RECEIVEDLEGISLATIVE AUDITOR
05 JAN-3 AM9:««3
GULF COAST TEACHINGFAMILY SERVICES, INC.
(A NONPROFIT ORGANIZATION)
FINANCIAL REPORT ANDSUPPLEMENTARY INFORMATION
June 30, 2004 and 2003
Under provisians ef §fgte i»w, this report is a publicdocument. Acopy of the r§p0rt has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.
Release Date
GULF COAST TEACHING FAMILY SERVICES, INC.
TABLE OF CONTENTSJUNE 30, 2004 and 2003
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS 1-2
FINANCIAL STATEMENTSStatements of Financial Position 3Statements of Activities 4Statement of Functional Expense - June 20, 2004 5Statements of Cash Flows 6Notes to Financial Statements 7-17
INDEPENDENT AUDITOR'S REPORT ON THE SUPPLEMENTARY 18INFORMATION
SUPPLEMENTARY INFORMATION
SCHEDULESSchedule 1 - Combined Statement of Revenues and Expenses By Cost ReportGrouping 19Schedule 2 - Statement of Expenses by Program / Fund - Year Ended June 30, 2004 20-38
SPECIAL REPORTS OF INDEPENDENT AUDITOR
Report on Compliance and on Internal Control Over Financial ReportingBased on an Audit of Financial Statements Performed in Accordance 39-40With Government Auditing Standards
Report on Compliance with Requirements Applicable to Each Major ProgramAnd On Internal Control Over Compliance Required by OMB 41-42Circular A-133
SCHEDULESSchedules of Findings and Questioned Costs
Schedule 1 - Summary of Audit Results 43Schedule 2 - Reportable Conditions - Financial Statements - Current Year 44Schedule 3 - Reportable Conditions - Major Federal Award Programs Audit 45Schedule 4 - Summary of Prior Year's Audit Findings 46Schedule 5 - Management's Corrective Action Plan for Current Year Findings 47Schedule 6 - Schedule of Expenditures of Federal Awards for the Year Ended June
30, 2004 and Related Notes 48-49
••••••••••••• JOSEPH V.FRANKS II, C.P.A.
B E R N A R D & F R A N K SA CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS NICHOLAS F. CHETTA, C.P.A.
NICHOLAS W. LAFRANZ III, C.P.A.
JAM ESL WHITE, C.P.A.
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
To the Board of DirectorsGulf Coast Teaching Family Services, Inc.New Orleans, Louisiana
We have audited the accompanying statements of financial position of Gulf Coast Teaching FamilyServices, Inc. (a nonprofit corporation), as of June 30, 2004 and 2003, and the related statements ofactivities and cash flows for the years then ended and the statement of functional expenses for the yearended June 30, 2004. These financial statements are the responsibility of Gulf Coast Teaching FamilyServices, Inc.'s management. Our responsibility is to express an opinion on these financial statementsbased on our 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 Auditing Standards.issued by the Comptroller General of the United States. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Gulf Coast Teaching Family Services, Inc. as of June 30, 2004 and 2003, and thechanges in its net assets and its cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated December 22,2004, on our consideration of Gulf Coast Teaching Family Services, Inc.'s internal control over financialreporting and our tests of its compliance with certain provisions of laws, regulations, contracts andgrants. That report is an integral part of an audit performed in accordance with Government AuditingStandards and should be read in conjunction with this report in considering the results of our audit.
1
MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS; SOCIETY OF LOUIS IANA CERTIFIED PUBLIC ACCOUNTANTS
4141 VETERANS BLVD., SUITE 313, METAIRIE, LA 70002 | PHONE: (504) 885-0170 FAX: (504) 456-9531
Our audit was performed for the purpose of forming an opinion on the basic financial statements of GulfCoast Teaching Family Services, Inc. taken as a whole. The accompanying schedule of expenditures offederal awards is presented for purposes of additional analysis as required by U.S. Office of Managementand Budget Circular A-133, Audits of States, Local Governments, and'Non-Profit Organizations, and isnot a required part of the basic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in allmaterial respects, in relation to the basic financial statements taken as a whole.
December 22, 2004
GULF COAST TEACHING FAMILY SERVICES, INC.(A NONPROFIT ORGANIZATION)
STATEMENTS OF FINANCIAL POSITIONJUNE 30, 2004 AND 2003
ASSETS
CURRENT ASSETSCash and cash equivalentsInvestment securitiesReceivables:
ProgramAllowance for doubtful accountsOther receivables
Total receivables
Prepaid expensesTotal current assets
PROPERTY AND EQUIPMENT - AT COSTLandBuilding and improvementsSoftwareLeasehold improvementsFurniture and equipmentTransportation equipmentLeased equipment under capitalized leases
Less accumulated depreciation and amortization
DEPOSITS
Total assets
2004 2003
$
$
$
$
$
$
2,452,913123,932
3,067,162(300,000)
21,7572,788,919
189,4815,555,245
247,3601,021,978
169,54098,706
822,260141,176
13,7832,514,803
(1,202,033)1,312,770
7,790
6,875,805
$ 602,077123,176
2,433,424(195,000)
19,2042,257,628
158,344$ 3,141,225
$ 247,360983,170130,26893,466
699,825112,16613,783
2,280,038(1,007,001)
$ 1,273,037
$ 7,790
$ 4,422,052
See Notes to Financial Statements.
LIABILITIES AND NET ASSETS
CURRENT LIABILITIESNotes payableCurrent portion of mortgage notes payableAccounts payableAccrued liabilities
Total current liabilities
2004
62,083 $40,432
494,2341,826,144
2003
61,33443,871
495,612998,457
$ 2,422,893 $ 1,599,274
LONG-TERM LIABILITIES, LESS CURRENT PORTIONMortgage notes payable $ 384,557 $ 423,711
COMMITMENTS AND CONTINGENCIES
UNRESTRICTED NET ASSETS $ 4,068,3 55_ $ 2,399,067
Total liabilities and net assets $ 6,875,805_ $ 4,422.052
GULF COAST TEACHING FAMILY SERVICES, INC.(A NONPROFIT ORGANIZATION)
STATEMENTS OF ACTIVITIESYEARS ENDED JUNE 30, 2004 AND 2003
UNRESTRICTED NET ASSETS
REVENUE, GAINS, AND SUPPORT:Grants and fees for servicesDonationsInterest incomeOther income
Total revenues, gains and support - unrestricted
2004 2003
$ 25,097,418 $ 19,838,785336,724 292,032
9,529 1,3635,999 31,863
$ 25,449,670 $20,164,043
EXPENSES:PROGRAM SERVICES:
Community group homesFoster Care/Professional CarePersonal care attendantsSupervised independent livingRespite servicesOthers, in totalHomeless/HousingElderly Services
Total program expenses
ADMINISTRATIVE AND GENERAL
Fund raising
Total expenses
INCREASE (DECREASE)IN UNRESTRICTED NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$ 570,7251,451,7588,027,6325,563,7141,155,3091,526,1191,308,961
151,813
$ 19,756,031
$ 3,760,943
263,408
$ 532,6191,533,7035,203,6044,369,2943,141,0951,238,681
602,547131,106
$ 16,752,649
$ 2,904,171
232,667
$ 23,780,382 $ 19,889,487
$ 1,669,288 $ 274,556
2,399,067 2,124,511
$ 4,068,355 $ 2,399,067
See Notes to Financial Statements.
GULF COAST TEACHING FAMILY SERVICES, INC.
(A NONPROFIT ORGANIZATION)
STATEMENT OF FUNCTIONAL EXPENSES
YEAR ENDED JUNE 30,2004
Salaries and wages
Severance package
Employee benefits
Payroll taxes
Workmen's compensation
Total payroll cost
Office supplies
Advertising
Bad debts
Telephone
Training
Travel
HUD supporting services
Professional services
Insurance
Repairs and maintenance
Depreciation
Interest
Lease expense
Client needs
Room and board
Contractual services
Utilities
Consultants
Computer expenses
Recognition expense
Care facilities fees
Rental expense
Food
Life skills training
Medical supplies
Others, in total
Total direct expenses
Program Services
Community
Group
Homes
$ 246,986
7,151
18,759
8,157
281,053
1,117
-
19,226
2,532
1,017
2,941
1,132
27,913
10,096
22,219
10,007
-
27,320
-
-
15f887
12,617
-
-
50,398
45,769
2,418
37,063
$ 570,725
Professional/
Foster
Care
$ 366,518
9,553
27,499
12,443
416,013
1,995
3,224
1,420
5,827
3,128
18,463
-
-
455
-
-
7,408
26,906
273,717
660,814
872
-
-
2,692
-
-
45
28,779
$ 1,451,758
Personal
Care
Attendants
$ 6,718,862
67,440
525,137
220,636
7,532,075
17,396
5,057
109,911
29,126
19,098
109,921
-
-
15,393
3,278
-
83,729
1,841
-
-
12,355
4,530
3,059
16,020
-
-
12,963
51,880
$ 8,027,632
Supervised
Independent
Living
$ 4,524,077
50,290
349,740
148,941
5,073,048
14,620
4,231
89,014
25,096
16,245
129,337
31,252
2,347
10,319
1,239
-
48,773
25,875
-
-
1,784
6,123
2,739
10,174
-
-
6,772
64,726
$ 5,563,714
Respite
Services
$ 876,121
15,410
67,096
32,747
991,374
3,942
1,029
41,842
9,552
6,250
19,335
1,440
-
4,676
-
-
21,621
3,611
4,125
-
3,707
2,295
-
2,784
-
-
1,731
35,995
$ 1,155.309
Administrative & general allocated 96,551 $ 269,580 $ 1,413,562 $ 949,924 $ 214,964
Program Services Supporting Services
Housing/
Homeless
$ 498,564
-
16,203
37,196
16,351
568,314
7,730
-
-
18,153
2,348
26,715
98,802
7,375
-2,240
5,502
-
-
317,380
10,966
-
-
22,255
24,338
-
-
128,381
-
53,695
-14,767
$ 1,308,961
Elderly
Services
$ 122,443
-910
9,685
4,125
137,163
742
264
-
1,094
1,258
3,618
-
-
-
361
-
-
1,805
1,697
-
-
704
-
-
-
-
-
-
-
518
2,589
$ 151,813
Other
Programs
$ 872,971
-
21,749
67,051
28,839
990,610
6,286
3,077
2,309
19,065
8,906
150,065
-
44,596
25,409
4,574
20,873
8,539
18,207
177,091
2,934
6,426
4,353
-
2,257
549
-
-
-
-
28529,708
$ 1,526,119
Total
Program
Services
$ 14,226,542
-
188,706
1,102,163
472,239
15,989,650
53,828
16,882
263,722
110,445
58,250
460,395
98,802
85,795
55,669
48,114
53,111
18,546
181,543
581,721
291,742
667,240
39,662
47,820
32,393
32,219
50,398
128,381
45,769
53,695
24,732
265,507
$ 19,756,031
Administrative
and General
$ 1,770,366
473,148
29,625
122,458
46,576
2,442,173
82,301
8,608
68563,019
31,777
20,360
-259,358
110,412
34,111
141,164
10,661
306,139
---
15,874
-
32,358
30,760
-1,307
-
-
-
169,876
$ 3,760,943
Fund
Raising
$ 60,752
-2,653
4,338
2,045
69,788
6,130
141,817
-1,441
-
1,377
-1,081
-
1,025
608
-
-
-
-
-
-
-
422
340
-
-
-
-
-
39,379
$ 263,408
Total
Supporting
$ 1,831,118 S
473,148
32,278
126,796
48,621
2,511,961
88,431
150,425
685
64,460
31,777
21,737
-
260,439
110,412
35,136
141,772
10,661
306,139
-
-
-
15,874
-
32,780
31,100
-
1,307
-
-
-
209,255
$ 4,024,351 $
GRAND
TOTALS
16,057,660
473,148
220,984
1,228,959
520,860
18,501,61 1
142,259
167,307
264,407
174,905
90,027
482,132
98,802
346,234
166,081
83,250
194,883
29,207
487,682
581,721
291,742
667,240
55,536
47,820
65,173
63,319
50,398
129,688
45,769
53,695
24,732
474,762
23,780,382
$ 22,315 243,838 S 3,210,734 S 551,310 $ 22,099 573,409 3,784,143
GULF COAST TEACHING FAMILY SERVICES, INC.(A NONPROFIT ORGANIZATION)
STATEMENTS OF CASH FLOWSYEARS ENDED JUNE 30, 2004 AND 2003
CASH FLOWS FROM OPERATING ACTIVITIESIncrease in unrestricted net assetsAdjustments to reconcile increase in unrestricted net assets
to net cash provided by operating activities:DepreciationChanges in assets and liabilities:
(Increase) decrease in program receivables(Increase) decrease in other receivables(Increase) decrease in prepaid expensesIncrease (decrease) in accounts payable
and accrued liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIESIncrease in investment securities, netPurchases of property and equipmentDeposits (made) returned
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTTVITIESProceeds from notes payablePrincipal payments made on notes payablePrincipal payments on mortgage notes payable
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
SUPPLEMENTAL DISCLOSURES OF CASH INFORMATION
Cash paid for:Interest
$
$
$
$
$
$$
$
ION
$
2004
1,669,288
195,032
(528,738)(2,553)
(31,137)
826,309
2,128,201
(756)(234,765)
(235,521)
289,771(139,022)(192,593)
(41,844)
1,850,836
602,077
2,452,913
28,571
2003
$ 274,556
176,551
(290,392)6,475
(30,658)
130,510
$ 267,042
$ (1,240)(90,112)
4,059
$ (87,293)
$ 109,134(100,196)(31,006)
$ (22,068)
$ 157,681
444,396
$ 602,077
$ 42,685
See Notes to Financial Statements.
GULF COAST IE ACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTSJUNE 3 0,2004 and 2003
Note 1 - ORGANIZATION
Gulf Coast Teaching Family Services, Inc. is a nonprofit corporation organizedexclusively for charitable, religious, educational and scientific purposes. TheOrganization maintains group homes, child and family centers and other relatedprograms for the youth and their families and provides a program, which will give theyoung people and their families an opportunity to become normalized, independent,productive and respected citizens of the community. These services are provided in theSouth Louisiana area.
The Organization's major programs include the following:
Community Group Homes - A residential treatment facility for mentally impairedadults.
Professional Care Program - This program provides foster homes in the community forabused, neglected or troubled children and adolescents, emotionally disturbed childrenand children and adults with physical and/or mental disabilities. This program alsolocates and serves runaways and homeless youth through prevention, crisis interventionand follow up services.
Personal Care Attendant Services - PCA provides assistance for adults or children withmental or physical disabilities in performing the activities of daily living that they mightotherwise not be able to perform alone.
Supported Independent Living - The SIL program works with individuals with mentaland /or physical disabilities and for older adolescents in need of extra support,assistance and monitoring.
Respite Services - Respite Services are offered to parents with children or adults withphysical/mental illness and is designed to offer relief from the demanding care for theirspecial needs.
Housing/Homeless - Supportive Housing and services to assist the homeless transitioninto temporary housing and later to permanent housing. Services include but are notlimited to assistance in finding housing, acquiring necessary furnishings, integration intothe community and establishing community supports. Management InformationSystems are also established and maintained for present and future assistance to thehomeless.
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTSJUNE 30, 2004 and 2003
Note 1 - ORGANIZATION (Continued)
Elderly - This type of service covers all needs of the elderly such as general hygieneneeds, assisting with grocery shopping, meal planning and preparation, teaching andassisting with activities, finding resources and encouraging interactions with otherpersons with similar interest.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies used in the preparation of theaccompanying financial statements follows:
1. Basis of Accounting and Financial Statement Presentation
The accompanying financial statements are presented on the accrual basis ofaccounting in accordance with generally accepted accounting principles.
The Organization follows the financial statement presentation recommended byStatement of Financial Accounting Standards (SFAS) No. 117, Financial Statementsof Not-For-Profit Organizations. Under SFAS No. 117, the Organization is requiredto report information regarding its financial position and activities according to threeclasses of net assets (unrestricted net assets, temporarily restricted net assets, andpermanently restricted net assets) based upon the existence or absence of donor-imposed restrictions. In addition, the Organization is required to present a statementof cash flows. At present, all of the Organizations funds are included in theUnrestricted category,
The Organization also follows the recommendations included in SFAS No. 116,Accounting for Contributions Received and Contributions Made. In accordance withSFAS No. 116, contributions received are recorded as unrestricted, or permanentlyrestricted support, depending on the existence and/or nature of any donorrestrictions. As of June 30, 2004 and 2003, the Organization has not received anycontributions with donor-imposed restrictions that would result in temporarily orpermanently restricted net assets.
2. Use of Estimates
The preparation of financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect certainreported amounts and disclosures. Accordingly, actual results could differ from thoseestimates.
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
3. Income Taxes
The Organization is a nonprofit organization and exempt from income taxes underSection 501(c)(3) of the Internal Revenue Code and classified by the Internal RevenueCode as other than a private foundation.
4. Cash and Cash Equivalents
For purposes of the statement of cash flows, the Organization considers cash on handand demand deposits to be cash equivalents.
5. Allowance For Doubtful Accounts
The Organization has established an allowance for doubtful accounts in order to allowfor corrections and billing adjustments that may be related to accounts receivablebalances at June 30, 2004 and 2003.
Actual billing adjustments and bad debts, if any, are charged to the specific fund orprograms as determined. Bad debt expense for the years ended June 30, 2004 and 2003was $264,407 and $256,686, respectively.
6. Depreciation and Amortization
Property and equipment are carried at cost. Depreciation and amortization are calculatedusing the straight-line method. Depreciable lives for most assets in the class are asfollows: Buildings, 20 years; Leasehold improvements, 10 years or lease term if shorter;Furniture and fixtures, 10 years; Computers and related equipment, 3 to 5 years;Transportation equipment, 3 to 5 years. When assets are retired or disposed o£ the costand related accumulated depreciation are removed from the accounts, and any resultinggain or loss is reflected in income for the period. The cost of maintenance and repairs ischarged to income as incurred; significant renewals and betterments are capitalized.Donated property is capitalized at fair value. Depreciation and amortization expenseamounted to $195,032 and $176,551 for the years ended June 30, 2004 and 2003,respectively.
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
7. Capital Leases
For financial reporting, the Organization has capitalized certain leased equipment. Thestatement of financial position reflects all capitalized lease equipment as assets andobligations under capital lease. The capital lease obligations are recorded at the presentvalue of the future minimum lease payments discounted at the interest rate implicit ineach lease.
8. Employee Vacation Benefits
Employee vacation benefits are accrued and expensed in the period earned by theemployee.
9. Program Revenues
Program revenues earned under reimbursement type contracts are recorded as revenuesin the appropriate program when the related expenses are incurred.
Program revenues earned on fee for service and per-diem contracts are recorded asrevenues when services are provided.
10. Allocated Costs
Expenses are charged to each program directly when the charge is identified to theprogram. Program expenditures which cannot be directly identified to a program areallocated based on square footage, usage statistics and ratio of program payrollexpenses to total payroll expenses as appropriate. Management and general expensesinclude those expenses that are not directly identifiable with any other specificfunction but provide the overall support and direction of the Center.
For management analysis purposes, the Organization allocated administrative costs ofthe central and regional offices in the amount of $3,210,734 and $2,526,809 to thevarious programs it administered during the years ended June 30, 2004 and 2003,respectively. The allocation is based on proportion of direct program cost to total directprogram costs. These allocated costs are included in Administrative and Generalexpenses in the Statement of Activities.
10
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
11. Contributions - Donations
Contributed property and equipment is recorded at fair value at the date of donation. Ifthe donors stipulate how long the assets must be used, the contribution is recorded asrestricted support. In the absence of such stipulation, contributions of property andequipment are recorded as unrestricted support. To date, all contributions have beenincluded in unrestricted support.
12. In Kind - Matching
Independent Living Program and HUD contracts require a match of Program B funds byGulf Coast Teaching Family Services, Inc. of an equal amount. This match is providedthrough in-kind services. These services are reported to the funding agency on monthlybillings. They are not included in the revenues and expenditures in the Statements ofActivities of the financial statements, or in the supplemental information schedules.During the year ended June 30, 2004 in-kind services provided as match were $33,631in Lafayette and $37,531 in Houma. During the year ended June 30, 2004, in-kindservices provided as match were $147,485 for the HUD program. During the year endedJune 30, 2003, in-kind services provided as match were $32,266 in Lafayette and$25,177 in Houma. During the year ended June 30, 2003, in-kind services provided asmatch were $8,678 for the HUD program.
Note 3 - INVESTMENT SECURITIES
Investment securities at June 30, 2004 and 2003 consist of the following:
2004 2003
Mutual Fund - US. Government Obligations Fund $ 123.932 $ 123r176
Cost and fair market value are the same at June 30, 2004 and 2003.
These funds earned approximately $876 and $1,363 and incurred expenses of approximately$58 and $123 for the years ended June 30, 2004 and 2003, respectively.
11
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 4 - PROGRAM RECEIVABLES
Program receivables consist of reimbursements for expenses incurred or revenue earned onfee for service and per-diem contracts. Program receivables consist of the following as ofJune 30, 2004 and 2003:
2004 2003
U.S. Department of Health and Human Services $ 101,640 $Medicaid 2,012,246 1,540,423U.S. Department of Housing and Urban Development 172,920 69,852State of Louisiana:
Department of Public Safety and Corrections 39,497 61,652Office of Mental Health 139,585 210,817Office of Community Services 408,266 395,152Office of Citizens with Developmental Disabilities 20,879 35,296Louisiana Rehabilitation Services 39,572 24,110Department of Health & Hospitals CAHSD 16,440 9,356Office of Youth Development 63,336
Other:Capital Area Agency on Aging 22,044 27,270Private 3,960 22,658JPHSA 26,361 36,423Various 416 415
Subtotal $ 3,067,162 $2,433,424Less: Allowance for Doubtful Accounts (300.000> (195.000^Total, net S 2.767.162 S 2.238.424
Note 5 - NOTES PAYABLE
Notes payable consist of the following at June 30, 2004:
Note payable to Cannanwill, Inc. dated 2-16-2004 in theoriginal amount of $139,771 and payable in nine monthlypayments of $15,521. Note bears interest at 5.5%.Final payment due 11-14-2004. $ 62.083
Notes payable consist of the following at June 30, 2003:
Note payable to Cannanwill, Inc. dated 3-12-2003 inthe original amount of $109,134 and payable in nine monthlypayments of $12,438. Note bears interest at 6.14%,Final payment due 11-12-2003. S 61.334
12
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 6 - ADDITIONAL BREAKDOWN OF PROGRAM AND OPERATING EXPENSES
For reporting purposes, the Organization has separated two additional Program Groups,Homeless/Housing and Elderly Services, which in the past were included with in the OtherProgram grouping. In addition, the Organization has separated its Fund Raising expensesfrom Administrative and general for the current reporting period.
Note 7 - MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at June 30,2004:
Current Long-termNote payable to Hibemia National Bank, datedOctober 21, 2003 in the original amount of $150,000and payable in 59 monthly installments of $1,252 with afinal payment of $114, 923 due October 21, 2008.Note bears interest at the rate of 5.75 percent. $ 6,832 $ 138,826
Note payable to Hibernia National Bank dated6-4-98 in the original amount of $ 400,000 andpayable in 180 monthly payments of $3,876.Note bears interest at 4.9%. Note is secured byreal estate having an appraisal value of $648,000. 33.600 245.731
Total $ 40.432 $ 384.557
Mortgage notes payable consist of the following at June 30, 2003:
Current Long-termNote payable to Richard X. Patin dated 7-1-97in the original amount of $180,000 and payable in 180monthly payments of $1,772. Note bears interest at8.5 % and is secured by real estate.Final payment was due July 2012. Paid ofFin 2003. $ 10,320 $ 123,160
13
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 7 - MORTGAGE NOTES PAYABLE (Continued)
Note payable to Richard X. Patin dated 11-12-97in the original amount of $30,000 and payablein 180 monthly payments of $295. Note bearsinterest at 8.5 % and is secured by real estate.Final payment due 11-12- 2012. Paid offin 2003.
Note payable to Hibernia National Bank dated6-4-98 in the original amount of $ 400,000 andpayable in 180 monthly payments of $3,876.Note bears interest at 2.55 % over the interestrate on 1-5 year U.S. Treasury Securities. Rateat issue was 8.11%. Note is secured by realestate having an appraisal value of $648,000.
Total
Current
1,651
31.900
S 43.871
Long-term
21,266
279.285
S 423.711
The maturities for the mortgage notes payable are as follows:Year Ending June 30:
2005
2006 $ 42,2352007 44,6632008 162,8282009 40,800Thereafter 94,031Total S 384.557
Interest expense for the years ended June 30, 2004 and 2003 amounted to $28,571 and$42,685, respectively.
14
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 8 - ACCRUED LIABILITIES
Accrued liabilities consist of the following at June 30, 2004 and 2003:
Accrued salaries and payroll taxesRefunds due State of LouisianaCompensated absencesOtherSeverance package
Total
2004
S 1.826.144
2003
$ 708,055157,087426,33061,524473.148
$ 465,221195,871333,5343,831__.
S 998.457
Severance Package
The Organization has signed a severance agreement with its former Executive Director. TheAgreement calls for an initial payment of $60,000 and a monthly payment of $4,231 fromJanuary, 2004 until October, 2008. The Agreement has been recorded as expense for thecurrent year and the related liability has been recorded at its net present value as of June 30,2004.
Due to State of Louisiana
This liability is being paid off monthly by offsetting current amounts due from the Stateagainst the liability.
15
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 30, 2004 and 2003
Note 9 - COMMITMENTS
The Organization leases facilities and equipment under operating leases expiring through theyear 2011. Rental expense related to these leases was $481,846 and $440,818 for the yearsended June 30, 2004 and 2003, respectively. Minimum future rental payments due underthese leases as of June 30, 2004 are as follows:
Year EndingJune 30. All Renewed Non-Cancelable
2005 $ 453,000 $ 285,0002006 463,000 296,0002007 473,000 305,0002008 483,000 305,0002009 483.000 305.000
Total $ 2.355.000 $ 1.496.000
Management expects that in the normal course of business leases will be renewed or replacedby other leases.
Note 10 - CONCENTRATIONS OF CREDIT RISK
State law requires that deposits of all political subdivisions be fully collateralized at all times.Acceptable collateralizations includes FDIC/FSLIC insurance and the market value ofsecurities purchased and pledged to the political subdivision. The Organization, being aquasi-public nonprofit entity, is required to comply with these regulations. Obligations of theUnited States, the State of Louisiana and certain political subdivisions are allowed as securityfor deposits. Obligations furnished as security must be held by the political subdivision orwith an unaffiliated bank or trust company for the account of the political subdivision. Atvarious times during the year, deposits in excess of FDIC insurance were collateralized by thesecurities described above.
Note 11 - UNEMPLOYMENT INSURANCE FUND
Effective July 1, 1992, the Organization became self-insured for employee unemploymentcompensation claims through the establishment of an Organization unemployment insurancefund.
16
GULF COAST TEACHING FAMILY SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)JUNE 3 0,2004 and 2003
Note 11 - UNEMPLOYMENT INSURANCE FUND (Continued)
Actual payments to the State for Unemployment benefits paid totaled $46,126 in 2004 and$50,963 in 2003.
All known claims as of June 30, 2004 have been recorded in the financial statements. Thefond balance of the Unemployment Insurance Fund totaled $65,539 and $64,787 as of June30, 2004 and 2003, respectively. The Unemployment Insurance Fund balance is included inunrestricted net assets for financial statement presentation.
Note 12 - ECONOMIC DEPENDENCY
The Organization receives a majority of its revenue from funds provided through programsadministered by the State of Louisiana. The program amounts are appropriated each year bythe federal and state governments. If significant budget cuts are effected at the federal and/orstate level, the amount of the funds the Organization receives could be reduced significantlyand have an adverse impact on its operations. Management is not aware of any actions thatwill adversely affect the amount of funds the Organization will receive in the next fiscal year.
Note 13 - CONTINGENCIES
Programs administered by the Organization are subject to review and audit by the variousfunding agencies. Accordingly, any disallowed payments which may arise as a result of theseaudits, may be recovered by the funding agencies in subsequent years.
Note 14 - LINE OF CREDIT
The Organization signed a Line of Credit Agreement on July 1, 2004 with a local nationalbank. The agreement has a principal amount of $750,000, a maturity date of July 1, 2005,and a variable interest rate equal to the Wall Street Journal Prime Rate. Any loans againstthe line will be secured by a Security Agreement that includes most of the Organization'sassets. The agreement also calls for several financial covenants and ratio requirements. Therewere no outstanding loans against the line at June 30, 2004. Fees of $7,500 each year werepaid to secure the agreement in 2004 and 2003.
17
SUPPLEMENTARY INFORMATION
— -— — •••••••• JOSEPH V.FRANKS II, C.P.A.
B E R N A R D & F R A N K SA CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS NICHOLAS F.CHETTA, C.P.A.
NICHOLAS W. LAFRANZIH, C.P.A.
JAMES L WHITE, C.P.A.
INDEPENDENT AUDITOR'S REPORT ON THE SUPPLEMENTARY INFORMATION
To the Board of DirectorsGulf Coast Teaching Family Services, Inc.New Orleans, Louisiana
Our audit was made for the purpose of forming an opinion on the basic financial statements taken asa whole. The supplementary information contained on pages 19 to 38 is presented for purposes ofadditional analysts and is not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to the basic financial statementstaken as a whole.
December 22, 2004
MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS; SOCIETY OF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS
4141 VETERANS BLVD., SUITE 313, METAIRIE, LA 70002 | PHONE: (504) 885-0170 FAX: (504) 456 -9531
GULF COAST TEACHING FAMILY SERVICES, INC.(A NONPROFIT ORGANIZATION)
SCHEDULE 1 - COMBINED STATEMENT OF REVENUESAND EXPENSES BY COST REPORT GROUPING
YEARS ENDED JUNE 30, 2004 AND 2003
2004 2003
REVENUEProgramsDonationsInterest incomeOther income
Total revenue
$ 25,097,418336,724
9,5295,999
$ 19,838,785292,032
1,36331,863
$ 25,449,670 $ 20,164,043
EXPENSES:Administrative and generalPlant operation and maintenanceCost related to capital assetsDietary, laundry, and linenHousekeepingPersonal client needsTherapeutic and trainingMedical and nursingRecreationalConsultants
Total expenses
INCREASE (DECREASE)IN UNRESTRICTED NET ASSETS
$ 9,253,299138,782843,37068,2009,361
642,66012,711,540
24,82740,36847,975
$ 7,573,181131,459782,48560,76910,180
291,16610,915,869
17,53174,76632,081
$ 23,780,382 $ 19,889,487
$ 1,669,288 $ 274,556
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SPECIAL REPORTS OF INDEPENDENT AUDITOR
JOSEPH V.FRANKS II, C.P.A.B E R N A R D & F R A N K SA CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS NICHOLAS F. CHETTA, C.P.A.
NICHOLAS W. IAFRANZ til, C.P.A.
JAM ESL WHITE, C.P.A.
REPORT ON COMPLIANCE AND ON INTERNALCONTROL OVER FINANCIAL REPORTING BASED
ON AN AUDIT OF FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of DirectorsGulf Coast Teaching Family Services, Inc.New Orleans, Louisiana
We have audited the financial statements of Gulf Coast Teaching Family Services, Inc. (a nonprofitorganization), as of and for the years ended June 30, 2004 and 2003, and have issued our reportthereon dated December 22, 2004. We conducted our audits in accordance with auditing standardsgenerally accepted in the United States of America and the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates.
COMPLIANCE
As part of obtaining reasonable assurance about whether Gulf Coast Family Teaching Services,Inc.'s financial statements are free of material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts and grants, noncompliance with which couldhave 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 ofnoncompliance that are required to be reported under Government Auditing Standards.
*INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered Gulf Coast Family Teaching Services, Inc.'sinternal control over financial reporting in order to determine our auditing procedures for thepurpose of expressing our opinion on the financial statements and not to provide assurance on theinternal control over financial reporting. Our consideration of the internal control over financialreporting would not necessarily disclose all matters in the internal control over financial reportingthat might be material weaknesses. A material weakness is a condition in which the design or
MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTS; SOCIETY OF L O U I S I A N A CERTIFIED PUBLIC ACCOUNTANTS
4141 VETERANS BLVD., SUITE 313, METAIRIE, LA 70002 | PHONE: (504) 885-0170 FAX: (504) 456-9531
operation of one or more of the internal control components does not reduce to a relatively lowlevel the risk that misstatements in amounts that would be material in relation to the financialstatements being audited may occur and not be detected within a timely period by employees in thenormal course of performing their assigned functions. We noted no matters involving the internalcontrol over financial reporting and its operation that we consider to be material weaknesses.
This report is intended for the information of the Board of Directors, management and the State ofLouisiana and pass-through entities and is not intended to be and should not be used by anyoneother than these specified parties.
December 22. 2004
40
JOSEPH V. FRANKS II, C.P.A.
B E R N A R D & F R A N K SA CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS NICHOLAS F. CHETTA, C.P.A
NICHOLAS W. LAFRANZ III, C.P.A.
JAMES L WHITE, C.PA
REPORT ON COMPLIANCE WITH REQUIREMENTSAPPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL
CONTROL OVER COMPLIANCE IN ACCORDANCEWITH OMB CIRCULAR A-133
To the Board of DirectorsGulf Coast Teaching Family Services, Inc.New Orleans, Louisiana
COMPLIANCE
We have audited the compliance of Gulf Coast Teaching Family Services, Inc. (a nonprofitorganization) with the types of compliance requirements described in the "U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement" that are applicable toeach of its major federal programs for the year ended June 30, 2004. Gulf Coast Teaching FamilyServices, Inc.'s (the Organization's) major federal programs are identified in the summary of auditresults section and on the accompanying schedule of findings and questioned costs. Compliancewith the requirements of laws, regulations, contracts, and grants applicable to each of its majorfederal programs is the responsibility of the Organization's management. Our responsibility is toexpress an opinion of the Organization's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted inthe United States of America; the standards applicable to financial audits contained in 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 andOMB Circular A-133 require that we plan and perform the audit to obtain reasonable assuranceabout whether noncompliance with the types of compliance requirements referred to above thatcould have a direct and material effect on a major federal program occurred. An audit includesexamining, on a test basis, evidence about the Organization's compliance with those requirementsand performing such other procedures as we considered necessary in the circumstances. We believethat our audit provides a reasonable basis for our opinion. Our audit does not provide a legaldetermination of the Organization's compliance with those requirements.
In our opinion, the Organization complied, in all material respects, with the requirements referred toabove that are applicable to each of its major federal programs for the year ended June 30, 2004.
MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTS; SOCIETY OF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS
4141 VETERANS BLVD., SUITE 313, METAIR1E, LA 70002 | PHONE: (504) 885-0170 FAX: (504) 456-9531
INTERNAL CONTROL OVER COMPLIANCE
The Organization's management is responsible for establishing and maintaining effective internalcontrol over compliance with the requirements of laws, regulations, contracts, and grants applicableto federal programs. In planning and performing our audit, we considered the Organization'sinternal 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 expressingour opinion on compliance and to test and report on the internal control over compliance inaccordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all mattersin the internal control that might be material weaknesses. A material weakness is a condition inwhich the design or operation of one or more of the internal control components does not reduce toa relatively low level the risk that noncompliance with applicable requirements of laws, regulations,contracts, and grants that would be material in relation to a major federal program being auditedmay occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control overcompliance and its operation that we consider to be material weaknesses.
This report is intended for the information and use of the Board of Directors, management and theState of Louisiana and pass-through entities and is not intended to be and should not be used byanyone other than the specified parties.
December 22, 2004
42
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTSSCHEDULE 1 - SUMMARY OF AUDIT RESULTS
YEAR ENDED JUNE 30, 2004
1. The independent auditor's report on the financial statements expressed an unqualifiedopinion.
2. The statement that reportable conditions in internal control were disclosed by the audit ofthe financial statements and whether any such conditions were material weaknesses is notapplicable.
3. No instances of noncompliance considered to be material to the financial statements weredisclosed by the audit.
4. No instances of reportable conditions were disclosed during the audit of major federalaward programs. No management letter was issued during this period.
5. The auditor's report on compliance for major federal award programs for Gulf CoastTeaching Family Services, Inc. expressed an unqualified opinion on all major federalprograms.
6. There were no findings to be reported on the Schedule of Federal Awards Findings andQuestioned Costs.
7. Major programs for the fiscal year ended June 30, 2004 were as follows:
Department of Health and Human Services - Title <CFDA # 93.674>IV-E - Independent Living
Department of Housing and Urban Development <CFDA # 14.235>
Department of Health and Human Services <CFDA # 95.550>Transitional Living Program
8. The threshold for distinguishing Types A and B programs was $500,000.
9. Gulf Coast Teaching Family Services, Inc. was not determined to be a low-risk auditee.
43
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTSSCHEDULE 2 - REPORTABLE CONDITIONS -FINANCIAL STATEMENTS - CURRENT YEAR
YEAR ENDED JUNE 30, 2004
No instances of reportable conditions found.
44
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTSSCHEDULE 3 - REPORTABLE CONDITIONS -
MAJOR FEDERAL AWARDS PROGRAMS AUDITYEAR ENDED JUNE 30, 2004
No instances of reportable conditions found.
45
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE 4 - SUMMARY OF PRIOR YEAR'SAUDIT FINDINGS
YEAR ENDED JUNE 30, 2004
No instances of reportable conditions found.
46
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE 5 - MANAGEMENT'S CORRECTIVE ACTION PLANFOR CURRENT YEAR FINDINGS
YEAR ENDED JUNE 30, 2004
No instances of reportable conditions found.
47
GULF COAST TEACHING FAMILY SERVICES, INC.(A NONPROFIT ORGANIZATION)
SCHEDULE 6 - SCHEDULE OF EXPENDITURES OF FEDERALAWARDS FOR THE YEAR ENDED JUNE 30,2004
AND RELATED NOTES
Federal Grantor/Pass-Through Grantor/Program Title
FederalCFDA
Number
Agency orPass-Through
NumberFederal
Expenditures
MAJOR PROGRAMS:U.S. Department of Housing and Urban Development
Supportive Housing ProgramMoving Up - RenewalVisionsVisions IIThe NetworkBridging the GapService Net
U.S. Department of Health and Human ServicesAdministration for Children and FamiliesLouisiana Dept. of Social Services-Office of Community ServicesTransitional Living Program
Title IV - Independent Living ProgramTitle IV - Independent Living ProgramChafTee Educational & Training VoucherChaffee Educational & Training Voucher
TOTAL MAJOR PROGRAMS
OTHER FEDERAL PROGRAMSU.S. Department of Health and Human Services
Louisiana Department of Social ServicesOffice of Community ServicesBasic Center Grant
14.23514.23514.23514.23514.23514.235
Services93.550
93.67493.67493.67493.674
LA48B008002LA48B108002LA48B208002LA48B908002LA48B802001LA48B304002
06CX0732/02
567051568903601408601439
93.623 06CY076401
Foster Parent TrainingFoster Parent Training
Respite Camp - Camp Nuff
TOTAL OTHER FEDERAL AWARDS
93.958 597921
$$$$$$$
$
$$$$$
$
276,360121,972140,683111,75025,551
996677,312
230,657
76,307115,12920,78744,378256,601
1,164,570
$ 111,334
93.66793.667
587148575092
$
$
13,81622,78236,598
TOTAL EXPENDITURES OF FEDERAL AWARDS48
$ 15,201
163,133
$ 1,327,703
GULF COAST TEACHING FAMILY SERVICES, INC.
SCHEDULE 6 - SCHEDULE OF EXPENDITURES OF FEDERALAWARDS FOR THE YEAR ENDED JUNE 30, 2004
AND RELATED NOTES
Note A - Basis of Accounting
The accompanying Schedule of Expenditures of Federal Awards includes the federal grantactivity of the Organization and is presented on the accrual basis of accounting. The informationin 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 amountspresented in this schedule may differ from amounts presented in, or used in the preparation of thebasic financial statements.
Note B - Risk-Based Audit Approach
The dollar threshold used to distinguish between Type A and Type B programs is $500,000. TheOrganization does not qualify as a low-risk auditee.
Note C - Matching Contributions
U.S. Department of Health and Human Services federal awards passed through the State ofLouisiana Office of Community Service required matching funds as follows:
Title IV-E Independent Living Lafayette $ 33,631
Title IV-E Independent Living Houma $ 37,531
HUD Program matching funds were: $ 147,485
49
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