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KEDREN COMMUNITY
HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE
AND KEDREN COMMUNITY CARE CLINIC
AUDITED FINANCIAL STATEMENTS
JUNE 30, 2016
KEDREN COMMUNITY HEALTH CENTER, INC.
(MENTAL HEALTH, SAMHSA, CORPORATE AND
KEDREN COMMUNITY CARE CLINIC)
TABLE OF CONTENTS
For the Year Ended June 30, 2016
PAGE (S)
AUDITED FINANCIAL STATEMENTS
Independent Auditors’ Report 1-2
COMBINED REPORTS
Combined Statement of Financial Position 3-4
Combined Statement of Activities and Changes in Net Assets 5-6
Combined Statement of Functional Expenses 7
Combined Statement of Cash Flows 8-9
Notes to Combined Financial Statements 10-17
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS
MENTAL HEALTH, SAMHSA, CORPORATE AND
COMMUNITY CARE CLINIC
Combining Statement of Financial Position 18-19
Combining Statement of Activities and Changes in Net Assets 20-21
Combining Statement of Functional Expenses 22
Schedule of Expenditures of Federal Awards 23
Schedule of Expenditures of State Awards 24
Schedule of Los Angeles County and City Contracts 25
INDIVIDUAL FUNDS/PROGRAMS
MENTAL HEALTH FUND
Statement of Financial Position 26-27
Statement of Activities and Changes in Net Assets 28-29
SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES
ADMINISTRATION (SAMHSA)
Statement of Financial Position 30-31
Statement of Activities and Changes in Net Assets 32
Table of Contents - Page 2
PAGE (S)
CORPORATE FUND
Statement of Financial Position 33-34
Statement of Activities and Changes in Net Assets 35
KEDREN COMMUNITY CARE CLINIC (KCCC)
Statement of Financial Position 36-37
Statement of Activities and Changes in Net Assets 38
NOTES TO SUPPLEMENTARY INFORMATION 39
INDEPENDENT AUDITORS’ REPORTS
Report on Internal Control Over Financial Reporting and on Compliance 40-42
and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
Independent Auditor’s Report on Compliance for Each Major Program and on
Internal Control Over Compliance required by OMB Circular A-133 43-45
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Summary of Auditors’ Results 46
Federal Award Findings and Questioned Costs 47
Summary Schedule of Prior Year’s Audit Findings 48
AUDITED FINANCIAL
STATEMENT
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Kedren Community Health Center, Inc.
(Mental Health, SAMHSA, Corporate and
Kedren Community Care Clinic Programs)
Report on the Financial Statements
We have audited the accompanying combined financial statements of Kedren Community Health
Center, Inc. (Kedren) (a nonprofit organization) which comprise the combined statement of
financial position as of June 30, 2016, and the related combined 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.
Auditor’s 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 auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independent Auditors’ Report
Page 2
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Kedren as of June 30, 2016, and the changes in its net assets and its cash flows
for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Other information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a
whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, 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 relations to
the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 5, 2016, on our consideration of Kedren’s internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in
considering Kedren’s internal control over financial reporting and compliance.
Los Angeles, California
December 5, 2016
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FINANCIAL POSITION
JUNE 30, 2016
CURRENT ASSETS Total
Cash and Cash Equivalents 1,127,784$
Accounts Receivable: LA County 4,895,522
Grants Receivable 143,421
Accounts Receivable 333,976
Other Receivable 749,403
Prepaid Insurance 7,633
Prepaid Expenses 414,972
Inventory 14,096
TOTAL CURRENT ASSETS 7,686,807
PROPERTY AND EQUIPMENT - AT COST
Property and Equipment,
Net of Accumulated Depreciation 6,463,448
TOTAL PROPERTY AND EQUIPMENT 6,463,448
OTHER ASSETS
Intangible Assets 223,418
TOTAL OTHER ASSETS 223,418
TOTAL ASSETS 14,373,673$
ASSETS
See accompanying notes to supplementary information.
-3-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND
KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FINANCIAL POSITION
JUNE 30, 2016
CURRENT LIABILITIES Total
Accounts Payable 1,634,901$
Accrued Payroll & Benefits 1,493,983
Accrued Expenses 825,670
Retirement Plan Payable 1,702
Deferred Revenue 4,500
NCB Capital Impact Loan, Current Portion 99,458
Line of Credit - Comerica Bank 290,819
Line of Credit - Wells Fargo Bank 1,903,830
TOTAL CURRENT LIABILITIES 6,254,863
LONG-TERM LIABILITIES
Retirement Plan Payable 1,503,705
Vacation Payable 470,405
NCB Capital Impact Loan 1,455,910
TOTAL LONG-TERM LIABILITIES 3,430,020
TOTAL LIABILITIES 9,684,883
NET ASSETS
Unrestricted 4,688,790
Temporarily Restricted -
TOTAL NET ASSETS 4,688,790
TOTAL LIABILITIES AND NET ASSETS 14,373,673$
LIABILITIES AND NET ASSETS
See accompanying notes to supplementary information.
-4-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES AND SUPPORT Total
Los Angeles County 32,728,364$
Grant - 330 831,665
Income - OSHPD HSD34083F 128,719
Income - EHRS 208,740
Income - SSI 18,198
SAMHSA 246,545
Miscellaneous Income 87,944
Interest Income 185
Medi-Cal 1,092,110
Medicare 56,913
Fee - Private/Self/Sliding 32,838
Fee - Capitation 203,306
Charles Drew University 85,000
Rental Income 50,334
Fund Raising 119,519
TOTAL REVENUES AND SUPPORT 35,890,380
EXPENSES
PROGRAM SERVICES
Consultants - Medical 2,061,843
Consultants - Other Professional 1,266,570
Bad Debt Expense 63,061
Dietary 28,596
Food 311,243
Employee Benefits 3,518,818
Employee Physical Exam 28,230
Flex Fund Expense 377,390
Insurance 286,857
Lab Fees 54,990
Rental/Leasing - Building, Vehicle and Equipment 590,204
Linen & Bedding 118,102
Outside Services 1,911,271
Pharmacy, In - Patient Medication 148,539
Program Supplies 295,553
Repairs & Maintenance 510,413
Salaries and Wages 19,140,070
Software - EHR 208,740
Supplies 245,817
Training, Travel and Mileage Expense 121,921
TOTAL PROGRAM SERVICES EXPENSES 31,288,228$
See accompanying notes to supplementary information.
-5-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
JUNE 30, 2016
MANAGEMENT AND GENERAL Total
Advertising 31,363$
Amortization Expense 74,595
Audit Fees 44,500
Auto Expense 93,390
Bank Charges/Data Processing 193,549
Board Stipends 20,070
Conferences & Meetings 23,942
Consultant - IT 149,056
Consultants - Other Professional 400,959
Depreciation Expense 610,927
Dues & Subscriptions 56,163
Employees Welfare Expense 3,161
Employee Physical Exam 1,225
Salaries and Benefits 362,251
Health Fair 170
Housekeeping 28,156
Insurance 15,051
Interest Expense 131,613
Lab Fees 45,390
Legal Fees 174,523
Licenses & Permits 20
Loss on Disposal of Assets 11,718
Minor Equipment 3,815
Miscellaneous Expenses 36,913
Office Supplies 122,249
Other Expenses 64,752
Outside Services 8,637
Payroll Fees 3,678
Printing 6,662
Postage & Delivery 10,644
Rental/Leasing - Building, Vehicle and Equipment 5,865
Retirement Expense 496,440
Repairs & Maintenance 2,815
Security and Alarm Services 9,828
Taxes & Licenses 117,663
Telephone 353,077
Training 5,967
Travel 19,329
Utilities 500,488
TOTAL MANAGEMENT AND GENERAL EXPENSES 4,240,614
FUND RAISING
Fund Raising Expenses 139,306
TOTAL EXPENSES 35,668,148
CHANGE IN NET ASSETS BEFORE 222,232
REVERSIONARY EQUIPMENT CAPITALIZATION
REVERSIONARY EQUIPMENT
Capitalized 461,578
Provision for Depreciation (4,616)
Total Reversionary Equipment 456,962
CHANGE IN NET ASSETS 679,194
NET ASSETS, BEGINNING OF YEAR 4,009,596
NET ASSETS, END OF YEAR 4,688,790$
See accompanying notes to supplementary information.
-6-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE FUNDS AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FUNCTIONAL EXPENSES
JUNE 30, 2016
TOTAL
PROGRAM SERVICES
Consultants - Medical 2,061,843$
Consultants - Other Professional 1,266,570
Bad Debt Expense 63,061
Dietary 28,596
Food 311,243
Employee Benefits 3,518,818
Employee Physical Exam 28,230
Flex Fund Expense 377,390
Insurance 286,857
Lab Fees 54,990
Leasing - Building 45,834
Rental/Leasing - Vehicles/Building 544,370
Linen & Bedding 118,102
Outside Services 1,911,271
Pharmacy, In - Patient 148,539
Program Supplies 295,553
Repairs & Maintenance 510,413
Salaries and Wages 19,140,070
Software - EHR 208,740
Supplies 245,817
Training, Travel and Mileage Expense 121,921
TOTAL PROGRAM SERVICES EXPENSES 31,288,228
MANAGEMENT AND GENERAL
Advertising 31,363
Amortization Expense 74,595
Audit Fees 44,500
Auto Expense 93,390
Bank Charges/Data Processing 193,549
Board Stipends 20,070
Conferences & Meetings 23,942
Consultant - IT 149,056
Consultants - Other Professional 400,959
Depreciation Expense 610,927
Dues & Subscriptions 56,163
Employees Welfare Expense 3,161
Employee Physical Exam 1,225
Salaries and Benefits 362,251
Health Fair 170
Housekeeping 28,156
Insurance 15,051
Interest Expense 131,613
Lab Fees 45,390
Legal Fees 174,523
Licenses & Permits 20
Loss on Disposal of Assets 11,718
Minor Equipment 3,815
Miscellaneous Expenses 36,913
Office Supplies 122,249
Other Expenses 64,752
Outside Services 8,637
Payroll Fees 3,678
Printing 6,662
Postage & Delivery 10,644
Rental/Leasing - Building, Vehicle and Equipment 5,865
Retirement Expense 496,440
Repairs & Maintenance 2,815
Security and Alarm Services 9,828
Taxes & Licenses 117,663
Telephone 353,077
Training 5,967
Travel 19,329
Utilities 500,488
TOTAL MANAGEMENT AND GENERAL EXPENSES 4,240,614
FUND RAISING
Fund Raising Expenses 139,306
TOTAL EXPENSES 35,668,148$
See accompanying notes to supplementary information.
-7-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND
KEDREN COMMUNITY CARE CLINIC
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Increase in Net Assets 679,194$
Adjustments to Reconcile Increase in Net Assets to Net
Cash Provided (used) by Operating Activities:
Depreciation and Amortization Expenses 685,522
Disposal of Property - Imperial Court (2,447)
Decrease in Grants Receivable 83,805
Increase in Accounts Receivable (2,303,107)
Decrease in Due From LACOE 14,008
Decrease in Prepaid Expenses and Deposits 106,279
Decrease in Inventory 824
Increase in Accounts Payable 353,960
Increase in Accrued Payroll and Accrued Expenses 16,255
Decrease in Deferred Revenue (4,500)
Increase in Accrued Expenses 464,583
Net Cash Provided (used) by Operating Activities 94,376
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment (1,369,431)
Net Cash Provided (used) by Investing Activities (1,369,431)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Lines of Credit 1,400,000
Increase in Fund Vacation Liability 56,497
Payment on Note Payable (100,034)
Net Cash Provided (used) by Financing Activities 1,356,463
NET INCREASE IN CASH AND CASH EQUIVALENTS 81,408
CASH AND CASH EQUIVALENTS, Beginning of year 1,046,376
CASH AND CASH EQUIVALENTS, End of year 1,127,784$
The accompanying notes are an integral part of these financial statements.
-8-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND
KEDREN COMMUNITY CARE CLINIC
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016
Unrestricted Cash, End of year 1,127,784$
Total Cash and Cash Equivalents, End of year 1,127,784$
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest 131,613$
The accompanying notes are an integral part of these financial statements.
-9-
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-10-
NOTE 1 - NATURE OF ACTIVITIES
Kedren Community Health Center, Inc., (Kedren) is a private non-
profit public benefit corporation in the State of California. Kedren
was founded in 1965 by the late James L. Jones, M.D. (1926-1971), a
child psychiatrist. Kedren operates an acute psychiatric hospital, and a
community mental health center.
Since the Affordable Care Act signed into law in 2010, Kedren has
started to integrate its mental health care with health care through
prevention, early intervention, continuous health, mental health and
wrap around services for children, youth, adults, and older adults
residing in Los Angeles and neighborhood communities. Kedren has
established Kedren Community Care Clinic (KCCC) in 2013, a
community clinic licensed by the State of California to provide fully
integrated health, mental and behavior health, and substance abuse
care through a comprehensive, integrated, evidenced-based,
clinic/family focused, research and outcomes driven health care
system.
The combined financial statements include the financial statements of
Mental Health, SAMHSA, Corporate and KCCC Programs which are
related through common ownership and management.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Kedren adopted "Accounting for Contributions Received and
Contributions Made" and "Financial Statements of Not-For-Profit
Organizations" as required by the Not-for-Profit Entities topic of the
FASB Accounting Standards Codification. Accounting for
contributions received and contributions made requires that
unconditional promises (pledges) be recorded as receivables and
revenues of the appropriate net asset category. Financial statements of
not-for-profit organizations require that resources be classified for
accounting and reporting purposes into the following net asset
categories according to externally (donor) imposed restrictions:
unrestricted, temporarily restricted and permanently restricted.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-11-
CASH AND CASH EQUIVALENTS
Kedren considers highly liquid investments with a maturity of three
months or less to be cash equivalents.
Kedren maintains cash balances at several financial institutions located
in California. Accounts at each institution are insured under the
Federal Deposit Insurance Corporation’s policies and guidelines.
DONATIONS
Property and Equipment – Donations of property and equipment are
recorded as donations at their estimated fair value at the date of
donation. Such donations are reported as increases in unrestricted net
assets unless the donor has restricted the donated asset to a specific
purpose. Assets donated with explicit restrictions regarding their use
and contributions of cash that must be used to acquire property and
equipment are reported as restricted contributions. In the absence of
any stipulations from the donor regarding the period, these donated
assets must be maintained. Kedren reports expirations of donor’s
restrictions when the donated or acquired assets are placed in service
as instructed by the donor. At that time, Kedren reclassifies
temporarily restricted net assets to unrestricted net assets.
PROPERTY AND EQUIPMENT
All acquisitions of property and equipment, and all expenditures for
repairs, maintenance, renewals, and betterments exceeding $5,000 that
materially prolong the useful lives of assets, and which are deemed
probable that the assets will not revert back to the granting agency, are
capitalized.
Kedren records purchased property and equipment at cost, or in the
case of donated assets at estimated fair value at the date of donation.
Kedren maintains custody of reversionary assets that were acquired
with grant funds. Title to these assets vest with the grant recipient
subject to conditions. Kedren uses these assets in the project or
program for which it was acquired as long as needed and does not
encumber those assets without the approval of the grantor. When
Kedren no longer needs reversionary assets with a current fair market
value of $5,000 or more, Kedren may retain these assets for other uses
provided that compensation is made to the original grantor or its
successor.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-12-
DEPRECIATION
Buildings are depreciated over estimated useful lives of 17 and 33
years using the straight-line method of depreciation. Property,
equipment, furniture and automobiles are depreciated over estimated
useful lives, which range from three to forty years, depending on the
type of asset using the straight-line method of depreciation.
ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
DUE TO/DUE FROM OTHER FUND OR
INTERFUND PAYABLE/RECEIVABLE
The amounts in the due to/due from other fund or interfund
payable/receivable were created by normal operating interfund
activities, occurring when cash receipts were low in any fund. The
balances represent loans resulting from a temporary shift of the cash
resource from one fund to the other fund.
The interfund activities are eliminated on the combined balance sheet.
COST ALLOCATION
The costs of providing for the various programs have been
summarized on a functional basis in the statement of activities.
Accordingly, certain costs have been allocated among the programs
and supporting services benefited.
INCOME TAXES
Kedren is a non-profit health and human services organization exempt
from federal income taxes under Section 501 (c) (3) of the Internal
Revenue Code. Kedren is similarly exempt from California franchise
tax under Section 23701 (d) of the California Revenue and Taxation
Code. In addition, Kedren has been determined by the Internal
Revenue Service not to be a private foundation within the meaning of
Section 509 (a) of the Code. Accordingly, no provision has been made
for Federal and California income taxes in the accompanying financial
statements.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-13-
NOTE 3 - GRANTS RECEIVABLE
The following unconditional grants have been awarded prior to
June 30, 2016 and are all expected to be collected within one year:
KCCC $ 119,172
SAMHSA 24,249
Total $ 143,421
NOTE 4 - PROPERTY AND EQUIPMENT
Property and Equipment consisted of the following:
Mental Health Corporate KCCC
Total
Land Improvements $ - $ 95,552 $ -
$ 95,552
Buildings - 3,538,975 -
3,538,975
Building Improvements - 1,488,416 -
1,488,416
Portable Buildings 1,502,908 - -
1,502,908
Leasehold Improvements 5,092,961 - 36,802
5,129,763
Furniture and Fixtures 1,009,481 233,043 48,457
1,290,981
Equipment 1,144,250 - -
1,144,250
Computer Hardware 957,171 - -
957,171
Computer Software 413,241 - -
413,241
Automobiles 185,430 - -
185,430
10,305,442 5,355,986 85,259
15,746,687
Less accumulated
straight-line depreciation 4,876,706 4,398,976 7,557
9,283,239
Net Property and Equipment $ 5,428,736 $ 957,010 $ 77,702
$ 6,463,448
Depreciation expense for the year ended June 30, 2016 was $610,927.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-14-
NOTE 5 - INTANGIBLE ASSETS
The company obtained the developed patent from KIMSCO, Inc. costs
incurred for submitting the applications to the United States Patent and
Trademark Office for this patent has been capitalized. The patent
application was approved in 2005. Patent cost is amortized using the
straight-line method over a 14-year period. Amortization expense for the year ended June 30, 2016 is $74,595.
Amortization expense for the next five years for the intangible assets
owned at June 30, 2016 is as follows:
Year Ending
June 30,
2017 $ 74,595
2018 74,595
2019 74,228
$ 223,418
NOTE 6 - RETIREMENT PLAN
Kedren Mental Health (Kedren) has a 401K plan covering all of its
employees. After six (6) months of employment, employees who work
a minimum of twenty (20) hours per week (scheduled shift) are
eligible to participate in Kedren’s Retirement Plan. Plan entry dates
will be the first day of each calendar month following completion of
six (6) months employment. Kedren will make a Safe Harbor Match
of 100% on the first 1% of compensation deferred and an additional
50% match on the next 5% of compensation deferred.
Pension expense for the year ended June 30, 2016 was $496,440.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-15-
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Federal Awards and Grants
Kedren has received Federal Grant for primary care services that are
subject to review and audit by the grantor agency, and the U.S.
Department of Health and Human Services: Health Resources and
Services Administration.
Contingencies
Management has related, after consultation with general counsel, that
the disposition of all pending litigations and claims will not have a
significant effect on the accompanying financial statements.
NOTE 8 - LEASE COMMITMENTS
Mental Health leases numerous service sites and equipment leases with
periods of one year to five years. Total lease expense paid during the
current year was approximately $518,330.
Future minimum rental under non-cancelable operating leases are as
follows:
Year Ended
June 30 . Total
2017 $ 380,341
2018 122,331
2019 30,000
2020 30,000
$ 562,672
NOTE 9 - ACCRUED VACATION AND SICK LEAVE
Mental Health has a vacation and sick leave plan whereby every
employee who has satisfied defined employment requirements related
to length of service and work schedules can participate in the plan.
The vacation policy provides for annual accumulation of up to 160
maximum hours. The sick leave policy provides for annual
accumulation of up to 1,040 maximum hours.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-16-
NOTE 10 - NOTES PAYABLE
The Company has the following notes payable:
Promissory note for $1,800,000 term loan from a
Congressionally Chartered District of Columbia Non-Profit
Corporation. The balance at June 30, 2016 is $1,555,368. The
term of the loan is 10 years and principal and interest
amortization are based on a 180-month amortization schedule.
The interest on this note is 3.08% on the outstanding principal
balance. The maturity date is April 1, 2023. If principal or
interest is not received within 5 days of the due date, the
aggregate unpaid amount shall bear interest from the due date
until paid at 6.08%.
Total $ 1,555,368
Less Current Portion 99,458
Long Term Portion $ 1,455,910
The future scheduled maturities of long-term debt are as
follows:
Years ending June 30:
2017 $ 109,467
2018 99,717
2019 96,467
2020 96,467
Thereafter 1,053,792
$ 1,455,910
NOTE 11 - LINES OF CREDIT
The Company has the following lines of credit:
A $2,000,000 secured bank revolving line of credit with a
financial institution. The interest rate is subject to change from
time to time based on changes in an index which is the floating
rate equal to the prime rate set by the lender at its sole
discretion. Under no circumstances will the interest rate be less
than 5.00% per annum.
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
JUNE 30, 2016
-17-
The interest rate was 5% at June 30, 2016. The line is
collateralized by property located at 4211 S. Avalon Blvd., Los
Angeles, CA. The outstanding balance on the line of credit as
of June 30, 2016 was $1,903,830.
A $500,000 secured bank revolving line of credit with another
financial institution. The interest rate was 3.75% at June 30,
2016. All the Company’s equipment is used as collateral
excluding property or the proceeds belonging to the Federal
Government or in which the Federal Government maintains an
interest. The outstanding balance on this line of credit as of
June 30, 2016 was $290,819.
NOTE 12 - EVALUATION OF SUBSEQUENT EVENTS
Management has evaluated subsequent events through December 5,
2016, the date which the financial statements were available to be
issued.
COMBINED REPORTS
COMBINING STATEMENTS
Mental Health, SAMHSA, Corporate and KCCC
Combining Statement of Financial Position
Combining Statement of Activities and Changes in Net Assets
Combining Statement of Functional Expenses
Schedule of Expenditures of Federal Awards
Schedule of Expenditures of State Awards
Schedule of Los Angeles County and City Contracts
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FINANCIAL POSITION
JUNE 30, 2016
CURRENT ASSETS Mental Health SAMHSA Corporate
Kedren
Community Care
Clinic
Total
Cash and Cash Equivalents 123,344$ 4,384$ 605,131$ 394,925$ 1,127,784$
Accounts Receivable: LA County 4,895,522 - - - 4,895,522
Grants Receivable - 24,249 - 119,172 143,421
Accounts Receivable - - - 333,976 333,976
Other Receivable 254,097 - 490,545 4,761 749,403
Due from Primary Care - - 60,311 - 60,311
Due from Kedren CMHC - - 3,155,588 - 3,155,588
Due from SAMHSA - - 8,290 13 8,303
Security Deposit - - - 3,662 3,662
Prepaid Insurance - - - 7,633 7,633
Prepaid Expenses 404,494 164 2,852 7,462 414,972
Inventory 14,096 - - - 14,096
TOTAL CURRENT ASSETS 5,691,553 28,797 4,322,717 871,604 10,914,671
PROPERTY AND EQUIPMENT - AT COST
Property and Equipment,
Net of Accumulated Depreciation 5,428,735 - 957,010 77,703 6,463,448
TOTAL PROPERTY AND EQUIPMENT 5,428,735 - 957,010 77,703 6,463,448
OTHER ASSETS
Intangible Assets - - 223,418 - 223,418
TOTAL OTHER ASSETS - - 223,418 - 223,418
TOTAL ASSETS 11,120,288$ 28,797$ 5,503,145$ 949,307$ 17,601,537$
ASSETS
See accompanying notes to supplementary information.
-18-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FINANCIAL POSITION
JUNE 30, 2016
CURRENT LIABILITIES Mental Health SAMHSA Corporate
Kedren
Community Care
Clinic
Total
Accounts Payable 1,471,963$ 20,168$ 528$ 142,242$ 1,634,901$
Accrued Payroll & Benefits 1,493,983 - - - 1,493,983
Accrued Expenses 824,678 - 992 - 825,670
Retirement Plan Payable - 326 - 1,376 1,702
Due to Corporate - 8,290 - 60,311 68,601
Due to Primary Care - 13 - - 13
Deferred Revenue - - 4,500 - 4,500
Security Deposit - - 3,662 - 3,662
NCB Capital Impact Loan, Current Portion 99,458 - - - 99,458
Line of Credit - Comerica Bank - - 290,819 - 290,819
Line of Credit - Wells Fargo Bank - - 1,903,830 - 1,903,830
TOTAL CURRENT LIABILITIES 3,890,082 28,797 2,204,331 203,929 6,327,139
LONG-TERM LIABILITIES
Retirement Plan Payable 1,503,705 - - - 1,503,705
Vacation Payable 470,405 - - - 470,405
NCB Capital Impact Loan 1,455,910 - - - 1,455,910
Due to Corporate 3,155,588 - - - 3,155,588
TOTAL LONG-TERM LIABILITIES 6,585,608 - - - 6,585,608
TOTAL LIABILITIES 10,475,690 28,797 2,204,331 203,929 12,912,747
NET ASSETS
Unrestricted 644,598 - 3,298,814 745,378 4,688,790
Temporarily Restricted - - - - -
TOTAL NET ASSETS 644,598 - 3,298,814 745,378 4,688,790
TOTAL LIABILITIES AND NET ASSETS 11,120,288$ 28,797$ 5,503,145$ 949,307$ 17,601,537$
LIABILITIES AND NET ASSETS
See accompanying notes to supplementary information.
-19-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2016
REVENUES AND SUPPORT Mental Health SAMHSA Corporate
Kedren
Community Care
Clinic
Total
Los Angeles County 32,728,364$ -$ -$ -$ 32,728,364$
Grant - 330 - - - 831,665 831,665
Income - OSHPD HSD34083F 128,719 - - - 128,719
Income - EHRS 208,740 - - - 208,740
Income - SSI 18,198 - - - 18,198
SAMHSA - 246,545 - - 246,545
Miscellaneous Income 57,215 - 30,729 - 87,944
Interest Income 144 - 13 28 185
Medi-Cal - - - 1,092,110 1,092,110
Medicare - - - 56,913 56,913
Fee - Private/Self/Sliding - - - 32,838 32,838
Fee - Capitation - - - 203,306 203,306
Charles Drew University - - 85,000 - 85,000
Rental Income - - 50,334 - 50,334
Fund Raising - - 119,519 - 119,519
TOTAL REVENUES AND SUPPORT 33,141,380 246,545 285,595 2,216,860 35,890,380
EXPENSES
PROGRAM SERVICES
Consultants - Medical 2,061,843 - - - 2,061,843
Consultants - Other Professional 935,524 62,849 - 268,197 1,266,570
Bad Debt Expense - - - 63,061 63,061
Dietary 28,596 - - - 28,596
Food 311,243 - - - 311,243
Employee Benefits 3,441,864 - - 76,954 3,518,818
Employee Physical Exam 28,230 - - - 28,230
Flex Fund Expense 377,390 - - - 377,390
Insurance 286,857 - - - 286,857
Lab Fees 54,990 - - - 54,990
Rental/Leasing - Building, Vehicle and Equipment 544,370 - - 45,834 590,204
Linen & Bedding 118,102 - - - 118,102
Outside Services 1,911,271 - - - 1,911,271
Pharmacy, In - Patient 148,539 - - - 148,539
Program Supplies 295,553 - - - 295,553
Repairs & Maintenance 499,781 - - 10,632 510,413
Salaries and Wages 18,474,627 164,117 - 501,326 19,140,070
Software - EHR 208,740 - - - 208,740
Supplies - - - 245,817 245,817
Training, Travel and Mileage Expense 117,404 4,517 - - 121,921
TOTAL PROGRAM SERVICES EXPENSES 29,844,924$ 231,483$ -$ 1,211,821$ 31,288,228$
See accompanying notes to supplementary information.
-20-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
JUNE 30, 2016
MANAGEMENT AND GENERAL Mental Health SAMHSA Corporate
Kedren
Community
Care Clinic
Total
Advertising 21,053$ -$ -$ 10,310$ 31,363$
Amortization Expense - - 74,595 - 74,595
Audit Fees 44,500 - - - 44,500
Auto Expense 93,390 - - - 93,390
Bank Charges/Data Processing 173,142 1,892 16,899 1,616 193,549
Board Stipends - - 20,070 - 20,070
Conferences & Meetings - - - 23,942 23,942
Consultant - IT 148,775 - 281 - 149,056
Consultants - Other Professional 245,413 - 60,665 94,881 400,959
Depreciation Expense 496,743 - 108,025 6,159 610,927
Dues & Subscriptions 51,465 - 3,704 994 56,163
Employees Welfare Expense - - 3,161 - 3,161
Employee Physical Exam - - - 1,225 1,225
Salaries and Benefits - - 142,591 219,660 362,251
Health Fair - - - 170 170
Housekeeping - - - 28,156 28,156
Insurance - 117 678 14,256 15,051
Interest Expense 119,722 - 11,891 - 131,613
Lab Fees - - - 45,390 45,390
Miscellaneous Expenses - - - 36,913 36,913
Legal Fees 145,016 - 29,507 - 174,523
Licenses & Permits - - 20 - 20
Loss on Disposal of Assets - - 11,718 - 11,718
Minor Equipment 3,815 - - - 3,815
Office Supplies 116,488 4,944 817 - 122,249
Other Expenses 5,690 - 59,062 - 64,752
Outside Services - - 8,637 - 8,637
Payroll Fees - - - 3,678 3,678
Printing - - - 6,662 6,662
Postage & Delivery 10,644 - - - 10,644
Rental/Leasing - Building, Vehicle and Equipment - - 5,865 - 5,865
Retirement Expense 481,824 - - 14,616 496,440
Repairs & Maintenance - - 2,815 - 2,815
Security and Alarm Services 9,828 - - - 9,828
Taxes & Licenses 86,477 - 1,084 30,102 117,663
Telephone 349,789 - - 3,288 353,077
Training - - 5,967 - 5,967
Travel - 8,109 11,220 - 19,329
Utilities 488,407 - - 12,081 500,488
TOTAL MANAGEMENT AND GENERAL EXPENSES 3,092,181 15,062 579,272 554,099 4,240,614
FUND RAISING
Fund Raising Expenses - - 139,306 - 139,306
TOTAL EXPENSES 32,937,105 246,545 718,578 1,765,920 35,668,148
Change in Net Assets Before
Reversionary Equipment Capitalization 204,275 - (432,983) 450,940 222,232
Reversionary Equipment
Capitalized 461,578 - - - 461,578
Provision for Depreciation (4,616) - - - (4,616)
Total Reversionary Equipment 456,962 - - - 456,962
CHANGE IN NET ASSETS 661,237 - (432,983) 450,940 679,194
NET ASSETS, BEGINNING OF YEAR (16,639) - 3,731,797 294,438 4,009,596
NET ASSETS, END OF YEAR 644,598$ -$ 3,298,814$ 745,378$ 4,688,790$
See accompanying notes to supplementary information.
-21-
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH, SAMHSA, CORPORATE FUNDS AND KEDREN COMMUNITY CARE CLINIC
COMBINING STATEMENT OF FUNCTIONAL EXPENSES
JUNE 30, 2016
Mental Health SAMHSA Corporate
Kedren
Community
Care Clinic
TOTAL
PROGRAM SERVICESConsultants - Medical 2,061,843 - - - 2,061,843$ Consultants - Other Professional 935,524 62,849 - 268,197 1,266,570 Bad Debt Expense - - - 63,061 63,061 Dietary 28,596 - - - 28,596 Food 311,243 - - - 311,243 Employee Benefits 3,441,864 - - 76,954 3,518,818 Employee Physical Exam 28,230 - - - 28,230 FSP Members - - - - - Flex Fund Expense 377,390 - - - 377,390 Insurance 286,857 - - - 286,857 Lab Fees 54,990 - - - 54,990 Leasing - Building - - - 45,834 45,834 Linen & Bedding 118,102 - - - 118,102 Outside Services 1,911,271 - - - 1,911,271 Payroll Taxes - - - - - Pharmacy, In - Patient 148,539 - - - 148,539 Program Supplies 295,553 - - - 295,553 Rental / Leasing Equipment - - - - - Retirement Expense - - - - - Rental/Leasing - Vehicles/Building 544,370 - - - 544,370 Repairs & Maintenance 499,781 - - 10,632 510,413 Salaries and Wages 18,474,627 164,117 - 501,326 19,140,070 Software - EHR 208,740 - - - 208,740 Supplies - - - 245,817 245,817 Training, Travel and Mileage Expense 117,404 4,517 - - 121,921 Use Allowance - - - - - Other Costs - - - - -
TOTAL PROGRAM SERVICES EXPENSES 29,844,924 231,483 - 1,211,821 31,288,228
MANAGEMENT AND GENERALAdvertising 21,053$ -$ -$ 10,310$ 31,363 Amortization Expense - - 74,595 - 74,595 Audit Fees 44,500 - - - 44,500 Auto Expense 93,390 - - - 93,390 Bank Charges/Data Processing 173,142 1,892 16,899 1,616 193,549 Board Stipends - - 20,070 - 20,070 Conferences & Meetings - - - 23,942 23,942 Consultant - IT 148,775 - 281 - 149,056 Consultants - Other Professional 245,413 - 60,665 94,881 400,959 Data Processing - - - - - Depreciation Expense 496,743 - 108,025 6,159 610,927 Dietary - Canteen - - - - - Dues & Subscriptions 51,465 - 3,704 994 56,163 Employees Welfare Expense - - 3,161 - 3,161 Employee Physical Exam - - - 1,225 1,225 Salaries and Benefits - - 142,591 219,660 362,251 Health Fair - - - 170 170 Housekeeping - - - 28,156 28,156 Insurance - 117 678 14,256 15,051 Interest Expense 119,722 - 11,891 - 131,613 Lab Fees - - - 45,390 45,390 Legal Fees 145,016 - 29,507 - 174,523 Licenses & Permits - - 20 - 20 Loss on Disposal of Assets - - 11,718 - 11,718 Minor Equipment 3,815 - - - 3,815 Miscellaneous Expenses - - - 36,913 36,913 Office Supplies 116,488 4,944 817 - 122,249 Other Expenses 5,690 - 59,062 - 64,752 Outside Services - - 8,637 - 8,637 Payroll Fees - - - 3,678 3,678 Printing - - - 6,662 6,662 Postage & Delivery 10,644 - - - 10,644 Rental/Leasing - Building, Vehicle and Equipment - - 5,865 - 5,865 Retirement Expense 481,824 - - 14,616 496,440 Repairs & Maintenance - - 2,815 - 2,815 Security and Alarm Services 9,828 - - - 9,828 Taxes & Licenses 86,477 - 1,084 30,102 117,663 Telephone 349,789 - - 3,288 353,077 Training - - 5,967 - 5,967 Travel - 8,109 11,220 - 19,329 Utilities 488,407 - - 12,081 500,488
- - - - -
TOTAL MANAGEMENT AND GENERAL EXPENSES 3,092,181 15,062 579,272 554,099 4,240,614
FUND RAISINGFund Raising Expenses - - 139,306 - 139,306
TOTAL EXPENSES 32,937,105$ 246,545$ 718,578$ 1,765,920$ 35,668,148$
See accompanying notes to supplementary information.
-22-
SUPPLEMENTARY INFORMATION
KEDREN COMMUNITY HEALTH CENTER, INC.
(MENTAL HEALTH, SAMHSA, CORPORATE AND KEDREN COMMUNITY CARE CLINIC)
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2016
Pass-Through
Federal Entity
Federal Grant/Pass-Through CFDA Identifying Federal
Grantor/Program or Cluster Title Number Number SAMHSA KCCC Expenditures
U.S. Department of Health and Human Services:
Primary Care - Health Centers Program 93.224 776,674$ 776,674$
SAMHSA - Integrating Programs 93.243 246,545$ 246,545
SAMHSA - Block Grant - Federal 93.958 LAC-DMH 40,000$ 40,000
TOTAL EXPENDITURES OF FEDERAL AWARDS 286,545$ 776,674$ 1,063,219$
See accompanying notes to schedule of expenditures of federal awards.
-23-
KEDREN COMMUNITY HEALTH CENTER, INC.
(MENTAL HEALTH, SAMHSA, CORPORATE
AND KEDREN COMMUNITY CARE CLINIC)
SCHEDULE OF EXPENDITURES OF STATE CONTRACTS
FOR THE YEAR ENDED JUNE 30, 2016
State Awards/Contracts Mental Health
Contracts
Post Release CSCI - AB 109 1,354,540$
MHSA 3,046,785
TOTAL AWARDS 4,401,325$
See accompanying notes to supplementary information.
-24-
KEDREN COMMUNITY HEALTH CENTER, INC.
(MENTAL HEALTH, SAMHSA, CORPORATE AND
KEDREN COMMUNITY CARE CLINIC)
SCHEDULE OF LOS ANGELES COUNTY AND CITY CONTRACTS
FOR THE YEAR ENDED JUNE 30, 2016
Mental Health
COUNTY CONTRACTS
County General Fund 12,487,073$
MHSA 8,368,954
DCFS (MAT) 36,100
First 5 LA 3,781
Healthy Families, or MAA FFP 7,175,431
DCFS - Family Preservation 215,700
EHRS Technology Grant 208,740
TOTAL COUNTY AND CITY CONTRACTS 28,495,779$
See accompanying notes to supplementary information.
-25-
INDIVIDUAL FUNDS/PROGRAMS
Mental Health Fund
SAMSHA
Corporate Fund
KCCC
MENTAL HEALTH FUND
CURRENT ASSETS
Cash and Cash Equivalents 123,344$
Accounts Receivable: Due from LA County 4,895,522
Other Receivable 254,097
Prepaid Expenses 404,494
Inventory 14,096
TOTAL CURRENT ASSETS 5,691,553
PROPERTY AND EQUIPMENT
Property and Equipment at Cost,
Less: Accumulated Depreciation of $4,876,706 5,428,735
TOTAL PROPERTY AND EQUIPMENT 5,428,735
TOTAL ASSETS 11,120,288$
ASSETS
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH FUND
STATEMENT OF FINANCIAL POSITION
June 30, 2016
See accompanying notes to supplementary information.
-26-
LIABILITIES AND NET ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 1,471,963$
Accrued Payroll & Benefits 1,493,983
Accrued Expenses 824,678
NCB Capital Impact Loan, Current Portion 99,458
TOTAL CURRENT LIABILITIES 3,890,082
LONG-TERM LIABILITIES
Retirement Plan Payable 1,503,705
Vacation Payable 470,405
NCB Capital Impact Loan 1,455,910
Due To Corporate 3,155,588
TOTAL LONG-TERM LIABILITIES 6,585,608
TOTAL LIABILITIES 10,475,690
NET ASSETS
Unrestricted 644,598
TOTAL NET ASSETS 644,598
TOTAL LIABILITIES AND NET ASSETS 11,120,288$
See accompanying notes to supplementary information.
-27-
REVENUES AND SUPPORT
Los Angeles County - DMH 32,728,364$
Income - OSHPD HSD34083F 128,719
Income - EHRS 208,740
Income - SSI 18,198
Miscellaneous Income 57,215
Interest Income 144
TOTAL REVENUES AND SUPPORT 33,141,380
EXPENSES
PROGRAM SERVICES
Salaries and Wages 18,474,627
Consultants - Medical 2,061,843
Consultants - Other 935,524
Employee Benefits 3,441,864
Pharmacy - In - Patient 148,539
Outside Services 1,911,271
Food 311,243
Dietary Supplies 28,596
Flex Fund Expense 377,390
Insurance 286,857
Rental/Leasing - Building, Vehicle and Equipment 544,370
Software - EHR 208,740
Linen & Bedding 118,102
Travel, Training and Mileage Expense 117,404
Program Supplies 295,553
Repairs & Maintenance 499,781
Employee Physical Exam 28,230
Lab Fees 54,990
TOTAL PROGRAM SERVICES EXPENSES 29,844,924$
For the Fiscal Year Ended June 30, 2016
KEDREN COMMUNITY HEALTH CENTER, INC.
MENTAL HEALTH FUND
STATEMENT OF ACTIVITIES
AND CHANGES IN NET ASSETS
See accompanying notes to supplementary information.
-28-
MANAGEMENT AND GENERAL
Consultants - Other 245,413
Utilities 488,407
Other Expenses 5,690
Depreciation Expense 496,743
Telephone 349,789
Security and Alarm Services 9,828
Consultant - IT 148,775
Audit Fees 44,500
Office Supplies 116,488
Legal Fees 145,016
Minor Equipment 3,815
Taxes & Licenses 86,477
Dues & Subscriptions 51,465
Retirement Expense 481,824
Interest Expense 119,722
Bank Charges/Data Processing 173,142
Postage & Delivery 10,644
Auto Expense 93,390
Advertising 21,053
TOTAL MANAGEMENT AND GENERAL EXPENSES 3,092,181
FUND RAISING
Fund Raising Expenses -
TOTAL FUND RAISING EXPENSES -
TOTAL EXPENSES 32,937,105
Change in Net Assets Before
Reversionary Equipment Capitalization 204,275
Reversionary Equipment
Capitalized 461,578
Provision for Depreciation (4,616)
Total Reversionary Equipment 456,962
CHANGE IN NET ASSETS 661,237
NET ASSETS, BEGINNING OF YEAR (16,639)
NET ASSETS, END OF YEAR 644,598
See accompanying notes to supplementary information.
-29-
SAMHSA
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 4,384$
Grants Receivable 24,249
Prepaid Expenses 164
TOTAL CURRENT ASSETS 28,797
PROPERTY AND EQUIPMENT
Property and Equipment at Cost,
Less Accumulated Depreciation -
TOTAL PROPERTY AND EQUIPMENT -
OTHER ASSETS
Intangible Assets, Net -
TOTAL OTHER ASSETS -
TOTAL ASSETS 28,797$
KEDREN COMMUNITY HEALTH CENTER, INC.
SAMHSA
STATEMENT OF FINANCIAL POSITION
June 30, 2016
See accompanying notes to supplementary information.
-30-
LIABILITIES AND NET ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 20,168$
Retirement Plan Payable 326
Due to Primary Care 13
Due to Corporate 8,290
TOTAL CURRENT LIABILITIES 28,797
LONG-TERM LIABILITIES -
TOTAL LONG-TERM LIABILITIES -
TOTAL LIABILITIES 28,797
NET ASSETS
Unrestricted -
TOTAL NET ASSETS -
TOTAL LIABILITIES AND NET ASSETS 28,797$
See accompanying notes to supplementary information.
-31-
REVENUES AND SUPPORT
Income - SAMHSA 246,545$
TOTAL REVENUES AND SUPPORT 246,545$
EXPENSES
PROGRAM SERVICES
Consultants - Professional Fees 62,849$
Salaries & Benefits 164,117
Training 4,517
TOTAL PROGRAM SERVICES EXPENSES 231,483
MANAGEMENT AND GENERAL
Bank Charges/Data Processing 1,892$
Insurance 117
Office Supplies 4,944
Travel 8,109
TOTAL MANAGEMENT AND GENERAL EXPENSES 15,062
FUND RAISING
Fund Raising Expenses -
TOTAL FUND RAISING EXPENSES -
TOTAL EXPENSES 246,545
CHANGE IN NET ASSETS -
NET ASSETS, BEGINNING OF YEAR -
NET ASSETS, END OF YEAR -$
KEDREN COMMUNITY HEALTH CENTER, INC.
SAMHSA
STATEMENT OF ACTIVITIES
AND CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 2016
See accompanying notes to supplementary information.
-32-
CORPORATE FUND
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 605,131$
Other Receivable 490,545
Prepaid Expenses 2,852
Due from Kedren CMHC 3,155,588
Due from SAMHSA 8,290
Due from Primary Care 60,311
TOTAL CURRENT ASSETS 4,322,717
PROPERTY AND EQUIPMENT
Property and Equipment at Cost,
Less Accumulated Depreciation of $4,398,976 957,010
TOTAL PROPERTY AND EQUIPMENT 957,010
OTHER ASSETS
Intangible Assets, Net 223,418
TOTAL OTHER ASSETS 223,418
TOTAL ASSETS 5,503,145$
KEDREN COMMUNITY HEALTH CENTER, INC.
CORPORATE FUND
STATEMENT OF FINANCIAL POSITION
June 30, 2016
See accompanying notes to supplementary information.
-33-
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 605,131$
Other Receivable 490,545
Prepaid Expenses 2,852
Due from Kedren CMHC 3,155,588
Due from SAMHSA 8,290
Due from Primary Care 60,311
TOTAL CURRENT ASSETS 4,322,717
PROPERTY AND EQUIPMENT
Property and Equipment at Cost,
Less Accumulated Depreciation of $4,398,976 957,010
TOTAL PROPERTY AND EQUIPMENT 957,010
OTHER ASSETS
Intangible Assets, Net 223,418
TOTAL OTHER ASSETS 223,418
TOTAL ASSETS 5,503,145$
KEDREN COMMUNITY HEALTH CENTER, INC.
CORPORATE FUND
STATEMENT OF FINANCIAL POSITION
June 30, 2016
See accompanying notes to supplementary information.
-33-
LIABILITIES AND NET ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 528$
Accrued Expenses 992
Deferred Revenue 4,500
Security Deposit 3,662
Line of Credit - Wells Fargo Bank 1,903,830
Line of Credit - Comerica Bank 290,819
TOTAL CURRENT LIABILITIES 2,204,331
LONG-TERM LIABILITIES -
TOTAL LONG-TERM LIABILITIES -
TOTAL LIABILITIES 2,204,331
NET ASSETS
Unrestricted 3,298,814
TOTAL NET ASSETS 3,298,814
TOTAL LIABILITIES AND NET ASSETS 5,503,145$
See accompanying notes to supplementary information.
-34-
REVENUES AND SUPPORT
Charles Drew University 85,000$
Fund Raising 119,519
Rental Income 50,334
Interest Income 13
Miscellaneous Income 30,729
TOTAL REVENUES AND SUPPORT 285,595$
EXPENSES
MANAGEMENT AND GENERAL
Amortization Expense 74,595$
Bank Charges 16,899
Board Stipends 20,070
Consultants - IT 281
Consultants - Professional Fees 60,665
Depreciation Expense 108,025
Dues & Subscriptions 3,704
Employees Welfare Expense 3,161
Interest Expense 11,891
Insurance 678
Legal Fees 29,507
Licenses & Permits 20
Loss on Disposal of Assets 11,718
Miscellaneous Expenses 59,062
Office Supplies 817
Outside Services 8,637
Rental - Vehicle 5,865
Repairs & Maintenance 2,815
Salaries & Benefits 142,591
Taxes & Licenses 1,084
Training 5,967
Travel 11,220
TOTAL MANAGEMENT AND GENERAL EXPENSES 579,272
FUND RAISING
Fund Raising Expenses 139,306
TOTAL FUND RAISING EXPENSES 139,306
TOTAL EXPENSES 718,578
CHANGE IN NET ASSETS (432,983)
NET ASSETS, BEGINNING OF YEAR 3,731,797
NET ASSETS, END OF YEAR 3,298,814$
KEDREN COMMUNITY HEALTH CENTER, INC.
CORPORATE FUND
STATEMENT OF ACTIVITIES
AND CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 2016
See accompanying notes to supplementary information.
-35-
KCCC
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 394,925$
Accounts Receivable 333,976
Grants Receivable 119,172
Others Receivable 4,761
Security Deposit 3,662
Prepaid Insurance 7,633
Prepaid Expenses 7,462
Due from SAMHSA 13
TOTAL CURRENT ASSETS 871,604
PROPERTY AND EQUIPMENT
Property and Equipment at Cost,
Less Accumulated Depreciation of $7,557 77,703
TOTAL PROPERTY AND EQUIPMENT 77,703
OTHER ASSETS
Intangible Assets, Net -
TOTAL OTHER ASSETS -
TOTAL ASSETS 949,307$
KEDREN COMMUNITY HEALTH CENTER, INC.
KEDREN COMMUNITY CARE CLINIC (KCCC)
STATEMENT OF FINANCIAL POSITION
June 30, 2016
See accompanying notes to supplementary information.
-36-
LIABILITIES AND NET ASSETS
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 142,242$
Retirement Payable 1,376
Due to Corporate 60,311
TOTAL CURRENT LIABILITIES 203,929
LONG-TERM LIABILITIES -
TOTAL LONG-TERM LIABILITIES -
TOTAL LIABILITIES 203,929
NET ASSETS
Unrestricted 745,378
TOTAL NET ASSETS 745,378
TOTAL LIABILITIES AND NET ASSETS 949,307$
See accompanying notes to supplementary information.
-37-
REVENUES AND SUPPORT
Grant - 330 831,665$
Medi-Cal 1,092,110
Medicare 56,913
Fee - Self/Private/Sliding/IPA 32,838
Fee - Capitation 203,306
Interest Income 28
TOTAL REVENUES AND SUPPORT 2,216,860$
EXPENSES
PROGRAM SERVICES
Salaries & Wages 501,326$
Consultants - Professional Fees 268,197
Supplies 245,817
Employee Benefits 76,954
Bad Debt Expense 63,061
Leasing - Building 45,834
Repairs & Maintenance 10,632
TOTAL PROGRAM SERVICES EXPENSES 1,211,821
MANAGEMENT AND GENERAL
Advertising 10,310$
Bank Charges 1,616
Consultants - Professional Fees 94,881
Conference & Meeting 23,942
Depreciation Expense 6,159
Dues & Subscriptions 994
Employee Physical Exam 1,225
Health Fair 170
Housekeeping 28,156
Insurance 14,256
Lab Fees 45,390
Miscellaneous Expenses 36,913
Payroll Fees 3,678
Printing 6,662
Retirement 14,616
Salaries & Benefits 219,660
Taxes & Licenses 30,102
Telephone 3,288
Utilities - Water/Power/Gas 12,081
TOTAL MANAGEMENT AND GENERAL EXPENSES 554,099
FUND RAISING
Fund Raising Expenses -
TOTAL FUND RAISING EXPENSES -
TOTAL EXPENSES 1,765,920
CHANGE IN NET ASSETS 450,940
NET ASSETS, BEGINNING OF YEAR 294,438
NET ASSETS, END OF YEAR 745,378$
KEDREN COMMUNITY HEALTH CENTER, INC.
KEDREN COMMUNITY CARE CLINIC (KCCC)
STATEMENT OF ACTIVITIES
AND CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 2016
See accompanying notes to supplementary information.
-38-
KEDREN COMMUNITY HEALTH CENTER, INC.
NOTES TO SUPPLEMENTARY SCHEDULES
FOR THE YEAR ENDED JUNE 30, 2016
-39-
NOTE #1 – PURPOSE OF SCHEDULES
Combining Statements of Financial Position and Combining Statements of Activities
The combining statements of financial position, and the combining statements of activities
present the individual program’s financial position and results of operation for each significant
agency program.
Schedule of Expenditures of Federal and Non-Federal Awards
The accompanying Schedule of Expenditures of Federal Awards, the Schedule of Expenditures
of State Awards and the Schedule of Los Angeles County Contracts include the federal and
nonfederal grant activity of Kedren and is presented on the accrual basis of accounting. The
information in these schedules 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. Therefore, some amounts presented in this
schedule may differ from amounts presented in, or used in, the preparation of the financial
statements.
The Primary Care Program
KCCC implemented the cost accounting requirements and the procedures used by KCCC
meets the financial and program reporting requirements.
KCCC uses the e-clinicalworks software to generate performance reports both for
financial and program purposes.
Billing and collection is performed by a third party and is monitored by KCCC.
- 40 -
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
To the Board of Directors
Kedren Community Health Center, Inc.
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 Kedren Community Health Center,
Inc. (Kedren) (a nonprofit organization) which comprise the statement of financial
position as of June 30, 2016, and the related statements of activities, and cash
flows for the year then ended, and the related notes to the financial statements, and
have issued our report thereon dated December 5, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered
Kedren’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 Kedren’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the
Organization’s internal control.
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Board of Directors
Kedren Community Health Center, Inc.
Page 2
A deficiency in internal control exists when the design or operation of a control
does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct misstatements on a
timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or
detected and corrected on a timely basis. A significant deficiency is a deficiency,
or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited
purpose described in the first paragraph of this section and was not designed to
identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations, during our audit we did not
identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been
identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Kedren'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.
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Board of Directors
Kedren Community Health Center, Inc.
Page 3
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal
control and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the organization’s internal control or on
compliance. This report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the organization’s internal
control and compliance. Accordingly, this communication is not suitable for any
other purpose.
Los Angeles, California
December 5, 2016
INDEPENDENT AUDITORS’ REPORTS
Internal Control on Compliance and Other
Matters
Compliance on Each Major Program
- 43 -
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the Board of Directors
Kedren Community Health Center, Inc.
Report on Compliance for Each Major Federal Program
We have audited Kedren Community Health Center, Inc.’s (Kedren)
compliance with the types of compliance requirements described in the OMB
Compliance Supplement that could have a direct and material effect on each of
Kedren’s major federal programs for the year ended June 30, 2016. Kedren's
major federal programs are identified in the summary of auditor’s results
section of the accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations,
and the terms and conditions of its federal awards applicable to its federal
programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Kedren’s
major federal programs 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;
and 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). Those standards and
the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and
material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about Kedren's compliance with those
requirements and performing such other procedures as we considered
necessary in the circumstances.
- 43 -
Board of Directors
Kedren Community Health Center, Inc.
Page 2
We believe that our audit provides a reasonable basis for our opinion on
compliance for each major federal program. However, our audit does not
provide a legal determination of Kedren's compliance.
Opinion on Each Major Federal Program
In our opinion, Kedren complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and
material effect on each of its major federal programs for the year ended June
30, 2016.
Report on Internal Control Over Compliance
Management of Kedren is responsible for establishing and maintaining
effective internal control over compliance with the types of compliance
requirements referred to above. In planning and performing our audit of
compliance, we considered Kedren's internal control over compliance with the
types of requirements that could have a direct and material effect on each
major federal program to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an opinion on
compliance for each major federal program and to test and report on internal
control over compliance in accordance the Uniform Guidance, but not for the
purpose of expressing an opinion on the effectiveness of internal control over
compliance.
Accordingly, we do not express an opinion on the effectiveness of Kedren’s
internal control over compliance.
A deficiency in internal control over compliance exists when the design or
operation of a control over compliance does not allow management or
employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A 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
- 44 -
Board of Directors
Kedren Community Health Center, Inc.
Page 3
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 the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Los Angeles, California
December 5, 2016
SCHEDULE OF FINDINGS
AND QUESTIONED COTS
- 46 -
KEDREN COMMUNITY HEALTH CENTER, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2016
SUMMARY OF AUDITORS’ RESULTS
FINANCIAL STATEMENTS
Type of auditors’ report issued: Unqualified
Internal control over financial reporting:
Material weaknesses identified? No
Reporting conditions identified not considered to be material weaknesses? Yes
Noncompliance material to financial statements noted: No
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified? No
Reporting condition identified not considered to be material weaknesses? Yes
Type of auditors’ report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported
in accordance with Uniform Guidance. None
Identified as major programs:
CFDA Number(s) Name of Federal Program or Cluster
93.224 Primary Care – Health Center Program
Dollar threshold used to distinguish between Type A and Type B programs: $ 750,000
Auditee qualified as low-risk auditee? No
- 47 -
KEDREN COMMUNITY HEALTH CENTER, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2016
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None reported
- 48 -
KEDREN COMMUNITY HEALTH CENTER, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2016
SUMMARY SCHEDULE OF PRIOR YEAR’S AUDIT FINDINGS
None reported
Recommended