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RUTHERFORD HOUSE
SHREVEPORT, LOUISIANA
JUNE 30,2008
Under provisions of state law, this report is a publicdocument. A copy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.
Release Date
RUTHERFORD HOUSE
SHREVEPORT. LOUISIANA
TABLE OF CONTENTS
AUDITED FINANCIAL STATEMENTS
Page
Independent Auditor's Report 1
Statement of Financial Position 2
Statement of Activities 3-4
Statement of Cash Flows 5
Notes to Financial Statements 6-9
OTHER REPORTS
Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 10-11
Schedule of Findings and Responses 12
Schedule of Prior Year Findings 13
Management's Corrective Action Plan 14
AUDITED FINANCIAL STATEMENTS
HEARDMCELROY& VESTAL
LLPCERTIFIED PUBLIC ACCOUNTANTS
333 TEXAS STREI-T
15'1'M IM.OOK
SHKtvtrOHT, LA 71101
318429-1525
318429-2070 FAX
PosTOmci- 13ox 1607
71165-1607
PARTNERSSPENCER BERNARD, JR. , ci-,\H.Q. GAUAGAN, JK. . CI>A, APCG E R A L D W. HEDGCOCK, JR. . CPA, ATlM B. NlFLSf.N, Cl'A. APC
JOIIN"W. Dl-AN, Cl'A, APC
MARK D. EIDKI-DCE. CJ>AROHHRT L. DRAX, CPASni'iiiiN \V. CRAIG, ci>.\Rov E. PRKSTVCOOD, CI-A
A. D. JOHNSON. JR.. CPABENJAMIN C. Wooixs CPA/AHV, CVAALICE V. FRAZIEH, CPAMELISSA D. MITCHAM, CPA, c.w
OF COUNSELGIUIERT R. SHAM.F.Y, JK., ci'.-\C. CODY WHITE, JR., CPA, AI>CJ. FETCH GAn:NtY. CPA, APCRON" W. STEWART, CPA, AI-C
November 12, 2008
The Board of DirectorsRutherford HouseShreveport, Louisiana
Independent Auditor's Report
We have audited the accompanying statement of financial position of Rutherford House at June 30, 2008,and the related statements of activities and cash flows for the year then ended. These financial statementsare the responsibility of the Organization's management. Our responsibility is to express an opinion onthese financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and Government Auditing Standards issued by the Comptroller General of the United States.Those standards require the we plan and perform the audit to obtain reasonable assurance about whether thefinancial 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 includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of Rutherford House at June 30, 2008, and the changes in its net assets and its cash flows for theyear then ended, in conformity with accounting principles generally accepted in the United States ofAmerica.
In accordance with Government Auditing Standards, we have also issued our report dated November 12,2008 on our consideration of Rutherford House's internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts and grant agreements and othermatters. The purpose of that report is to describe the scope of our testing over internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.
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RUTHERFORD HOUSE
STATEMENT OF FINANCIAL POSITION
JUNE 30,2008
A S S E T S
Current assets:Cash-Note 3Investments-Note 4Accounts receivable-Note 6Prepaid expenses
Total current assets
Book value of fixed assets-Note 5
Total assets
LIABILITIES AND NET ASSETS
Current liabilities:Accounts payableOther current liabilities
Total current liabilities
Net assets:UnrestrictedTemporarily restricted-Note 8
Total net assets
Total liabilities and net assets
Rutherford Rutherford RutherfordHouse I House II House HI
35,274
35,274
35.274
35,274
35.274
46,297
46,297
46.297
46,297
46.297
37,037
37,037
37.037
46.297
37,037
37.037
37.037
RutherfordHouse IV
44,864
44,864
44,864
44.864
The accompanying notes are an integral part of the financial statements.
RutherfordHouse V
Office andSchool
TruancyCenter
CurfewProgram
FixedAssets Total
22,476
22,476
22.476
297,381278,52491,47653.984
721,365
240,463
240,463
240.463
9,717
9,717
1.450.146
297,381278,524527,60453,984
1,157,493
1,450.146
22,476
22,476
88,54249.438
137,980
583,385
583.385
22.476
240,463
240.463
240.463
9,717
9.717
1,450,146
1.450.146
1.450.146
88,54249.438
137,980
2,469,659
2,469.659
RUTHERFORD HOUSE
Public support and revenue:Public support:
Contributions-Notes 7 and 8Government grants:
Louisiana Department of CorrectionsOffice of Community ServicesLouisiana Commission on LawEnforcement
Louisiana Department of EducationCaddo Parish School BoardCity of ShreveportCaddo ParishTotal public support
Revenue:InvestmentsFund-raising, net of $6,800 in expensesOther
Total revenue
Total public support and revenue
Expenses:Salaries and wagesPayroll taxes and related expenseFringe benefitsTravel and trainingOffice suppliesRepairs and maintenanceUtilitiesInsuranceDepreciationFoodMedicalRecreation
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30. 2008
Rutherford RutherfordHouse I House II
irrections 462,506:es 7,046aw
ucation
469,552
expenses77
venue 469,559
143,683e
-
3,3467,453
2,5413,2013,571
494,382
494,382
22
494,384
135,299
250
4,0608,629
2,5452,1944,673
RutherfordHouse in
466,272
466,272
302302
466,574
181,685
-
2,4377,452
2,6092,5773,557
RutherfordHouse IV
470,813
470,813
-
_
470,813
124,023
150
2,6379,255
2,3004,5122,894
The accompanying notes are an integral part of the financial statements.
RutherfordHouse V
Office andSchool
TruancyCenter
CurfewProgram
FixedAssets Total
24,140337,109
361,249
84,431
51,350
81,48176,984
178,938
473,184
130,149
598.624728,773
58,300
58,300
84,431
2,048,262395,505
81,48176,984
178,93858,300
598.6243,522,525
--
4040
361.289
247,660----
3,8457,949
--
2,801916
3,097
16,59131,96667,127
115.684
588,868
1,013,054219,662281,045
4,40923,78440,13575,05885,295
-162,989
1,089428
--.-
728,773
108,598--
3,2429,974
13,75620,803
---352362
16,59131,96667.478
116,035
58,300 - 3,638,560
65,966 - 2,019,968219,662281,045
8,051388 - 34,146
70,216310 - 136,909
85,295127,583 127,583
175,78514,84118,582
RUTHERFORD HOUSE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2008
Expenses: (Continued)
Laundry and linenPersonal hygieneTelephoneProfessionalOutside contractsLicensingWork study and educationalMiscellaneousMaintenance suppliesProgram suppliesPersonal allowance
Total expenses
Change in net assets
Net assets-beginning of yearTransfers:
Purchase of fixed assetsOther
Net assets-end of year
RutherfordHouse I
3,3282,124
RutherfordHouse II
3,6032,205
RutherfordHouse HI
2,6932,195
RutherfordHouse IV
2,9852,137
1,253
20918
3.454174,181
295,378
40,424
(5,562)(294.966)(300,528)
1,352
26956
3,526168,661
325,723
43,452
(4,360)(318,518)f322,878)
301,250
11627
3,469210,097
256,477
46,173
(3,552)(262,061)(265,613)
1,214
9515
3.417155,634
315,179
35,825
(9,743)(296.397^1(306.140)
46.297 37.037 44.864
The accompanying notes are an integral part of the financial statements.
RutherfordHouse V
4,4111,936
----590-13933
5,447278.824
82,465
39,235
(20,548)(78,676)(99,224)
Office andSchool
1,990364
21,21418,41140,165
3,67037,26418,5975,381
36,077-
2,090.081
(1,501,213)
543,579
(71,252)1.612.2711,541,019
TruancyCenter
-6,900
-28,632
2024,3631,581
---
198,765
530,008
118,180
(32,741)(374,984)(407,725)
CurfewProgram
-*------108_
66.772
(8,472)
4,858
-13.33113.331
FixedAssets
---------.
127,583
(127,583)
1,429,971
147,758-
147,758
Total
19,01010,96128,11418,41168,7973,902
47,28620,1786,209
36,33419.313
3,470,598
167,962
2,301,697
__
-
22.476
RUTHERFORD HOUSE
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30.2008
Cash flows from operating activities:Change in net assetsAdjustments to reconcile change in net assets to
net cash provided by operating activities:DepreciationIncrease in accounts receivable(Increase) in prepaid expensesIncrease in accounts payableIncrease in other current liabilities
Total adjustmentsNet cash provided by operating activities
Cash flows from investing activities:Purchase of investmentsPurchase of fixed assets
Net cash (used) by investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
167,962
127,583(96,427)(1,221)16,8543.31850.107218,069
(9,966)(147.758)(157.724)
60,345
237,036
297.381
The accompanying notes are an integral part of the financial statements.
RUTHERFORD HOUSE
NOTES TO FINANCIAL STATEMENTS
JUNE 30. 2008
1. Nature of Business.For the year ending June 30, 2008, five homes for boys were operated for delinquent adolescents.These individuals are usually placed in the home by juvenile court. Rutherford House also operates aschooling program for the adolescents. Rutherford House receives substantially all of its incomefrom state and local government grants, generally under third-party reimbursement plans, and is anot-for-profit entity exempt from federal income taxation under Internal Revenue Code Section501(c)(3).
2. Summary of Significant Accounting Policies.
a) Financial Statement Presentation:As a not-for-profit entity, Rutherford House is required to report information regarding itsfinancial position and activities based on the absence or existence of donor-imposed restrictions.Accordingly, net assets of Rutherford House and changes therein may be classified and reportedas follows:
Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. Someunrestricted net assets may be designated by the Board for specific purposes.
Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may orwill be met by actions of Rutherford House, and/or by the passage of time.
Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they bemaintained permanently by Rutherford House. Generally, donors permit all or part of theincome earned on these assets to be used for general or specific purposes.
There were no significant temporarily or permanently restricted net assets at June 30, 2008,other than those disclosed in Note 8.
(b) Contributions:Contributions received are recorded as unrestricted, temporarily restricted, or permanentlyrestricted support depending on the existence and/or nature of any donor-imposed restrictions.Contributions that are restricted by the donor are reported as increases in unrestricted net assets ifthe restrictions expire in the fiscal year in which the contributions are recognized. All otherdonor-restricted contributions are reported as increases in temporarily or permanently restrictednet assets, depending on the nature of the restrictions. When a restriction expires, temporarilyrestricted net assets are reclassified to unrestricted net assets. Contributions from related partiesapproximated $26,000 during the fiscal year.
(c) Promises to Give:Contributions are recognized when the donor makes a promise to give to the Organization that is,in substance, unconditional. Rutherford House uses the allowance method to determineuncollectible unconditional promises receivable, when material. The allowance is based onprior years' experience and management's analysis of specific promises made.
2. Summary of Significant Accounting Policies. (Continued)
(d) Estimates:The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates andassumptions that affect certain reported amounts and disclosures. Accordingly, actual resultscould differ from those estimates.
(e) Fixed Assets:Property and equipment are stated at cost less accumulated depreciation. Depreciation iscomputed using the straight-line method over the following estimated useful lives:
Asset Estimated Life
Furniture, fixtures, and equipment 5-10 yearsHouse improvements 10-20 yearsBuildings 20 years
Donated property and equipment are reported at their estimated fair market value at the date ofgift. All expenditures for fixed assets in excess of $500 are capitalized.
(f) Cash Equivalents:For purposes of the statement of cash flows, Rutherford House considers all cash on hand anddemand deposits with banks to be cash equivalents.
(g) Advertising Costs:Costs of advertising are expensed as incurred.
(h) Compensated Absences:Annual leave generally is earned by employees at the rate of eight hours per month, beginningwith the third month of employment. A maximum of fifteen days may be carried forward to thenext fiscal year.
Sick leave generally is earned at the rate of eight hours per month, cumulative to a maximum ofthirty-six days. Sick leave is not redeemable when an employee separates from theorganization.
3. Cash.Rutherford House holds approximately $8,300 at June 30,2008, in various interest-bearing accountson behalf of individual adolescents. These monies include individual allowances allowed by statefunding and earnings in various fund-raising activities, and are not included in the accounts ofRutherford House.
Operating cash on deposit with banks is protected by FDIC insurance; deposits in excess of theselimits approximated $422,000 at June 30, 2008.
4. Investments.Investments are summarized as follows at June 30, 2008:
ApproximateCost Market Value
Chase Money Market Fund 78,524 78,524Certificate of Deposit, 3.45%, matures 4/9/09 60,000 60,000Certificate of Deposit, 4.85%, matures 7/17/08 50,000 50,000Certificate of Deposit, 3.5%, matures 9/12/08 90.000 90.000
278.524
5. Fixed Assets.The book value of fixed assets consists of:
Cost orDonated Value
Land 228,412Rutherford House I and improvements 115,139Rutherford House H and improvements 218,162Rutherford House m and improvements 138,252Rutherford House IV and improvements 103,442Rutherford House V and improvements 75,233Truancy Center Building and improvements 499,535Auto garage improvements 1,532Furniture and fixtures 485,940Vehicles 147,186Shop building 188,537Shop improvements 257,432Shop equipment 81,024School equipment 125,984Office and school, building and improvements 862,599Foster care equipment 4,653DOC After Care Assistance equipment 39,539Laundry/Book Store building 62.650
Total cost or donated value 3,635,251
Less-accumulated depreciation (2,185.105^
Book value of fixed assets
6. Receivables.Receivables are summarized by source as follows:
State of Louisiana 469,646Caddo Parish School Board 40,648City of Shreveport 9,717Other 7.593
527.604
7. Conditional Promises.Conditional promises consist of the unfunded portions of approved governmental awards, eithercurrently in effect or approved for commencement after June 30, 2008. Future funding of suchawards is conditioned upon Rutherford House's operation of certain programs, incurrence of certaincosts, and meeting certain matching requirements. Because such awards represent conditionalpromises to Rutherford House, they have not been recognized in the financial statements at June 30,2008. Such conditional promises amounted to approximately $2,700,000 at June 30, 2008.
8. Restricted Contributions.Rutherford House received donations during the year that were restricted for Christmas presents forkids. These restrictions were met during the current fiscal year. Summarized activity follows:
8. Restricted Contributions. (Continued)
2008
Temporarily restricted at June 30, 2007Temporarily restricted contributions-current year 730Restrictions released-qualifying expenses-current year (730)Temporarily restricted at June 30,2008 -
OTHER REPORTS
HEARDMCELROY& VESTAL
I.LPCERTIFIED PUBLIC ACCOUNTANTS
333 TKXAS STRICT1 5'i'H FLOORSHHKYKI 'OKT. LA 71101318429-1525318429-2070 FAX-POST OKICE Box 1607SUHEVlil 'ORT, LA
71165-1607
PARTNERSSi'KNCtu BEKNAKD, Jit., CPAH.Q. GAHAGAN, JR., CPA, APCGliKAm \V. HF.LXiCOCK. JR., CI'A, AI'C
Tl,\t B, NlUl-SliN, CI'A, M'U
JOHN W. DF.AN, CPA, APCMARK D. ELDRF.DCE, CPAROHKKT L. DEAN, CPASTEPHEN \V. CRAIG, C.I'AROY E. Pni;sT\vooD, CPA
A. D. JOHNSON, JR.. CPABENJAMIN C. Woons, CRV'AIIV, CVAALICE V. Fi!A7iFit, CPAMELISSA D. MITCHAM. CPA, O;P
OF COUNSELGILBERT R. SUANLEY, JR. , CPAC. Com- WHITE, JR.. CPA, APCJ. PFTFR GAFFNT.Y, CI*A. APCRov W. STI-\VART, CPA, APC
November 12, 2008
The Board of DirectorsRutherford HouseShreveport, Louisiana
Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
We have audited the financial statements of Rutherford House, as of and for the year ended June 30,2008,and have issued our report thereon dated November 12,2008. We conducted our audit in accordance withauditing standards generally accepted in the United States of America and the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller General of theUnited States.
Internal Control Over Financial ReportingIn planning and performing our audit, we considered Rutherford House's internal control over financialreporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on thefinancial statements, but not for the purpose of expressing an opinion on the effectiveness of RutherfordHouse's internal control over financial reporting. Accordingly, we do not express an opinion on theeffectiveness of Rutherford House's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detect misstatementson a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,that adversely affects Rutherford House's ability to initiate, authorize, record, process, or report financialdata reliably in accordance with generally accepted accounting principles such that there is more than aremote likelihood that a misstatement of the financial statements that is more than inconsequential will notbe prevented or detected by Rutherford House's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not be preventedor detected by Rutherford House's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in thefirst paragraph of this section and would not necessarily identify all deficiencies in internal control thatmight be significant deficiencies or material weaknesses. We did not identify any deficiencies in internalcontrol over financial reporting that we consider to be material weaknesses, as defined above.
A Piton:SsioNAL Snavicns K I R MWKST MONKOI;
[email protected] E-.MAII.\vw\v.hmvcpa.com \Vi-n A
10
Compliance and Other MattersAs part of obtaining reasonable assurance about whether Rutherford House's financial statements are freeof material misstaternent, we 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 thedetermination of Financial statement amounts. However, providing an opinion on compliance with thoseprovisions was not an objective of our audit and, accordingly, we do not express such an opinion. Theresults of our tests disclosed no instances of noncompliance or other matters that are required to be reportedunder Government Auditing Standards.
This report is intended for the information and use of the members of the board, management, and federaland state awarding agencies and is not intended to be and should not be used by anyone other than thesespecified parties.
11
RUTHERFORD HOUSE
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED JUNE 30.2008
A. Summary of Audit Results
1. The auditor's report expresses an unqualified opinion on the financial statements ofRutherford House.
2. No material weaknesses or control deficiencies related to the audit of the financialstatements are reported.
3. No instances of noncompliance are reported.
4. Rutherford House was not subject to a Federal Single Audit for the year ended June 30,2008.
B. Findings - Financial Statement Audit
None
12
RUTHERFORD HOUSE
SCHEDULE OF PRIOR YEAR FINDINGS
FOR THE YEAR ENDED JUNE 30.2008
No findings were reported.
13
RUTHERFORD HOUSE
MANAGEMENT'S CORRECTIVE ACTION PLAN
FOR THE YEAR ENDED JUNE 30.2008
No findings were reported.
14
