TECHE ACTION Franklin, Louisiana Financial and …app1.lla.la.gov/PublicReports.nsf/1441FB01D4686CA586257AC3007AE05A/...TECHE ACTION BOARD, INC. Franklin, Louisiana Financial and Compliance

TECHE ACTION BOARD, INC.

Franklin, Louisiana

Financial and Compliance Report May 31, 2012 and 2011

T A B L E OF C O N T E N T S

Page

Independent Auditor's Report 1-2

Financial Statements: Statement of Financial Position 3-4 Statement of Activities 5 Statement of Cash Flows 6 Statement of Functional Expenses 7 Notes to Financial Statements 8-17

Supplementay Information

Schedule of Expenditures of Federal Awards 18

Report on Intemal Control Over Financial Reporting and on Compliance and Odier Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards 19 - 20

Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Progr^n and on Intemal Control Over Compliance in Accordance with OMB Circular A-133 21-22

Schedule of Findings and Questioned Cost 23 - 24

Summ^ Schedule of Prior Year Findings and Questioned Costs 25

STEVEN M. DEROUEN & ASSOCIATES Certified Public Accountants

A%X1 IHLES ROAD P.O. BOX 4265

LAKE CHARLES, LA 70606 Member American Institute of (337) 513-4915 OFFICE / (337) 513-4737 FAX Member Louisiana Society of Certified Public Accountants , [email protected] Certiiicd Public Accountants

INDEPENDENT AUDITOR'S REPORT

Board of Directors Teche Action Board, Inc. Franklin, Louisiana

I have audited the accompanying statement of fmancial position of Teche Action Board, Inc., (a non-profit organization) as of May 31, 2012, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of Teche Action Board, Inc's management. My responsibility is to express an opinion on these fmancial statements based on my audit. The prior year summarized comparative information has been derived from the organization's May 31, 2011 fmancial statements, and in my report dated November 7, 2011,1 expressed an unqualified opinion on those financial statements.

I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall fmancial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to in the first paragraph present fairly, in all materia! respects, the financial position of Teche Action Board, Inc. as of May 31, 2012, and the changes in its net assets, its functional expenses and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordancQ mih Government Auditing Standards, I have also issued my report dated November 14, 2012, on my consideration of Teche Action Board, Inc's internal control over financial reporting and on 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 internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audit.

mailto:[email protected]

Board of Directors Teche Action Board, Inc. Franklin, Louisiana Page 2

My audit was conducted for the piupose of fonning an opinion on the basic financial statements of Teche Action Board, Inc. taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Govemments, and Non-Profit Organizations, and is not a required part of the financial statements. Such infonnation is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. This information has been subjected to the auditing procedures applied in the audit of die financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

steve^^ M. r £Rou£i/v a Associates

November 14, 2012

TECHE ACTION BOARD, INC. Franklin, Louisiana

Statement of Financial Position As of May 31, 2012

With Summarized Comparative Totals as of May 31, 2011

Assets

2012 2011

Current Assets Cash and cash equivalents Patient accoimts receivable, net Supplies inventory Prepaid expenses Other receivables

Total Current Assets

Property, Plant and Equipment

Land improvements Building and improvements Fumiture and equipment Vehicles

Less accumulated depreciation

Construction in progress Land

Net Property, Plant and Equipment

Other Assets

Investments

Total Assets

174,546 $

428,918

193,481

52,114

945

125,355

535,516

164,257

4,879

582 850,004

154,312

4,273,129

2,111,474

75,595

6,614,510

(2,564,225)

4,050,285

3,230,348

816,142

8,096,775

1,570,592

830,589

149,612

4,142,709

2,029,462

75,595

6,397,378

(2,196,130)

4,201,248

1,545,171

816,142

6,562,561

1,244,155

$ 10,517,371 $ 8,637,305

See accompanying notes to financial statements.


Statement of Financial Position (Continued) As of May 31, 2012

With Summarized Comparative Totals as of May 31, 2011

Liabilities and Net Assets 2012 2011

Current Liabilities Accounts payable Accrued payroll and related liabilities

Deferred grant revenue Line of credit Loan payable to LPCA

Current portion of capital lease Current portion of notes payable

Total Current Liabilities

Long Term Liabilities Capital lease payable - net of current portion Notes payable - net of current portion

Total Long Term Liabilities

Total Liabilities

Net Assets

Unrestricted net assets

Total Liabilities and Net Assets

687,263 $

532,348

175,619

1,189,400

375,000

13,622

18,300

494,879

497,943

140,679

498,846

375,000

31,009

13,078

2,991,552

36,616

368,393

405,009

3,396,561

7,120,810

$ 10,517,371 S

2,051,434

50,198

386,444

436,642

2,488,076

6,149,229

8,637,305

See accompanying notes to fmancial statements.


Statement of Activities For the Year Ended May 31, 2012

With Summarized Comparative Totals for the Year Ended May 31, 2011

Revenue and Support Revenue:

Net patient service revenue

2012

$ 6,117,327

2011

5,606,374

Support: Grant, Public Health Service Other grants and contracts State PPS refimd Investment income Other income

Income (loss) from LA Partnership for Choice and Access, LLC Realized gain (loss) on other investments

3,379,000

1,715,045

36,894

63,243

722,309

(54,490)

(4,044)

2,784,614

2,427,709

10,916

45,627

218,192

-2,699

Total Support

Total Revenue and Support

5,857,957

11,975,284

5,489,757

11,096,131

Expenses Program services Management and general

7,093,230 3,910,473

6,425,600 3,943,269

Total Expenses 11,003,703 10,368,869

Change in Net Assets 971,581 727,262

Net Assets - Beginning of Year 6,149,229 5,421,967

Net Assets - End of Year 7,120,810 $ 6,149,229


T E C H E A C T I O N BOARD, INC.

F rank l in , Louis iana

Sta tement of Cash Flows

For the Year Ended M a y 3 1 , 2012

With Summar ized Compara t ive Totals for the Year E n d e d M a y 31 , 2011

2012 2011 Cash Flows From Operating Activities

Change iu net assets Adjustments to reconcile change in net assets to net cash

provided by operating activities: Depreciation Loss on LPCA investment Change in allowance for doubtftil accounts (Increase) decrease in accounts receivable (Increase) decrease in supplies inventory (Increase) decrease in prepaid expenses Increase (decrease) in accounts payable Increase (decrease) in accmed payroll and other expenses

Net Cash Provided (Used) by Operating Activities

Cash Flows From Investing Activities Proceeds from sale of investments Purchase of investments Fixed asset acquisitions

Net Cash Provided (Used) by Investing Activities

Cash Flows From Financing Activities Principal payments on capital lease Proceeds from long term debt Principal payments on long term debt Proceeds from line of credit Principal payments on line of credit

Net Cash Provided (Used) by Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents - Beginning of Year

Cash and Cash Equivalents - End of Year

971,581 727,262

$

368,178

54,490

90,613 15,622

(29,224)

(47,235) (200,191)

69,345

1,293,179

_

(380,927)

(1,509,818)

(1,890,745)

(30,969)

-(12,829)

690,554 -

646,756

49,191

125,355

174,546 $

344,190

-178,622 (7,294)

(3,799)

18,985 143,373

286,936

1,688,275

27,717

-(2,744,117)

(2,716,400)

(26,302)

399,522

-370,016

(521,175)

222,061

(806,064)

931,419

125,355

Supplemental Disclosure: Interest paid 46,063 22.264



Schedule of Functional Expenses For the Year Ended May 31, 2012

With Summarized Comparative Totals for the Year Ended May 31, 2011

Salaries

Fringe benefits Medical contract expense Non-medical contract expense

Supplies Travel expense Repairs and maintenance

Utilities Telephone and postage

Dues and subscriptions Insurance Organization meeting

Advertising Depreciation Lease expense

Interest Rental expense Bad debt expense

Other

Total Functional Expenses

Program

Services

$ 4,773,833

650,525 199,253 33,253

1,155,986 44,507 54,251

806 108,896

2,914

-735

3,493

---

1,148

-63,631

$ 7,093,230

Supporting Services

Management

& General

$ 1,681,622

283,698 13,053

239,401

219,400 114,888 142,481

206,456 124,614

26,473 65,431 13,627

50,039 368,178 115,559

46,063 11,932 53,258

134,300

S 3,910,473

Total

2012

S 6,455,455 $

934,223 212,305 272,654

1,375,386 159,395 196,733

207,262 233,510

29,387 65,431 14,362

53,532 368,178 115,559

46,063 13,080 53,258

197,931

$ 11,003,703 $

2011

5,882,372

917,420 218,917 381,384

1,196,527 150,498 254,190

131,046 220,313

33,022 88,858 10,267

49,919 344,190

79,138

22,264 6,282

244,583

137,678

10,368,869


TECHE ACTION BOARD, EVC. Franklin, Louisiana

Notes to Financial Statements May 31,2012 and 2011

NOTE I - NATURE OF ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities

Teche Action Board, Inc., (a nonprofit corporation) operates as Teche Action Clinic. The Organization was incorporated in May 1974 to provide comprehensive health care to area residents, with particular emphasis on the socio-economic ally disadvantaged.

Income Taxes

The Organization is exempt from federal income taxes under Section 501 (c) (3) of the Internal Revenue Code. Accordingly, no provision for federal and state income taxes is included in the financial statements.

Method of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting, in accordance with generally accepted accounting principles.

Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, the Organization considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents.

Advertising Expense

The Organization expenses the cost of advertising as the expense is inciured. For the years ended May 31, 2012 and 2011, the cost totaled $53,532 and $50,458, respectively.

Property and Equipment

Property and equipment is stated at cost. It is the Organization's policy to capitalize expenditures for these items in excess of $3,000. Depreciation of property and equipment is computed principally by the straight-line method over die following estimated usefiil lives:

Ye^s Buildings and hnprovements 5-35 Equipment, furniture and fixtures 3-20 Vehicles 10


Notes to Financial Statements (Continued) May 31,2012 and 2011

NOTE 1 - NATURE OF ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Functional Expenses

The costs of providing the vîous programs and other activities have been summarized on a functional basis in the statement of activity. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

Accounts Receivable

The Organization records accounts receivable at the time of service according to fees developed from cost data of this md similar organizations. These amounts are often reduced because of the patients' inability to pay or because of disallowaices and reductions from third party payors.

Bad Debts

The Organization uses tiie allowance method in accounting for its un-collectible accounts. The allowance account consists of an estimate of uncollectible accounts and a general reserve. Management's evaluation of the adequacy of the allowmice is based on a continuing review of all accounts aid includes a consideration of past patient history, any adverse situations that might affect the patient's ability to repay, and current economic conditions. Amounts charged-off that are subsequently recovered are recorded as income.

Major Funding Source

The Organization receives fimds from DHHS, under section 330 of die Pubhc Health Service Act (42 U.S.C. 254c). In accordance with DHHS policies, all fiands disbursed should be in compliance with the specific tenns of die grant agreements. DHHS may, at its discretion, request reimbursement for expenses or retum of unexpended fiinds, or both, as a result of non-compliance by the Organization with the tenns of the grants. In addition, if the Organization terminates its DHHS grant activities, all unexpended federal funds are to be retumed to DHHS.

Inventory

Supply inventories are stated at lower of cost, determined by the FIFO method, or miu ket.

Net Patient Service Revenue

Net patient service revenue is reported at the estimated net realizable amounts from patients, third-party payors, and others for services rendered.



NOTE 1 - NATURE OF ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Grants and Contributions

Grants and contributions are recognized as income when received. The Bom d reports graits as temporarily restticted support if they are received with stipulations that limit the use of the fijnds. When grantor restrictions expire, temporary restricted net assets are reclassified to unrestricted net assets and reported in die statement of activities as net assets released from restrictions. All other support is recognized when eamed.

Retirement Plan

The Organization has a 401(k) retirement plan for eligible employees. The plan provides for a mandatory 3% safe-harbor matching contribution. The Organization will also match 50% of an employee's contributions up to an additional 2%. All participating employees are fijlly vested immediately. To be eligible, an employee must be employed with the Organization for at least one year and must be at least eighteen years of age. Retirement expense recognized was $101,024 and

J,495 for fiscal years ending May 31, 2012 and 2011, respectively.

Investments

The Organization reports its investments in accordaice with generally accepted accounting principles for not-for-profit organizations, which establish accounting stand^ds for investments in certain equity securities and for all debt securities. The guidance prescribes diat covered invesUnents be reported in the statement of financial position at fair value with any realized or imreaUzed gains or losses reported in the statement of activities.

NOTE 2 - PA TIENT ACCOUNTS RECEIVABLE

Patient accounts receivable are comprised of the following for the years ending May 31,:

2012 2011 Medicare Medicaid Private

Less allowance for doubtful accounts

$ 196,063 186,286 575,387

957,736

528,818

$ 428,918

$ 296,630 291,975 385,116

973,721

438,205

$ 535,516

10



NOTE 3 - COST REPORT RECEIVABLE

The Organization participates in the Medicare and Medicaid programs as a provider of medical services to program beneficiaries. The Organization participates in the Medicaid program as a federally qualified health center. Final settlements will be made upon completion of audits by program representatives.

NOTE 4 - ACCRUED VACATION

The Organization allows employees to cany 40 hours of unused vacation into the following year. An employee may carry over additional vacation hours only with written permission from the executive director. The accrual is calculated based on the employee's pay rate at the end of the year. At May 31, 2012 and 2011, accrued vacation totaled $302,391 and$277,084, respectively.

NOTE 5 - OPERATING LEASES

Effective August 2009, the Organization leased four copy machines for 48 mondis at $1,568 per montii.

Effective November 2009, the Organization leased a copy machine for 60 months at $194 per month.

Effective May 2010, the Organization leased a copy machine for 60 months at $208 per month.

Future minimum payments are as follows for the years ending May 31,:

2013 $ 23,640 2014 7,960 2015 3.258 Total $ 34.858

NOTE 6 - ECONOMIC DEPENDENCY

The Organization receives a substantial portion of its total support and revenues from the federal govemment. During the years ended May 31, 2012 and 2011, Teche Action Board, Inc. recorded $3,724,186 and $3,526,358, respectively, ingrant support from the Department of Health and Human Services. This represents 31% and 32% of total support and revenues for the years ended May 31, 2012 and 2011.

11



NOTE 7 - CONCENTRATIONS OF CREDIT RISK

The Organization maintains several bank accounts at various banks. Accounts at each institution are insiu-ed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 for interest bearing accounts. There is no limit on deposit insurance for non-interest bearing accounts through December 31, 2012. The Organization had deposit balances that exceeded federally inswed limits by $11,011 and $11,923 as of May 31, 2012 and 2011, respectively.

The majority of the Organization's patients are located in South Louisiana. The Organization grants credit without collateral to its patients. The mix of receivables from patients and third-party payors was as follows:

2012 2011

Medicare 14 % 35 Medicaid 31 31 Otiier 55 34

100 % 100

The mix of net patient revenues was as follows:

2012 2011 Medicare 23 % 22 Medicaid 47 47 Otiier 30 31

100 % 100

NOTE 8 - FUNCTIONAL ALLOCATION OF EXPENSES

Expenses were allocated in the accompanying fmancial statements to program and supporting service functional expense groups. The metiiods of allocation were based on several factors such as utilization of office space as well as the Organization's estimates of tiie relative proportion of various staff members' time and effort between program and aiininistrative fimctions.

NOTE 9 - CHARITY CARE

The Organization provides care to patients who qualify under federal guidelines and other policies of the OrgMiization at fees less than its estabhshed rates. The amount of charity care is reduced from the amount of fees for services presented in the statement of activities. The amount of chîty care for disclosure purposes should be measured by costs, including direct and indirect costs. Management has calculated the costs associated with providing charity care utilizing the cost to charge ratio obtained from the Medicare cost report data. The amount of costs associated with charity care for the fiscal years ending May 31, 2012 and 2011 was $2,815,675 and $2,745,067, respectively.

12



NOTE 10 - CAPITAL LEASE

The Organization has entered into a lease agreement as lessee for financing the acquisition of a portable building. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the lower of the present value of the future minimum lease payments or the fair value of tiie assets. The asset is depreciated over the lesser of its lease tenn or the estimated productive life. The capitalized costs on such leases were $144,640 and $144,640 for May 31, 2012 and 2011, respectively.

The accumulated depreciation on this equipment under capital lease was $28,928 and $19,285 at May 31, 2012 Mid 2011, respectively. The following is a schedule of the future minimum lease payments under capital lease, and the present value of the net minimum lease payments at May 31, 2012:

Year Ending May 31, 2013 $ 42,299 2014 14,101

Total Minimum Lease Payments 56,400 Less: Amount Representing Interest 6,162 Present Value of Future Minimum

Lease Payments $ 50.238

NOTE I I - LINE OF CREDIT

The Organization renewed a revolving line of credit with Regions Bank on October 10, 2011 with a limit of $1,000,000. The line of credit is secured by all deposits and investments held by the Organization and bears interest of 3.0 percentage points over the London Interbcmk Offered Rate (LIBOR). The balance outstanding on tiiis line of credit was $989,400 and $498,846 at May 31, 2012 and 2011, respectively.

The Organization opened a new revolving line of credit with Regions Bank with a limit of $740,000 dated May 15, 2012 with a maturity date of May 15, 2013. The line of credit is secured by the property located at 1110 Weber Street in Franklin Louisiana and bears interest of .40 percentage points over the prime rate of the lender but never lower than 4.75%. The balance outstanding on this line of credit was $200,000 at May 31, 2012.

NOTE 12 - lOANPAYABIE TO LPCA

The Organization has a promissory advance note from Louisiana Primary Care Association, Inc. (LPCA) for up to $375,000 at a fixed interest rate of 4.25%. These funds are available to the Center as an advance against a grant that is expected to be awarded by the LPCA for various Center construction projects in progress at May 31, 2012. The loan is unsecured and the balance due on this note is $3 75,000 at May 31,2012.

13



NOTE 13 - NOTES PA YABLE

Notes payable for the twelve months ended May 31,2012 consisted of the following:

Bank note payable, due in 59 equal monthly installments of $1,625.81 and one final payment of remaining balance to be paid June 22, 2016, including interest at 5.55%, collateralized by related real estate. $ 190,511

Bank note payable, due in 59 equal monthly installments of $1,649.23 aid one final payment of remaining balance to be paid in October 26, 2016, including interest at 5.55%, collaterahzed by related real estate

Total debt

Less current portion Long-term debt

Maturities of debt are as follows:

May 31,

2013

2014

2015

2016

2017

Total

196,182

386,693

18,300 $ 368,393

Amount

$ 18,314

19,357

20,459

21,624

306,939

$ 386,693

14



NOTE 14 - INVESTMENTS

The Organization applies GAAP for fair value measurements of financial assets that are recognized at fair value in the financial statements on a recurring basis. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant imobservable inputs (Level 3 measurements). The three levels of fair market hierarchy are as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Organization has the ability to access.

Level 2 inputs are inputs (other tiian quoted prices in Level 1) that are observable for the asset or liability, either directly or indirectly.

Level 3 are unobser\'able inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The imobservable inputs should be developed based on the best infomiation available).

The amortized cost and fair values measured on a recurring basis of investment securities as of May 31, 2012 are as follows:

Amortized Fair Unrealized Cost Value Gain (Loss)

Mortgage-Backed Securities $1,379,126 $1,375,082 $ (4,044) (Level 1 In Active Markets)

La. Rsp. For Choice (250 units) $ 195,510 $ 195,510 $ -0-(Level 3 Cost Basis)

The amortized cost and fair values measured on a recurring basis of investment securities as of May 31, 2011 are as follows:

Amortized Fair Unrealized Cost Value Gain (Loss)

Mortgage-Backed Securities $ 990,821 $ 994,155 $ 3,334 (Level 1 In Active Markets)

La. Rsp. For Choice (250 units) $ 250,000 $ 250,000 $ -0-(Level 3 Cost Basis)

15



NOTE 14 - INVESTMENTS (CONTINUED)

During 2009, the Organization invested $250,000 in the Louisiana Partnership for Choice and Access, LLC (LLC). The LLC investors a e limited to Federally Qualified Health Centers (FQHC) or FQHC look-alike organizations. The LLC investors will own 49% (directly or indirectly) of Healthy Louisiaia Choice, Inc., a Louisiana Corporation. The corporation will function as a Medicaid managed care organization servicing Louisiana Medicaid beneficiaries. Loss on tiiis investment was $54,490 for tiie yea- ending May 31,2012.

NOTE 15 - DONATED PHARMACEUTICALS

The Organization participates in several pharmaceutical distribution programs for indigent patients. Under these programs, free prescriptions are provided to eligible patients of the Organization. These amoimts are not included in tiie statements of activities.

NOTE 16 - PRIOR YEAR BALANCES

Certain prior year mnounts may have been reclassified to conform to current year presentation.

NOTE 1 7 - CONSTRUCTION IN PROGRESS

The Organization has various construction projects in progress at May 31, 2012. The following is a schedule of the significant projects in which the Organization has future obligations:

Estimated Total Costs

Franklin A(ininisfrative Building $ 1,733,831 Dulac Clinic Project $ 2,400,478 Houma Clinic Project $ 2,408,138

Cost Incurred To Date

$1,725,331 $ 595,246 $ 352,691

Estimated Completion Date

July 2012 December 2012 December 2012

NOTE 18 - SUBSEQUENT EVENT

The Organization evaluated its May 31, 2012 financial statements for subsequent events through November 14, 2012, the date the financial statements were available to be issued. The Organization is not awaê of any subsequent events which require recognition or disclosure in the financial statements.

16



NOTE 19 - FAIR VALUE OF INSTRUMENTS

The Organization has a number of financial instruments, none of which is held for fading purposes. The Organization estimates that the fair value of all financial instruments at May 31, 2012 does not differ materially from the aggregate carrying values of its financial insUnments recorded in the accompanying balance sheet. The estimated fair value amounts have been detennined by the Organization using available market infonnation and appropriate valuation methodologies. Considerable judgment is necessarily required in interpreting market data to develop the estimates of fair value, and, accordingly, the estimates are not necessarily indicative of the amounts that tiie agency could reahze in a current market exchange. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The recorded values of notes payable approximate their fair value, as interest is insignificant.

17


Schedule of Expenditures of Federal Awards

Year Ended May 31, 2012

Proeram Title

U. S. Depailmeut of Health and Hmnau

Services

Direct Programs: Commiinity Health

Center Section 330

Affordable Care Act

Capital Development

CFDA Nmnber

93.224

93.526

Grant Number

* H80CS00767-03-00

* C8ACS21375

Program Year

6/1/11-5/31/

10/1/11-9/3(

Program Receipts

Program Expenses

345,186

S 3,379,000

345,186

U. S. Depaitment of Agriculture Passed tluough:

La. Department of Health and Hospitals:

Office of Public Health 10.572 10/1/11-9/30/12 102,929 102,929

Total federal assistance $ 3,862,115 $ 3,827,115

Major Programs

Basis of Presentation

Tlie accompanying schedule of expenditures of federal awards includes the federal grantactivity of Teche Action Board, Inc.,

and is presented on the accrual basis of accounting. The infonnation on this schedule is presented in accordance with the requirements

of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Groveinments, and Non-Profit Organizations.

Certain costs have been aUocated to the federal program in accordance with OMB Circular A-122, Cost Pmiiciples of Non-Profit

Organizations. The amounts presented m this schedule do not differ from the amounts presented in, or used in the preparation

of the financial statements.

18

STEVEN M. DEROUEN & ASSOCIATES Certified Public Accountants

4827 IHLES ROAD P.O. BOX 4265

LAKE CHARLES, LA 70606 Member American Institute of ' (337) 513-4915 OFFICE / (337) 513-4737 FAX Member Louisiana Society of Certified Public Accountants [email protected] Certified Public Accountants

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


I have audited the financial statements of Teche Action Board, Inc. (a nonprofit organization) as of and for theyearended May 31,2012, and have issued my report thereon dated November 14,2012, I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Intemal Control Over Financial Reporting

Management of Teche Action Board, Inc. is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing my audit, I considered Teche Action Board, Inc'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 Teche Action Board, Inc's intemal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of Teche Action Board, Inc's internal control over financial reporting.

A deficiency in internal control exists when a 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 internal 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 internal control over fmancial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that 1 consider to be material weaknesses, as defined above.


Board of Directoi^ Teche Action Board, Inc. Franklin, Louisiana Page 2

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Teche Action Board, Inc's finaicial statements are fiêe of material misstatement, I perfonned tests of its compliance witii certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such ai opinion. The results of my tests disclosed no instances of noncomphance or other matters that ^ e required to be reported under Govemment Auditing Standards.

This report is intended solely for the information of the audit committee, management, and federal and state awarding agencies and pass-tiirough entities and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.

stevtvi M. i eT^wei/v a Associates

November 14, 2012

Member American Institute of Certified Public Accountants

TEVEN M. DEROUEN & ASSOCIATE; Certified Public Accountants

4827 IHLES ROAD P.O. BOX 4265

LAKE CHARLES, LA 70606 (337) 513-4915 OFFICE / (337) 513-4737 FAX

[email protected] Member Louisiana Society of Certified Public Accountants

REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER

COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133


Compliance

I have audited Teche Action Board, Inc's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Teche Action Board, Inc's major federal programs for the year ended May 31, 2012. Teche Action Board, Inc's major federal programs are identified in the summaiy of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Teche Action Board, Inc's, management. My responsibility is to express an opinion on Teche Action Board, Inc's, compliance based on my audit.

I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that I plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Teche Action Board's compliance with those requirements and performing such otiier procedures as I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion. My audit does not provide a legal determination of Teche Action Board's compliance with those requirements.

hi my opinion, Teche Action Board, Inc. complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended May 31,2012.


Board of Directors Teche Action Board, Inc. Franklin, Louisiana Page 2

Intemal Control Over Compliance

Management of Teche Action Board, Inc. is responsible for establishing and maintaining effective intemal control over compliance with the requirements of laws, regulations, conUâcts, and grants applicable to federal progrcuns. In planning and perfonning my audit, I considered Teche Action Board, Inc 's intemal control over compliance with the requirements that could have a direct and material effect on a major federal progrcmi in order to determine my auditing procedures for the purpose of expressing my opinion on compliance and to test and report on intemal control over compliance in accordance with OMB Circuit A-133, but not for the purpose of expressing an opinion on the effectiveness of intemal control over compliance. Accordingly, I do not express an opinion on the effectiveness of Teche Action Board, Inc 's intemal control over compliance.

A deficiency in intemal control over comphance exists when the design or operation of a control over compliance does not allow management or employees, in the nonnal coiu^se of perfonning their assigned functions, to prevent, or detect and correct, noncompliance with a tjê of compliance requirement of a federal program on a timely basis. A material wealmess in internal control over comphance is a deficiency, or combination of deficiencies, in intemal control over compliance, such that tiiere is a reasonable possibility that material noncomphance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

My consideration of intemal control over compliaice was for the hmited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in intemal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. I did not identify any deficiencies in intemal control over compliance that I consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of tiie audit committee, management, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone otiier tiian these specified parties. However, this report is a matter of public record and its distribution is not limited.

•StevetA. M. iêiûei/v a Associates

November 14, 2012


Schedule of Findings and Questioned Cost Year Ended May 31,2012

SECTION I - SUMMARY OF AUDITORS' RESULTS

Financial Statements Type of auditor's report issued Intemal control over financial reporting:

Material weaknesses identified? Significant deficiency identified not considered

to be material weaknesses? Noncompliance material to financial statements

noted?

Unqualified

Yes x No

Yes x None reported

Yes X No

Federal Awards Intemal control over major programs:

Material weaknesses identified? Yes Significant deficiency identified not considered

to be material weaknesses? Yes Type of auditor's report issued on compliance

for major programs: Any audit fmdings disclosed that are required

to be reported in accordance with Circular A-133, Section .510 (a)? Yes

Dollar threshold used to distinguish between Type A and Type B programs: $300,000

X No

X None reported

X No

Unqualified

Auditee qualified as low-risk auditee?

NO SEPARATE MANAGEMENT LETTER ISSUED

Yes X No


Schedule of Findings and Questioned Costs (Continued) For the Year Ended May 31,2012

SECTION II - FINDINGS AND QUESTIONED COSTS

NONE


Schedule of Prior Year Findings and Questioned Costs Year Ended May 31,2012

NONE

TECHE ACTION Franklin, Louisiana Financial and …app1.lla.la.gov/PublicReports.nsf/1441FB01D4686CA586257AC3007AE05A/...TECHE ACTION BOARD, INC. Franklin, Louisiana Financial and Compliance

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