Agenda for Children - app.lla.state.la.us€¦ · The Organization recognizes the tax benefit from uncertain tax positions only if it is "more likely than not" the tax position will

AGENDA FOR CHILDREN, INC. FINANCIAL STATEMENTS AND AUDITORS' REPORT

June 30, 2014

AGENDA FOR CHILDREN, INC. TABLE OF CONTENTS

June 30, 2014

Page

INDEPENDENT AUDITORS' REPORT I -2

FINANCIAL STATEMENTS

Statement of Financial Position 3

Statement of Activities 4

Statement of Cash Flows 5

NOTES TO FINANCIAL STATEMENTS 6-10

SUPPLEMENTAL INFORMATION

Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards 12-13

Independent Auditors' Report on Compliance for Each Major Program and on Internai Control Over Compliance Required by OMB Circular A-133 14-17

Schedule of Expenditures of Federal Awards 18

Note to Schedule of Expenditures of Federal Awards 19

Schedule of Findings and Questioned Costs 20-25

Management's Corrective Action Plan 26-28

L.L.C.

CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

S. DAVID KUSHNER, CPA' WILSON A. LaGRAIZE, JR., CPA/OFF' ERNEST G. GELPI, CPA, CGFM CRAIG M, FABACHER, CPA DOUGLAS W, FINEGAN, CPA, CVA 'A Professional Accounting Corporation 'Certified Forensic Accountant

MARY ANNE GARCIA, CPA WILLIAM B, HAMILTON, CPA KATHARINE M, LASSITER, CPA RICHARD J. RUMNEY, CPA

Members American Institute of CPA's Society of Louisiana CPA's

INDEPENDENT AUDITORS' REPORT

To the Board of Directors Agenda for Children, inc.

Report on the Financial Statements

We have audited the accompanying financial statements of Agenda for Children, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2014, and the related statements of activities, 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.

SUITE 100 3330 WEST ESPLANADE AVENUE METAIRIE, LOUISIANA 70002

r^DAMERICA \^l / lINTERNATIONAL

Crmw Homoth Intemational.

(504) 838-9991 • FAX (504) 833-7971 www.kl-cpa.com

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Agenda for Children, Inc. as of June 30, 2014, 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

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 Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2014, on our consideration of Agenda for Children, Inc.'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 Agenda for Children, Inc.'s internal control over financial reporting and compliance.

Metairie, Louisiana December 22, 2014

AGENDA FOR CHILDREN, INC. STATEMENT OF FINANCIAL POSITION

June 30, 2014

ASSETS

CURRENT ASSETS

Cash Grants receivables Other receivables Prepaid expenses

Total Current Assets

Property and equipment, net

Total Assets

2014

$ 369,592 1,133,063

8,166 24.918

1,535,739

52.239

$ 1.587.978

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

Accounts payable and accrued liabilities

Total Current Liabilities

Commitments

NET ASSETS

Unrestricted Temporarily restricted

Total Net Assets

Total Liabilities and Net Assets

$ 267.047

267,047

817,381 503.550

1.320.931

i 1.587.978

The Accompanying Notes are an Integral Part of this Financial Statement.

AGENDA FOR CHILDREN, INC. STATEMENT OF ACTIVITIES

For the Year Ended June 30, 2014

Temporarily Unrestricted Restricted Total

REVENUES AND OTHER SUPPORT Grant revenue $ 2,497,627 $ 231,593 $ 2,729,220 Fees 106,979 - 106,979 Contributions 53,241 - 53,241 Interest income 1,175 - 1,175 Other 2,566 - 2,566 Net assets released from restrictions 760.857 f760.857^ -

TOTAL REVENUES 3,422,445 (529,264) 2,893,181

EXPENSES Personnel costs 2,436,844 - 2,436,844 Travel 81,440 - 81,440 Supplies 169,371 - 169,371 Occupancy 140,533 - 140,533 Printing and publications 23,772 - 23,772 Professional services 362,226 - 362,226 Postage 8,179 - 8,179 Telephone 67,827 - 67,827 Equipment expense 152,869 - 152,869 Other 48.262 - 48.262

TOTAL EXPENSES 3.491.323 - 3.491.323

(Decrease) in net assets (68,878) (529,264) (598,142)

Net assets, beginning of year 886.259 1.032.814 1.919.073

Net assets, end of year $ 817,381 $ 503.550 $ 1.320.931

The Accompanying Notes are an Integral Part of this Financial Statement.

AGENDA FOR CHILDREN, INC. STATEMENT OF CASH FLOWS

For the Year Ended June 30, 2014

CASH FLOWS FROM OPERATING ACTIVITIES Decrease in net assets Adjustments to reconcile change In net assets to net cash provided by (used in) operating activities: Depreciation

Changes in operating assets and liabilities: Increase in grants receivables Decrease in other receivables Increase in prepaid expenses Increase in accounts payable and accrued liabilities

NET CASH USED IN OPERATING ACTIVITIES

$ (598,142)

10,479

(284,943) 8,462

(23,858) 27.136

(860,866)

CASH FLOWS USED IN INVESTING ACTIVIITES-Purchase of fixed assets (23.860)

NET DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR

(884,726)

1.254.318

$ 369.592

The Accompanying Notes are an Integral Part of These Financial Statements.

AGENDA FOR CH/LDREN, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2014

NOTE I - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements of Agenda for Children, Inc. (the Organization). The financial statements and notes are representations of the Organization's management, who is responsible for their integrity and objectivity. These accounting policies conform to U.S. generally accepted accounting principles.

Nature of Activities

Agenda for Children, Inc. is a non-profit corporation organized to provide an informed, consistent and intentional voice on behalf of Louisiana's children. Agenda for Children, Inc. helps families find and choose child care, offers training and technical assistance for child care providers, and provides child abuse prevention education in the southeastern Louisiana area.

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows:

Unrestricted Net Assets

Unrestricted net assets are not subject to donor-imposed restrictions. The Board of Directors may designate them for specific purposes.

Temporarily Restricted Net Assets

Temporarily restricted net assets are subject to donor-imposed restrictions that may be met by the actions of the Organization or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

AGENDA FOR CHILDREN, INC. NOTES TO FINANCIAL STATEMENTS-Continued

June 30. 2014

NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES -CONTINUED

Public Support and Revenues

Grants and other contributions of cash and other assets are reported as temporarily restricted support if they are received with donor-imposed stipulations that limit the use of the donated assets. When a donor's restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions.

Contributions of donated noncash assets are recorded at their estimated fair value at the date of donation.

Revenues related to grants that require the Organization to submit expenses for reimbursement are recorded when the funds are spent by the Organization on grant related activities.

Donated Services

Unpaid board members and volunteers conduct a significant portion of the Organization's functions. 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.

Property and Equipment

Property and equipment are recorded at cost. The Organization capitalizes all expenditures in excess of $5,000 on a straight-line basis upon the following estimated useful lives: software - 3 years and furniture and equipment - 5 years. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the remaining term of the lease. Depreciation expense for the year ended June 30, 2014 totaled $ 10,479.

Advertising Expense

The Organization paid $930 in advertising costs for the year ended June 30, 2014. The costs are expensed as incurred.

Income Taxes

The Organization is exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code. Therefore, no provision for income taxes has been included in these financial statements.


June 30, 2014

NOTE I - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES -CONTINUED

Income Taxes - Continued

The Organization recognizes the tax benefit from uncertain tax positions only if it is "more likely than not" the tax position will be sustained on examination by the taxing authorities. To the extent the Organization's assessment of such tax positions change, the change will be recorded in the period in which the determination is made. No adjustments were required for the fiscal year ended June 30, 2014.

The Organization's tax returns for the years ended June 30, 2013, 2012, and 2011 remain open and subject to examination by taxing authorities. The income tax return for June 30, 2014 has not been filed.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Organization's management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

Fair Value of Financial Instruments

Fair value estimates, methods and assumptions for the Organization's financial instruments are that the carrying amounts reported in the Statement of Financial Position are a reasonable estimate of fair value for the fiscal year ended June 30, 2014.

Functional Expense Reporting

The expenses of providing program and other activities have been summarized on a functional basis in Note 7 to the financial statements. Certain of those expenses have been allocated among the program and supporting services benefited based on estimates by management of the costs involved.

NOTE 2 - OFF BALANCE SHEET RISK

The Organization maintains its cash in bank accounts. The accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At June 30, 2014 the Organization had no accounts that exceeded the FDIC insurance limit.


June 30, 2014

NOTE 3 - CONCENTRATIONS

The Organization had 2 grantors who accounted for 67% of total grant income for the year ended June 30, 2014.

The Organization had 2 grantors who accounted for 66% of total grant receivables at June 30, 2014.

NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS

As of June 30, 2014, the temporarily restricted net assets were for the following purposes:

Awesome Girls Mentoring $ 14,916 Bridge to Quality 62,421 Communications Plan 12,501 Early Literacy Program 235,064 Kids Count 83,243 NOLA Early Learning 1,092 Organization Development 38,313 Strategic Planning 56.000

$ 503.550

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2014 consisted of the following:

Leasehold Improvements $ 52,392 Software

Less accumulated depreciation 76,252

(24.013) $ 52.239

NOTE 6 - COMMITMENTS

The Organization leases its administrative facility under an operating lease expiring March 31, 2017. It also leases a location in Mandeville that expires June 30, 2015. The Houma location lease expired on June 30, 2014 and the agreement has continued on a month-to-month basis.

Future minimum lease payments are as follows:


June 30. 2014

NOTE 6 - COMMITMENTS - CONTINUED

|une 30. 2015 2016 2017

$

1

The rental expense for the year ended June 30, 2014 totaled $95,096.

NOTE 7 - FUNCTIONAL EXPENSE

69,900 60,900 45.675 176.475

Functional expenses for the year ended June 30, 2014 are as follows:

Program Services: Statewide child advocacy Nutrition counseling Pilot program Literacy & school readiness

$ 1,586,583 653,958 545,804 297.454

3,083,799

Supportive Services: Management and general Fundraising

NOTE 8 - RELATED-PARTY TRANSACTIONS

379,984 27.540

407.524 $ 3.491.323

The Organization made payments to a business owned by related party totaling $ 1,975 during the year ended June 30, 2014 for services related to its child care training programs. A current board member of the Organization is an owner of the business.

NOTE 9 - SUBSEQUENT EVENTS

The Organization has evaluated subsequent events through the date the financial statements were available to be issued, which corresponds with the date of the independent auditors' report. No material subsequent events have occurred since June 30, 2014 that require recognition or disclosure in these financial statements.

10

SUPPLEMENTAL INFORMATION

L.L.C.


S. DAVID KUSHNER, CPA' WILSON A. LaGRAIZE, JR., CPA/OFF' ERNEST G. GELPI, CPA, CGFM CRAIG M. FABACHER, CPA DOUGLAS W. FINEGAN, CPA, CVA 'A Professional Accounting Corporation 'Certified Forensic Accountant

MARY ANNE GARCIA, CPA WILLIAM B, HAMILTON, CPA KATHARINE M. LASSITER, CPA RICHARD J. RUMNEY, CPA

Members American Institute of CPA's Socletv of Louisiana CPA's

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of Directors of Agenda for Children, Inc. New Orleans, Louisiana

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Agenda for Children, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2014, 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 22, 2014.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered Agenda for Children, Inc.'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 Agenda for Children, Inc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified a certain deficiency in internal control that we consider to be a material weakness.

SUITE 100 3330 WEST ESPLANADE AVENUE METAIRIE, LOUISIANA 70002

rPAM ERICA / ^INTERNATIONAL

CiawHowthlntcmaUonal.

(504) 838-9991 FAX (504) 833-7971 www.kl-cpa.com

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. We consider the deficiency described In the accompanying schedule of findings and questioned costs as Item 14-001 to be a material weakness.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Agenda for Children, Inc.'s financial statements are free from material misstatement, we performed tests of Its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an Instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which Is described In the accompanying schedule of findings and questioned costs as Item 14-002.

Agenda for Children, Inc.'s Response to Findings

Agenda for Children, Inc.'s response to the findings Identified In our audit Is described In the accompanying schedule of findings and questioned costs. The Organization's response was not subjected to the auditing procedures applied In the audit of the financial statements and, accordingly, we express no opinion on it.

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. However, under Louisiana Revised Statute 24:513, this report Is distributed by the Legislative Auditor as a public document.

Metairle, LA December 22, 2014

L.L.C.


S. DAVID KUSHNER, CPA' WILSON A. LaGRAIZE, JR., CPA/OFF' MARY ANNE GARCIA, CPA ERNEST G. GELPI, CPA, CGFM WILLIAM B. HAMILTON, CPA CRAIG M. FABACHER, CPA KATHARINE M. LASSITER, CPA DOUGLAS W. FINEGAN, CPA, CVA RICHARD J. RUMNEY, CPA *A Professional Accounting Corporation 'Certified Forensic Accountant Members

INDEPENDENT AUDITORS' REPORT ON Society of Louisiana CPA's

COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE

REQUIRED BY OMB CIRCULAR A-133

The Board of Directors of Agenda for Children, Inc. New Orleans, Louisiana

Report on Compliance for Each Major Federal Program

We have audited Agenda for Children, Inc.'s compliance with the types of compliance requirements described in the OMB Circular A-/33 Compliance Supplement that could have a direct and material effect on each of Agenda for Children, Inc.'s major federal programs for the year ended June 30, 2014. Agenda for Children, Inc.'s major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

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

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Agenda for Children, Inc.'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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Agenda for Children, Inc.'s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

SUITE 100 3330 WEST ESPI-ANADE AVENUE ^DA MERICA 838-9991 • FAX (504) 833-7971 METAIRIE, LOUISIANA 70002 #*INTERNATIONAL www.kl-cpa.com

CnMvHomothlrttanBtkyd.

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 Agenda for Children, Inc.'s compliance.

Basis for Qualified Opinion on Special Supplemental Nutrition Program for Women, Infants, and Children and Child Care and Development Fund Cluster

As described in the accompanying schedule of findings and questioned costs. Agenda for Children, Inc. did not comply with requirements regarding the Special Supplemental Nutrition Program for Women, Infants, and Children as described in finding number 14-001 and the Child Care and Development Fund Cluster as described in finding number 14-001 for maintaining internal control over Federal programs in accordance with OMB Circular A-133 Subpart C.300b. Compliance with this requirement is necessary, in our opinion, for Agenda for Children, Inc. to comply with the requirements applicable to those programs.

Qualified Opinion on Special Supplemental Nutrition Program for Women, Infants, and Children and Child Care and Development Fund Cluster

In our opinion, except for the noncompliance described in the Basis for Qualified Opinion paragraph. Agenda for Children, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on Special Supplemental Nutrition Program for Women, Infants, and Children and Child Care and Development Fund Cluster for the year ended June 30, 2014.

Other Matters

The results of our auditing procedures disclosed other instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as item 14-003. Our opinion on each major federal program Is not modified with respect to this matter.

Agenda for Children, Inc.'s response to the noncompliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. Agenda for Children, Inc.'s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over Compliance

Management of Agenda for Children, Inc. 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 Agenda for Children, Inc.'s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance

with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Agenda for Children, Inc.'s internal control over compliance.

Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses and significant deficiencies.

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. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 14-001 to be a material weaknesses.

A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 14-004 and 14-005 to be significant deficiencies.

Agenda for Children, Inc.'s response to the internal control over compliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. Agenda for Children, Inc.'s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133

We have audited the financial statements of Agenda for Children, Inc. as of and for the year ended June 30, 2014, and have issued our report thereon dated December 22, 2014, which contained an unmodified opinion on those financial statements. 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 is presented for purposes of additional analysis as required by OMB Circular A-133 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 schedule of expenditures of federal awards is fairly stated In all material respects in relation to the financial statements as a whole.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. However, under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Metairie, Louisiana December 22, 2014

AGENDA FOR CHILDREN, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Year Ended June 30. 2014

Program Title Award

Number

U.S. Department of Agriculture

Passed through State of Louisiana Department of Health and Hospitals - Office of Public Health;

Special Supplemental Nutrition Program for Women, Infants, Children

Special Supplemental Nutrition Program for Women, Infants, Children

CFDA Number

CFMS# 692191

CFMS # 722296

10.557*

10.557*

Total for U.S. Department of Agriculture

U.S. Department of Education

Direct Program:

Special Education - Training and Information for Parents of Children with Disabilities H328CI0020-I2 84.328C

Total for U.S. Department of Education

U.S. Department of Health and Human Services

Passed through State of Louisiana Department of Children & Family Services:

Federal Expenditures

$ 269,752

466.012

735,764

102.691

102,691

Child Care and Development Block Grant 28-I4-CO-A4 93.575* 104,094 Community Based Family Resources Support Grant CFMS # 729626 93.590 8,595 Child Care Mandatory and Matching Funds of the Child Care and Development Fund CFMS # 702983 93.596* 300,693

Child Care Mandatory and Matching Funds of the Child Care and Development Fund CFMS # 702985 93.596* 480,967

Child Care Mandatory and Matching Funds of the Child Care and Development Fund CFMS # 703844 93.596* 314,799

ARRA-Head Start 28-I4-CP-A4 93.708 26.916

Total for U.S. Department of Health and Human Services 1.236.064

Total Federal Expenditures S 2.074.519

' This Program is considered a major program under OMB Circular A-133 for the year ended June 30, 2014.

18

AGENDA FOR CHILDREN, INC. NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Year Ended June 30. 2014

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Agenda for Children, Inc. and is presented on the modified accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements.

19

AGENDA FOR CHILDREN, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Year Ended June 30, 2014

I. SUMMARY OF AUDITORS' RESULTS

a. The type of report issued on the financial statements: Unmodified opinion.

b. Significant deficiencies in internal control were disclosed by the audit of the financial statements: None reported: Material weaknesses: One reported.

c. Noncompliance which is material to the financial statements: None.

d. Significant deficiencies in internal control over major program: Two reported: Material weaknesses: One reported.

e. The type of report issued on compliance for major program: Oualified opinion.

f. Any audit findings which are required to be reported under Section 510 (a) of OMB Circular A-133: Yes - See items 14-001 through 14-005 in the Schedule of Findings and Questioned Costs.

g. Major Program:

CFDA Numberfs^ NAME OF FEDERAL PROGRAM OR CLUSTER

U.S. Department of Agriculture: 10.557 Special Supplemental Nutrition Program for Women, Infants,

and Children

U.S. Department of Health and Human Services: Child Care and Development Fund Cluster -

93.575 Child Care and Development Block Grant 93.596 Child Care Mandatory and Matching Funds of the Child

Care and Development Fund

h. Dollar threshold used to distinguish between Type A and Type B programs: $300,000.

i. Auditee qualified as a low-risk auditee under Section 530 of OMB Circular A-133: Yes.

20

AGENDA FOR CHILDREN, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS-Continued


2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS

14-001

Criteria;

Management for Agenda for Children is responsible for establishing and maintaining effective internal control to help ensure that appropriate goals and objectives are met and ensuring that management and financial information is reliable and properly reported as outlined in Section A 1.08(d) of the Government Auditing Standards.

Condition:

During our review and testing of internal controls we noted the Director of Finance and Administration has significant roles in all major functions (operations, accounting, custody, and authorization) in the transaction stream for cash disbursements, payroll, and recording of activity in the general ledger.

Cause:

During the year, the Organization lost essential members of the accounting department and was not successful in finding replacement personnel. The Organization was unable to reassign responsibilities to consider these vacancies.

Effect:

Without the proper segregation of duties, an employee could perpetrate and conceal fraud and misappropriate the Organization's assets.

Recommendation:

We recommend the Organization ensure all essential positions in the accounting department are properly staffed and internal control procedures over the major transaction classes are assigned to appropriate personnel. Additionally, the Organization should revise its Accounting Policies and Procedures Manual to reflect a more accurate depiction of current assignments and methods to address future vacancies.

Management's Response

See Management's Corrective Action Plan.

21

AGENDA FOR CHILDREN, INC, SCHEDULE OF FINDINGS AND QUESTIONED COSTS-Continued


2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS - CONTINUED

14-002

Criteria:

Agenda for Children, Inc. receives federal funding passed through the State of Louisiana to administer the Louisiana Women, Infants, and Children (WIC) Breastfeeding Peer Counselor Program. The Organization employs peer counselors to perform the counseling services of the WIC Breastfeeding Program.

Condition:

During our audit procedures, we noted multiple employee contracts had not been renewed in a timely manner or updated to include all applicable language to correspond to current grant agreement terms and applicable Organization policies and procedures.

Cause:

Employee contracts were not updated to correspond with current grant agreement terms and Organization policies and procedures.

Effect:

Utilizing old contract language could potentially subject the Organization to possible non-compliance with federal, state or local laws and regulations.

Recommendation:

We recommend the Organization review its current contracts and make any necessary revisions to ensure compliance with all applicable laws, regulations and grant agreements.



22



3. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS

14-003

Criteria;

Agenda for Children, Inc. receives federal funding passed through the State of Louisiana to administer the Child Care and Development Block Grant Program. In accordance with the grant agreement, Agenda for Children, Inc. is required to establish safeguards to prohibit employees from using their positions for a purpose that constitutes or presents the appearance of personal or organizational conflict of interest, or personal gain.

Condition:

During our review of cash disbursements, we noted payments of teacher stipends funded through the state portion of the Child Care and Development Block Grant Program, totaling $1,250, to an organization whose registered agent is also a member of Agenda for Children, Inc.'s Board of Directors.

Cause:

The Organization does not maintain formal written policies & procedures to identify potential conflicts of interest.

Effect:

Payments to related organizations could potentially be a conflict of interest and may result in noncompliance with applicable federal and state laws and regulations.

Recommendation:

We recommend the Organization establish formal written policies and procedures to assess and identify potential conflicts of interest and require all members of the Board of Directors and Management to identify any affiliated organization.



23



3. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS -CONTINUED

14-004

Criteria:

Agenda for Children, Inc. receives federal funding passed through the State of Louisiana to administer the Louisiana Women, Infants, and Children (WIC) Breastfeeding Peer Counselor Program and is required to comply with all terms and conditions of OMB Circulars A-122 and A-133.

Condition:

During our review of payroll expenditures for the Peer Counselor Program, we noted no evidence that the timesheet for the state counselor manager was reviewed for accuracy and completeness by an employee of the Organization, other than the state counselor manager.

Cause:

A review of salaries and wages is not performed by a responsible official of the Organization in accordance with OMB Circular A-122 Attachment B Section B.m.

Effect:

Payroll disbursements that are not adequately reviewed and approved could result in disallowed costs, noncompliance with program requirements and the potential for the misappropriation of assets.

Recommendation:

We recommend the Organization implement procedures to ensure all grant expenditures are reviewed and approved by an appropriate member of management in accordance with applicable federal and state laws and regulations.



24

AGENDA FOR CHILDREN, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS-Continued


3. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS -CONTINUED

14-005

Criteria;

Agenda for Children. Inc. receives federal funding passed through the State of Louisiana to administer the Child Care and Development Block Grant Program and is required to comply with all terms and conditions of OMB Circulars A-122 and A-133.

Condition:

During our audit procedures we reviewed compliance reports issued by the Louisiana Department of Children and Family Services noting the Organization did not maintain timesheets for salaried employees that are charged to the Child Care and Development Fund Cluster program. Based on our review of payroll disbursements, we noted salaries for regional employees were supported by activity logs and reports. However, we did not observe documentation supporting activity by the program director or supervisors.

Cause:

The Organization was unable to support the distribution of salaries and wages with personnel activity reports in accordance with OMB Circular A-122 Attachment B Section 8.m.

Effect:

Salaries and wages could be charged to programs with no activity resulting in potential noncompliance with applicable federal laws and regulations and grant agreements.

Recommendation:

As recommended in the compliance reports issued by the Louisiana Department of Children & Family Services, the Organization should strengthen internal controls over support of salaries and wages to ensure compliance with applicable laws and regulations and grant agreements.



25

Agenda for ^CHILDREN

PO Box 51837 New Orleans, LA 70151

Phone: 504.586.8509 Fax: 504.586.8522

.0 voice for Louisiana's children and families www.agendaforchildren.org

Management's Corrective Action Plan

For the Year Ended June 30,2014

Louisiana State Legislative Auditor

Agenda For Children respectfully submits the following corrective action plan for the internal control

findings for the year ended June 30,2014.

Independent Public Accounting Firm

Kushner LaGraize, L.L.C.

3330 West Esplanade Avenue, Suite 100

Metairie, Louisiana 70002

Audit period: July 1, 2013 - June 30, 2014

14-001

Condition:

During our review and testing of internal controls we noted the Director of Finance and Administration has significant roles in all major functions (operations, accounting, custody, and authorization) in the transaction stream for cash disbursements, payroll, and recording of activity in the general ledger.

Recommendation:

We recommend the Organization ensure all essential positions in the accounting department are properly staffed and internal control procedures over the major transaction classes are assigned to appropriate personnel. Additionally, the Organization should revise its Accounting Policies and Procedures Manual to reflect a more accurate depiction of current assignments and methods to address future vacancies.

Management's Corrective Action

Agenda has hired two additional staff for the finance and administration department allowing the Director of Finance and Administration to delegate functions that will remove her from transaction processing. In addition. Agenda will update the policies and procedures to more accurately reflect the staffing.

14-002

Condition:

During our audit procedures, we noted multiple employee contracts had not been renewed in a timely manner or updated to include all applicable language to correspond to current grant agreement terms and applicable Organization policies and procedures.

Recommendation:

We recommend the Organization review its current contracts and make any necessary revisions to ensure compliance with all applicable laws, regulations and grant agreements.


Management is currently reviewing and updating its processes and procedures for updating contract employee files.

14-003

Condition:

During our review of cash disbursements, we noted payments of teacher stipends funded through the state portion of the Child Care and Development Block Grant Program, totaling $1,250, to an organization whose registered agent is also a member of Agenda for Children, Inc.'s Board of Directors.

Recommendation:

We recommend the Organization establish formal written policies and procedures to assess and identify potential conflicts of interest and require all members of the Board of Directors and Management to identify any affiliated organization.


Management has implemented a Conflict of Interest policy and will develop policies and procedures for identifying related party transactions.

14-004

Condition:

During our review of payroll expenditures for the Peer Counselor Program, we noted no evidence that the timesheet for the state counselor manager was reviewed for accuracy and completeness by an employee of the Organization, other than the state counselor manager.

Recommendation:

We recommend the Organization implement procedures to ensure all grant expenditures are reviewed and approved by an appropriate member of management in accordance with applicable federal and state laws and regulations.


Management is currently reviewing and updating its processes and procedures for approving all timesheets.

14-005

Condition:

During our audit procedures we reviewed compliance reports issued by the Louisiana Department of Children and Family Services noting the Organization did not maintain timesheets for salaried employees that are charged to the Child Care and Development Fund Cluster program. Based on our review of payroll disbursements, we noted salaries for regional employees were supported by activity logs and reports. Flowever, we did not observe documentation supporting activity by the program director or supervisors.

Recommendation:

As recommended in the compliance reports issued by the Louisiana Department of Children & Family Services, the Organization should strengthen internal controls over support of salaries and wages to ensure compliance with applicable laws and regulations and grant agreements.


Agenda has implemented an electronic timesheet that allows for routine collection and reporting of staff time by activity by pay period.

Documents

Agenda for Children - app.lla.state.la.us€¦ · The Organization recognizes the tax benefit from uncertain tax positions only if it is "more likely than not" the tax position will