my audit, and accordingly, I do not express such an opinion. The results of my tests did not disclose any instances of noncompliance or other matters that are required to be reported under Governmertl Auditing Standards.

Purpose of this Report

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

This report is intended solely for the information and use of Jefferson SPCA's management and the Legislative Auditor of the State of Louisiana and is not intended to be and should not be used by anyone other than these specified parties. The restriction is not intended to limit the distribution of this report, which, upon acceptance by the Board of Directors of the JetTerson SPCA is a matter of public record.

June 27, 2013

JEFFERSON SPCA sciiii:Dui.E: OF F I N D I N G S A N D Q U E S T I O N E D C O S T S

FOR THE YEAR ENDED DECEMBER 31, 2012

Section I - Summary of Auditor's Results

Financal Statements

Type of auditor's report issued; Unqualified

Internal control over financial reporting:

Material wcakncsscd identified? yes Significant deficiencies identifial

not considered to be material weaknesses? ycS

Noncompliance material to fmaneial statcmentt! nottxl? yes

WiiS 0 management letter issued? yes

Section H - FinaBctal Stfttement Findings

Current Year (December 31, 2012): No findings material to the financial slalemenls were noted during the audit

Prior Year (December 31, 2011): No audit required for the prior year

Section 111 - Internal Control Findings

Current Year (December 31, 2012): No findings related to intemal control, which would be required to be reported in accordance with Government Auditing Siandards, were noted during the audit

Prior Year (December 31,2011): No audit rctiuired for the prior year

See independent auditor's report. 14