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NO/AIDS TASK FORCE
FINANCIAL STATEMENTS
JUNE 30,2004 AND 2003
Under provisions of state law. this report is a publicdocument. A copy of the report has been submitted tothe entity and ot^er appropriate public officials Thereport is available forpubiic inspection at the BatonRougeofficeof the Legislative Auditor and. whereappropriate at the office of the parish clerk of court
Release Date 2~ }/c
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS'REPORT 1
FINANCIAL STATEMENTS:
Statements of Financial Position 2
Statement of Activities, Year Ended June 30, 2004 3
Statement of Activities, Year Ended June 30, 2003 4
Statement of Functional Expenses, Year Ended June 30, 2004 5
Statement of Functional Expenses, Year Ended June 30, 2003 6
Statements of Cash Flows 7
Notes to Financial Statements 8
ACCOMPANYING SCHEDULE:
Schedule of Expenditures of Federal Awards 14
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ONINTERNAL CONTROL OVER FINANCIAL REPORTING BASEDON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 15
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITHREQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM ANDINTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCEWITH OMB CIRCULAR A-133 17
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 19
MATERINEapac
REPORT
To the Board of Directors of . . - •NO/AIDS Task Force • • .
New Orleans, Louisiana ;. :.
We have audited the accompanying statements of financial position of NO/AIDS Task Force (the TaskForce) as of June 30, ^004 and 2()03, and the related statements of activities, functional expenses andcash flows for the years then ended. These financial statements are the responsibility of the TaskForce's management. Our.responsibility is to express an opinion on these financial statements based onour audits.
We conducted our audits in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audits to obtain reasonable assurance about whether the financial statements are
-free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in 'the financial statements/ An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the Task Force as of June 30, 2004 and 2003, and the changes in its net assets andits cash flows for the years then ended, in conformity with accounting principles generally accepted inthe United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated November24, 2004, on our consideration of the Task Force's internal control over financial reporting and our testsof its compliance with certain provisions of laws, regulations, contracts and grants. That report is anintegral part of an audit performed in accordance with Government Auditing Standards and should beread in conjunction with this report in considering the results of our audit. •
Our audits were performed for the purpose of forming an opinion on the basic financial statements ofthe Task Force taken as a whole. The accompanying schedule of expenditures of federal awards for theyear ended June 30, 2004, is presented for purposes of additional analysis as required by the U.S. Officeof Management and Budget Circular A-133, Audits of States, Local Governments, and Non-ProfitOrganizations, and is not a required part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basic financial statements, and, in ouropinion, is fairly stated in all material respects in relation to the basic financial statements taken as a-whole.
November 24, 2004Energy Centre • 1100 Poydras St. * 34th Floor • New Orleans, LA 70163 • Telephone 504/561-0020 • Fax 504/561-0023
Member American Institute of Certified Public Accountants
• Private Companies Practice Section • Management Consulting Services Section • Personal Financial Planning Section
NO/AIDS TASK FORCESTATEMENTS OF FINANCIAL POSITION
JUNE 30, 2004 AND 2003
ASSETSCashReimbursements receivable (net of allowance of
$12,057 for 2003)Unconditional promises to give (net of allowances of
$2,857 for both 2004 and 2003)Other receivablesPrepaid expensesInvestments in marketable securitiesDepositsEquipment and leasehold improvements, less
accumulated depreciation and amortization
Total assets
LIABILITIES AND NET ASSETSLiabilities:
Cash overdraftsAccounts payableAccrued expensesLine of creditCapital lease obligation
Total liabilities
Net Assets:UnrestrictedTemporarily restricted
Total net assets
Total liabilities and net assets
2004
$
919,036
92348,27111,387
-9,940
33,693
$ 1,023,250
$ 21,556364,304124,743150,166
2,942663,711
358,5391,000
359,539
$ 1,023,250
2003
$ 40,876
1,204,265
923-
11,28721,355
9,540
45,813
$ 1,334,059
$418,669155,880126,46711,081
712,097
607,46214,500
621,962
$ 1,334,059
The accompanying notes are an integral part of these financial statements.
2
NO/AIDS TASK FORCESTATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2004
REVENUES AND OTHER SUPPORT:Grants and contractsFund raisingPledges and contributionsOther support and revenue
Net assets released from restrictions:Satisfaction of program restrictionsTotal public support and revenue
EXPENSES:Program servicesSupport services
Total expenses
ALLOCATIONS:Allocations to other AIDS related agencies
CHANGE IN NET ASSETS
Net assets, beginning of year
Met assets, end of year
Unrestricted
$ 3,474,486358,159
87,523266,999
13,500
4,200,667
3,672,984772,069
4,445,053
4,537
(248,923)
607,462
$ 358,539
TemporarilyRestricted
-
(13,500)(13,500)
---
-
(13,500)
14,500
$ 1,000
Total
$ 3,474,486358,159
87,523266,999
-
4,187,167
3,672,984772,069
4,445,053
4,537
(262,423)
621,962
$ 359,539
The accompanying notes are an integral part of these financial statements.
NO/AIDS TASK FORCESTATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2003
REVENUES AND OTHER SUPPORT:Grants and contractsFund raisingPledges and contributionsOther support and revenue
Net assets released from restrictions:Satisfaction of program restrictions
Total public support and revenue
EXPENSES:Program servicesSupport services
Total expenses
ALLOCATIONS:Allocations to other AIDS related agencies
CHANGE IN NET ASSETS
Net assets, beginning of year
Net assets, end of year
Unrestricted
$ 3,388,669326,918115,154189,856
36,434
4,057,031
3,274,333695,097
3,969,430
2,117
85,484
521,978
$ 607,462
TemporarilyRestricted
$14,500
(36,434)
(21,934)
---
-
(21,934)
36,434
$ 14,500
Total
$ 3,388,669341,418115,154189,856
-
4,035,097
3,274,333695,097
3,969,430
2,117
63,550
558,412
$ 621,962
The accompanying notes are an integral part of these financials statements.
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NO/AIDS TASK FORCESTATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2004 AND 2003
CASH FLOWS FROM OPERATING ACTIVITIES:Change in net assets . ;
•Adjustments to reconcile change in net assets' .to net cash used in operating activities:
Depreciation and amortizationGain on sale of investmentsNon cash lossChanges in assets and liabilities:
Reimbursements receivableUnconditional promises to giveOther receivablesPrepaid expensesDepositsCash overdraftsAccounts payableAccrued expenses
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales of investmentsPurchase of equipment and leasehold improvements
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in line of creditPayments on capital lease obligation
Net cash provided by financing activities
Decrease in cash
ash at beginning of year
ash at end of year
Supplemental Disclosures:Interest paid
2004
$ (262,423)
26,931(4,848)1,867
285,229
(48,271)(100)(400)
21,556(54,365)(31,137)(65,961)
26,203(16,678)
9,525
23,699(8.139)15,560
(40,876)
40,876
$ 10,229
2003
$ 63,550
29,217
1,147
(663,.552)30
9,239(100)
239,9547.508
(313,007)
(16,770)
(16,770)
., 126,467(13,387)113,080
(216,697)
-' 257,573
$ ' 40,876
5,325
The accompanying notes are an integral part of these financial statements.
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
NO/AIDS Task force "the Task Force" is nonprofit organization providing support and services topeople affected by acquired immune deficiency syndrome (AIDS) and human immunodeficiency virus(HIV) in the Southeast Louisiana region. The Task Force also offers educational programs andinformational materials to the general public, in order to prevent more people from becoming infectedand to build awareness of the serious medical, legal, social and emotional problems faced by thosealready infected.
The Task Force's programs are as follows:
Education
Education continues to be the best method for slowing the spread of HIV/AIDS. This program'sgoal is making the community aware that prevention is vital to reducing the spread of HIV. TheTask Force uses community and venue-based outreach to talk to adolescents, injection drugusers and others high-risk individuals in a non-threatening and non-judgmental manner abouttheir behavior. Additionally, a community mobilization project develops partnerships to designand implement prevention projects in the New Orleans French Quarter community. TheEducation program also performs health education presentations throughout the SoutheastLouisiana region.
Primary Medical Care
The Task Force offers viral-load testing, T-cell monitoring and counseling in diet, exercise andstress management. The Task Force helps HIV-infected clients ensure that their health and livesare as strong as they can be. The Task Force has a physician on staff two days per week forpreliminary medical evaluations and referrals to specialists as needed.
Case Management
The Task Force provides case managers who serve as liaisons between the clients and thenetwork of community resources needed to live comfortably and with dignity. Case Managerswork with those living with HIV and AIDS to develop a plan of care that addresses theirmedical, financial, emotional and social needs.
Mental Health
The Task Force offers short-term individual counseling to help HIV-infected and affectedindividuals cope with the complex emotional, physical and practical problems they face.Support groups are offered on a regular basis and, if needed, appointments are offered with apsychiatrist once a week.
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Volunteer
The Task Force operates a statewide hotline. The counselors who answer the phone arevolunteers. The counselors answer callers' questions and provide information on HIVtransmission and prevention. They provide referrals to other agencies and set up appointmentsfor HIV testing and primary care services. Volunteer counselors staff a HIV antibodycounseling and testing program where nearly 2000 individuals are tested yearly. Volunteersalso staff the Food for Friends program.
Food for Friends
The Task Force delivers three well-balanced meals, seven days a week to HIV-infectedindividuals who are unable to provide meals for themselves. Additionally, a food pantrysupplements the clients' needs with nonperishable food items and personal care items.
Housing/Peer Support
The Task Force provides assistance to HIV-infected individuals to obtain acceptable andaffordable housing. Additionally, the Task force provides a program where individual andgroup level support is offered by trained peers living with HIV/AIDS.
Medication
Medication is provided to HIV-infected individuals who meet certain income requirements. TheTask Force also assists with insurance co-payments for qualified individuals.
Basis of Presentation
The accompanying financial statements are presented using the accrual method of accounting. Underthis method, revenues are recognized in the period earned and expenses are recognized in the periodincurred. Grants are recognized as revenues when the conditions of the grant are considered to havebeen met. Contributions are recorded as unrestricted, temporarily restricted, or permanently restrictedsupport, depending on the existence and/or nature of any donor restrictions. All contributions areconsidered to be available for unrestricted use unless specifically restricted by the donor. Restrictedcontributions whose restrictions are met in the same reporting period as the contribution are shown asunrestricted contributions.
The Task Force reports information regarding its financial position and activities according to threeclasses of net assets, as applicable: unrestricted net assets, temporarily restricted net assets, andpermanently restricted net assets. When a restriction is satisfied or expires, temporarily restricted netassets are reclassified to unrestricted net assets.
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Donated Services
Donated services are reflected as contributions in the accompanying statements at their estimated fairvalues at the date of receipt. During fiscal years 2004 and 2003, a news publication company donatedadvertising space and services, primarily for fund raising activities. The estimated value of thesedonated services and the corresponding expenses for the years ended June 30, 2004 and 2003, was$165,000 and $153,000, respectively, and is reflected in the accompanying financial statements as othersupport and revenue and support service expenses.
Donated Property and Equipment
Donations of property and equipment are recorded as support at their estimated fair value at the date ofdonation. Such donations are reported as unrestricted support, unless the donor has restricted thedonated asset to a specific purpose or for use for a specified period of time. Assets donated withexplicit restrictions regarding their use and contributions of cash that must be used to acquire propertyand equipment are reported as restricted support.
Absent donor stipulations regarding how long those donated assets must be maintained, the Task Forcereports expirations of donor restrictions when the donated or acquired assets are placed in service asinstructed by the donor. The Task Force reclassifies temporarily restricted net assets to unrestricted netassets at that time. If a time restriction has been stipulated by the donor, the expiration of thisrestriction is reported as the related asset is depreciated.
Functional Allocation of Expenses
The costs of providing the various programs and other activities of the Task Force have beensummarized on a functional basis in the accompanying statements of functional expenses. In preparingthese statements, certain costs such as rent, utilities and supplies have been allocated among the variousprograms and supporting services on the basis of program expenses to total expenses in each activity.
Investments in Marketable Securities
Investments consist primarily of common stocks that were donated to the Task Force in the past severalyears. These investments are stated at fair market value based on quoted market prices. Investmentincome consists primarily of unrealized gains on these common stocks and is included in other supportand revenue.
Equipment and Leasehold Improvements
Equipment and leasehold improvements are recorded at cost. The Task Force capitalizes allexpenditures for equipment in excess of $500; the fair value of donated assets is similarly capitalized.Depreciation is provided over the estimated useful lives of the respective assets on a straight-line basis.Leasehold improvements are amortized over the shorter of the estimated useful life of the improvementor the term of the related lease.
10
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Unconditional Promises to Give
Substantially all of the balance of unconditional promises to give are expected to be collected within thenext year.
Advertising and Promotion
Advertising costs are expensed as incurred. The primary purpose of these appeals are to promote theTask force's fund-raising events.
Allocations to AIDS Related Agencies
A percentage of proceeds from certain fund raising activities are earmarked for donation to othercommunity AIDS related agencies by management of the Task Force.
Tax Status
The Task Force is exempt from federal income taxes under Section 501(c)(3) of the Internal RevenueCode and it is not a private foundation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted inthe United States of America requires management to make estimates and assumptions that affect thereported amount of assets and liabilities at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results could differ from those estimates.The Task Force's estimates include those regarding the fair value of donated materials and services.
NOTE 2 — RESTRICTIONS ON NET ASSETS
Temporarily restricted net assets as of June 30, 2004 and 2003 relate to cash donations received infiscal years 2004 and 2003, respectively, that are for the Task Force's fiscal years 2005 and 2004events, respectively.
11
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 3— EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements are summarized as follows at June 30:
2004 2003
Computer equipment and software $ 86,295 $ 77,673
Office furniture, fixtures and equipment 113,289 110,281
Leasehold improvements 108.560 106.338308,144 294,292
Less - Accumulated depreciation and amortization 274.451 248,479
S 33.693
NOTE 4 — LINES OF CREDIT
As of June 30, 2004 and 2003, the Task Force had two $ 100,000 unsecured lines of credit with financialinstitutions. The total outstanding borrowings under these lines were $150,166 and $126,467 at June30, 2004 and 2003, respectively. The first line of credit had an outstanding balance of $80,039 and$97,167 at June 30, 2004 and 2003, repectively, charged interest at the financial institution's prime plus0.5% (6.25% at both June 30, 2004 and 2003) and had an open maturity date. The second line of credithad an outstanding balance of $70,127 and $29,300 at June 30, 2004 and 2003, respectively, andcharged interest at the financial institution's prime (5.0% at both June 30, 2004 and 2003) and maturesin March 2005.
NOTE 5 — COMMITMENTS AND CONTINGENCIES
Operating Leases
The Task Force leases its administrative and operational facility under a noncancelable operating leaseat a monthly rent of $7,100 until the lease expiration in March 2008. In addition, the Task Force leasestwo operating facilities for program activities on a monthly basis for a total of $ 1,700 per month.
Rental expense relating to these leases was approximately $110,200 and $100,500 for the years endedJune 30, 2004 and 2003, respectively.
Concentrations
Grants received require the fulfillment of certain conditions as set forth in the grant instruments. TheTask Force intends to fulfill the condition of all grants, recognizing that failure to fulfill the conditionscould result in the return of the funds to donors. The Task Force, by accepting the grants and theirterms, has agreed to the conditions of the donors. For fiscal 2004 and 2003, government grantsrepresent approximately 81% and 83%, respectively, of the Task Force's total support and revenue. Inaddition, the balance of reimbursements receivable is comprised primarily of government grants.
12
NO/AIDS TASK FORCENOTES TO FINANCIAL STATEMENTS
NOTE 6 - PENSION PLAN
The Task Force provides a simplified employee pension plan ("the Plan") to its employees. The Planprovides, to all employees who have been with the Task Force for a minimum of two years, an annualcontribution to an Individual Retirement Account (IRA) equal to 3% of an employee's current grosseligible compensation. Contributions to the Plan were approximately $29,100 and $28,400 for theyears ended June 30, 2004 and 2003, respectively.
NOTE 7 - ALLOCATION OF JOINT COSTS
During fiscal 2004 and 2003, the Task Force incurred costs related to the publication and mailing of itsperiodic newsletter; this newsletter includes requests for contributions, as well as program andmanagement and general components. These costs are not specifically attributable to particularcomponents of the activities (joint costs). These joint costs were allocated as follows for the yearsended June 30:
Expense Category 2004 2003Fund Raising $ 1,789 $ 2,466Program Services:
Education 2,000 1,682Primary Medical Care 1,561 1,871Case Management 3,658 5,076Mental Health 683 991Volunteer 293 506Food for Friends 2,520 3,302Housing/Peer Support 374 837Medication 2,569 3,302
Management and General 813 1.981
Total
13
NO/AIDS TASK FORCESCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2004
Grantor/Pass Through Grantor/Program TitleCFDA
NumberDisbursements/Expenditures
UNITED STATES DEPARTMENT OFHEALTH AND HUMAN SERVICESPublic Health Service Centers for Disease Control and Prevention -
HIV Prevention Programs and CBOS
Pass through:Mayor's Office of Health Policy
93.939 175,000
Ryan White C.A.R.E. Act Title I FundsHIV Emergency Relief Formula Grants
Mayor's Office of Health Policy
93.915 ,320,772
Ryan White C.A.R.E. Act Title II FundsHIV Emergency Relief Formula Grants
Louisiana Department of Health and Hospitals
93.915 229.239
Office of Public Health - HIV/AIDS ServicesAcquired Immunodeficiency Syndrome (AIDS) Activity
UNITED STATES DEPARTMENT OFHOUSING AND URBAN DEVELOPMENT
Pass through:
City of New Orleans Division of Housing and Neighborhood Development
93.118 184,501
and Unity for the HomelessHousing Opportunities for Persons with AIDS
TOTAL FEDERAL AWARDS
14.241 267.514
3,177,026
NOTES TO SCHEDULEBasis of Presentation
The Schedule of Expenditures of Federal Awards includes the federal grant activity of NO/AIDS Task Force and is>resented on the 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.
The Task Force's federal awards are operated on a cost reimbursement basis (except for the Ryan White grants)
thereby the Task Force applies for reimbursement of costs incurred hi conjunction with program activities. The RyanWhite grants are operated on a units of service fee basis whereby the Task Force is compensated at fixed rates per unitsof service as called for in the federal grant contracts. Accordingly, this schedule presents the revenues earned through>oth the expenditure of funds cost reimbursement and the unit of service fee reimbursement.
Vlaior Programs
Vlajor programs are identified in the Summary of Auditors' Results section of the Schedule of Findings and
Questioned Costs.
14
TM
MATERNEapac
Consultants and CPAs
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE ANDON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors ofthe NO/AIDS Task Force
New Orleans, Louisiana
We have audited the financial statements of NO/AIDS Task Force (a nonprofit organization) as of andfor the year ended June 30, 2004 and have issued "our report thereon dated November 24, 2004. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States.
ComplianceAs part of obtaining reasonable assurance about whether the NO/AIDS Task Force's financialstatements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grants, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinion oncompliance with those provisions was not an objective of our audit and, accordingly, we do not expresssuch an opinion. The results of our tests disclosed no instances of noncompliance that are required to bereported under Government Auditing Standards.
Internal Control Over Financial ReportingIn planning and performing our audit, we considered the NO/AIDS Task Force's internal control overfinancial reporting in order to determine our auditing procedures for the purpose of expressing ouropinion on the financial statements and not to provide assurance on the internal control over financialreporting. Our consideration of the internal control over financial reporting would not necessarilydisclose all matters in the internal control over financial reporting that might be material weaknesses. Amaterial weakness is a condition in which the design or operation of one or more of the internal controlcomponents does not reduce to a relatively low level the risk that misstatements in amounts that wouldbe material in relation to the financial statements being audited may occur and not be detected within atimely period by employees in the normal course of performing their assigned functions. We noted nomatters involving the internal control over financial reporting and its operation that we consider to bematerial weaknesses. However, we noted other matters involving the internal control over financialreporting, which we have reported to management of NO/AIDS Task Force in a separate letter datedNovember 24, 2004.
Energy Centre - 1100 Poydras St. - 34th Floor • New Orleans, LA 70163 • Telephone 504/561-0020 - Fax 504/561-0023
Member American Institute of Certified Public Accountants
• Private Companies Practice Section • Management Consulting Services Section • Personal Financial Planning Section
This report is intended solely for the information and use of the finance committee, management, otherswithin the organization and federal awarding agencies and pass-through entities and is not intended to beand should not be used by anyone other than these specified parties.
November 24, 2004
16
MATERNEapac
'Consultants and CPAs
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITHREQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND
ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITHOMB CIRCULAR A-133
To the Board of Directors ofthe NO/AIDS Task Force
New Orleans, Louisiana
ComplianceWe have audited the compliance of the NO/AIDS Task Force (a nonprofit organization) with the typesof compliance requirements described in the U.S. Office of Management and Budget COMB') Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year endedJune 30, 2004. The NO/AIDS Task Force's major federal programs are identified in the summary ofauditors' results section of the accompanying schedule of findings and questioned costs. Compliancewith the requirements of laws, regulations, contracts and grants applicable to each of its major federalprograms is the responsibility of the NO/AIDS Task Force's management. Our responsibility is toexpress an opinion on the NO/AIDS Task Force's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in the GovernmentAuditing 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 OMBCircular A-133 require that we plan and perform the audit to obtain reasonable assurance about whethernoncompliance with the types of compliance requirements referred to above that could have a direct andmaterial effect on a major federal program occurred. An audit includes examining, on a test basis,evidence about the NO/AIDS Task Force's compliance with those requirements and performing suchother procedures as we considered necessary hi the circumstances. We believe that our audit provides areasonable basis for our opinion. Our audit does not provide a legal determination on the NO/AIDSTask Force's compliance with those requirements.
In our opinion, the NO/AIDS Task Force complied, in all material respects, with the requirementsreferred to above that are applicable to each of its major federal programs for the year ended June 30,2004.
Internal Control Over Compliance ,The management of the NO/AIDS Task Force is responsible for establishing and maintaining effectiveinternal control over compliance with requirements of laws, regulations, contracts and grants applicable'to federal programs. In planning and performing our audit, we considered the NO/AIDS Task Force's
Energy Centre • 1100 Poydras St. - 34th Floor * New Orleans, LA 70163 • Telephone.504/561-0020 • Fax 504/561-0023 '
Member American Institute of Certified Public Accountants
• Private Companies Practice Section • Management Consulting Services Section • Personal Financial Planning Section
internal control over compliance with requirements that could have a direct and material effect on amajor federal program in order to determine our auditing procedures for the purpose of expressing ouropinion on compliance and to test and report on internal control over compliance in accordance withOMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters inthe internal control that might be material weaknesses. A material weakness is a condition in which thedesign or operation of one or more of the internal control components does not reduce to a relatively lowlevel the risk that noncompliance with applicable requirements of laws, regulations, contracts and grantsthat would be material in relation to a major federal program being audited may occur and not bedetected within a timely period by employees in the normal course of performing their assignedfunctions. We noted no matters involving the internal control over compliance and its operation that weconsider to be material weaknesses.
This report is intended solely for the information and use of the finance committee, management, otherswithin the organization and federal awarding agencies and pass-through entities and is not intended to beand should not be used by anyone other than these specified parties.
November 24, 2004
18
NO/AIDS TASK FORCESCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004
Section I - Summary of Auditors' Results
Financial Statements
Type of auditors' report issued: UnqualifiedInternal control over financial reporting:• Material weakness(es) identified:• Reportable conditions(s) identified
that are not considered to materialweaknesses?
Federal Awards
x no
x none reported
Internal control over major programs:• Material weakness(es) identified: yes x_no• Reportable condition(s) identified
that are not considered to be materialweakness(es)? yes x_ none reported
Type of auditors' report issued on compliance for major programs: UnqualifiedAny audit findings disclosed that areRequired to be reported in accordanceWith section 510(a) of Circular A-133? yes x noIdentification of major programs:
CED A Numbers') Name of Federal Program or Cluster93.915 HIV Emergency Relief Formula Grants
Dollar threshold used to distinguishBetween type A and type B programs: $500,000Auditee qualified as low-risk auditee? x yes no
19
NO/AIDS TASK FORCESCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2004
Section II - Financial Statement Findings
No matters were reported.
Section III - Federal Award Findings and Questioned Costs
No matters were reported.
20
MATERINEapac
Consultants and CPAs
To the Board of Directors ofNO/AIDS Task Force
In planning and performing our audit of the financial statements of NO/AIDS Task Force ("theTask Force") for the year ended June 30, 2004, we considered the Task Force's internal controlto determine our auditing procedures for the purpose of expressing an opinion on the financialstatements and not to provide assurance on internal control.
However, during our audit, we became aware of several matters that are opportunities forstrengthening internal controls and operating efficiency. We previously reported on the TaskForce's internal control in our report dated November 24, 2004. This letter does not affect ourreport dated November 24,2004, on the financial statements of NO/AIDS Task Force.
We will review the status of these comments during our next audit engagement. We havealready discussed many of these comments and suggestions with various Task Force personnel,and we will be pleased to discuss these comments in further detail at your convenience, toperform any additional study of these matters, or to assist you in implementing therecommendations. Our comments are summarized as follows:
GENERAL INTERNAL CONTROL PRACTICES/CONTRACT COMPLIANCE
Observation 04-1
Check Numbering and Sequence
During testing of accounts payable, we noted the check register supplied routinely containedchecks that were written out of sequential order. Additionally, we noted two pairs of checks withduplicate numbers. This is in part, a repeat finding from prior year observations (Observation03-1).
Recommendation
Checks should be written in sequential order to reduce the risk of unaccounted for checks. Checkregisters should be scanned as part of the monthly close to ensure that duplicate check numbersdo not exist. Writing checks hi sequential order and reducing the amount of misnumberedchecks would increase controls over cash and better protect the Task Force's assets.
Energy Centre • 1100 Poydras St. • 34th Floor • New Orleans, LA 70163 • Telephone 504/561-0020 • Fax 504/561-0023
Member American Institute of Certified Public Accountants
• Private Companies Practice Section • Management Consulting Services Section • Personal Financial Planning Section
Management's Response
This was caused by the misalignment of pre-numbered checks and occasional printer problems.In the future, the Task Force will void misnumbered checks and replace with a check in whichcheck number agrees with the printed number on the check.
Observation 04-2
Units of Service Support
During our compliance testing of the Task Force's services provided related to federal grants, wenoted that in several instances the only support was a listing in the client file indicating thenumber of units of service provided, date and type service provided. There was no indication ofwho performed the service nor a signature or initialing of that person taking responsibility for theservice. This is a repeat finding from prior year observations (Observation 03-3).
Recommendation
The employee performing the service and entering the information on the log should also sign orinitial the log taking responsibility for having performed the service. In the case of the FoodBank or Meal Delivery programs, the client receiving the goods should initial (for confidentiallypurposes) the log or list indicating the receipt of goods. Additionally, the Task Force shouldconsider converting to a computerized timesheet type system whereby employees code their timeto certain programs, client codes and services performed. These timesheets could then be used aspart of the payroll system so as to minimize the risk of an employee charging for more or lessunits of service than was actually performed by that employee.
Management's Response
At this time, the Task Force does not have the financial resources to comply with the aboverecommendation. We appreciate the suggestion and will begin to research the availability offinancial resources to change our current method of recording employees' time in order tominimize any perceived risk.
We appreciate the cooperation we have received from the Task Force personnel and theopportunity to be of service to you and the Task Force.
This report is intended solely for the information and use of the Board of Directors, management,and others within the Task Force and should not be used by anyone other than these specifiedparties.
November 24, 2004
