-
^1.01
ARC OF IBERIA
Audits of Financial Statements
June 30, 2010 and 2009
Under provisions of state law, this report is a public document.
Acopy of the report has been submitted to the entity and other
appropriate public officials. The report is available for public
inspection at the Baton Rouge office of the Legislative Auditor
and, where appropriate, at the office of the parish clerk of
court.
Release Date c^hiii
-
Contents
Independent Auditor's Report 1 - 2
Basic Financial Statements
Statements of Financial Position 3-4
Statements of Activities 5 -6
Statements of Cash Flows 7
Notes to Financial Statements 8-19
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 20 - 21
Schedule of Findings and Responses 22
Summary Schedule of Prior Year Audit Findings 23 - 24
-
LAPORTESEHRT ROMIGHAND CERTlFUOrUSHCACCOliNTANrS
Independent Auditor's Report
To the Board of Directors An; of Iberia New Iberia,
Louisiana
We have audited the accompanying statement of financial position
of Arc of Iberia (ARC), a non-profit organization, as of June 30,
2010 and the related statements of activities and cash flows for
the year then ended. These financial statements are the
responsibility of the Organization's management. Our responsibility
is to express an opinion on these financial statements based on our
audit. The financial statements of ARC as of June 30, 2009 were
audited by other auditors whose report dated December 23, 2009,
expressed an unqualified opinion on those statem ents.
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 of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Arc of Iberia as of June 30, 2010, and the changes in its net
assets and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States
of America.
H i Vf:n;i4,K3'i :i5^2 • F A , \ .'>i»4.J43.''-5.'i.'̂ .>
5100 Vd.ivK.i, W A L K . St; in: MHK (.'OM^^C-IO^. L.A
7(i43.1-4(ll2 • «>K5,8'J2,5>!5f) - I-AX '*K5,f*y2,5y56
TOWN M A I . r WhST- MM!(i() rtiHKiNs Hnwi;-, S! H ^iK', B A M O
Hour,);, l.,A 7(t8!(3-|7y7 - J25.2'J(..5!5t) • I^AN
~25.J')n,515l
W U W , l , A l ' ( i K l ( - , ( ( l \ J
RSM McGladrey Network
-
In accordance with Government Auditing Standards, we have also
issued our report dated December 2, 2010, on our consideration of
Arc of Iberia's internal control ovei; financial reporting and our
tests of its compliance with certain provisions of laws,
regulations, contracts, 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 the
internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with
Govemment Auditing Standards and Is important for assessing the
results of our audit.
- / , - • - • /
A Professional Accounting Corporation
December 2, 2010
-
ARC OF IBERIA Statements of Financial Position June 30,2010 and
2009
2010 2009 Assets Current Assets
Cash Investments Receivables Due from Other Agencies Inventory
Prepaid Expenses Other Current Assets
Total Current Assets
Fixed Assets Property and Equipment. Net
Other Assets Investment in Kramer Place, Inc. Deposits Held for
Others Other Assets
Total Other Assets
Restricted Cash Respite Building Fund Community Rural
Development
Total Restricted Cash
$ 5,079.656 $ 4,050.751 907.960 62,609
1.194.685 26.690 6,000
39.963
7.317,563
4.161,035
37,708
12,204
49,912
23,754
39,110
62,864
833.859 97,228
1.455.779 31.583 15.215 48,145
6,532.560
3.779,833
240.885
143,898
12,204
396,987
22,174
38.900
61,074
Total Assets $ 11.591.374 $ 10.770.454
The accompanying notes are an integral part of these financial
statements.
3
-
ARC OF IBERIA Statements of Financial Position (Continued) June
30.2010 and 2009
2010 2009 Liabilities and Net Assets Current Liabilities Payable
from Current Assets
Accounts Payable Accrued Liabilities Accrued Compensated
Absences Retainage Payable Current Portion of Long-Term Debt
Total Current Liabilities Payable from Current Assets
Current Liabilities Payable from Restricted Assets Current
Portion of Long-Term Debt
Total Current Liabilities
Other Liabilities Long-Term Debt Deposits Held for Others
Total Other Liabilities
Total Liabilities
Net Assets Unrestricted Temporanly Restricted
Total Net Assets
Total Liabilities and Net Assets
319,753 431,307 160.215
966,002
268.391 399.063 166,380
8,278 34.026
945,301
20,701
46,257
888.369
18,175
906,544
718,481 37,708
756,189
1,722,191
9,564,608 304,575
9,869,183
$ 11.591,374
791,703 143.898
935,601
1,842,145
8,618,458 309.851
8.928.309
$ 10,770,454
The accompanying notes are an integral part of these financial
statements.
4
-
ARC OF IBERIA Statement of Activities For the Year Ended June
30, 2010
Temporarily Unrestricted Restricted Total
Revenues, Gains and Other Support Contributions Program Revenue
Investment Income, Net Membership Revenue Miscellaneous Revenue
$ 383,013 13,040,015
68.011 15.772 30,821
$ 116.151 ----
$ 499.164 13,040,015
68,011 15,772 30,821
Net Assets Released from Restrictions Expiration of Time
Restrictions
Total Revenues, Gains and Other Support
Expenses Program Expenses
Employment Services Community Services Residential Services
General and Administrative Expenses
Total Expenses
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
13,537,632
121,427
13,659,059
3.339,102 6,710,139 1,676,012
987,656
12.712.909
946,150
8,618,458
$ 9,564,608
116,151
(121.427)
(5,276)
-
(5,276)
309.851
$ 304,575
13,653,783
13,653,783
3,339,102 6,710,139 1,676,012
987,656
12.712,909
940,874
8,928.309
$ 9,869,183
The accompanying notes are an integral part of these financial
statements.
5
-
ARC OF IBERIA Statement of Activities For the Year Ended June
30.2009
Temporarily Unrestricted Restricted Total
Revenues, Gains and Other Support Contributions Program Revenue
Investment Loss. Net Membership Revenue Miscellaneous Revenue
Net Assets Released from Restrictions Expiration of Time
Restrictions
Total Revenues, Gains and Other Support
Expenses Program Expenses
Employment Services Community Services Residential Services
General and Administrative Expenses
Total Expenses
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
$ 391,371 12,663,271
(39.038) 17,855
105.692
13,139,151
78,989
13.218.140
3,201.388 6,555,156 1,655.119 1,021.590
12,433.253
784,887
7.833,571
$ 8,618,458
$ 308.475
308,475
(78,989)
229.486
-
-
229,486
80.365
$ 309,851
$ 699.846 12,663,271
(39,038) 17.855
105.692
13,447,626
13.447.626
3,201,388 6.555,156 1,655,119 1,021,590
12,433,253
1,014.373
7.913.936
$ 8,928,309
The accompanying notes are an integral part of these financial
statements.
6
-
ARC OF IBERIA Statements of Cash Flows For the Years Ended June
30,2010 and 2009
2010 2009
Cash Flows from Operating Activities Change in Net Assets
Adjustments to Reconcile Change in Net Assets
to Net Cash Provided by Operating Activities Depreciation
Realized and Unrealized (Gain) Loss on Investments Gain on Sale of
Fixed Assets Donated Fixed Assets
(Increase) Decrease in: Receivables Due from Other Agencies
Inventories and Prepaids Other Current Assets
Increase (Decrease) in: Accounts Payable Accrued Liabilities
Accnjed Compensated Absences Retainage Payable
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities Purchase of Fixed Assets
Net Proceeds from Sale of Fixed Assets Loss on Transfer of
Investment Change in Investments
Net Cash Used in Investing Activities
Cash Flows from Financing Activities Repayments of Long-Term
Debt
Net Cash Used in Financing Activities
Net Increase in Cash
Cash, Beginning of Year
Cash, End of Year
Cash and Cash Equivalents Shown on Statement of Financial
Position as:
Current Assets - Cash Restricted Assets - Restricted Cash
Total
Supplemental Disclosure of Cash Flow Information Cash Paid for
Interest
Non-Cash Transactions Donated Fixed Assets
The accompanying notes are an integral part of these financial
statements.
7
$ 940.874
375,220 (31,002)
(116,151)
34.619 261.094
14.108 8.182
51,362 32,244 (6,165) (8,278)
1,556,107
(448,471)
49.085 (43,099)
(442.485)
(82,927)
(82,927)
1,030,695
4,111,825
$ 5,142,520
$ 1,014,373
305,542 86,768 (7.643)
(303.475)
(6,246) (193,727)
50.754 (17,149)
(8.997) 34,043 15,072
969,315
(459,086) 7,643
(22,323)
(473.766)
(93.826)
(93,826)
401,723
3,710,102
$ 4.111,825
$
$
$
$
5,079,656 62,864
5,142.520
22,182
116.151
$
$
$
$
4,050,751 61.074
4.111,825
42.670
303.475
-
ARC OF IBERIA
Notes to Financial Statements
Note 1. Nature of Organization and Summary of Significant
Accounting Policies
Nature of Organization Arc of Iberia (ARC) is a Louisiana
nonprofit corporation charted in August 1954. Its purpose is to
promote the general welfare of developmentally disabled physically
handicapped and incapacitated citizens in the Acadiana area and to
aid their parents and families. The following is a description
ofthe various programs.
Operating Fund The operating fund is used to account for all
general and administrative expenses of ARC.
Employment Services Employment Services is a day program for
citizens of the community who are developmentally disabled. The day
program operates in New Iberia, Lafayette. Opelousas, and IVlorgan
City, Louisiana. Employment Services also operates several retail
clothing stores with locations in New Iberia, Lafayette, Breaux
Bridge, St. Martinville, Loreauville, and Opelousas, Louisiana.
Sales from these stores account for approximately 5% of program
revenue for the year ended June 30, 2010 and 2009.
Residential Services Residential Services provides four homes in
the New Iberia, Louisiana area for adults who are developmentally
disabled.
Community Services The programs listed below are consolidated
into one program. These programs operate in New Iberia, Lafayette,
Crowley, Opelousas and Morgan City, Louisiana.
Independent Living - ARC supervises adults who are
developmentally disabled that live in their own home or
apartment.
Personal Care Assistance (PCA) and Individual Family Support
(IFS) - The PGA and IFS programs provide the services to the
Independent Living program on more of a "one-on-one" basis. These
programs are administered completely out of the clients' homes.
Basis of Accounting The accompanying financial statements have
been prepared on the accnjal basis of accounting, and accordingly
reflect all significant receivables, payables and liabll ities.
Support and Expenses All contributions are considered to be
available for unrestricted use unless specifically restricted by
the donor. Amounts received that are restricted by the donor for
specific purposes are reported as temporarily restricted or
permanently restricted support that increases those net asset
classes.
-
ARC OF IBERIA
Notes to Financial Statements
Notel . Nature of Organization and Summary of Significant
Accounting Policies (Continued)
Support and Expenses (Continued) When a donor restriction
expires, that is, when a stipulated time restriction ends or
purpose restriction is accomplished, temporarily restricted net
assets are reclassified to unrestricted net assets in the
statements of activities as net assets released from restrictions.
Expenses are recorded when incurred in accordance with the accnjal
basis of accounting.
Cash and Cash Equivalents For the purposes of the statement of
cash flows, ARC considers all highly liquid investments (including
restricted assets) with an original maturity of three months or
less to be cash equivalents.
Investments Investments of certificates of deposit are presented
in the financial statements at cost which approximates fair market
value. Investments in marketable securities with readily
determinable fair values and ail investments in debt securities are
reported at their fair values in the statements of financial
position. Unrealized gains and losses are included in the change in
net assets in the accompanying statements of activities. Gains,
losses and investment income are accounted for as unrestricted,
temporarily restricted or permanentiy restricted based on
restrictions, if any, imposed by donors.
Inventory Inventory is stated at cost. Cost is detennined using
the average cost method.
Allowance for Doubtful Accounts ARC considers amounts due from
other agencies to be fully collectible; accordingly, no allowance
for doubtful accounts has been recorded.
Restricted Cash ARC is required to put In a separate reserve
account at least 10% of the monthly payment to FHA under loan
provisions for the building utilized as the Redwood Home under the
Residential Services program and renovations to the Redwood Drive
administrative building. These reserved amounts are reflected as
restricted cash on the statements of financial position.
Donated Services ARC receives donated services from unpaid
volunteers who assist in program services during the year; however,
these donated services are not reflected in the statement of
activities because the criteria for recognition have not been satis
fied.
Property and Equipment Purchased property and equipment is
recorded at cost at the date of acquisition. Contributed property
and equipment is recorded at fair value at the date of
donation.
-
ARC OF IBERIA
Notes to Financiai Statements
Notel . Nature of Organization and Summary of Significant
Accounting Policies (Continued)
Property and Equipment (Continued) In the absence of donor
stipulations regarding how long the contributed assets must be
used, ARC has adopted a policy of implying a time restriction on
contributions of such assets that expire over the assets' useful
lives. As a result, all contributions of property and equipment,
and of assets contributed to acquire property and equipment, are
recorded as restricted support.
Depreciation is computed by the straight-line method at rates
based on the following estimated useful lives:
Furniture and Equipment 5-20 Years Building and Improvements
8-30 Years Transportation Equipment 3-5 Years
Interest on debt issued to finance the renovations to the
Walton, Street building and Redwood Street administrative building
has been capital ized as a part of the project.
Compensated Absences Employees of ARC earn annual leave per
mouth depending on years of service at a minimum of twelve days per
fiscal year. Annual leave is cumulative from one year to the next,
up to a maximum of 240 hours. Upon resignation or termination of
employment for cause, an employee may be paid for the value of any
accrued leave up to a maximum of 240 hours.
Federal Income Taxes ARC qualifies for an exemption from federal
income tax under Section 501(c)(3) of the Internal Revenue Code.
Therefore, no provision for income taxes is made in the
accompanying financiai statements.
Use of 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.
Fair Value of Financial Instruments Investments in equity
securities with readily determinable fair values and all
investments in debt securities are measured at fair value in the
Statement of Financial Position.
ARC has adopted the provisions of the Fair Value t̂
/leasurements and Disclosure Topic of the Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC)
Topic 820. Under this topic, fair value is defined as the price
that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date.
10
-
ARC OF IBERIA
Notes to Financial Statements
N o t e l . Nature of Organization and Summary of Significant
Accounting Policies (Continued)
Fair Value of Financiai instruments (Continued) This topic
establishes a fair value hierarchy for inputs used in measuring
fair market value that maximizes the use of observable inputs and
minimizes the use of unobservable inputs by requiring that the most
observable inputs be used when available. Observable inputs are
those that market participants would use in pricing the asset or
liability based on the best information available in the
circumstances. The fair value hierarchy is categorized into three
levels based on the inputs as follows:
Level 1 - Valuations based on unadjusted quoted prices in active
markets for identical assets or liabilities as ofthe reporting
date.
Level 2 - Valuations based on quoted prices in markets that are
not active or for which all significant inputs are observable,
either directly or Indirectly, as ofthe reporting date.
Level 3 - Valuations based on inputs that are unobservable and
include situations where there is little, if any, market activity
for the investment. The inputs into the determination of fair value
require significant management judgment or estimation.
In some instances, the inputs used to measure fair value may
fall into different levels of the fair value hierarchy. In such
instances, an investment's level within the fair value hierarchy is
based on the lowest level of input that is significant to the fair
value measurement (see Note 6).
ARC'S measurements of fair value are made on a recurring basis,
and their valuation techniques for assets recorded at fair value
are as follows:
Investments - The fair value of investments is the market value
based on quoted market prices, when available, or market prices
provided by recognized broker dealers. If listed prices or quotes
are not available, fair value is based upon externally developed
models that use unobservable inputs due to the limited market
activity of the investment.
Note 2. Due from Other Agencies
Due from Other Agencies at June 30, 2010 and 2009 consisted of
the following:
2010
Total
2009 Due from O.C.D.D. Due from Louisiana Rehabilitation
Services Due from Medicaid Due from Other Facilities
$ 12.168 5,917
1,093,409 83,191
$ 18,300 750
1,312,734 123,995
$ 1,194,685 $ 1,455,779
11
-
ARC OF IBERIA
Notes to Financial Statements
Note 3. Property and Equipment
Property and equipment at June 30, 2010 consisted ofthe
following:
Land Building and Improvements Furniture and Equipment Vehicles
Construction in Progress
Less: Accumulated Depreciation
Net Property and Equipment
Historical Costs
$ 104.027 4,160,278
827,110 632,178 110,442
5.834,035
(2,068,420)
$ 3,765,615
Donated Value
$ 91,750
43,800 863,463
999,013
(603,593)
$ 395.420
$
$
Total 195.777
4.160.278 870,910
1,495,641 110,442
6.833.048
(2,672,013)
4,161.035
Total depreciation expense for tiie year ended June 30, 2010 was
$375,220 of which $121,427, was related to donated assets.
Property and equipment at June 30, 2009 consisted of the
following:
Land Building and Improvements Furniture and Equipment Vehicles
Construction in Progress
Historical Costs
$ 81,027 3,853,697
618,592 600.124 42,095
Donated Value
$ 91,750 3 -
43,800 747.312
.
Total 1 172.777
3.853.697 662.392
1.347.436 42.095
5.195.535 882.862 6.078.397
Less: Accumulated Depreciation (1.816.398) (482,166)
(2.298.564)
Net Property and Equipment $ 3,379.137 $ 400,696 $ 3.779,833
Total depreciation expense for the year ended June 30, 2009 was
$305,542 of which $71,636, was related to donated assets.
12
-
ARC OF IBERIA
Notes to Financial Statements
Note 4. Investments
As more fully described in Note 1, investments are presented In
the financial statements at fair value and are composed of the
following for the years ended June 30, 2010 and 2009:
2010 2009 Cash - Money Market and Certificate of Deposit $
262.730 $ 212,113 U.S. Government and
Federal Agencies 119,757 116,760 Equity Securities 391,501
378,098 Debt Securities 133,972 126,888
Total $ 907,960 $ 833.859
Investment Income (Loss), Net is composed of the following for
the years ended June 30, 2010 and 2009:
2010 2009 Dividends and Interest $ 23,063 $ 24,991 Interest
Income 13.946 22,739 Realized Loss (9,629) (72,851) Unrealized Gain
(Loss) 40,631 (13,917)
Total $ 68,011 $ (39.038)
Note 5. Kramer Place. Inc.
Kramer Place. Inc. represents a capital contribution from Arc of
Iberia of the book value ofthe building and contents located at
2217 Kramer Drive in New Iberia. Louisiana as of June 2004. Kramer
Place, Inc. is a non-profit corporation sponsored by Arc of Iberia.
For the year ended June 30, 2009, the building was operating as a
rental facility for individuals with disabilities. For the year
ended June 30, 2010, the investment in Kramer Place, Inc. was
reclassified as a fixed asset, as the building will be used by ARC
for its programs. A loss of $49,085 was recognized upon
reclassification to properiy reflect the fair value of the building
at the tim e of the transfer.
13
-
ARC OF IBERIA
Notes to Financial Statements
Note 6. Fair Value Measurements
ARC'S assets and liabilities recorded at fair value have been
categorized based upon a fair value hierarchy with the Fair Value
Measurements and Disclosure Topic of the FASB ASC Topic 820. See
Note 1 for a description of ARC's policies and valuation
techniques.
The valuation of ARC's assets measured at fair value on a
recurring basis at June 30, 2010 are as fol lows:
Assets Level 1 Level 2 Level 3 Net Balance Cash - Money Market
and $ 262.730 $ - $ - $ 262.730
Certificate of Deposit Corporate Fixed Income - 133,972 -
133.972 Corporate Stock 391,501 - - 391.501 U.S. Government
Obligations - 119,757 • 119.757 Other - 12.204 -_ 12.204
Total $ 654,231 $ 265,933 $ - $ 920,164
The valuation of ARC's assets measured at fair value on a
recurring basis at June 30, 2009 are as fol lows:
Assets Level 1 Level 2 Level 3 Net Balance i - $ 212.113
126,888 378,098 116,760 12.204
Cash - Money Martlet and Certificate of Deposit
Corporate Fixed Income Corporate Stock U.S. Government
Obligations Other
$ 212.113 $
-378.098
--
-
126,888 • -
117.098 12,204
Total $ 590.211 $ 256.190 $ $ 846.063
14
-
ARC OF IBERIA
Notes to Financiai Statements
Note 7. Notes Payable
Notes payable at June 30, 2010 and 2009 consisted ofthe follow
ing:
2010 2009 General Fund
Mortgage note payable to FHA, due in monthly installments of
$2,585. bearing interest at 4.125%, secured by collateral mortgage
on the building at 3716 Redwood Drive, maturing August 9,2035. $
484,646 $ 495,431
Mortgage note payable to FHA, due in monthly installments of
$543. bearing interest at 4.125%, secured by collateral mortgage on
the building at 3716 Redwood Drive, maturing August 9,2035. 101,810
104,075
Employment Services
Note payable to bank due in monthly installments of $4,089.
bearing interest at 5.75%, secured by collateral mortgage on the
Walton Street building, maturing November 27,2011. 34,026
97,167
Community Services
Mortgage note payable to FHA, due in monthly installments of
$1,028. bearing interest at 5.25%, secured by collateral mortgage
on the Respite home, maturing April 11,2025. 126.206 131,756
Mortgage note payable to FHA, due in monthly installments of
$215. bearing interest at 5.125%. secured by collateral mortgage on
the Respite home, maturing April 11.2025.
Total Less: Current Portion
Long-Term Portion $
26,520
773,208 (54,727)
718.481 $
27,706
856.135 (64,432)
791,703
15
-
ARC OF IBERIA
Notes to Financial Statements
Note 7. Notes Payable (Continued)
Maturities of notes payable are as follows as of June 30,
2010:
Years Amount 2011 $ 54,727 2012 21,652 2013 22,648 2014 23,690
2015 24,782
Thereafter 625,709
Total $ 773,208
Interest expense for the years ended June 30, 2010 and 2009 was
$36,487 and $42,670, respectively.
Note 8. Operating Leases
ARC leases facilities and equipment under operating leases, some
of which include renewal options. Rental expenses under long-term
operating leases of property and equipment for the years ended June
30, 2010 and 2009 was $147,303 and $115,852, respectively. Future
minimum lease commitments as of June 30, 2010 are payable as
follows:
Years Amount 2011 2012 2013 2014 2015
Thereafter
Total
$
$
111,884 88,581 79.998 38,966 6,025 2,250
327,704
16
-
ARC OF IBERIA
Notes to Financial Statements
Note 9. Detail of Program Revenue
Program revenue included the following for the years ended June
30, 2010 and 2009:
Program „___ Employment C
Total Employment Community Residential
Services Services Services
$ 11,310,074 $ 1,633,841 $ 7,708.394 $ 1,967,839 2010
Medicaid Office of Citizens with
Developmental Disabilities 66,977 9.661 57.316 Louisiana Rehab
Services 58,040 58.040 Sales 759,202 759,202 Client Billings
287,281 3,679 134,145 149.457 Other Residential Facilities 558,441
558.441 •
Total Revenue $ 13.040.015 $ 3.022.864 $ 7.899.855 $
2.117.296
Program
2009 Medicaid Office of Citizens with
Developmental Disabilities Louisiana Rehab Services Sales Client
Billings Other Residential Facilities
Total Revenue
$
$
Total
11.020,917
98.199 33.289
691.655 248,138 571,073
12.663.271
Employment Services
$ 1,433.974
17.092 33,289
691,655 3,156
571,073
$ 2.750.239
Community Services
$ 7,663.118
81.107 --
102,739 -
$ 7.846.964
Residential Services
$ 1.923.825
---
142,243 -
$ 2.066,068
Note 10. Temporarily Restricted Net Assets
Temporarily restricted net assets are available for the
following periods or purposes as of June 30. 2010 and 20 09:
2010 2009 Remaining Net Book Value of Contributed
Property and Equipment Employment Services Program $ 304.575 .1;
aofl.R.qi
17
-
ARC OF IBERIA
Notes to Financial Statements
Note 11. Net Assets Released from Restrictions
Net assets were released from donor restrictions by incurring
expenses satisfying the restricted purposes or the expiration of
time for the years ended June 30*'':
2010 2009 Expenses Incurred
Cash Donations Community Services Program $ - $ 5,000
Time Restriction Expired
Expired Portion of Net Book Value of Contributed Property and
Equipment 121,427 73,989
Total $ 121,427 $ 78,989
Note 12. Fiduciary Funds
ARC acts as a fiduciary agent for several of its residents. The
balance of the checking accounts maintained by ARC totaled $37,708
and $143,898 .
The Community Services Program, through its Independent Living
Program, also acts as fiduciary agent for several of its clients.
Checking accounts are maintained for each client, as applicable.
Deposits include the client's social security benefits, their
payroll checks, if employed, and miscellaneous gifts from family
members. Disbursements consist of day-to-day living expenses and
are based on the individual client's needs. The balance in these
checking accounts at June 30, 2010 and 2009 was $92,831 and
$68,086, respectively. These funds are not included in the
statements of financial position of Arc of Iberia.
Note 13. Concentration of Credit Risk
ARC sometimes maintains cash and time deposit balances in excess
of Federal Deposit Insurance Corporation (FDIC) coverage at its
banks. FDIC coverage is $250,000 per depositor per bank. At June
30, 2010, ARC's uninsured balances totaled $3,956,683. A large
majority of funds held on deposit by ARC are transferred each night
to a repurchase account and collateralized with direct U.S
Government obligations, U.S. Government Agency obligations or
collateralized mortgage obligations.
ARC also receives a considerable amount of its total support and
revenues from Medicaid for payments for services provided to
clients. During the years ended June 30, 2010 and 2009, ARC
received $11,310,074 and $11,020,917, respectively, from Medicaid,
which was 82.83% and 81.95%, respectively, of total revenues.
18
-
ARC OF IBERIA
Notes to Financial Statements
Note 14. Accounting for Uncertain Tax Positions
On January 1, 2009, ARC adopted the provisions of the Accounting
for Uncertainty in Income Taxes Topic ofthe FASB Accounting
Standards Codification. The implementation of this Topic had no
impact on the statement of financial position or statement of
activities.
All tax returns have been appropriately filed by ARC. ARC
recognizes interest and penalties, if any, related to unrecognized
tax benefits in income tax expense. ARC's tax filings are subject
to audit by various taxing authorities. ARC open audit periods are
2006 through 2009. Management evaluated ARC tax position and
concluded that ARC has taken no uncertain tax positions that
require adjustment to the financial statements to comply with the
provisions of this guidance.
Note 15. Subsequent Events
Management has evaluated subsequent events through the date that
the financiai statements were available to be issued which was
December 2, 2010, and determined that no events occurred that
require disclosure. No subsequent events occurring after this date
have been eval uated for inclusion in these financial
statements.
19
-
LAPORTESEHRT ROMIGHAND CIRIIFli.O rUBHC ACCOUNTANTS
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 Arc of Iberia New Iberia,
Louisiana
We have audited the financial statements of Arc of Iberia, a
nonprofit organization, as of and for the year ended June 30, 2010,
and have issued our report thereon dated December 2, 2010. 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 bythe Comptroller General ofthe United
States.
Internal Control Over Financial Reporting In planning and
performing our audit, we considered Arc of Iberia's internal
control over financial reporting as a basis for designing our
auditing procedures for the purpose of expressing our opinion on
the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of Arc of Iberia's internal control
over financial reporting. Accordingly, we do not express an opinion
on the effectiveness of Arc of Iberia's internal control over
financial reporting.
A deficiency in intemal 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 intemal control such that there is a reasonable
possibility that a material misstatement ofthe entity's financial
statements will not be prevented, or detected and corrected on a
timely basis.
20 i i l V'tit-KANs Ml MOKiAi l int ! 1 V \nn , .Si m hOiJ, Mi
rAit!i! . I-A TfKKiS • 5il J.s:i?.552- • I'AX 5 04.83 5.5531
5i'K! Vii.i„\t;! W .MK.S i i i i Mid, < (iviM.iON. i-A
"^Uf.V^-iili; • 'JHS,8'J2.585!! • FAX'JS5 892.5^56
'IXJWN H A H W i s r . mniii) P I R K I N S R O W ! . S H
:;t)(l. H.-UOV K O I t.i . i.A 708l()-l?'»7 - ,;2S.2W'.5l5'! • F A
X 225,2yh S l t l
WW W . L A I ' O K M A O M
RSM McGiadrey Network
-
Our consideration of the intemal 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 intemal control over financial reporting that might
be deficiencies, significant deficiencies, or material weaknesses.
We did not identify any deficiencies in intemal control over
financial reporting that we consider to be material weaknesses, as
defined above. However, we identified a certain deficiency in
intemal control over financial reporting, described in the
accompanying schedule of findings and responses that we consider to
be significant deficiencies in intemal control over financial
reporting as item 2010-1. 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.
Compliance and Other Matters As part of obtaining reasonable
assurance about whether Arc of Iberia'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.
Arc of Iberia's response to the finding identified in our audit
is described in the accompanying schedule of findings and
responses. We did not audit Arc of Iberia's response and,
accordingly, we express no opinion on it.
This report is intended solely for the information and use of
management, the Board of Directors, others within the organization,
and the Louisiana Legislative Auditor and is not intended to be and
should not be used by anyone other than these specified parties.
However, under Louisiana Revised Statute 24:513, this report is
distributed by the Legislative Auditor as a public document.
A Professional Accounting Corporation
December 2, 2010
21
-
ARC OF IBERIA Schedule of Findings and Responses
For the Year Ended June 30,2010
Part I - Summary of Auditor's Results
Financial Statements
1. Type of auditors' report Unqualified
2. Internal control over financial reporting a. Material
weaknesses identified None b. Significant deficiencies identified
not considered to be material weaknesses Yes c. Noncompliance
material to the financial statements noted None
Federal Awards - Not applicable
Part 11 - Financial Statement Findings Section
2010-1 Segregation of Duties
Finding:
Recommendation:
Current Status:
ARC does not have an adequate segregation of duties at its
Employment Services Lafayette location. One employee prepares
invoices, collects payments, posts payments, makes deposits, etc. A
system of intemal control procedures contemplates a segregation of
duties so that no one individual handles a transaction from its
inception to its completion. While we recognize that ARC may not be
large enough to permit an adequate segregation of duties for an
effective system of internal control procedures, it is important
that you be aware of this condition.
Keeping in mind the limited number of emptoyees to which duties
can be assigned, ARC should monitor assignment of duties to assure
as much segregation of duties and responsibility as possible.
Since last year's audit, we have segregated the duties in our
New Iberia Employment Program. It is not financially feasible at
this time to add an additional clerical person in Lafayette and St.
Landry Day Programs to handle deposits and/or invoicing until our
growth warrants us to do so.
22
-
ARC OF IBERIA Summary Schedule of Prior Year Audit Findings
For the Year Ended June 30.2010
2009-1 Segregation of Duties
Finding:
Recommendation:
Current Status:
ARC does not have an adequate segregation of duties at its
Employment Services New Iberia and Lafayette locations. One
employee prepares invoices, collects payments, posts payments,
makes deposits, etc. A system of internal control procedures
contemplates a segregation of duties so that no one Individual
handles a transaction from its inception to its completion. While
we recognize that ARC may not be large enough to permit an adequate
segregation of d uties for an effective system of internal control
procedures, it is important that you be aware of this
condition.
Keeping in mind the limited number of employees to which duties
can be assigned, ARC should monitor assignment of duties to assure
as much segregation of duties and responsibility as possible.
As of January 2010, duties for verifying cash/checks for
deposits have t>een assigned to the secretary at the New Iberia
Day Program. This person verifies all cash and checks and prepares
deposits. The deposit detail along with all backup for the
cash/checks/deposits is then verified by the New Iberia Employment
Service Program Administrative Assistant, who then posts the
deposits, sales, and payments for invoices in Quickbooks. In
addition, three other people have been assigned to bring the
deposits to the bank in addition to the Administrative Assistant,
including the Secretary, our shuttle driver, and the PnDgram
Manager. Both the Administrative Assistant and Program Manager
reconcile the New Iberia Day Program checkbook. The monthly
checkbook reconciliation for all programs is also verified by our
Accounting Department Personnel on a monthly basis.
It is not financially feasible at this time to add an additional
clerical person in Lafayette and St. Landry Day Programs to handle
deposits and/or invoicing until our growth warrants us to do
so.
2009-2 Controls Over Due from Medicaid Account
Finding: Medicaid claims to be resubmitted which were initially
denied are sometimes not rebilled to Medicaid on a timely basis
resulting in ultimate denial of the claims and a loss of revenue to
ARC. There is no system in place to post adjustments by Medicaid
that are made to billings for amounts not initially denied by
Medicaid, normally due to a Medicaid rate adjustment. This can
result in an inaccurate balance for amounts due from Medicaid.
23
-
ARC OF IBERIA Summary Schedule of Prior Year Audit Findings
(Continued)
For the Year Ended June 30, 2010
2009-2 Controls Over Due from Medicaid Account (Continued)
Recommendation: The subsidiary schedule of amounts due from
Medicaid does not identify the status of claims in the Medicaid
filing process to enable claims which are to be rebilled to be
separately Identified on billing system reports. This
identification would assist in monitoring the claims in process on
a monthly basis so that timely rebilling may be accomplished. The
Due from Medicaid account should be adjusted when any adjustments
are made to Medicaid billings. The balance in amounts due from
Medicaid should reflect current billings less adjustments and
payments received to date. If appropriate, an allowance should be
recorded on the general ledger for estimated uncollectible amounts
for claims which will ultimately be permanently denied by Medicaid,
'
Current Status: Resolved.
2009-3 Controls Over Compensated Absences
Finding: Terminated employees are not always paid the amounts
due to them for accrued vacation time upon termination.
Recommendation: ARC should develop a system to communicate to
the payroll department the status of all terminated employees to
ascertain that the payroll department remits amounts owed to the
terminated employee for accrued vacation time on the employee's
final paycheck.
Current Status: Resolved.
24
