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BRENDEL W . DEEMER, CPA
brei^deideeraer^aoLCom
CPA & CONSULTING SBRXnCES, LLC
BOYS & GIRLS CLUB OF
EL CAMINO REAL
AUDIT FOR THE YEARS ENDED
DECEMBER 31 2011 AND 2010
P.O. Box 37CS47 • New Orleans, Louisiana 70187 * 5O4.40L958i • Fax 504.245.5886
Table of Contents
Independent Auditor's Report 1
Statement of Financial Position 2
Statement of Activities 3
Statement of Cash Flow 4
Schedule of Functional Expenses 5
Schedule of Functional Expenses 6
Notes to the Financial Statements 7
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 12
Current Year Findings and Management Responses 14
Prior Year Findings Update 24
BRENDEL W. DEEMER, CPA
brendt-ideemeriS'aoi.cum
CPA G? CONSULTING SERVICES, LLC
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of Boys & Girls Club of El Camino Real Natchitoches, Louisiana
I have audited the accompanying statements of financial position of the Boys & Girls Club of El Camino Real (a nonprofit organization) as of December 31, 2011 and 2010, and the related statements of activities, tunctional expenses, and cash flows for the years then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits 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. Those standards require that I plan and perform the 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 the overall financial statement presentation. I believe that my 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 Boys & Girls Club of El Camino Real as of December 31, 2011 and 2010 and tlie changes in its net assets and its cash flows for the years 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 March 15, 2012 on my consideration of the Boys & Girls Club of El Camino Real'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 internal control over fmancial reporting and 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.
Q^ex^ r^ -^ fA ^ C c ^ ^ J ^ ' ^ f ^ ^ ^ - - ^ Deemer CPA & Consulfing, LLC
New Orleans, Louisiana March 15. 2012
P.O. Box 870S47 • New Orleans, Louisiana 70187 * 504.40L9581 • ra.x 504.245.5886
Boys & Gir ls C l u b of E l C a m i n o Rea l
S t a t e m e n t of F inanc ia l Posi t ion D e c e m b e r 3 1 , 2011 a n d 2010
Dec. 31,2011 Dec. 31, 2010 Note ASSETS
Current Assets Cash
Accounts Receivable Grants Receivable Investments Capita! Assets
Less: Accumulated Depreciation
TOTAL ASSEIS
LIABILITIES AND NET ASSETS Liabilities
Current Liabilities Accounts Payable Payroll Liabilities Current Portion - Note Payable
Total Current Liabilities
Non-Current Note Payable
Total Long-term debt
Total Liabilities
Net Assets Net Assets
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
17,606.00 11,598.00 3,207.00
10,654.00 74,522.00
(56,555.00)
61,032.00
16,500.00
8,481.00
24,981.00
4,840.00
4,840.00
29,821.00
31,211.00 31,211.00
11,790.00 1 10,962.00 2 20,151.00 2 18,758.00 3 74,522.00 4
(48,379.00) 4
87,804.00
17,752.00 7,038.00 7,848.00 5
32,638.00
13,100.00
13,100.00
45,738.00
42,066.00
42,066.00
$ 61,032.00 $ 87,804.00
See A c c o m p a n y i n g Notes to F inanc ia l S t a t emen t s
2
Boys & Girls Club of El Camino Real Statement of Activities For the years Ended
December 31,2011 and 2010
December 31, 2011 December 31,2010
Revenues
Revenues Grants and
Contributions
Net Assets Released from Restrictions Net Income
Unrestricted
S 190,615.00
Temporarily Restricted
337,563.00 (337,563.00)
528,178,00
Total
$ - S 190,615.00
337,563.00 337,563.00
528,178.00
Unrestricted
S 192,318.00
394,692.00
587.010.00
Temporai-ily Restricted
394,692.00
(394.692,00)
Total
192,318.00
394,692.00
587.010,00
Expense Program Services Management and
General
Fund Raising
Tolal Expense
336,759.00
123,005.00
79,271.00
539.035.00
336,759.00
123,005.00
79.271.00
539,035.00
395,639.00
149,048.00
69,515.00
614,202.00
395,639.00
149,048.00
69,515.00
614,202.00
Decrease in Net Assets
Net Assets Beginning
Net Assets Ending
(10,857.00)
42.067.00
$ 31,210.00
(10,857.00)
42.067.00
S 31.210.00
(27,192.00)
69,259.00
$ 42.067.00
(27,192.00)
69.259-00
$ 42.067.00
See Accompanying Notes to Financial Statements 3
Boys & Girls Club of El Camino Real Statement of Cash Flows
For the Years Ended December 31, 2011 and 2010
OPERATING ACTIVITIES (Decrease)/lncrease in Net Assets Adjustments to reconcile Net income to Net Cash provided by
operations: Depreciation (Decrease) Increase in Accounts Receivable (Decrease in Un-deposited Funds (Decrease) Increase in Grants Receivable Increase (Decrease) in Accounts Payable Increase (Decrease) in Payroll Liabilities
Net cash provided by operating activities INVESTING ACTIVITIES
(Purchase)Redemption of Investments Unrealized loss on Investments
Net cash provided/(used) by investing activities FINANCING ACTIVITIES
Payments on Note Payable Net Assets
Net cash provided/(used) by financing activities Net cash increase/(decrease) for period Cash at beginning of period Cash at end of period
12/31/2011
$(10,855.00)
8,177.00 (636.00)
16,944.00 (1,806.00) (7,039.00)
4,785.00
7,553.00 551.00
8,104.00
(7,627.00) 554.00
(7,073.00) 5,816.00
11,790.00 $ 17,606.00
12/31/2010
$(27,193.00)
8,343.00 9,692.00 (106.00) 2,429.00 9,959.00
(12,733.00) (9,609.00)
(2,839.00) 823.00
(2,016.00)
(10,574.00) 15,038.00 4.464.00
(7,161.00) 18,951.00
$ 11,790.00
See Accompanying Notes to Financial Statements 4
Boys & Girls Club of El Camino Real Statement of Functional Expenses
For the Years Ended December 31, 2011 and 2010
Functional Expenses 2011 Expenses
Auto & Truck Expense
Bank Service Charge
Consultant
Depreciation
Dues & Subscriptions
Insurance
Interest and Penalties Conferences and Professional Development
Miscellaneous
Office Related Expenses
Bingo Expenses
Technology & Communication
Maintenance/Ground Care
Special Events Expenses
Payroll
Program Related Expenses
Rent
Travel and Lodging
Utilities
In-kind Services
Total Expenses
Program Expenses
$ 2,545.00
25.00
7.257.00
-264.00
2.803.00
119.00
345.00
-1,061.00
-2.032.00
547,00
-109,156.00
5,715.00
3,600.00
1,228.00
962.00
199,100-00
$336,759.00
General Operating Expenses
$ 1,658.00
112.00
-8,177.00
716.00
5,493.00
1,420.00
2,503.00
7,319.00
4,270.00
-2,925.00
1,826.00
-80,021.00
--
37.00
6,528.00
$ 123,005.00
Fund Raising Expenses
$ 4.00
----
:
--
56,776.00
--
6,818.00
15,673,00
----
$79,271.00
Total Expenses
$ 4,203.00
141,00
7,257.00
8,177.00
980,00
8,296.00
1,539.00
2,848.00
7,319.00
5,331.00
56,776-00
4.957.00
2,373,00
6,818.00
204,850,00
5,715.00
3.600,00
1,265,00
7,490,00
199-100.00
$ 539,035.00
See Accompanying Notes to Financial Statements 5
Boys & Girls Club of El Camino Real Statement of Functional Expenses
For the Years Ended December 31, 2011 and 2010
Functional Expenses 2010 Expenses
Auto & Truck Expense
Bank Service Charge
Consultant
Depreciation
Dues & Subscriptions
Insurance
Interest and Penalties
Legal & Accounting
License & Fees
Conferences & Professional Development
Miscellaneous
Office Related Expenses
Bingo Expense
Technology & Communication
Maintenance/Care of Grounds
Special Events Expenses
Payroll
Program Related Expenses
Rent
Travel & Lodging
Utilities
In-Kind Expense
Total Expenses
Program Expenses
$ 8,452.00
-15,193.00
-26.00
20.00
----
-
351,00
-2,438,00
141.00
-
165,443.00
1,003.00
3,375.00
-97.00
199,100,00
$ 395,639.00
General Operating
$ 1,672,00
217-00
8,352,00
8,092.00
11,395.00
1,176.00
4,000.00
37,00
1,115.00
1,357.00
9,946.00
5.00
2,741,00
3,321,00
1,406-00
73,562.00
12,843-00
-1,465.00
6,346,00
-
$ 149,048,00
Fund Raising
S -
~ --------
20,00
59,480.00
--
4.949.00
5,066.00
-----
$ 69,515,00
Total
$ 10,124-00
217,00
15,193,00
8,352,00
8,118,00
11,415,00
1,176.00
4,000,00
37.00
1,115.00
1.357.00
10,317.00
59,485,00
5,179,00
3,462,00
6.355,00
244,071,00
13,846,00
3,375,00
1,465,00
6,443,00
199,100-00
$614,202.00
See Accompanying Notes to Financial Statements 6
Boys and Girls Club of El Camino Real Notes to the Financial Statements
December 31, 2011 and 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities
The Boys & Girls Club of El Camino Real was formed as a youth services agency to provide behavior guidance and to promote the health, social, educational, vocational, and character development of" youth with special concern for those from disadvantaged circumstances.
Basis of Accounting
The financial statements of the Organization accounting and accordingly recognize revenues they are incurred.
Basis of Presentation
lave been prepared on the accrual basis of when they are earned and expenses when
Financial statement presentation follows the lecommendations of the Financial Accounting Standards Board (FASB) in its Accounting Standards Codification (ASC) 958-210-50-3, Financial Statements of Not-fd.r-Profit Organizations. Under FASB ASC 958-210-50-3, the Organizations are required to report information regarding their financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
Public Support and Revenue
Annual campaign contributions are generally campaign year unless specifically restricted
available for unrestricted use in the related the donor.
Grants and other contributions of cash and otJier assets are reported as temporarily restricted support if they are received with doQor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as assets released fi*om restrictions.
Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance nonfmancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not p-ovided by donation, are recorded at their fair values in the period received.
Boys and Girls Club of El Camino Real Notes to the Financial Statements
December 31,2011 and 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Estimates
Management uses estimates and assumptions in preparing fmancial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Organization considers all highly liquid investments with a maturity value of three months or less when purchased to be cash equivalents. Cash and cash equivalents for the purposes of the statement of cash flows exclude permanently restricted cash and cash equivalents.
Investments
The Organization carries investments in marketable securities with readily determined fair values at their fair value in the Statement of Financial Position.
Compensated Absences
Employees may not accumulate or carry forward unused vacation leave. Sick leave can be accumulated to a maximum of 50 days, but is forfeited at separation. Therefore, no accrual has been made for such pay.
Expense Allocation
Directly identifiable expenses are charged to programs and supporting services. Expenses related to more than one function are charged to programs and supporting services on the basis of periodic time and expense studies. Management and general expenses include those expenses that are not direcfiy identifiable with any other specific fimction but provide for the overall support and direction of the Organization.
8
Boys and Girls Club of El Camino Real Notes to the Financial Statements
December 31,2011 and 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Tax Status
The Organization is exempt from federal income tax under Section (501) (c) (3) of the Internal Revenue Service Code. However, income from certain activities not directly related to the Organization's tax exempt purpose is subject to taxation as unrelated business income. In addition, the Organization qualifies for the charitable contribution deduction under Secfion 170(b) (1) (A) and has been classified as an organization other than a private foundation under Section 509(a) (2).
Compensation Paid to Board Members
The members of the Board of Directors receive no compensation for their services.
Subsequent Events
Boys and Girls Clubs of El Camino Real adopted the Subsequent Events topic of the FASB Accounting Standards Codification (ASC) 855, which requires disclosure of the date through which subsequent events have been evaluated. Management performed an evaluation of its activity through March 15, 2012, the audit report date, and has concluded that there are no significant subsequent events requiring disclosure through the date these financial statements were issued.
2. Receivables
Accounts Receivable and Grants Receivable at December 31, 2011 and 2010 consisted of the following:
2011 2010 Accounts Receivable Bingo Other
Grants Receivable OJP-19265 OJP-19266 Wal-Mart Grant Other
$ 8,758.00 2,840.00
$11,598.00
$
5,000,00 (1,793.00)
$ 3,207.00
$10,962,00 -
$10,962-00
$ 6,636.00 10,308.00 5,000.00
(1,793,00)
$20,151.00
Boys and Girls Club of El Camino Real Notes to the Financial Statements
December 31,2011 and 2010
1. Investments
2011
$18,758.00 447.00
(8,000,00)
(551.00)
$10,654.00
2010
$16,743.00 2,839.00
(824,00)
$18,758.00
FASB ASC 958, Accounfing for Certain Investments Held by Not-for-Profit Organizations requires investments to be carried at fair value. At December 31, 2011 and 2010 investments consisted of the following:
Investments Income Redemption Less: Unrealized Loss
2. Fixed Assets
The following is a summary of changes in fixed assets for the Organization for the years ended December 31, 2011 and 2010:
Fixed Assets Depreciation Vehicles Equipment Vehicles Equipment
Balance 01/01/2010 $32,222.00 $42,300.00 3,218.00 36,985.00 Additions 6,444.00 1,732.00
Deletions -
Balance 12/31/2010 32,222,00 $ 42,300.00 $9,662.00 $38,717.00
Balance 01/01/2011 32,222.00 42,300,00 9,662.00 38,717.00 Additions - - 6,444.00 1,732.00 Deletions - -Balance 12/31/2011 $32,222.00 $42,300.00 $16,106,00 $40,449.00
3. Long-term Debt
The Organization financed two (2) Ford Vans with Sabine Bank & Trust Company in May 2009, in the amount of $31,521.00 at 4.5% interest. Payments to maturity for this debt are as follows:
2011 $ 7,848.00
2012 8,481.00
2013 4,619.00
$20,948.00
10
Boys and Girls Club of El Camino Real Notes to the Financial Statements
December 31, 2011 and 2010
4. Donated Facilities
The City of Natchitoches and Parish Housing Authorifies, and individuals donated facilities for use by the Organization. The estimated value of these donations has been reflected in the financial statements as in-kind revenue and in-kind expenses. For 2011 and 2010, the fair value was estimated at $199,100.00.
5. Net Assets
An adjustment was made to net assets for the year ending 2010 for accounts receivables not recorded in prior periods in the amount of $19,428.00. In addition, unrealized gains were recorded to Net Assets for the year ended 2011.
11
BRENDEL W. DEEMER, CPA
brendeldeem£[email protected]!ri
CPA & CONSULTING SERVICES, LLC
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
To the Board of Directors of the Boys & Giris Club of El Camino Real Natchitoches, Louisiana
I have audited the financial statements of the Boys & Girls Club of El Camino Real (a not-for-profit organization), as of and for the years ended December 31, 2011 and 2010, and have issued my report thereon dated March 15, 2012.1 have 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, and the Louisiana Governmental Audit Guide.
Internal Control over Financial Reporting
In planning and performing my audit, I considered the Organization's internal control over financial reporting as a basis for designing my audit procedures for the purpose of expressing my opinion on the fmancial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organizafion's internal control over fmancial reporting. Accordingly, I do not express an opinion on the effectiveness of the Organization's internal 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 internal control such that there is a reasonable possibility that a material misstatement of the Organization's fmancial statements will not be prevented, or detected and corrected on a timely basis.
My consideration of the internal control over fmancial reporting was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. However, I identified 4 deficiencies over financial reporting, described in the accompanying schedule of findings and responses that I consider to be material weaknesses in internal control over financial reporting 10-01/11-01 to 10-04/11-04.
12
P.O. Box 370S47 • New Orleans, Louisiana 70137 • 504-401.9531 • Fax 504.245.5886
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization's financial statements are free of material misstatement, 1 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 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 an opinion. The results of my tests disclosed 2 instances of noncompliance or other matters that required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and responses as items 10-05/11-05 and 10-06/11-06.
The Organization's response to the findings identified in my audit is described in the accompanying schedule of findings and responses. I did not audit the Organization's responses and accordingly, I do not express an opinion on them.
This report is intended solely for the information and use of the Boys & Girls Club of El Camino Real's management, the Louisiana Legislative Auditor, the Boys & Girls Club of America, and interested state and federal agencies and is not intended to be and should not be used by anyone other than these specified parties. However, under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public dQcumcnt.
^ Deemer, CPA & Consulting, LLC J March 15, 2012 New Orleans, Louisiana
13
Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs
For the Years ended 2011 and 2010
10-01 / 11-01 Accounting Functions
Condition: The accounting functions were handled by a person that did not have the skills to properly record and classify transactions, consequently, prior period audit adjustments and recording errors existed in the summary books of account.
Effect: Material errors existed in the books of account that required correction prior to generating the financial statements for the Organization.
Cause: The Organization does not have adequate funding to employ and individual who possesses the requisite skills to perform the normal bookkeeping functions. In addition, prior to year end, the person handling the bookkeeping duties terminated their employment with the Organization.
Recommendation: Since the Organization cannot employ a full-time person possessing the requisite bookkeeping skills, it is recommended that the Organization obtain the services of a contractor on a quarterly basis to review and correct the books of account.
Management's Response:
Two of the three persons handling the responsibilities of monies for the organization are no longer with the organization. The other person was not in a position to have access to the books nor was she informed of the correct procedures by the former employees, however now that person has been taught the correct procedures for such responsibilities.
We have hired a new Chief Professional Officer who has extensive bookkeeping experience through her employment as an Office Manager for a mid-size law firm. At this time, the bookkeeping duties will be in addition to her duties as an executive director of the organization.
We will not have the hands to hire a contractor to review the books on a quarterly basis, but our current volunteer treasurer is a bank official with extensive experience with bookkeeping who is and will continue to monitor the books on a monthly, if not biweekly basis.
14
Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-02 /11/02 Bank Reconciliation were not performed timely.
Condition: The bank accounts were not reconciled through December 31, 2011. It was also noted that during the years 2010 and 2011, the bank accounts were not reconciled within a timely period after month end.
Effect: The effect of not reconciling the bank statements reduces management's opportunity for an internal verification of cash receipts and disbursement transactions.
Cause: The Organization has limited funding and carmot afford a fiill time person to handle bookkeeping and accounting functions. In addition, the person who had previously handled the reconciliations terminated employment prior to year end.
Recommendation: It is recommended that the Organization ensure that bank reconciliations are performed on a timely basis. In addition, It is recommended that someone other than the person performing reconciliation receives and reviews the bank statements prior to the reconciliation process.
Management's Response:
Two of the three persons handling the responsibilities of monies for the organization are no longer with the organization. The other person, the Club's Administrative Assistant, was not in a position to have access to the books nor was she informed of the correct procedures by the former employees, however now that person has been taught the correct procedures for such limited responsibilities that have been given to her.
A new volunteer treasurer took over in October/November when the former volunteer treastirer resigned from the Board when he moved firom the area and has completely reviewed the books. He was instrumental in ascertaining the information needed for the auditor to report his findings which are included in this report. Our last treasurer did not have a hands-on approach to his volunteer position, yet this one does. He requires reporting at every level.
We have hired a new Chief Professional Officer (CPO) who has extensive bookkeeping experience through her employment as an Office Manager for a mid-size law firm. At this time, the bookkeeping duties will be in addition to her duties as an executive director of the organization.
Since her hiring, she has "cleaned up" the books and reconciled them through February 29, 2012 (the last bank statement), and has forwarded the bank reconciliation reports and the known outstanding debts to the entire Board of Directors.
The CPO will continue to forward the monthly bank reconciliation reports to the treasurer.
15
Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-03/11-03 The Organization Did Not Allocate Program Expenses
Condition: During the preparation of the financial statements, it was determined that the Organization did not properly allocation program expenses in the books of accounting, consequent, the Statement of Function Expenses contain material errors.
Effect: Although the Organization reported expenses to the granting or contracting organization as required in the grant/contracting agreements, the financial statements do not agree with the financial reports to the granting/contracting organizations.
Cause: The Organization does have a person with the requisite skills to perform bookkeeping and accounting functions. The Organization's budget restraints prevent it fiom employing a person with the requisite skills.
Recommendation: The Organization should consider employing a contractor to ensure that the books of account and fmancial statements are materially stated.
Management's Response:
fwo of the three persons handling the responsibilities of monies for the organization are no longer with the organization. The other person, the Club's Administrative Assistant, was not in a position to have access to the books nor was she informed of the correct procedures by the former employees, however now that person has been taught the correct procedures for such limited responsibilities that have been given to her.
A new volunteer treasurer took over in October/November when the former volunteer treasurer resigned from the Board when he moved from the area and has completely reviewed the books. He was instrumental in ascertaming the information needed for the auditor to report his findings which are included in this report. Our last treasurer did not have a hands-on approach to his volunteer position, yet this one does. He requires reporting at every level.
We have hired a new Chief Professional Officer (CPO) who has extensive bookkeeping experience through her employment as an Office Manager for a mid-size law firm. At this time, the bookkeeping duties will be in addition to her duties as an executive director of the organization. She has also begun training through the Rapides Foundation regarding grants and other financial functions necessary for at 501(c) (3) organization.
16
Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-03/11-03, Management Response, (continued)
At this time, the new CPO is learning the prerequisite and correct way to report expenses as needed in the grant processes. However, due to the neglect of the former employees, as ofthis date, the grants secured by them are no longer part of the financial picture of the organization as they have been withdrawn.
The CPO will continue to work toward the correction of any past reporting and will not report un-founded financials.
In response to the recommendation to have the organization consider employing a contractor to ensure that the books of account and financial states are materially stated, the organization will not have the funds to hire a contractor to review the books on a quarterly basis, but our current volunteer treasurer is a bank official with extensive experience with bookkeeping who is and will continue to monitor the books on a monthly, if not bi-weekly basis.
17
Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-04 / 11/04 Lack Separation of Duties in Bingo Operations
Condition: The Bingo operations consist of just one person who performs the Bingo games, counts the supplies, counts the revenues, and files the reports.
Effect: Although the actual Bingo game does not generate a material amount of revenue, the chance for misstatements exists because of the lack of a separation of duties. In addition, the operation can only keep a maximum of $500.00 in the gaming fiind, when the amount exceeds the threshold; a person from the administrative office retrieves the excess from the gaming fund and makes a deposit. However, only one person retrieves the fiinds and there is no other person to verify the money count.
Cause: The funding level for the Organization prevents the Organization fi*om employing addition persons to obtain adequate separation of duties.
Recommendation: A member of the Board of Directors should be available for the Bingo games to ensure the begirming cash count and supplies count and the ending cash count and supplies count are verify and that the report is prepared in accordance with the counts. In addition, a person other than the person obtaining the excess funds should review the cash count and compare with the ending report and make the deposit.
Management's Response:
It is the practice ofthis office that the Administrative Offices order and review the supplies, verifying the supplies and revenues and that they file the reports with the State offices and the State Office of Charitable Gaming help with any flags regarding any issues tiiat would arise from missing monies.
In response to the recommendation to have a member of the Board of Directors available for each of the Bingo games to ensure the beginning cash count and supplies count and the ending cash count and supplies count are verified and that report is prepared in accordance with the counts, we are looking into the purchase of a computer program that will track this type of inventory and income/expense data. It will also flag any discrepancies within a two game cycle. It is not feasible that such a small, volunteer Board would have members, who have jobs outside ofthis volunteer work, that could attend every Bingo session because we are assigned up to 15 sessions per month at all hours between 11 ;00 AM to 9:00 PM seven days a week. In fact, it would be impossible to have the employees of the organization to do so with the loss of two employees who were doing the job of three employees, who were recently replaced with one employee.
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Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-04 / 11/04, Management Response (continued)
In addition, it is the practice ofthis office to send two persons from the administrative offices any time any monies are retrieved from the Bingo Hall and each person verifies the cash count and makes that deposit. The deposit is then verified during the quarterly reporting and monthly bank reconciliation. However, until this was brought to the attention of the CPO, there was no inventory control by this office other than that by the quarterly report. As of mid February, a inventory of all "cards" sold has been kept and as of the next order of daubers, there will be an inventory control done on those as well.
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Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-05/11-05 Late Report
Condition: Louisiana state law requires that the Organization have an aimual audit performed and submitted to the Legislative Auditor within six (6) months after the close of their fiscal year. For the year ended December 31, 2010, this requirement was not met.
Effect: The Organization is not in compliance with state law.
Cause: The Organization did not engage an auditor within the required time period.
Recommendation: The Organization should institute procedures to engage the auditor prior to year end. In addition, the books and accounting records prepared in sufficient time to prepare and submit the report.
Management's Response:
The two persons handling the responsibilities of administration of the organization, including the aimual audit for the organization are no longer employed by the organization.
In fact, due to the lack of compliance, the organization has lost all nationally funding and it new staff is working diligently just trying to keep the doors opened, including running fundraisers on a short time line.
A new volunteer treasurer took over in October/November when the former volunteer treasurer resigned from the Board when he moved fiom the area and has completely reviewed the books. He was instrumental in ascertaining the information needed for the auditor to report his findings which are included in this report. Our last treasurer did not have a hands-on approach to his volunteer position, yet this one does. He requires reporting at every level.
However, due to the neglect of the former employees, as ofthis date, the Board hired the current contract auditor to get us back into compliance.
In response to the recommendation to have the organization consider employing an auditor prior to year end, this is a recommendation the Board should employ.
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Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-05/11-05, Management Response (continued)
We have hired a new Chief Professional Officer (CPO) who has extensive bookkeeping experience through her employment as an Office Manager for a mid-size law firm. At this time, the bookkeeping duties will be in addition to her duties as an executive director of the organization and all reports are done on a monthly basis to report to the Board of Directors. She has on her calendar and has sent it to the other Board of Directors for them to add to their calendars, that the Board must employ an annual auditor and that audit should be completed no later than two months following the end of the fiscal year as required by a 501(c) (3) organization.
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Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-06/11-06 990 for 2010 Not Submitted Timely
Condition: The federal form 990 Remm of Organization Exempt from Income Tax for the year ended December 31,2010 was not filed on a timely basis. Form 990 is due on the 15 '̂' day of the fifth month after the end of the fiscal year.
Effect: Because the Organization did not file form 990 timely, there is a possibility that the Organization will incur an addition liability in the form of interest and penalties assessed by the Internal Revenue Service for delinquent filing of the information form. The penalty for not filing form 990 timely is $20.00 per day for every day that the form is late.
Cause: The Organization depends on the auditing firm to assist in filing form 990. Since the Organization did not engage an auditor in 2010, the tax return was not filed.
Recommendation: The Organization should put into place procedures to ensure that Form 990 if filed on a timely basis even if the auditor the auditor has not completed the audit report. In any event, the Organization should put into place procedures to obtain extensions to prevent the assessment of penalties and interest that may be incurred because the Form is not completed.
Management's Response:
Two of the three persons handling the responsibilities of monies for the organization are no longer with the organization. The other person, the Club's Administrative Assistant, was not in a position to have access to the books nor was she informed of the correct procedures by the former employees, however now that person has been taught the correct procedures for such limited responsibilities that have been given to her.
A new volunteer treasurer took over in October/November when the former volunteer treasurer resigned from the Board when he moved from the area and has completely reviewed the books. He was instrumental in ascertaining the information needed for the auditor to report his findings which are included in this report. Our last treasurer did not have a hands-on approach to his volunteer position, yet this one does. He requires reporting at every level.
We have hired a new Chief Professional Officer (CPO) who has extensive bookkeeping experience through her employment as an Office Manager for a mid-size law firm. At this time, the bookkeeping duties will be in addition to her duties as an executive director
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Boys and Girls Club of El Camino Real Current Year Findings and Questioned Costs (continued)
For the Years ended 2011 and 2010
10-06/11-06 Management Response, (continued)
of the organization. She has also begun training through the Rapides Foundation regarding grants and other financial functions necessary for at 501(c) (3) organization.
However, due to the neglect of the former employees, they put the organization in a precarious position wherein they did not employ or support the Mission or Goals of our organization and thereby will cause the organization to possibly close their doors dues to their lack of fiscal responsibility.
In response to the recommendation to have the organization put into place procedures to obtain extensions to prevent the assessment of penalties and interest that may be incurred because the Form is not completed timely, the current CPO has put the requirement on her calendar and has sent it to the other Board of Directors for them to add to their calendars, that the Board must employ an annual auditor and that audit should be completed no later than two months following the end of the fiscal year as required by a 501(c)(3) organization.
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Boys and Girls Club of El Camino Real Update of Prior Year Findings and Questioned Costs
For the Years ended 2011 and 2010
Finding 09-01 - Internal Control - Segregation of Duties
Unresolved
Fmdmg 09-02 - Late Report
Unresolved
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