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-2 AH 9:19
Financial Report
Crossroads Louisiana, Inc., and Subsidiary
June 30, 2007
Under provisions of state law, this report is. a publicdocument. Acopy of the report hoe bsen 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
TABLE OF CONTENTS
Crossroads Louisiana, Inc., and Subsidiary
June 30, 2007
Independent Auditor's Report
Exhibits
Consolidated Statements of Financial Position
Consolidated Statements of Activities
Consolidated Statement of Functional Expenses, 2007
Consolidated Statement of Functional Expenses, 2006
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
PageExhibits Number
1-2
A
B
C-l
C-2
D
E
3 - 4
5
6 - 7
8-9
10
11-21
Supplementary Information
Independent Auditor's Report on the Supplementary Information
Consolidated Statement of Activities and FunctionalExpenses by Program, 2007
Consolidated Statement of Activities and FunctionalExpenses by Program, 2006
PageSchedules Number
22
23-24
25-26
TABLE OF CONTENTS (Continued)
Crossroads Louisiana, Inc., and Subsidiary
June 30, 2007
Special Report of Certified Public Accountants
PageNumber
Report on Internal Control Over FinancialReporting and on Compliance and OtherMatters Based on an Audit of FinancialStatements Performed in Accordancewith Government Auditing Standards 27 - 29
Schedule of Findings and Responses 30 - 31
Reports By Management
Schedule of Prior Year Findings and Responses 32
Management's Corrective Action Plan on Current Year Findings 33 - 34
B o u r g e o i s B e n n e t t
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors,Crossroads Louisiana, Inc., and Subsidiary,
New Orleans, Louisiana.
We have audited the accompanying consolidated statements of financial position ofCrossroads Louisiana, Inc., and Subsidiary (a nonprofit organization) as of June 30, 2007 and 2006,and the related consolidated statements of activities, functional expenses, and cash flows for the yearsthen ended. These consolidated financial statements are the responsibility of the Organization'smanagement. Our responsibility is to express an opinion on these consolidated financial statementsbased on our audits.
We conducted our audits in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the consolidated financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall consolidated financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, inall material respects, the financial position of Crossroads Louisiana, Inc., and Subsidiary as of June 30,2007 and 2006, and the changes in their net assets and their cash flows for the years then ended, inconformity with accounting principles generally accepted in the United States of America.
1340 West Tunnel Blvd., Suite 430P.O. Box 2168Houma,LA7036l-2l68Phone (985) 868-0139Fax (985) 879-1949
Certified PublicAccountants | Consultants
A Limited Liability Company
P. O. Box 60600New Orleans, LA 70160-0600Heritage Plaza, 17th FloorPhone (504) 831-4949Fax (504) 833-9093
507-D St. Philip Street?. O. Box 1205Thibodaux,LA70302-l205Phone (985) 447-5243
In accordance with Government Auditing Standards, we have also issued our reportdated December 27, 2007, on our consideration of the Organization's internal control over financialreporting and our tests of its compliance with certain provisions of laws, regulations, contracts, andgrant agreements and other matters. The purpose of that report is to describe the scope of our testingof internal control over financial reporting and compliance and the results of that testing, and not toprovide an opinion on internal control over financial reporting or on compliance. That report is anintegral part of an audit performed in accordance with Government Auditing Standards and should beread in conjunction with this report in considering the results of our audit.
0Certified Public Accountants.
New Orleans, Louisiana,December 27, 2007.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Crossroads Louisiana, Inc., and Subsidiary
June 30, 2007 and 2006
ASSETS
2007 2006
Current AssetsCash and cash equivalentsAccounts receivableAdvances to officersAdvances to affiliates:
The Saint Charles, Inc.Job Link, Inc.
Other receivablesPrepaid expenses
Total current assets
Investments
Property and Equipment,Net of accumulated depreciation
Other AssetsNote receivable - The Saint Charles, Inc.Deposits
Total other assets
$ 289,915566,045
4,716148,46798,84628,177
1,136,166
916,622
566,323
191,0451,492
192,537
$ 358,475278,781
23,541
222,393130,55941,72059,672
1,115,141
948,466
408,780
191,0451,492
192,537
Total assets $ 2,811,648 $ 2,664,924
See notes to consolidated financial statements.
Exhibit A
LIABILITIES AND NET ASSETS
2007 2006
Current LiabilitiesClient deposits $ 119,967 $ 119,967Advances from officers 12,048Accounts payable 82,510 39,885Accrued expenses:
Salaries and payroll taxes 38,575 22,724Insurance 59,635 7,168Other 6,000 6,105
Notes payable - current 5,104Notes payable - line of credit :_ 17,646
Total current liabilities 323,839 213,495
Long-Term LiabilitiesNotes payable - long-term 14,315Deferred compensation 916,345 878,936Deferred severance pay 1_ 19,000
Total long-term liabilities 930,660 897,936
Total liabilities 1,254,499 1,111,431
Net AssetsUnrestricted 1,557,149 1.553,493
Total liabilities and net assets $ 2,811,648 $ 2,664,924
Exhibit B
CONSOLIDATED STATEMENTS OF ACTIVITIES
Crossroads Louisiana, Inc., and Subsidiary
For the years ended June 30, 2007 and 2006
2007 2006Support and Revenues
Government fees for services $ 3,148,493 $ 2,434,708Investment income 50,842 184,946Tenant rents 153,406 130,442Miscellaneous 4,793 18,165
Total support and revenues - unrestricted 3,357,534 2,768,261
ExpensesProgram services:
Olivier Street Program - 48,755Melbrooke Street Program 29,620State Street Program 449,757 277,109Toledano Street Program 289,610 220,576Timberwood Drive Program 152,195 123,579Nunez Street Program 307,947 251,044Hancock Street Program 332,330 233,991RHSProgram 809,112 310,530St. Charles Place Program 98,830 140,671McArthur Program 225,621Specific assistance to individuals 28,434 -_
Total program services 2,723,456 1,606,255
Supporting services:Management and general 630,422 817,752Hurricane Katrina expenses, net ^_ 4,560
Total supporting services expenses 630,422 822,312
Total expenses 3,353,878 2,428,567
Increase In Unrestricted Net Assets 3,656 339,694
Net AssetsBeginning of year 1,553,493 1,213,799
End of year $ 1,557,149 $ 1,553,493
See notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES
Crossroads Louisiana, Inc., and
For the year ended June 30, 2007
Subsidiary
Program Services
SalariesEmployee benefits:
InsuranceRetirement planPayroll taxesDeferred compensation
Bed feesDepreciationFoodInsuranceInterestLocal transportationMiscellaneousOccupancy:
Contract servicesMaintenanceRentRepairs, buildingRepairs, furnitureUtilities
Professional servicesSuppliesTelephoneVocational program
Total expenses
See notes to consolidated
Olivier Melbrooke StateStreet Street Street
Program Program Program
$ - - $ 193,840
$ 27 12,565.
16,655-
30,88813,75117,348
-_
13,330670 1,667
3,143916
24,000 24,000560 4,810
998256 7,484
3,181 7,57334,335
10 3,33964,031
$ - $ 29,620 $ 449,757
financial statements.
6
Toledano TimberwoodStreet Drive
Program Program
$ 114,986 $ 96,195
5,692 3,976417
9,874 8,295-
31,3177,925 6,2398,294 5,315
--
13,694 2972,444 5,448
1,499 961-
15,000 9,0005,419 3,457
993 207,821 3,6235,414 335
17,207 5,9832,431 2,634
39,600
$ 289,610 $ 152,195
NunezStreet
Program
$ 135,880
6,949-
11,694•
26,6708,160
12,058~-
16,8857,347
3,333-
15,600948725
1,5638,462
17,3402,433
31,900
$ 307,947
Program ServicesHancock St. Charles Specific
Street RHS Place McArthur AssistanceProgram Program Program Program to Individuals
$ 149,940 $ 672,911 $ 60,145 $ 86,913 $
7,875 42,643 2,882 5,169_
12,877 58,359 5,180 7,571_
26,055 - - 19,3489,139 4,285 - 8,4229,451 104 1,520 10,101
.720
12,875 4,963 1,854 9,89510,419 8,444 11,050 5,355 28,434
1,386 422 - 1,648257
15,600 12,000 14,360 24,0003,766 - - 2,878
722 5944,328 - 569 3,514
11,231 645 - 6,25223,300 1,357 809 9,920
1,763 2,002 461 1,49131,603 - - 22,550
$ 332,330 $ 809,112 $ 98,830 $ 225,621 $ 28,434
7
Totals
$ 1,510,810
87,778417
130,505-
134,27857,92164,191
-720
73,79381,278
12,3921,173
153,56021,838
4,05229,15843,093
110,25116,564
189,684
$ 2,723,456
Support ServicesManagement
andGeneral
$ 327,851
19,7761,257
26,44337,094
-13,866
56021,677
8303,578
38,328
2,3254,035
30,3385,1574,8863,042
67,5818,520
13,278-
$ 630,422
Exhibit C-l
Totals
$ 1,838,661
107,5541,674
156,94837,094
134,27871,78764,75121,677
1,55077,371
119,606
14,7175,208
183,89826,995
8,93832,200
110,674118,77129,842
189,684
$ 3,353,878
CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES
SalariesEmployee benefits:
InsuranceRetirement planPayroll taxesDeferred compensation
Bed feesDepreciationFoodInsuranceInterestLocal transportationMiscellaneousOccupancy:
Contract servicesMaintenanceRentRepairs, buildingRepairs, furnitureUtilities
Professional servicesSuppliesTelephoneVocational program
Total expenses
See notes to consolidated
Crossroads Louisiana, Inc.,
For the year ended June
Olivier MelbrookeStreet Street
Program Program
$ 12,090 $ -
576(574)954
--
3,4701,937
---
5,120
--
14,9291,707
-4,547
7152,469
815-
$ 48,755 $ -
financial statements.
8
and Subsidiary
30, 2006
Program ServicesState ToledanoStreet Street
Program Program
$ 96,629 $ 82,510
6,967 5,114(1,068) (863)7,915 6,872
-27,769 27,769
7,807 7,2086,936 4,987
--
11,242 9,4725,322 2,652
1,144 796-
26,000 9,375997 5,891756 2,270
4,113 3,728673 2,380
13,697 12,523427 1,449
59,783 36,443
$ 277,109 $ 220,576
TimberwoodDrive
Program
$ 72,294
4,495(1,147)6,062
--
3,6703,700
--
4612,836
761-
9,0007,1611,5352,687
-8,3631,701
-
$ 123,579
NunezStreet
Program
$ 100,376
5,926(2,592)8,335
-27,389
4,7816,110
--
12,0637,625
610-
15,6002,749
3971,6954,062
12,9831,318
41,617
$ 251,044
ProgramHancock
StreetProgram
$ 78,587
4,789(1,342)6,599
-26,222
9,3194,883
--
13,7024,823
1,150-
15,6002,395
3835,7432,411
14,9181,299
42,510
$ 233,991
ServicesSt. Charles
RHS PlaceProgram Program
$ 252,015 $ 93,648
19,227 6,454(3,246) (586)19,989 7,713
.-
212 3,681339 3,253
--
1,840 9,6583,030 648
1,536 688-
12,000 8,1641,849
170-
1,350 1652,053 2,547
185 2,619-
$ 310,530 $ 140,671
Totals
$ 788,149
53,548(11,418)64,439
-109,14940,14832,145
--
58,43832,056
6,685-
110,66822,749
5,51122,51311,75669,553
9,833180,353
$ 1,606,255
Support ServicesManagement
andGeneral
$ 338,917
13,998(5,326)26,679
250,899-
7,310-
18,0042,5186,359
53,142
2,9447,880
15,2449,347
8641,375
45,19414,2278,177
-
$ 817,752
Exhibit C-2
Totals
$ 1,127,066
67,546(16,744)91,118
250,899109,14947,45832,14518,0042,518
64,79785,198
9,6297,880
125,91232,0966,375
23,88856,95083,78017,990
180,353
$ 2,424,007
9
CONSOLIDATED STATEMENTS OF CASH FLOWS
Crossroads Louisiana, Inc., and Subsidiary
For the years ended June 30, 2007 and 2006
Exhibit D
2007Cash Flows From Operating Activities
Increase in unrestricted net assetsAdjustments to reconcile increase in net assets to net
cash provided by (used in) operating activities:Depreciation and amortization(Gain) loss on sale of property and equipmentGain on disposition of property and equipment - Hurricane KatrinaUnrealized (gain) loss on investmentsRealized (gain) loss on sales of investments(Increase) decrease in operating assets:
Accounts receivableOther receivablesPrepaid expensesDeposits
Increase (decrease) in operating liabilities:Accounts payableAccrued expensesClient depositsDeferred compensationDeferred severance pay
Net cash provided by (used in) operating activities
Cash Flows From Investing ActivitiesPurchases of property and equipmentInsurance recoveries from Hurricane Katrina claimsProceeds from sale of equipmentAdvances to officers, net advancesAdvances from (to) affiliates, netPurchases of investmentsProceeds from sales of investments
Net cash used in investing activities
Cash Flows From Financing ActivitiesNet repayments on line of credit
Net Increase (Decrease) In Cash
CashBeginning of year
End of year
See notes to consolidated financial statements.
3,656
71,7876,596
(48,636)24,188
(287,264)(57,126)31,495
42,62568,213
37,409(19,000)
(126,057)
(216,507)
35,589199,769
(3,805,072)3,861,364
75,143
(17,646)
(68,560)
358,475
$ 289,915
2006
$ 339,694
47,458(6,386)(16,682)67,090
(240,122)
(114,838)(10,919)(14,236)
(75)
(2,392)(11,813)119,967241,399(18,989)
379,156
(206,979)27,5896,386
45,747(108,169)
(2,453,567)2,469,461
(219,532)
(14,024)
145,600
212,875
$ 358,475
10
Exhibit E
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Crossroads Louisiana, Inc., and Subsidiary
June 30, 2007 and 2006
Note 1 - NATURE OF ACTIVITIES
Crossroads Louisiana, Inc., and Subsidiary (the Organization) is a nonprofit corporationwhich provides residential treatment services for the psychologically handicapped in theNew Orleans area and is substantially funded by the State of Louisiana and FederalMedicaid payments.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization and Income Taxes
The Organization is a nonprofit corporation organized under the laws of the State ofLouisiana in 1981. It is exempt from Federal income tax under Section 501(c)(3) ofthe Internal Revenue Code, and qualifies as an organization that is not a privatefoundation as defined in Section 509(a) of the Code. It is also exempt fromLouisiana income tax under the authority of R.S.47:121(5).
b. Financial Statement Presentation
Financial statement presentation follows the recommendations of the Statement ofFinancial Accounting Standards, (SFAS) No. 117, "Financial Statements of Not-For-Profit Organizations." Under SFAS No. 117, the Organization classifies its netassets, revenues, and expenses based on the existence or absence of donor-imposedrestrictions. Accordingly, net assets and changes therein are classified and reportedas follows:
Unrestricted Net Assets - Net grants and other revenues and expenditures offunds for the general operation of its facilities.
11
Exhibit E(Continued)
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b. Financial Statement Presentation (Continued)
Temporarily Restricted Net Assets - Grants and other revenues specificallyauthorized by the grantor or donor to be used for a certain purpose or to benefit aspecific accounting period. There were no temporarily restricted net assets atJune 30, 2007 or 2006.
Permanently Restricted Net Assets - There were no permanently restricted netassets at June 30, 2007 or 2006.
c. Consolidated Financial Statements
Following the guidance of Statement of Position 94-3, the consolidated financialstatements include the accounts of the Organization and the accounts of Cher-AmiHome of Gretna, LA., Inc. The Organization obtained control of the Cher-AmiHome early in the 1996 fiscal year and has assumed control of its operations. Allsignificant inter-company transactions and accounts are eliminated in consolidation.In the Consolidated Statements of Functional Expenses, the operations of Cher-AmiHomes are labeled Hancock Street Program.
d. Basis of Accounting
The consolidated financial statements of the Organization are prepared on theaccrual basis of accounting generally accepted in the United States of America.
e. Use of Estimates
The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect certain reported amounts and disclosures.Actual results could differ from those estimates.
12
Exhibit E(Continued)
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Cash and Cash Equivalents
Cash and cash equivalents consist primarily of operating funds maintained inchecking and operating accounts. Any investments in money market accounts,certificate of deposit or other investments with maturities of three months or lesswould also be considered cash and cash equivalents, except for money market fundsmaintained in the Fidelity Investments Brokerage accounts which are reported asinvestments.
g. Allowance For Doubtful Accounts
The Organization provides services under contracts entered into with various stateand local agencies. Accounts receivable includes amounts billed under thesecontracts and amounts due from patients for services provided. A major portion ofthe accounts receivable balance as of June 30, 2007 and 2006 is from the State ofLouisiana Department of Health and Hospitals.
Accounts receivable are stated at the amount management expects to collect fromoutstanding balances. Management provides for probable uncollectible amounts andadjustments to amounts billed through a valuation allowance based on its assessmentof the current status of individual receivables from contracts and Medicaid.
h. Investments
Investments are carried at fair market value based on quoted market prices for theinvestments.
i. Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided over theestimated useful life of each class of depreciable asset and is computed on thestraight-line method. Donated property is recorded at its fair market value at thedate of donation.
13
Exhibit E(Continued)
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j. Allocated Expenses
The cost of providing the various programs and other activities are summarized inthe consolidated statement of functional expenses. Expenses by function have beenallocated among program and supporting services classifications based on State ofLouisiana Rate Setting classifications. Shared expenses are allocated amongprograms based on the portion of direct expenses by program to total expenses.
Note 3 - ADVANCES TO OFFICERS
The amount due from officers represents unsecured advances to officers. Interest paymentsare not required on the advances to officers.
Note 4- INVESTMENTS
Investments include amounts held in investment accounts with Fidelity Investments, Inc.Details of investments are as follows:
June 30, 2007
CostMarketValue
Money market funds $ 916,622 $ 916,622
June 30, 2006
CostMarketValue
StocksMoney market funds
782,997214,105
Total investments $ 997,102
734,361214,105
$ 948,466
14
Exhibit E(Continued)
Note 4- INVESTMENTS (Continued)
The market values and costs of investments held at June 30,2007 and 2006 are as follows:
MarketValue Over
Market (Under)Cost Value Cost
Balances at June 30,2007 $ 916,622 $ 916,622 $Balances at June 30,2006 $ 997,102 $ 948,466 (48,636)
Increase in unrealized appreciationduring 2007 $ 48,636
Investment returns for the year ended June 30,2007 and 2006 are summarized as follows:
2007 2006
Interest and dividend income $ 26,394 $ 11,914Unrealized gain (loss) 48,636 (67,090)Realized gain (loss) (24,188) 240,122
Net investment income $ 50,842 $ 184,946
Note 5 - PROPERTY AND EQUIPMENT
At June 30, 2007 and 2006, the cost of property and equipment and accumulateddepreciation are as follows:
Depreciation2007 2006 Annual Rates
Equipment, furniture, and fixtures $ 282,391 $ 291,107 5-20%Leasehold improvements 575,077 451,305 20%Vehicles 162,666 142,015 20%
1,020,134 884,427Less accumulated depreciation (453,811) (475,647)
Net property and equipment $ 566,323 $ 408,780
15
Exhibit E(Continued)
Note 5 - PROPERTY AND EQUIPMENT (Continued)
Depreciation expense charged to income was $71,787 and $47,458 for 2007 and 2006,respectively.
Note 6- NOTE RECEIVABLE
On December 15,2003, the Organization received a note from The Saint Charles, Inc., anaffiliate. The note receivable consists of a 5% note due in monthly installments of $1,120,scheduled to begin on January 31, 2006 and through December 2036. Payments will beapplied to accrued interest first before any portion will be applied to principal. Interest willaccrue from the date of the note. The first payment towards principal will be in February2012. No payments have been made as of June 30, 2007.
Interest income of $10,438 and $10,486 was earned on this note for 2007 and 2006,respectively.
Note 7 - NOTES PAYABLE - LINE OF CREDIT
The Organization has available a revolving line of credit with a bank in the amount of$100,000. This is a demand obligation with a variable rate of interest, which was 8.25% atJune 30, 2007. There was no balance outstanding at June 30, 2007. At June 30, 2006,$17,646 was outstanding.
NoteS- LONG-TERM DEBT
Long-term debt at June 30, 2007 consisted of the following:
Note payable to bank, monthly paymentsof $524 including interest at 6.67%until December 2010, collateralizedby a vehicle. $ 19S419
Current portion 5,104
Long-term debt $ 14,315
16
Exhibit E(Continued)
Note 8 - LONG-TERM DEBT (Continued)
Debt maturities are as follows:
Year EndingJune 30, Amount
2007 $ 5,1042008 5,4682009 5,8572010 2,990
Total $ 19,419
Note 9- LEASES
The Organization leases its administrative and residential facilities under the followingoperating leases:
The Olivier Street facility is leased from the wife of the Executive Director for $1,866per month, The lease began July 1, 2002 and ends on June 30,2008. The lease has anoption for renewal for 5 years at a monthly rental of $2,146. Total rent expense was$22,394 for each of the years ended June 30, 2007 and 2006. One-third of the facilitywas used for administration and the other two-thirds as a residential facility during theyear ended June 30, 2006. The facility was used solely for administration during theyear ended June 30, 2007
The Nunez Street facility is leased from the wife of the Executive Director for $1,300per month. The lease began July 1, 2002 and ends on June 30, 2008. The lease has anoption for renewal for 5 years at a monthly rental of $1,495. Total rent expense is$15,600 for each of the years ended June 30, 2007 and 2006.
The Hancock Street residential facility is leased from the wife of the Executive Directoron a monthly basis for $1,300 per month. The lease began July 1, 2002 and ends onJune 30, 2008. The lease has an option for renewal for 5 years at a monthly rental of$1,495, Total rent expense is $15,600 for each of the years ended June 30, 2007 and2006.
The RHS Program leases a facility owned by Job Link, Inc. for $1,000 per month on amonth-to-month basis, beginning on July 1,2004. Rent expense is $12,000 for each ofthe years ended June 30, 2007, and 2006.
17
Exhibit E(Continued)
Note 9 - LEASES (Continued)
The State Street residential facility is leased from an officer of the Organization for$2,000 per month. The lease began March 1, 2003, and ends on February 28, 2008.The lease has an option for renewal for 5 years at a monthly rental of $2,100. Total rentexpense is $24,000 and $26,000 for the years ended June 30, 2007 and 2006,respectively.
The Toledano Street residential facility is leased for a 5 year term commencingSeptember 1,2003 and ending August 31,2008. The monthly payment is $ 1,250. Totalrent expense is $15,000 and $9,375 for the years ended June 30, 2007 and 2006,respectively.
The Timberwood Drive facility is leased from the wife of the Executive Director for$750 per month. The lease began on July 1, 2002 and ends June 30, 2008. The leasehas a renewal option for 5 years at a monthly rental of $863. Total rent expense is$9,000 for each of the years ended June 30, 2007 and 2006.
The Melbrooke facility is leased for $2,000 per month on a month-to-month basis,beginning on July 1, 2006. Rent expense is $24,000 for the year ended June 30,2007.
The St. Charles Place facility is leased for on a month-to-month basis. Rent expense is$14,360 and $8,164 for the years ended June 30, 2007 and 2006, respectively.
The McArthur facility is leased for $2,000 per month on a month-to-month basis,beginning on July 1, 2006. Rent expense is $24,000 for the year ended June 30, 2007.
During the years ended June 30, 2007 and 2006, the Organization leased equipment onmonth-to-month leases in the amount of $7,944 and $7,779, respectively.
Rent expense related to these leases totaled $183,898 and $125,912 for the years endedJune 30, 2007 and 2006, respectively.
18
Exhibit £(Continued)
Note 9 - LEASES (Continued)
The future minimum lease payments under the above described leases are as follows:
Year EndingJune 30, Amount
2008 $ 91,5942009 2,500
Total $ 94,094
Note 10 - RETIREMENT PLAN
The Organization has a non-contributory defined contribution retirement plan which coverssubstantially all of its employees. Contributions to the defined contribution retirement planare determined at the discretion of the Organization's Board of Directors. No contributionswere made for the years ended June 30, 2007 and 2006.
Note 11 - OFFICERS COMPENSATION
Officer's compensation is as follows for the years ended June 30, 2007 and 2006:
2007 2006
Executive Director $ 108,000 $ 74,000Assistant Director 50,000 96,744
Totals $ 158,000 $ 170,744
Note 12 - RELATED PARTY TRANSACTIONS
The Organization uses Job Link, Inc. to provide development services for group homeprograms in accordance with State of Louisiana regulations. Job Link, Inc. is owned bymembers of the Organization's Board of Directors. The Organization incurredapproximately $191,000 and $183,000 in 2007 and 2006, respectively, in fees related tothese services. The Organization paid rent of $12,000 on a building owned by Job Link,Inc. for both the years ended June 30,2007 and 2006 to operate the RHS Program. At June30, 2007 and 2006, $148,467 and $130,559, respectively, is due from Job Link, Inc.,principally due to the costs of salaries of shared employees for the portion of time spent onJob Link, Inc. activities, and is reported as advances to affiliates.
19
Exhibit E(Continued)
Note 12 - RELATED PARTY TRANSACTIONS (Continued)
The Organization has agreed to assist with the operation of The Saint Charles, Inc. (St.Charles Place), which is a brain and spinal injury center owned by the Executive Director ofthe Organization. The Saint Charles, Inc. has agreed to reimburse the Organization for allof the program costs related to the Center plus a portion of the Organization's managementand general expenses. The Saint Charles, Inc. began operations in March 2002. For theyears ended June 30, 2007 and 2006, the Organization billed The Saint Charles, Inc.$98,830 and $140,671, respectively, for program costs and $23,751 and $51,806,respectively, for management and general expenses.
The Organization has a note receivable from The Saint Charles, Inc. as described in Note 6.
At June 30, 2007 and 2006, accounts receivable due from The Saint Charles, Inc. totaled$4,716 and $222,393, respectively, related to current operating expenses.
The Organization also leases some property and equipment from related parties described inNote 9. Total rent expense for these leases totaled $86,594 and $88,594 for the years ended2007 and 2006, respectively.
During September 1995, the Organization took over control of the operations of the Cher-Ami Homes of Gretna, LA., Inc. (Cher-Ami). Cher-Ami's major assets consisted of itscontract with the State of Louisiana and the related accounts receivable. At June 30,2007,Cher-Ami had no debts outstanding. The intercompany receivable balance of $ 161,196 atJune 30, 2007 and 2006 has been eliminated in consolidation.
Note 13 - SIGNIFICANT CONTRACTS AND GRANTS
For the years ended June 30, 2007 and 2006, approximately $3,026,000 and $2,242,000,respectively, of government fees for services was from the State of Louisiana Departmentof Health and Hospitals acting as a Medicaid fiscal intermediary. These programs arereimbursed on a per diem rate based on costs and budgets, received annually by the State ofLouisiana. The State provides annual contracts to the Organization which grant the Statethe right to audit program accounts and activities. The State, acting as the Medicaidintermediary for Medicaid patients, reimburses services rendered to Medicaid programbeneficiaries under an allowable cost reimbursement formula that is subject to audit andretroactive adjustments. Management believes that the Organization is in compliance withthe provisions of these contracts and grants and that the findings of an audit, if any, wouldnot have a material impact on the financial statements.
20
Exhibit E(Continued)
Note 14 - DEFERRED COMPENSATION AGREEMENT
The Organization entered into a deferred compensation agreement with one of its officerseffective July 1,1993. The agreement provides that upon reaching age 65, the officer willreceive monthly compensation commencing with retirement and continuing for the rest ofhis life. In the event of his death, prior to normal life expectancy at retirement (age 65), theparticipant's designated beneficiary shall be paid a death benefit equal to the present valueof the future payments to which the participant would have been entitled. If the retiredparticipant dies before the end of his life expectancy, his beneficiary will receive a deathbenefit equal to the present value for the installments that the participant would havereceived if he had lived to his life expectancy.
At June 30,2004, the agreement was amended to discontinue future funding. Accordingly,no contribution was accrued for the years ended June 30, 2007 and 2006. The funds owedunder this agreement are maintained in a separate investment account, with investmentactivity reported as income and corresponding deferred compensation expense. Theliability each year is adjusted to equal the balance of the investments in the account. Theamount charged to expense was $37,094 and $241,399 for the years ended June 30, 2007and 2006, respectively. There were no contributions accrued for the years ended June 30,2006. The total liability under the agreement as of June 30, 2007 and 2006 wasapproximately $916,000, and $879,000, respectively.
Note 15 - CONCENTRATION OF CREDIT RISK
The Organization maintains its cash accounts in various financial institutions where theaccounts are insured by Federal Deposit Insurance Corporation up to $ 100,000 per financialinstitution. At June 30,2007 and 2006, the Organization had approximately $149,000 and$234,000, respectively, in excess of the insured limits.
Note 16 - CASH FLOW INFORMATION
Cash payments of interest during the years ended June 30, 2007 and 2006 are $1,550 and$2,518, respectively.
Non cash financing and investing activities during the year ended June 30,2007 include theacquisition of a vehicle through new long-term debt borrowing for $I9S4I9.
21
SUPPLEMENTARY INFORMATION
B o u r g e o i s B e n n e t t
INDEPENDENT AUDITOR'S REPORTON THE SUPPLEMENTARY INFORMATION
To the Board of DirectorsCrossroads Louisiana, Inc., and Subsidiary,
New Orleans, Louisiana
Our audits were preformed for the purpose of forming an opinion on the basicconsolidated financial statements of Crossroads Louisiana, Inc., and Subsidiary taken as a whole. Thesupplementary information is presented for purposes of additional analysis and is not a required part ofthe basic consolidated financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the consolidated basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the consolidated basic financial statements taken as awhole.
Certified Public Accountants.
New Orleans, Louisiana,December 27, 2007.
22
1340 West Tunnel Blvd., Suite 430P.O. Box 2168Houma,LA7036l-2l68Phone (985)868-0139Fax (985) 879-1949
Certified PublicAccountants | Consultants
A Limited Liability Company
R O. Box 60600New Orleans. LA 70160-0600Heritage Plaza, 17th FloorPhone (504) 831 -4949Fax (504) 833-9093
507-D St. Philip StreetP.O.Box 1205Thibodaux, LA 7030M 205Phone (985) 447-5243
CONSOLIDATED STATEMENT OF ACTIVITIES ANDFUNCTIONAL EXPENSES BY PROGRAM
Crossroads Louisiana, Inc., and Subsidiary
For the year ended June 30, 2007
Program Services
Support and RevenuesGovernment fees for servicesInvestment incomeRentsOther
Total support and revenues
ExpensesSalariesEmployee benefits:
Workers compensationPensionPayroll taxesDeferred Compensation
Bed feesDepreciationFoodInsuranceInterestLocal transportationMiscellaneousOccupancy:
Contract servicesMaintenanceRentRepairs - BuildingsRepairs - FurnitureUtilities
Professional ServicesSuppliesTelephoneVocational program
Total direct program expenses
Hurricane Katrina expenses, net
Management and general expense allocation
Increase (decrease) inunrestricted net assets
Oliver MelbrookeStreet Street
Program Program
$ 6,417 $---
6,417
-
27---------
670
-916
24,000560
-256
3,181-
10-
29,620
6,165
$ 6,417 $ (35,785)
23
StateStreet
Program
$ 487,591-
37,9335
525,529
193,840
12,565-
16,655-
30,88813,75117,348
--
13,3301,667
3,143-
24,0004,810
9987,4847,573
34,3353,339
64,031
449,757
.
93,609
$ (17,837)
ToledanoStreet
Program
$ 376,034-
29,841-
405,875
114,986
5,692-
9,874-
31,3177,9258,294
--
13,6942,444
1,499-
15,0005,419
9937,8215,414
17,2072,431
39,600
289,610_
60,276
$ 55,989
TimberwoodDrive
Program
$ 180,354---
180,354
96,195
3,976417
8,295--
6,2395,315
--
2975,448
961-
9,0003,457
203,623
3355,9832,634
-
152,195
,
36,250
$ (8,0911
NunezStreet
Program
$ 281,179-
35,32115
316,515
135,880
6,949-
11,694-
26,6708,160
12,058--
16,8857,347
3,333-
15,600948725
1,5638,462
17,3402,433
31,900
307,947
.
64,092
$ (55,524)
Program ServicesHancock
StreetProgram
$ 292,162 !-
20,688-
312,850
149,940
7,875-
12,877-
26,0559,1399,451
-.
12,87510,419
1,386-
15,6003,766
7224,328
11,23123,300
1,76331,603
332,330
RHSProgram
& 1,179,798--
30
1,179,828
672,911
42,643-
58,359--
4,285104
-720
4,9638,444
422257
12,000---
6451,3572,002
-
809,112
St. CharlesPlace
Program
$ 122,581--
3,843
126,424
60,145
2,882-
5,180---
1,520--
1,85411,050
_-
14,360--
569-
809461
-
98,830
SpecificMcArthur AssistanceProgram to Individuals
$ 222,377 $-
16,35083
238,810
86,913
5,169-
7,571-
19,3488,422
10,101
-9,8955,355 28,434
1,648-
24,0002,878
5943,5146,2529,9201,491
22,550
225,621 28,434
Totals
$ 3,148,493-
140,1333,976
3,292,602
1,510,810
87,778417
130,505-
134,27857,92164,191
-720
73,79381,278
12,3921,173
153,56021,838
4,05229,15843,093
110,25116,564
189,684
2,723,456
Support Services
Management& General
$ 50,84213,273
817
64,932
327,851
19,7761,257
26,44337,094
-13,866
56021,677
8303,578
38,328
2,3254,035
30,3385,1574,8863,042
67,5818,520
13,278-
630,422
Schedule 1
Totals
$ 3,148,49350,842
153,4064,793
3,357,534
1,838,661
107,5541,674
156,94837,094
134,27871,78764,75121,677
1,55077,371
119,606
14,7175,208
183,89826,995
8,93832,200
110,674118,77129,842
1 89,684
3,353,878
.
69,168
$ (88,648)
168,400
5 202,316
20,570
$ 7,024
46,960
$ (33,771) $ (28,434)
565,490
$ 3,656
(565,490)
$
_
$ 3,656
24
CONSOLIDATED STATEMENT OF ACTIVITIESFUNCTIONAL EXPENSES BY
Crossroads Louisiana, Inc., and
For the year ended June 30,
PROGRAM
Subsidiary
2006
AND
Program Services
Support and RevenuesGovernment fees for servicesRentsInvestment incomeOther
Total support and revenues
ExpensesSalariesEmployee benefits:
Workers compensationPensionPayroll taxesDeferred compensation
Bed feesDepreciationFoodInsuranceInterestLocal transportationMiscellaneousOccupancy:
Contract servicesMaintenanceRentRepairs - BuildingsRepairs - FurnitureUtilities
Professional servicesSuppliesTelephoneVocational program
Total direct program expenses
Hurricane Katrina expenses, net
Management and general expense allocation
Increase (decrease) inunrestricted net assets
Oliver ArtsStreet Street
Program Program
$ 63,862 $ -7,346
-23
71,231
12,090
576(574)954
--
3,4701,937
---
5,120
-_
14,9291,707
-4,547
7152,469
815.
48,755
19,789
$ 2,687 $ -25
StateStreet
Program
$ 490,53238,913
-700
530,145
96,629
6,967(1,068)7,915
-27,769
7,8076,936
--
11,2425,322
1,144-
26,000997756
4,113673
13,697427
59,783
277,109
110,417
$ 142,619
ToledanoStreet
Program
$ 336,01928,660
--
364,679
82,510
5,114(863)
6,872-
27,7697,2084,987
--
9,4722,652
796-
9,3755,8912,2703,7282,380
12,5231,449
36,443
220,576
.
88,160
$ 55,943
TimbenvoodDrive
Program
$ 164,026---
164,026
72,294
4,495(1,147)6,062
--
3,6703,700
--
4612,836
761-
9,0007,1611,5352,687
-8,3631,701
-
123,579_
41,069
$ (622)
NunezStreet
Program
$ 410,68022,970
-6,496
440,146
100,376
5,926(2,592)8,335
-27,3894,7816,110
.-
12,0637,625
610-
15,6002,749
3971,6954,062
12,9831,318
41,617
251,044
100,147
$ 88,955
ProgramHancock
StreetProgram
$ 354,65932,553
--
387,212
78,587
4,789(1,342)6,599
-26,222
9,3194,883
--
13,7024,823
1,150-
15,6002,395
3835,7432,411
14,9181,299
42,510
233,991
93,438
$ 59,783
Services
RHSProgram
$ 422,563---
422,563
252,015
19,227(3,246)19,989
--
212339
--
1,8403,030
1,536-
12,000---
1,3502,053
185-
310,530
122,212
$ (10,179)
St. CharlesPlace
Program
$ 192,367--
350
192,717
93,648
6,454(586)
7,713--
3,6813,253
--
9,658648
688-
8,1641,849
170-
1652,5472,619
-
140,671
51,806
$ 240
Totals
$ 2,434,708130,442
-7,569
2,572,719
788,149
53,548(11,418)64,439
-109,14940,14832,145
--
58,43832,056
6,685-
110,66822,749
5,51122,51311,75669,553
9,813180,353
1,606,255
.
627,038
$ 339,426
Support Services
Management& General
$-
184,94610,596
195,542
338,917
13,998(5,326)26,679
250,899-
7,310-
18,0042,5186,359
53,142
2,9447,880
15,2449,347
8641,375
45,19414,2278,177
-
817,752
(4,560)
(627,038)
$ 268
Schedule 2
Totals
$ 2,434,708130,442184,94618,165
2,768,261
1,127,066
67,546(16,744)91,118
250,899109,14947,45832,14518,0042,518
64,79785,198
9,6297,880
125,91232,0966,375
23,88856,95083,78017,990
180,353
2,424,007
(4,560)_
$ 339,69426
SPECIAL REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
B o u r g e o i s B e n n e t t
REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDITOF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors,Crossroads Louisiana, Inc., and Subsidiary,
New Orleans, Louisiana.
We have audited the consolidated financial statements of Crossroads Louisiana, Inc.,and Subsidiary (a nonprofit organization) as of and for the year ended June 30,2007, and have issuedour report thereon dated December 27, 2007. We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and the standards applicable to financialaudits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Crossroads Louisiana, Inc., andSubsidiary's internal control over financial reporting as a basis for designing our audit procedures forthe purpose of expressing our opinion on the consolidated financial statements, but not for the purposeof expressing an opinion on the effectiveness of the Crossroads Louisiana, Inc., and Subsidiary'sinternal control over financial reporting. Accordingly, we do not express an opinion on theeffectiveness of the Crossroads Louisiana, Inc., and Subsidiary's internal control over financialreporting.
Our consideration of the internal control over financial reporting was for the limitedpurpose described in the preceding paragraph and would not necessarily identify all deficiencies ininternal control over financial reporting that might be significant deficiencies or material weaknesses.However, we identified a deficiency in internal control over financial reporting that we consider to bea significant deficiency and which is described in the accompanying schedule of findings andresponses as item 07-01.
27
1340 West Tunnel Blvd., Suite 430P. O. Box 1168Houma,LA7036l-2168Phone (985) 868-0139Fax (985) 879-1949
Certified PublicAccountants I Consultants
A Limited Liability Company
P. O. Box 60600New Orleans, LA 70160-0600Heritage Plaza, 17th FloorPhone (504) 831-4949Fax (504) 833-9093
507-D St. Philip StreetP.O.Box 1205Thibodaux, LA 70302-1205Phone (985) 447-5243
A control deficiency exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, to prevent ordetect misstatements on a timely basis. A significant deficiency is a control deficiency, orcombination of control deficiencies, that adversely affects the Crossroads Louisiana, Inc., andSubsidiary's ability to initiate, authorize, record, process, or report financial data reliably inaccordance with generally accepted accounting principles such that there is more than a remotelikelihood that a misstatement of the Crossroads Louisiana, Inc., and Subsidiary's consolidatedfinancial statements that is more than inconsequential will not be prevented or detected by theCrossroads Louisiana, Inc., and Subsidiary's internal control. We consider the deficiency described inthe accompanying schedule of findings and responses to be a significant deficiency in internal controlover financial reporting.
A material weakness is a significant deficiency, or combination of significantdeficiencies, that results in more than a remote likelihood that a material misstatement of the financialstatements will not be prevented or detected by the Crossroads Louisiana, Inc., and Subsidiary'sinternal control.
Our consideration of internal control over financial reporting was for the limited purposedescribed in the first paragraph of this section and would not necessarily identify all deficiencies ininternal control that might be significant deficiencies and, accordingly, would not necessarily discloseall significant deficiencies that are also considered to be material weaknesses. However, we believethat the significant deficiency described in item 07-01 is a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization's consolidatedfinancial statements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements, noncompliance with whichcould 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 our audit and,accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
28
This report is intended solely for the information and use of the Board of Directors,management, the State of Louisiana and the Legislative Auditor for the State of Louisiana and is notintended to be and should not be used by anyone other than those specified parties. Under LouisianaRevised Statue 24:513, this report is distributed by the Legislative Auditor as a public document.
Certified Public Accountants.
New Orleans, Louisiana,December 27, 2007.
29
SCHEDULE OF FINDINGS AND RESPONSES
Crossroads Louisiana, Inc., and Subsidiary
For the year ended June 30, 2007
Section I - Summary of Auditor's Report
a) Financial Statements
Type of auditor's report issued: unqualified
Internal control over financial reporting:
• Material weakness(es) identified? X yes no• Significant deficiency(ies) identified that are not
considered to be material weakness yes _X_ no
Noncompliance material to financial statements noted? yes X no
b) Federal Awards
Crossroads Louisiana, Inc., and Subsidiary did not receive federal awards in excess of$500,000 during the year ended June 30, 2007 and, therefore, is exempt from the auditrequirements under the Single Audit Act and OMB Circular A-133, Audits of States, LocalGovernments, and Non-Profit Organizations.
Section II - Financial Statement Findings
Internal Control
07-01 Lack of Segregation of Duties
Criteria - Adequate internal controls relating to cash receipts, bank deposits, generalledger postings, and bank reconciliations require that specific procedures be in place toensure that receipts are properly accounted for and that there are no misappropriation ofthe Crossroads Louisiana, Inc., and Subsidiary's assets.
30
(Continued)
Section II - Financial Statement Findings (Continued)
Internal Control (Continued)
07-01 Lack of Segregation of Duties (Continued)
Condition - Incoming cash receipts are received, deposited and posted to the generalledger by the same employee. The same employee also receives the bank statementsand reconciles them without management oversight. In addition, bank reconciliationsare not documented as approved by a management level employee.
Cause - Lack of segregation of duties in the cash receipts function of CrossroadsLouisiana, Inc., and Subsidiary.
Effect - The lack of adequate internal controls relating to cash receipts could result inCompany assets being misappropriated and/or the financial statements being materiallymisstated.
Recommendation - Crossroads Louisiana, Inc., and Subsidiary should implementadequate internal controls relating to the cash receipts function and cash reconciliationprocess in the form of a segregation of duties. There should be management oversightto ensure that Crossroads Louisiana, Inc., and Subsidiary is complying with its policiesand procedures and to ensure that the Organization's assets are not misappropriated.
Views of responsible officials of the auditee when there is disagreement with thefinding, to the extent practical. - None.
Compliance
No compliance findings material to the financial statements were noted during the auditof the consolidated financial statements for the year ended June 30, 2007.
Section III - Federal Award Findings and Questioned Costs
Not applicable.
31
REPORTS BY MANAGEMENT
SCHEDULE OF PRIOR YEAR FINDINGSAND RESPONSES
Crossroads Louisiana, Inc., and Subsidiary
For the year ended June 30, 2007
Section I - Internal Control and Compliance Material to the Financial Statements
Internal Control
No material weaknesses were reported during the audit of the consolidated financial statementsfor the year ended June 30, 2006.
06-01 Recommendation - We recommend the Organization consider having other personnelinvolved in the accounting function, although to employ such controls may not be costbeneficial.
Management's Corrective Action Plan - The Organization's office has neither thequalified personnel nor the funds to hire additional personnel to assist in the accountingfunctions. Unresolved; see finding 07-01.
Compliance
No compliance findings material to the financial statements were noted during the audit of theconsolidated financial statements for the year ended June 30, 2006.
Section II - Internal Control and Compliance Material To Federal Awards
Crossroads Louisiana, Inc., and Subsidiary did not receive federal awards in excess of$500,000 during the year ended June 30, 2006 and, therefore, is exempt from the auditrequirements under the Single Audit Act and OMB Circular A-133, Audits of States, LocalGovernments, and Non-Profit Organizations.
Section III - Management Letter
A management letter was not issued in connection with the audit for the year ended June 30,2006.
32
MANAGEMENT'S CORRECTIVE ACTION PLANON CURRENT YEAR FINDINGS
Crossroads Louisiana, Inc., and Subsidiary
For the year ended June 30, 2007
Section I - Internal Control and Compliance Material to the Financial Statements
Internal Control
07-01 Lack of Segregation of Duties
Recommendation - The School should implement adequate internal controls relatingto the cash receipts function and cash reconciliation process in the form of asegregation of duties. There should be management oversight to ensure that theSchool is complying with its policies and procedures and to ensure that CrossroadsLouisiana, Inc., and Subsidiary's assets are not misappropriated.
Management's Corrective Action Plan - The Organization's office has neither thequalified personnel nor the funds to hire additional personnel to assist in the accountfunctions.
Compliance
No compliance findings material to the financial statements were noted during the audit of theconsolidated financial statements for the year ended June 30, 2007.
33
(Continued)
Section II - Internal Control and Compliance Material To Federal Awards
Crossroads Louisiana, Inc., and Subsidiary did not receive federal awards in excess of$500,000 during the year ended June 30, 2007 and, therefore, is exempt from the auditrequirements under the Single Audit Act and OMB Circular A-133, Audits of States, LocalGovernments, and Non-Profit Organizations.
Section III - Management Letter
A management letter was not issued in connection with the audit for the year ended June 30,2007.
34
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