YOUTH EMPOWERMENT PROJECT FIN ANCL\L REPORT JUNE 30, 2010

Transcription

1 /o^7^ YOUTH EMPOWERMENT PROJECT FIN ANCL\L REPORT JUNE 30, 2010 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 LegislativeAuditor and, where appropriate, at the office of the parish clerk of court. Release Date

2 YOUTH EMPOWERMENT PROJECT TABLE OF CONTENTS JUNE 30,2010 INDEPENDENT AUDFTOR'S REPORT Page FINANCIAL STATEMENTS 1 STATEMENT OF FINANCIAL POSITION 2 STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS 3 STATEMENT OF CASH FLOWS 4 STATEMENT OF FUNCTIONAL EXPENSES 5 NOTES TO FINANCLSLL STATEMENTS 6-17 SPECIAL REPORTS OF CERTIFIED PUBLIC ACCOUNTANT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WTTH GOVERNMENT AUDITING STANDARDS SCHEDULE OF FINDINGS AND RESPONSES REPORTS BY MANAGEMENT SCHEDULE OF PRIOR YEAR FINDINGS 22 MANAGEMENT CORRECTIVE ACTION PLAN 23

3 Reginald A. Bresette, III, CPA Reginald A, Bresette, ill Limited Liabilitv ComDany INDEPENDENT AUDITORS' REPORT Member American Institute of Certified Public Accountants society of Louisiana Certified Public Accountants To the Board of Directors, Youth Empowerment Project New Orleans, Louisiana I have audited the accompanying statement of financial position of the Youdi Empowerment Project (a non-profit organization) as of June 30,2010, and the related statements of activities, cash flows, and functional expenses for the year then ended. These financial statements are the responsibility of the Youth Empowerment Project's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted the audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform tiie audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating tlie overall financial statement presentation. I believe tliat the audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Youth Empowerment Project as of June 30,2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, I have also issued my report dated November 9,2010, on my consideration of Youth Empowerment Project*s intemal control over financial reporting and my tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of intemal control over fmancial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Au^h^^andards and should be considered in assessing the results of my audit. Certified Public Accoimtant November 9, 2010 aao8 Yale street, suite A Metairie. Louisiana (504) FAX (504) CELL (504) reggle@bresettec0.c0m

4 YOUTH EMPOWERMENT PROJECT STATEMENT OF FINANCIAL POSITION JUNE 30, 2010 ASSETS: Cash and cash equivalents S 85,130 Unconditional promises to give (Note 3) 265,000 Reimbursements receivable (Note 4) 93,683 Assets restricted to investment in property, Fumiture, and equipment (Note 5) Cost less accumulated depreciation 17,965 Total assets S 461,778 LIABILITIES AND NET ASSETS: Accounts payable $ 20,442 Payroll taxes payable 10,023 Total liabilities Unrestricted net assets 83,021 Temporarily restricted net assets (Note 6) 348,292 Total net assets 431,313 Total liabilities and net assets $ 461,778 The accompanying notes are an integral part of these financial statements. 2

5 YOUTH EMPOWERMENT PROJECT STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30,2010 Support, revenues and reclassifications Public support: Unrestricted Temporarily Restricted Total Grants Contributions Total public support $ 772,069 14, ,546 $ 457,750 S , ,750 1,244,296 Reclassifications: Net assets released from restrictions due to satisfaction of time and purpose restrictions Total reclassifications 301,135 (301,135) 301,135 (301,135) Total support, revenues and reclassifications 1,087, ,615 1,244,296 Expenses Program services 812, ,978 Supporting services: Management and general Fundraising Total supporting services 208,993 22, , ,993 22, ,233 Total expenses 1,044, ,211 CHANGES IN NET ASSETS 43, , ,085 NET ASSETS AT THE BEGINNING OF THE YEAR , ,228 NET ASSETS AT THE END OF THE YEAR $ 83,021 $ 348,292 $ The accompanying notes are an integral part of these financial statements. 3

6 YOUTH EMPOWERMENT PROJECT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30,2010 Increase (decrease) In Cash and Cash Equivalents CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from the public support Cash payments for operating expenses Cash payments for employee salaries and benefits Net cash provided (used) by operaung activities 1, (238,566) ( ) (11,049) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of furniture and equipment Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at begmmng of year Cash and cash equivalents at end of year (18,784) (18.784) (29,833) RECONCILIATION OF CHANGE IN NET ASSETS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Change in net assets Adjustments to reconcile change in net assets to net cash provided (used) by operating activmes: Depreciation (Increase) decrease in unconditional promises to give (Increase) decrease in receivables Increase (decrease) in accounts payable Increase (decrease) in payroll taxes payable Total adjustments (213,725) (14,071) ( ) Net cash provided (used) by operating acuvities (11,049) The accompanying notes are an integral part of these financial statements. 4

7 YOUTH EMPOWERMENT PROJECT STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30,2010 PROGRAM SERVICES SUPPORTING SERVICES MANAGEMENT & GENERAL FUNDRAISING TOTAL TOTAL EXPENSE Salaries Benefits Travel Client Expense Office Expense Miscellaneous Counseling Sessions Consultants Computers & Maintenance Educational Tutor Accounting Support Services General Insurance Postage Printing and Duplication Rent Telephone Training Utilities Depreciation S , ,775 8,743 5,780 8, ,631 15, , $ 103, , ,816 $ , S ,327 4,189 6,807 38,838 2, ,053 3,816 S ,990 11,061 1,455 6, , Total $ $ S $ S 1.044,211 The accompanying notes are an integral part of these statements.

8 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 1 - NATURE OF ACTIVrTIES The History and Mission of the Youth Empowerment Project (YEP): The Youth Empowerment Project (YEP) is a community-based non-profit organization in New Orleans, LA. Our case management and administrative office in located in the central city neighborhood of New Orleans and our educational center is in the mid-city neighborhood. YEP's founders started the organization In 2004 in order to assist young people returning to New Orleans from correctional facilities. Since our inception, YEP has earned local and statewide recognition for being at the ciiuing edge of progressive programs for at-risk youth. We started as the first-of-its kind re-entry program for juvenile offenders in Louisiana and now, in our sixth year of operation, we are the region's most comprehensive and established agency working witli at-risk, court-involved and out-of-school youth and their families. We have expanded our original mission statement to meet the increased needs of our community post- Katrina. YEP's updated mission is, "by providing case management and educational services to courtinvolved, at-risk and out-of-school New Orleans youth, YEP will su-engthen each young person's capacity to successfully connect witli their families and communities and lay the foundation for their healthy transition to adulthood". The Need for YEP: There remains a dire shortage of programming in our community that addresses the diverse and vast needs of high-risk youth. We are unique to the New Orleans region as we are the only youthdevelopment program that targets the holistic needs of at-risk, out-of-school and adjudicated youth. YEP's direct services address root causes of social problems by affirming the value of our clients and promoting their positive development. Youth involved in or at-risk of becoming involved in the juvenile justice system are some of the most neglected members of our communities. Through our diverse programming, YEP guides disadvantaged, primarily African-American youth, by providing them with opportunities for personal development and with essential life skills. Being involved with YEP provides youth with a sense of belonging and positive self image. Current YEP Programs: We continue to create new collaborations, develop more referral sources and maintain effective relationships with exceptional mental health and substance abuse specialists to guarantee that our clients are receiving all of the expert services they need to succeed. Although Hurricane Katrina severely interrupted programmatic interventions during FY 2005 and 2006, YEP has expanded every year since our inception and we have enjoyed tremendous success over the past four years. YEP currently operates the following four programs:

9 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCL\L STATEMENTS JUNE 30, 2010 Currently, The Youth Empowerment Project operates the following four, fully operational programs: 1) The Village Program YEP started its newest program, the Village, in July The Village is named after the ancient African Proverb "It takes a village to raise a child," Through our many combined years of experience working with vulnerable, out-of-school and court-involved youth in New Orleans, our staff recognizes that it takes a committed, joint effort between suiff, youth, a youth's family and the larger community to assist young people to become happy and successful adults. The Village is a self-contained, stmctured class at NOPLAY that provides 30 of our most at-risk and challenging youth with engaging and innovate instruction five days a week, five hours a day. The class is led by a talented YEP instructor who is a product of our public school system and is supported by a Literacy AmeriCorps member who is a NOPLAY graduate. In addition to providing these fifteen youth with the most empowering and valuable classroom education they have ever received, youth in the Village are paired with a YEP Youth Advocate who provides them with daily mentoring support. It is estimated we will provide quality services to a minimum of 30 youth in the Village this Fiscal Year. Eligible youth: Ages Out-of-school youth enrolled at NOPLAY(dropped from the role of their most recent high school placement) Services provided: Low teacher to student ratio (no more than 15 students per class) with NOPLAY teacher and trained. Literacy AmeriCorps member Structured, culturally competent, engaging GED and pre-ged instruction Field trips, guest speakers and engagement activities Support of Full-time Social Worker and Social Work interns Individualized Service Plans Comprehensive case management (including job placement, in-house mental health counseling, appropriate substance abuse and other referrals) Transportation Assistance Assistance with Basic Needs

10 2) Communitv Reintegration Program YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 YEP'S Community Reintegration Program was the program that we originally started in While our mandate and clientele have expanded, our Community Reintegration program is still a key service of our organization. Through the provision of intensive, individualized case management and support, YEP ensures that coordinated services are provided in meaningful and effective ways for youth making the very difficult - and critical transitions home. It is estimated that we will provide quality reintegration services to a minimum of 60 youth this year. Eligible youth: Ages Youth on parole supervision with the Office of Juvenile Justice Youth who have been adjudicated delinquent in juvenile court Youth who have been placed in non-secure or secure OJJ facilities Youth exiting non-secure and secure OJJ facilities and returning to the New Orleans area Services Provided: Individualized re-entry.services Youth Advocate/Mentor Intensive Case Management for 6-12 months Male and/or Female Empowerment Groups Transportation Job Readiness and Employment Assistance Enrichment Activities and Field uips Educational support and enrollment Mental Health Counseling Appropriate referrals for necessary services Assistance with Basic Needs Conflict Resolution group 3) Communitv Based Mentoring program In order to meet the needs of the larger community and to ensure that we reach youth prior to their involvement in the juvenile Justice system, YEP implemented a Community-Based Mentoring program in July The CBM program targets year-olds from the Greater New Orleans area who are not court-mvolved but are at-risk for engaging in delinquent behavior. We utilize the evidenced-based case management model that has been effective with our court-involved youth as the framework for our preventive. Community Based Mentoring program. The services that youth receive through CBM include intensive and individualized case management, mentoring, curfew monitoring, tutoring, educational advocacy and support, referrals to local service providers, in-house mental health services, transportation assistance, enrichment and cultural activities, violence prevention groups and weekly empowerment groups. It is estimated that we will provide CBM services to a minimum of 10 youth this fiscal year.

11 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCL\L STATEMENTS JUNE Eligible youth: Ages 8-15 Youth who are "at-risk" for engaging in delinquent behavior Youth who meet a minimum of identified "risk factors" Youth who have no prior involvement with the juvenile justice system Services: Youth Advocate/Mentor (small-group and individual attention) Ongoing, long-term support Educational Advocacy and Support Individualized Service Plans Conflict Resolution Group Enrichment activities Basic Needs Transportation Assistance Afterschool tutoring 4) NOPLAY (New Orleans Providing Literacy to All Youth) NOPLAY provides GED and basic literacy instruction to out-of-school youth and young adults between the ages of from the Greater New Orleans region. NOPLAY classes are held five days a week at the Tulane Tower Learning Center. NOPLAY has an open-enrollment policy and is tailored to meet the individual needs of at-risk students - students receive the intensive, personalized instruction they need for the time they need it. NOPLAY is the only adult education provider in the city that specializes in providing literacy and educational services to at-risk youth and young adults. All eligible applicants are admitted to NOPLAY, no matter how high or low their academic initial assessment, even if they lack documentation required in more traditional educational settings. In addition to our specialized educational services, NOPLAY is committed to reducing the barriers that prevent many young people from pursuing their education. Specifically, we provide free transportation to students, pay the cost of the GED test, provide employment counseling, offer in-house parenting classes, assist with vision and hearing appointments, provide students with basic needs and make outside referrals for students to other services as necessary. YEP estimates that we will provide a minimum of 500 youth with educational services this year through NOPLAY, Eligible youth: Ages Out-of-school youth and young adults from the Greater New Orleans Region Services provided: Low teacher to student ratio (no more than 15 students per class) with NOPLAY teacher and trained. Literacy AmeriCorps member Drop-In center option Literacy services/class

12 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS Fast Track class Individualized instruction JUNE 30, 2010 Payment of GED test for referred students ACT preparation class Official Practice Test Administered Structured, culturally competent, engaging GED and pre-ged instruction Field trips, guest speakers and engagement activities Support of Full-time Social Worker and Social Work interns Assistance with job placement needs, referrals for mental health counseling, substance abuse counseling and other necessary referrals Transportation Assistance Overview of in-house Services Available to YEP Youth: With four programs and a team of experts, YEP currently provides the following supportive services to our youth clients and their families: 1. Intensive and individualized case management services 2. Youth Mentors and Advocates 3. GED preparation; structured classes for students at a variety of skills levels; and one on one instruction 4. After-school tutoring 5. In-house family and individual mental health counseling 6. In-house substance abuse counseling 7. Transportation services for clients and families 8. Job readiness support and assistance 9. Cultural/educational activities 10. Young men's awareness & empowerment groups 11. Young women's awareness and empowerment groups 12. Independent living skills training 13. Weekly anger management and violence prevention groups 14. Parenting groups for our young parents 15. Referrals to health and social service agencies 16. Assistance with basic needs 17. Educational advocacy and support 10

13 Description of YEP's Clients: YOUTH EMPOWERMENT PROJECT NOTES TO FINANCL^ STATEMENTS JUNE 30, 2010 The majority of YEP clients who are in our Community Reintegration and Mentoring programs fit a common profile. They are African-American males from the Greater New Orleans region (Orieans and Jefferson parishes) and are between years old. They have been involved with the juvenile courts on multiple occasions and have been placed on probation for a minimum of 6 months. These youth and their families have received few or no community services prior to their involvement with YEP. The youth are from impoverished households that are headed by single female parents. The youth have not attained a GED or high school diploma and many of them have unaddressed special education needs. Our youth lack the skills they need to obtain gainful employment and many of them have never had a job. Widi our expansion a year ago that added NOPLAY. our educational program, we now provide educational support to all out-of-school youth in ihe city. Although 70% of these youth are not involved with the juvenile or criminal justice system, they have all been unsuccessful in traditional school settings and face the same struggles and disenfranchisement as our court-involved youth. YEP's Partners: Much of YEP's success can be attributed to our ability to create and maintain formal and informal partnerships with a wide range of stakeholders in the community. Some of our key collaborations include the following: 1. Louisiana Office of Juvenile Justice (OJJ) refers youth to YEP for our Community Reintegration and Mentoring programs and supports our efforts through fee-for-service contracts. 2. Orleans Parish Juvenile Court refers youth for case management, tutoring and GED services. 3. New Orieans Criminal Disuict Court supports NOPLAY activities by referring young adults and providing financial support for staff and overhead. 4. Literacy Alliance of Greater New Orleans provides technical assistance and staff training. 5. Literacy AmeriCorps connects NOPLAY with AmeriCorps members and provides members with ongoing training, supervision and professional development. 6. Delgado Community College (DCC) is a partner with YEP through the Tulane Towers Learning Center Collaborative. DCC provides GED insirucuon to adults who are ineligible for NOPLAY. 7. Juvenile Justice Project of Louisiana (JJPL) provides YEP with resources and support regarding advocating for clients in educational settings and looking into abuse allegations in secure facilities. 11

14 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCL^ STATEMENTS JUNE 30, Raintree Children and Family Services is a non-profit social service organization that provides inhouse. violence prevention and anger management services to YEP youth. 9. Cafe Reconcile is a community-based organization that provides youth with hospitality training. 10. Crescent City Counseling provides individual and family counseling to help clients work through mental health issues and to promote emotional well-being. 11. Gasper Counseling Services provides YEP youth with in-house, weekly substance abuse group counseling to both our male and female constituents. 12. Greater New Orleans Afterschool Partnership provides YEP staff with technical assistance and free, evidenced- based training opportunities for youth advocates. 13. Urban Strategies (US) provides case management services to former public housing residents from one New Orleans community. They send us referrals for our Community-Based Mentoring program. 14. Families and Friends of Louisiana's Incarcerated Children (FFLIC) provides support to parents and staff concerned about the "school to prison pipeline" and provides them with advocacy tools. 15. Urban Impact Ministries sponsors YEP youth to attend a week-long leadership and sports camp in Missouri during the summer 16. Liberty's Kitchen provides referrals to our NOPLAY program and enrolls some of our students in their hospitality training program. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards FASB ASC 958 (formerly SFAS No. 117), Not-For-Profit Entities. Under Topic 958, net assets, revenues, and expenses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of YEP and changes therein are classified and reported as follows: Unrestricted Net Assets - Net assets that are not subject to donor-imposed stipulations. Temporarily Restricted Net Assets - Net assets that are subject to donor-imposed stipulations that may or will be met by actions of YEP. These resu"ictions are considered to expire when payments for restricted purposes are met. Permanently Restricted Net Assets - Net assets that are subject to donor-imposed stipulations that the principal not be expended, but rather invested to provide a permanent source of income for YEP. New Accounting Pronouncements - In June 2009, the Financial Accounting Standards Board ("FASB") issued FASB ASC 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification (FASB ASC), as the sole source of authoritative generally accepted accounting principles. Pursuant to the provisions of Topic 105, YEP has updated references to GAAP in its financial statements issued for the year ended June 30, The adoption of Topic 105 did not impact YEP's financial statements. 12

15 YOUTH EMPOWERMENT PROJECTF NOTES TO FINANCL\L STATEMENTS JUNE 30, 2010 FASB ASC (formerly, FASB Interpretation No, 48, Accounting for Uncertain Tax Positions), provides detailed guidance for financial statement recognition, measurement, and disclosure of uncertain tax positions recognized in an entity's financial statements. Effective July 1, 2009, YEP adopted tlie disclosure requirements of this standard. The adoption of the disclosure requirements of this standard had no material effect on YEP's financial statements. Tax years ended June 30, 2007 and later remain subject to examination by the taxing authorities. Subsequent Events- Management evaluates events occurring subsequent to the date of the financial statements in determining the accounting for and disclosure of transactions and events that effect the financial statements. Subsequent events have been evaluated through November 9, 2010, which is the date the financial statements were available to be issued. Contributions - Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the resu^iction expires in the reporting period in which the support is recognized. All otlier donor-restricted support is reported as in increase in temporarily or permanently resuicted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or a purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported m the statement of activities as net assets released from resuictions. Cash and cash equivalents - For purposes of the smtement of cash flows, Y^P considers all unrestricted highly liquid investments with an initial maturity of diree months or less to be cash equivalents, YEP maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. YEP has not experienced any losses in such accounts. YEP believes it is not exposed to any significant credit risk on cash and cash equivalents. Fixed assets - All expenditures for leasehold improvements and equipment are capitalized. Depreciation on leasehold improvements is provided by using the straight-line method over the estimated life of 10 years. Depreciation on equipment is provided by using the straight-line and the decliningbalance method over the estimated useful lives of 5 to 7 years. Income taxes - YEP is a non-profit corporation organized under the laws of the State of Louisiana. It is exempt from Federal income tax under Section 501(c) (3) of the Internal Revenue Code of 1986, and qualifies as an organization that is not a private foundation as defined in Section 509(a) of the Code. It is exempt from Louisiana income tax under the authority of R.S. 47:121(5). Use of estimates - The preparation of financial statements in conformity with accountmg principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 13

16 YOUTH EMPOVi^RMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 3 - UNCONDITIONAL PROMISES TO GIVE: During the year YEP entered into contracts representing unconditional promises to give as follows: Various grant agreements were established during the year in which $571,250 has been awarded. At June 30, 2010 funds of $306,250 have been received. In summary, unconditional promises to give at June 30, 2010 and expected to be collected in the future total $265,000. NOTE 4 - REIMBURSEMENTS RECEFVABLE YEP has incurred expenses on cases involving incarcerated children at June 30, 2010, in excess of contract fees for services received at that date. A receivable has been recorded on these cases for the excess expenses as follows: New Orieans P & J Foundation $7,990 Louisiana Office of Youth Development 43,141 New Orleans Criminal Disuict Court 12,336 Urban SU-ategies 5,600 Louisiana Department of Education 11,256 Literacy Alliance of New Orleans 13,360.$ NOTE 5 - PROPERTY FURNITURE AND EQUIPMENT Property, furniture and equipment consisted of the following at June 30, Furniture and Equipment S 24,767 Less: accumulated depreciation Net book value $ Depreciation expense for the year ended June 30,2010 was $3,

17 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30,2010 NOTE 6- TEMPORARY RESTRICTIONS ON ASSETS: Temporarily restricted net assets are restricted by donors for specific purposes or designated for subsequent periods. At June 30, 2010, temporarily restricted net assets are available for the following purposes: Institute of Mental Hygiene - Grant agreement for the period of July, 2010 through June 2012, and restricted for program operations; funds under this grant were recorded as income and touiied $100,000 in : $100,000 The Twenty - First Century Foundation - Grant agreement for die period of January 2010 through December 2010 for program operations; funds under this grant were recorded as income and totaled $40,000 in ; Since incepuon $20,000 has been expended for grant purposes 20,000 Youth Justice Funding Collaborative - Grant agreement for the period of December 2009 through November 2010 for program operations; funds under this grant were recorded as income and totaled $30,000 in ; Since inception $17,500 has been expended for grant purposes $12,500 GPOA Foundation - Grant agreement for the period of April 2010 through March 2011 for program operations; funds under this grant were recorded as income and totaled $5,000 in ; Since inception $1,250 has been expended for grant purposes The Twenty - First Century Foundation - Grant agreement for the period of May 2010 through October 2010 for program operations; funds under this grant were recorded as income and totaled $5,000 in ; Since inception $1,000 has been expended for grant purposes 4,000 Dollar General - Grant agreement for the period of May 2010 through April 2011 for program operations: funds under this grant were recorded as income and totaled $10,000 in Since inception $1,666 has been expended for grant purposes 8,334 15

18 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 Urban Strategies - Grant agreement for the period of July 2010 through June 2011, and restricted for program operations; funds under this grant were recorded as income and totaled $65,000 in ,000 Crescent Civic Engagement Fund - Grant agreement for the period of December 2009 through November 2010 for program operations; funds under this grant were recorded as income and totaled $2,750 in ; Since inception $1,375 has been expended for grant purposes 1,375 The City of New Orleans - Grant agreement for the period of January 2010 through December 2010 for program operations; funds under tliis grant were recorded as income and totaled $100,000 in ,000 Baptist Community Ministries - Grant agreement for the period of December 2009 through September 2010, and restricted for program Operations; funds under this grant were recorded as income and totaled $100,000 in ; Since inception $66,667 has been expended for grant purposes Total temporarily restricted funds -June 30, S Net assets were released from donor restrictions by incurring expenses satisfying the purpose or time restrictions specified by donors as follows: Crescent Civic Engagement Fund $ 1,375 Louisiana Bar Foundation 7,203 GPOA Foundation 11,476 Institute of Mental Hygiene 50,000 City of New Orieans 80,000 The Twenty First Century Foundation 38,916 New Schools for New Orieans 18,000 Rite Aid 4,167 Baptist Community Ministries 66,667 Youth Justice Funding Collaborative 21,665 Dollar General 1,666 Total net assets released $

19 YOUTH EMPOWERMENT PROJECT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 NOTE 7 - FUNCTIONAL ALLOCATION OF EXPENSES: The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supported services benefited. NOTE 8 - CREDIT RISK CONCENTRATION AND MAJOR FUNDING SOURCES YEP receives grants and contracts for services from the public which comprises the majority of its revenue. NOTE 9 - LITIGATION AND CLAIMS: There is no pending litigation against YEP at June 30, Furthermore, the management of YEP believes that any potential lawsuits would be adequately covered by insurance. NOTE 10 - BOARD OF DIRECTORS' COMPENSATION: The Board of Directors is a voluntary board; therefore, no compensation has been paid to any member. 17

20 SPECLAJL REPORTS OF INDEPENDENT AUDITOR

21 Reginald A, Bresette. III. CPA To the Board of Directors, Youth Empowerment Project Reginald A. Bresette, ill Limited Liability Company REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDTT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Member American institute of Certified Public Accountants society of Louisiana Certified Public Accountants I have audited thefinancialstatements of Youth Empowerment Project (the Company) (a nonprofit organization) as of and for the year ended June 30, 2010, and have issued my report there on dated November 9, I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable tofinancialaudits contained in Government Auditing Standards, issued by the Comptroller General of the United States, Intemal Control Over Financial Reporting In planning and performing my audit, I considered the Company's intemal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Company's intemal control overfinancialreporting. Accordingly, I do not express an opinion on the effectiveness of the Company's intemal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in intemal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. My consideration of intemal control overfinancialreporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be deficiencies, significant deficiencies, or material weaknesses. I did not identify any deficiencies in intemal control over financial reporting that I consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Company's financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination offinancialstatement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly. I do not express such an opinion. The results of my test disclosed of noncompliance or other matters that are required to be reported under Govemment Auditing Standards and which are described in the accompanying schedule offindingsand responses as items and The Company's response to thefindingsidentified in my audit is described in the accompanying schedule offindingsand responses. I did not audit the Company's response and, accordingly, I express no opinion on it Yale Street, Suite A Metairie, Louisiana (504) FAX ( CELL (504) reggie@bresettec0.c0m

22 This report is intended solely for the information and use of management, the Board of Directors, the State of Louisiana, the Legislative Auditor for the State of Louisiana, and the federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statue 24:513. this report is distributed by the Legislative Auditor as a public document. Reginald A. Bresette, III LLC Certified Public Accountant November 9, 2010

23 SCHEDULE OF FINDINGS AND REPONSES For the Year Ended June 30,2010 I have audited thefinancialstatements of Youth Empowerment Project (the Company) (YEP) as of and for the year ended June 30, 2010, and have issued our report thereon dated November 9, I conducted my audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by Comptroller General of die United States, My audit of the financial statements as of June , resulted in an unqualified opinion. Section I Summary of Auditor's Reports a. Report on Intemal Control and Compliance Material to the Financial Statements Intemal Control Material Weaknesses - None Significant Deficiencies - Yes Compliance Compliance Material to Financial Statements - No Compliance Immaterial lo Financial Statements - Yes Findings: As is common m small organizations, management has chosen to engage the auditor to propose certain year-end adjusting journal entries and to prepare their annual financial statements. This condition is intentional by management based upon the Company's financial complexity, along with the cost effectiveness of acquiring the ability to prepare financial statements in accordance with generally accepted accounting principles. Consistent with this decision, intemal controls over the preparation of year-end adjusting entries and annual financial statements, complete wilh notes, in accordance with generally accepted accounting principles, have not been established. Under generally accepted auditing standards, this condition represents a significant deficiency m intemal controls. Recommendation: As mentioned above, whether or not it would be cost effective to cure a control deficiency is not a factor in applying reporting requirements. Because prudent management requires that the potential benefit from an internal control must exceed its cost, it may not be practical to correct all the deficiencies an auditor reports. In this case I do not believe that curing the significant deficiency described above would be cost effective or practical and accordingly do not believe any corrective action is necessary. 20

24 SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED) Management's Response: We concur with the audit finding Findings: Our examination disclosed there is lack of segregation of duties within the company. This weakness is due to the fact that the company has a very small staff. Due to the lack of segregation of duties, possible errors or irregularities could occur in the accounting records and not be detected. Understandably, since the company has such a small staff, the most ideal system of intemal control or the most desirable accounting system may not be practicable. Also the cost of hiring additional employees to handle separate aspects of the accounting funcrion might exceed any benefits gained. Recommendation: Based upon the cost-benefit of hiring additional accounting personnel, it may not be feasible to achieve complete segregation of duties. I recommend that the organizations's finance committee and executive director continue to closely monitor all records and transactions. Managements Response: The company's executive director and board concur with the recommendation. b. Federal Awards YEP did not receive federal awards during the year ended Jime 30, Section II Financial Statement Findings There were nofinancialstatementfindingsduring the fiscal year ended June 30, Section HI Federal Award Findings and Questioned Costs YEP did not receive federal awards during the year ended June 30,

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26 SCHEDULE OF PRIOR YEAR FINDINGS For the Year Ended June 30,2010 SECTION I INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL STATEMENTS Intemal Control Material Weaknesses - None Responses - None Compliance Compliance Material to Financial Statements - No Compliance Immaterial to Financial Statements - No SECTION n INTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS YEP did not receive federal awards during the year ended June 30, SECTION III MANAGEMENT LETTER There was no management letter issued for the audit year ended June 30,

27 MANAGEMENT CORRECTIVE ACTION PLAN For the Year Ended June 30,2010 SECTION I INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL STATEMENTS YEP had no material weaknesses or reportable conditions in internal control. Also, there were no compliance issues material to the financial statements. SECTION n INTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS YEP did not receive federal awards during the year ended June 30, SECTION III MANAGEMENT LETTER There was no management letter issued for the audit year ended June 30,