LUTHER C. SPEIGHT & COMPANY

Transcription

1 LUTHER C. SPEIGHT & COMPANY A Corporation of Certified Public Accountants and Management Consultants OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC. REVIEWED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2005 Under provisions of state law, this report is a public document, A copy 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 theparish clerk of court. lil Release Date New Orleans Office: )0001 Lake Forest Blvd., Sufte 404 New Orleans, LA phone (504) fax (504) Atlanta Office: 400 Colony Square. Suite 200 Atlanta, GA phone (404) fax (404)

2 OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC. Table of Contents Page No. ACCOUNTANT'S REVIEW REPORT 1 STATEMENT OF FINANCIAL POSTION 2-3 STATEMENT OF ACTIVITIES 4 STATEMENT OF CASH FLOWS 5 NOTES TO THE FINANCIAL STATEMENT 6-8 ACCOUNTANTS ATTESTATION REPORT 9-11 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 12-13

3 LUTHER C. SPEIGHT & COMPANY A Corporation of Certified Public Accountants and Management Consultants To the Board of Directors of Opportunities Industrialization Center of Greater New Orleans, Inc. We have reviewed the accompanying statement of financial position of Opportunities Industrialization Center of Greater New Orleans, Inc. (OIC), a non-profit organization, as of September 30,2005, and the related statements of activities and cash flows for the year then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is representation of the management of Opportunities Industrialization Center of Greater New Orleans, Inc, (OIC). A review consists principally of inquiries of OIC personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly we do not express such an opinion. Land and building recorded on the books of OIC stated at $410,430 were significantly damaged by Hurricane Katrina. As a result of related insurance claims the agency recorded an insurance proceeds receivable totaling $1,222,639 and an estimated net gain on involuntary conversion stated at $951,099. In addition, the agency reported a liability balance in unearned grants totaling $141,966. However the agency's records in support of these balances were not complete and available to determine the fairness of the stated amounts. Because the significance and pervasiveness of the matters discussed above make it difficult to assess their impact on the financial statements taken as a whole, users of these financial statements should recognize that they might reach different conclusions about the agency's financial position, results of operations and cash flows if they had access to revised financial statements prepared in accordance with generally accepted accounting principles. Luther C. Speight & Company October 15,2007 New Orleans Office: Lake Forest Blvd., Suite 404 New Orleans, LA phone (504) fax (504) Atlanta Office: 400 Colony Square, Suite 200 Atlanta, GA phone (404) fax (404)

4 OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC Statement of Financial Position September 30,2005 ASSETS Current Assets Cash and Cash Equivalents Insurance Proceeds Receivable Grants Receivable Accounts Receivable Allowance for Doubtful Accounts $ 227,649 1,222,639 9,500 2,653 (2,414) Total Current Assets $1,460,027 Fixed Assets Land Real Estate Buildings 318,153 16,646 75,631 Total Fixed Assets 410,430 Deposits 2, TOTAL ASSETS $1, See accompanying notes and accountant's report 2

5 OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC Statement of Financial Position September 30,2005 LIABILITIES & NET ASSETS Current Liabilities Accounts Payable Employment Taxes Payable Security Deposits Unearned Grants $ , ,966 Total Current Liabilities TOTAL LIABILITIES $ ,427 Net Assets Unrestricted Net Assets Temporarily Restricted Net Assets Permanently Restricted Net Assets 986,283 11, Total Net Assets TOTAL LIABILITIES & NET ASSETS 1.714,579 $1,873,007 See accompanying notes and accountant's report 3

6 OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC Statement of Activities For the fiscal period ended September 30,2005 PUBLIC SUPPORT REVENUES AND RECLASSIFICATION Legislative Grant WIA Pilot Program Childcare Grant Rental Income Refunds Interest Income Miscellaneous Income Net Assets Released from Restriction Satisfaction of purpose restriction Expiration of time restriction TEMPORARILY PERMANENTLY UNRESTRICTED RESTRICTED RESTRICTED TOTAL 182,566 (100) ,705 $ 255, , (347,468) $ 255, , ,566 (100) ,705 EXPENSES Program Expenses Grant Programs Legislative Grant Childcare Grant Total Grant Programs OIC Programs: Real Estate Total OIC Programs Total Program Expenses TOTAL PUBLIC SUPPORT, REVENUES AND RECLASSIRCATIONS General & Administrative Costs TOTAL EXPENSES Changes in Net Assets Before Extraordinary Items Net Gain from Involuntary Conversion Change In Net Assets Net Assets as Beginning of Year Net assets as of end of Year , ,465 92, , , , ,262 84, ,991 (11,930) 11, , ,169 11,088 47,114 $ 986,283 $ 11,088 $ 571, ,465 92, , , , ,262 84, ,991 (842) 951, , , , ,208 $ 1.714,579 See accompanying notes and accountant's report. 4

7 OPPORTUNITIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS, INC Statement of Cash Flows September 30,2005 OPERATING ACTIVITIES Change in Net Assets $ (842) Adjustments to reconcile Changes In Net Assets to net cash provided by operations: Accounts Receivable 1,725 Due From Other Programs (70,218) Grants Receivable (9,500) Accounts Payable (375) Due To Other Programs 70,218 Employment Taxes Payable (735) Other Withholdings Payable (50) Rental Deposits 2,937 Unearned Revenue (182,426) Net cash provided by Operating Activities (189,266) Net cash increase(decrease) for period (189,266) Cash at beginning of period 416,915 Cash at end of period 227,649 See accompanying notes and accountant's report 5

8 OPPORTUNTIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS INC. Notes to the Financial Statements September 30,2005 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities Opportunities Industrialization Center of Greater New Orleans Inc. (OIC) is a non-profit organization, which is located at 727 S. Dupre Street in New Orleans, Louisiana. The organization provides manpower-training services to the unemployed and economically disadvantaged members of the community to afford them the opportunity to acquire job related skills that will make them marketable. The organization also provides affordable and safe quality housing for low to moderate-income individuals through rehabilitation and new construction. The program is primarily funded by federal grants. OIC is a non-profit organization as described in Section 501 (c.) (3) Of the Internal Revenue Code and is exempt from federal and state income taxes. Public Support and Revenue Grants and other contributions of cash and other assets are reported as temporarily restricted support if they are received with donor stipulations that limit the use of donated assets. When a donor restriction expires, that is, when the stipulated time restriction ends or purpose restriction is accomplished temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Invested earnings available for distribution arc recorded in unrestricted net assets. NOTE 2 - FURNITURE. FIXTURES AND EQUIPMENT Furniture, fixtures, and equipment are capitalized at costs. It is OIC policy to capitalize expenditures for these items in excess of $500. Lesser amounts are expensed. Furniture and equipment are being depreciated over estimated lives of three to ten years using a straight-line method. The fixed asset records for OIC were destroyed in Hurricane Katrina. The agency fixed asset subsidiary records had not been reconstructed as of our review. In addition a fixed asset physical inventory had not been taken. Accordingly, the composition of fixed assets recorded at $410,430 is not presented.

9 NOTE 3- RENTAL INCOME OPPORTUNTIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS INC. Notes to the Financial Statements September 30,2005 The organization receives rental income from properties renovated through their housing programs. The income is utilized to maintain the properties and pay utilities, insurance, and other costs for low-income tenants. The rental income is stated at $182,566 at September 30, NOTE 4 - TEMPORARILY RESTRICTED NET ASSETS Net assets were released from grantor restrictions by incurring expenses satisfying the purpose or time restriction specified by donors as follows: Purpose of restriction accomplished: Legislative Grant $ 255,465 Childcare 103,091 Total restrictions released due to Satisfaction of purpose $ NOTE 5 - ECONOMIC DEPENDENCY The organization receives a majority of its revenue from funds provided through contracts with the federal, state, and local governments. If significant budget cuts are made at the federal and/or local level, the amount of the funds the organization receives could be reduced significantly and have and adverse impact on its operations. NOTE 6 - GAIN ON INVOLUNTARY CONVERSION The collapse of the New Orleans levee system in the aftermath of Hurricane Katrina caused widespread devastation. All of the Agency's properties were significantly damaged however were adequately insured. The resulting insurance claims yielded proceeds that significantly exceeded the carrying value of the related assets. In accordance with SFAS No. 144, the Agency recorded an impairment loss in the amount by which the carrying amount of its fixed assets exceeded their estimated net realizable value. This resulted in an impairment loss of $271,539. However, the Agency's assets were insured, resulting in a net gain of $951,099.

10 OPPORTUNTIES INDUSTRIALIZATION CENTER OF GREATER NEW ORLEANS INC. Notes to the Financial Statements September 30,2005 NOTE 6 - GAIN ON INVOLUNTARY CONVERSION, continued In aggregate, OIC received insurance proceeds totaling $1,222,639 resulting from hurricane Katrina. These proceeds were received during the subsequent period and were accrued in accordance with SFAS No. 144.

11 ACCOUNTANT'S ATTESTATION REPORT Opportunities Industrialization Center of Greater New Orleans, Inc. Independent Accountant's Report on Applying Agreed-Upon Procedures To the Opportunities Industrialization Center of Greater New Orleans, Inc. We have performed the procedures included in the Louisiana Governmental Audit Guide and enumerated below, which were agreed to by the management of Opportunities Industrialization Center of Greater New Orleans, Inc., the Legislative Auditor, State of Louisiana, and applicable state grantor agency/agencies solely to assist the users in evaluating management's assertions about Opportunities Industrialization Center of Greater New Orleans, Inc. compliance with certain laws and regulations during the fiscal year ended September 30, 2005 included in the accompanying Louisiana Attestation Questionnaire. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Federal, State, and Local Awards 1. Determine the amount of federal, state and local award expenditures for the fiscal year, by grant and grant year. Opportunities Industrialization Center of Greater New Orleans, Inc. federal and state award expenditures for all federal and state programs for the fiscal year follow: Federal Grant Name Grant Year CFDA No. Amount Office of Workforce Development - Legislative Grant 7/1/2004-6/30/2005 N/A 222,760 Office of Workforce Development - Legislative Grant 7/1/2005-6/30/2006 N/A 32,705 Quality Childcare and Development 3/1/2004-6/30/ ,840 Quality Childcare and Development 7/1/2005-6/30/ ,163 Total Expenditures 347,468

12 2. For each federal, state, and local award, we randomly selected six disbursements from each award administered during the period under examination. Accordingly, our selection included twelve (12) disbursements. 3. For the items selected in procedure 2, we traced the twelve disbursements to supporting documentation as to proper amount and payee without exception. 4. For the items selected in procedure 2, we determined if the twelve disbursements were properly coded to the correct fund and general ledger account without exception. 5. For the items selected in procedure 2, we determined whether the twelve disbursements received approval from proper authorities without exception. 6. For the items selected in procedure 2: For federal awards, we determined whether the disbursements complied with the applicable specific program compliance requirements summarized in the Compliance Supplement (or contained in the grant agreement, if the program is not included in the Compliance Supplement) and for state and local awards, we determined whether the disbursements complied with the grant agreement, relating to: Activities allowed or unallowed: No exceptions noted. Eligibility Not applicable. 7. For the programs selected for testing in item (1) that had been closed out during the period under review, we compared the close-out report, when required, with the entity's financial records to determine whether the amounts agree. There were no required closeout reports for either of the programs under review 10

13 Meetings We examined evidence indicating that agendas for meetings recorded in the minute book were posted as an open meeting as required by LSA-RS 42:1 through 42:12 (the open meetings law). Opportunities Industrialization Center of Greater New Orleans, Inc. advised us that they post the agenda for upcoming meetings on the door to the center when applicable, however no evidence of the agendas or minutes of meetings were available due to the loss of records resulting from Hurricane Katrina. Comprehensive Budget 8. For all grants exceeding five thousand dollars, determine that each applicable federal, state, or local grantor agency/agency was provided with a comprehensive budget of those grants that included the purpose and duration, and for state grants included specific goals and objectives and measures of performance. OIC indicated that they prepared and submitted comprehensive budgets to the applicable state grantor agencies for the programs mentioned previously. These budgets specified the anticipated uses of the funds, estimates of the duration of the projects, and plans showing specific goals and objectives that included measures of performance. Information related to specific goals, objectives and measures of performance were not available for the state grant. However, we were advised that these documents were lost in the Katrina flood and were therefore not available for our review. Prior Comments and Recommendations 9. Review any prior-year suggestions, recommendations, and/or comments to determine the extent to which such matters have been resolved. There were no prior suggestions, recommendations, and/or comments to review. We were not engaged to, and did not perform an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of management of Opportunities Industrialization Center of Greater New Orleans, Inc, the Legislative Auditor (State of Louisiana), and the applicable state grantor agency/agencies and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. Luther C. Speight & Company September 29,

14 OPPORTUNITIES INDUSTRIALIZATION CENTER FOR GREATER NEW ORLEANS FISCAL YEAR ENDED SEPTEMBER 30, 2005 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FINDING # CURRENT REVIEW NOT COMPLETED TIMELY QUESTIONED COSTS: $- 0- CONDITION: The review attestation engagement for OIC for the fiscal year ended September 30,2005 was not timely completed as required by the State of Louisiana Legislative Auditor. CAUSE: The Agency experienced significant disruptions to its administrative operations and losses of supporting documentation as a result of Hurricane Katrina. These conditions delayed the availability of financial records and progress of the engagement process. EFFECT: The agency is not in compliance with LSA-R.S. 24:513 which states that "all engagements must be completed and transmitted to the legislative auditor within six months of the close of the Agency's fiscal year." RECOMMENDATION: We recommend that OIC comply with the State law governing engagement completion. 12

15 OPPORTUNITIES INDUSTRIALIZATION CENTER FOR GREATER NEW ORLEANS FISCAL YEAR ENDED SEPTEMBER 30, 2005 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FINDING # FILE BACKUP AND RECOVERY QUESTIONED COSTS: $- 0- CONDITION: The agency's primary offices were flooded in the aftermath of Hurricane Katrina. As a result most of the original source documents were lost. These records were reconstructed where possible, but many records remained unavailable. CAUSE: The Agency did not have an adequate disaster backup plan that included off-site storage of source documentation. EFFECT: OIC's source documentation of its financial and programmatic activities was limited to records that could be reconstructed from third-party sources. RECOMMENDATION: We recommend that OIC develop and implement adequate backup and recovery procedures relating to source documents. 13