and affiliate

AND AFFILIATE COMBINING FINANCIAL STATEMENTS IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND UNIFORM GUIDANCE JUNE 30, 2020 AND 2019

THRIVE SUPPORT AND ADVOCACY, INC. AND AFFILIATE Contents June 30, 2020 and 2019

Pages

Unmodified Opinion on Combining Financial Statements Accompanied by Other Information – Not-For-Profit Entity .........................................................................................

1 - 1A

Combining Financial Statements:

Combining Statements of Financial Position ........................................................................ 2

Combining Statements of Activities and Changes in Net Assets .......................................... 3

Combining Statements of Cash Flows ...................................................................................

4

Combining Statements of Functional Expenses ....................................................................

5 - 6

Notes to Combining Financial Statements ............................................................................ 7 - 19

Schedule of Expenditures of Federal Awards ..........................................................................

20

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Combining Financial Statements Performed in Accordance With Government Auditing Standards ................................................................

21 - 22

Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance ..............................................

23 - 24

Schedule of Findings and Questioned Costs ........................................................................... 25 - 26

Unmodified Opinion on Combining Financial Statements Accompanied by Other Information – Not-For-Profit Entity

Independent Auditor’s Report

To the Board of Directors of

Thrive Support and Advocacy, Inc. and Affiliate: Report on the Combining Financial Statements We have audited the accompanying combining financial statements of Thrive Support and Advocacy, Inc. and Affiliate (Massachusetts corporations, not for profit) (collectively, the Organization) which comprise the combining statements of financial position as of June 30, 2020 and 2019, and the related combining statements of activities and changes in net assets, cash flows and functional expenses for the years then ended, and the related notes to the combining financial statements. Management’s Responsibility for the Combining Financial Statements Management is responsible for the preparation and fair presentation of these combining financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combining financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these combining financial statements based on our audits. We conducted our 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 we plan and perform the audits to obtain reasonable assurance about whether the combining financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combining financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combining financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the combining financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combining financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

50 Washington Street Westborough, MA 01581 508.366.9100 aafcpa.com

A

Opinion In our opinion, the combining financial statements referred to on page one present fairly, in all material respects, the combining financial position of Thrive Support and Advocacy, Inc. and Affiliate as of June 30, 2020 and 2019, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Our audits were conducted for the purpose of forming an opinion on the combining financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards for the year ended June 30, 2020, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the combining financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combining financial statements. The information has been subjected to the auditing procedures applied in the audit of the combining financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combining financial statements or to the combining financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the combining financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 26, 2021, on our consideration of the Organization’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control over financial reporting and compliance. Westborough, Massachusetts February 26, 2021

THRIVE SUPPORT AND ADVOCACY, INC. AND AFFILIATE

Combining Statements of Financial PositionJune 30, 2020 and 2019

Combining CombiningThrive GMPD Total Eliminations Total Thrive GMPD Total Eliminations Total

Current Assets:Cash and cash equivalents 853,630$ 31,098$ 884,728$ -$ 884,728$ 689,901$ 16,473$ 706,374$ -$ 706,374$ Current portion of restricted cash - 5,671 5,671 - 5,671 - 5,838 5,838 - 5,838 Contracts and grants receivable, net of allowance for doubtful accounts

of approximately $1,900 at June 30, 2020 and 2019 832,975 1,627 834,602 - 834,602 362,847 461 363,308 - 363,308 Due from related party 8,952 - 8,952 (8,952) - 18,935 - 18,935 (18,935) - Prepaid expenses and other assets 54,507 4,481 58,988 - 58,988 42,081 4,212 46,293 - 46,293

Total current assets 1,750,064 42,877 1,792,941 (8,952) 1,783,989 1,113,764 26,984 1,140,748 (18,935) 1,121,813

Property and Equipment:Land 158,832 141,132 299,964 - 299,964 158,832 141,132 299,964 - 299,964 Buildings and improvements 272,317 1,702,807 1,975,124 - 1,975,124 272,317 1,702,807 1,975,124 - 1,975,124 Vehicles 66,816 31,558 98,374 - 98,374 66,816 31,558 98,374 - 98,374 Furniture and equipment 71,314 43,774 115,088 - 115,088 38,695 37,391 76,086 - 76,086

569,279 1,919,271 2,488,550 - 2,488,550 536,660 1,912,888 2,449,548 - 2,449,548 Less - accumulated depreciation 202,959 1,287,571 1,490,530 - 1,490,530 181,888 1,212,649 1,394,537 - 1,394,537

Net property and equipment 366,320 631,700 998,020 - 998,020 354,772 700,239 1,055,011 - 1,055,011

Other Assets:Website development and software, net 33,619 - 33,619 - 33,619 27,571 - 27,571 - 27,571 Restricted cash 53,338 112,396 165,734 - 165,734 17,855 99,167 117,022 - 117,022

Total other assets 86,957 112,396 199,353 - 199,353 45,426 99,167 144,593 - 144,593

Total assets 2,203,341$ 786,973$ 2,990,314$ (8,952)$ 2,981,362$ 1,513,962$ 826,390$ 2,340,352$ (18,935)$ 2,321,417$

Liabilities and Net Assets

Current Liabilities:Current portion of long-term debt 83,088$ 27,350$ 110,438$ -$ 110,438$ 7,733$ 26,423$ 34,156$ -$ 34,156$ Accounts payable 114,500 12,008 126,508 - 126,508 68,719 10,211 78,930 - 78,930 Due to related party - 8,952 8,952 (8,952) - - 18,935 18,935 (18,935) - Accrued expenses 401,866 7,209 409,075 - 409,075 193,069 8,871 201,940 - 201,940

Total current liabilities 599,454 55,519 654,973 (8,952) 646,021 269,521 64,440 333,961 (18,935) 315,026

Other Liabilities:Long-term debt, net 204,579 1,084,208 1,288,787 - 1,288,787 212,622 1,108,755 1,321,377 - 1,321,377 Contingent debt 734,900 - 734,900 - 734,900 - - - - -

Total other liabilities 939,479 1,084,208 2,023,687 - 2,023,687 212,622 1,108,755 1,321,377 - 1,321,377

Total liabilities 1,538,933 1,139,727 2,678,660 (8,952) 2,669,708 482,143 1,173,195 1,655,338 (18,935) 1,636,403

Net Assets:Without donor restrictions:

Operating 439,136 26,931 466,067 - 466,067 797,161 1,183 798,344 - 798,344 Property and equipment 187,272 (379,685) (192,413) - (192,413) 179,843 (347,988) (168,145) - (168,145)

Total without donor restrictions 626,408 (352,754) 273,654 - 273,654 977,004 (346,805) 630,199 - 630,199

With donor restrictions 38,000 - 38,000 - 38,000 54,815 - 54,815 - 54,815 Total net assets 664,408 (352,754) 311,654 - 311,654 1,031,819 (346,805) 685,014 - 685,014

Total liabilities and net assets 2,203,341$ 786,973$ 2,990,314$ (8,952)$ 2,981,362$ 1,513,962$ 826,390$ 2,340,352$ (18,935)$ 2,321,417$

2020 2019

Assets

The accompanying notes are an integral part of these combining statements. Page 2


Combining Statements of Activities and Changes in Net AssetsFor the Years Ended June 30, 2020 and 2019

Combining CombiningThrive GMPD Eliminations Total Thrive GMPD Eliminations Total

Changes in Net Assets Without Donor Restrictions:Operating revenue and support:

Contracts 5,143,832$ -$ -$ 5,143,832$ 4,373,127$ -$ -$ 4,373,127$ Rents - 383,411 - 383,411 - 377,936 - 377,936 Client fees 313,086 - - 313,086 338,315 - - 338,315 Grants and contributions 114,486 - - 114,486 129,682 - - 129,682 In-kind contributions 24,570 - - 24,570 24,570 - - 24,570 Special events 15,117 - - 15,117 9,305 - - 9,305 Interest and other 44,965 58 (32,580) 12,443 38,617 54 (32,471) 6,200 Net assets released from purpose restrictions 29,815 - - 29,815 12,843 - - 12,843

Total operating revenue and support 5,685,871 383,469 (32,580) 6,036,760 4,926,459 377,990 (32,471) 5,271,978

Operating expenses:Program services 5,023,650 261,849 - 5,285,499 3,917,127 297,350 - 4,214,477 General and administrative 944,406 127,569 (32,580) 1,039,395 916,867 138,686 (32,471) 1,023,082 Fundraising 68,411 - - 68,411 112,828 - - 112,828

Total operating expenses 6,036,467 389,418 (32,580) 6,393,305 4,946,822 436,036 (32,471) 5,350,387

Changes in net assets without donor restrictions (350,596) (5,949) - (356,545) (20,363) (58,046) - (78,409)

Changes in Net Assets With Donor Restrictions:Grants and contributions 38,000 - - 38,000 54,815 - - 54,815 Grants returned to donor (25,000) - - (25,000) - - - - Net assets released from purpose restrictions (29,815) - - (29,815) (12,843) - - (12,843)

Changes in net assets with donor restrictions (16,815) - - (16,815) 41,972 - - 41,972

Changes in net assets (367,411) (5,949) - (373,360) 21,609 (58,046) - (36,437)

Net Assets:Beginning of year 1,031,819 (346,805) - 685,014 1,010,210 (288,759) - 721,451

End of year 664,408$ (352,754)$ -$ 311,654$ 1,031,819$ (346,805)$ -$ 685,014$

2020 2019



Combining Statements of Cash FlowsFor the Years Ended June 30, 2020 and 2019

Combining CombiningThrive GMPD Eliminations Total Thrive GMPD Eliminations Total

Cash Flows from Operating Activities:Changes in net assets (367,411)$ (5,949)$ -$ (373,360)$ 21,609$ (58,046)$ -$ (36,437)$ Adjustments to reconcile changes in net assets to net cash

provided by (used in) operating activities:Amortization of debt issuance costs charged as

interest expense - 2,796 - 2,796 - 2,796 - 2,796 Depreciation and amortization 40,023 74,922 - 114,945 31,748 75,065 - 106,813 Bad debt 863 - - 863 - - - - Changes in operating assets and liabilities:

Contracts and grants receivable (470,991) (1,166) - (472,157) (17,258) 5,317 - (11,941) Due from related party 9,983 - (9,983) - 1,221 - (1,221) - Grant receivable - - - - (25,000) - - (25,000) Prepaid expenses and other assets (12,426) (269) - (12,695) 9,641 5,484 - 15,125 Accounts payable 45,781 1,797 - 47,578 (3,338) (1,234) - (4,572) Due to related party - (9,983) 9,983 - - (1,221) 1,221 - Accrued expenses 208,797 (1,662) - 207,135 5,688 (6,185) - (497)

Net cash provided by (used in) operating activities (545,381) 60,486 - (484,895) 24,311 21,976 - 46,287

Cash Flows from Investing Activities:Investment in website development and software (25,000) - - (25,000) - - - - Acquisition of property and equipment (32,619) (6,383) - (39,002) - (19,575) - (19,575)

Net cash used in investing activities (57,619) (6,383) - (64,002) - (19,575) - (19,575)

Cash Flows from Financing Activities:Proceeds from long-term debt 75,000 - - 75,000 - - - - Proceeds from contingent debt 734,900 - - 734,900 - - - - Principal payments on long-term debt (7,688) (26,416) - (34,104) (7,390) (25,837) - (33,227)

Net cash provided by (used in) financing activities 802,212 (26,416) - 775,796 (7,390) (25,837) - (33,227)

Net Change in Cash and Cash Equivalents and Restricted Cash 199,212 27,687 - 226,899 16,921 (23,436) - (6,515)

Cash and Cash Equivalents and Restricted Cash:Beginning of year 707,756 121,478 - 829,234 690,835 144,914 - 835,749

End of year 906,968$ 149,165$ -$ 1,056,133$ 707,756$ 121,478$ -$ 829,234$

Reconciliation of Cash and Cash Equivalents and Restricted Cash ReportedWithin the Combining Statements of Financial Position:

Cash and cash equivalents 853,630$ 31,098$ -$ 884,728$ 689,901$ 16,473$ -$ 706,374$ Restricted cash 53,338 118,067 - 171,405 17,855 105,005 - 122,860

Total cash and cash equivalents and restricted cash 906,968$ 149,165$ -$ 1,056,133$ 707,756$ 121,478$ -$ 829,234$

Supplemental Disclosures of Cash Flow Information:Cash paid for interest 9,369$ 41,431$ -$ 50,800$ 9,668$ 42,012$ -$ 51,680$

2020 2019



Combining Statement of Functional ExpensesFor the Year Ended June 30, 2020(With Summarized Comparative Totals for the Year Ended June 30, 2019)

2019

Youth and Social Total General

Residential Family and Program and Total Combining CombiningServices Services Recreation Services Administrative Fundraising Thrive GMPD Eliminations Total Total

Operating Expenses:Personnel costs:

Salaries and wages 2,541,386$ 719,536$ 83,943$ 3,344,865$ 197,555$ 40,172$ 3,582,592$ 48,582$ -$ 3,631,174$ 2,935,535$ Employee benefits and payroll taxes 541,575 171,295 8,412 721,282 90,394 1,197 812,873 11,533 - 824,406 610,032 Temporary help and contracted services - - - - 89,829 17,610 107,439 21,507 - 128,946 106,941

Total personnel costs 3,082,961 890,831 92,355 4,066,147 377,778 58,979 4,502,904 81,622 - 4,584,526 3,652,508

Occupancy:Repairs and maintenance 51,729 765 - 52,494 32,677 - 85,171 88,549 - 173,720 196,430 Rent 12,136 75,431 - 87,567 47,858 6,054 141,479 10,000 (10,000) 141,479 126,688 Property insurance 56,089 5,428 - 61,517 15,685 - 77,202 14,792 - 91,994 93,330 Building depreciation 7,114 - - 7,114 - - 7,114 74,003 - 81,117 78,201 Utilities 9,438 4,693 - 14,131 13,235 - 27,366 30,291 - 57,657 57,121 Interest 9,369 - - 9,369 - - 9,369 44,228 - 53,597 54,476

Total occupancy 145,875 86,317 - 232,192 109,455 6,054 347,701 261,863 (10,000) 599,564 606,246

Direct program costs:Stipends - 260,802 - 260,802 - - 260,802 - - 260,802 164,391 Food 132,000 4,199 60 136,259 8,940 - 145,199 - - 145,199 137,823 Vehicle operating costs 53,118 17,431 5,276 75,825 - - 75,825 9,068 - 84,893 75,682 Recreation 478 42,779 16,859 60,116 1,159 - 61,275 - - 61,275 67,855 Travel 162 13,571 - 13,733 194 - 13,927 - - 13,927 18,438 Vehicle depreciation 5,551 - - 5,551 - - 5,551 - - 5,551 5,551 Training 923 1,808 210 2,941 1,843 - 4,784 - - 4,784 20,807

Total direct program costs 192,232 340,590 22,405 555,227 12,136 - 567,363 9,068 - 576,431 490,547

Other costs:Professional fees 17,960 4,490 - 22,450 257,064 - 279,514 12,026 - 291,540 218,335 Office supplies and postage 32,590 14,982 - 47,572 37,857 840 86,269 1,197 - 87,466 78,083 Data processing 21,275 736 - 22,011 44,705 - 66,716 - - 66,716 41,907 Telephone 24,003 6,232 - 30,235 10,867 - 41,102 - - 41,102 34,084 Advertising - - 25 25 36,741 285 37,051 - - 37,051 56,246 Consultants 14,745 7,288 - 22,033 8,433 - 30,466 - - 30,466 95,071 Dues and publications 868 1,711 775 3,354 25,462 - 28,816 - - 28,816 40,846 Equipment depreciation and amortization 18,953 - - 18,953 8,405 - 27,358 918 - 28,276 23,061 Miscellaneous 26 3,425 - 3,451 10,419 - 13,870 144 - 14,014 9,732 Insurance - - - - 4,221 - 4,221 - - 4,221 3,506 Special event - - - - - 2,253 2,253 - - 2,253 215 Bad debt - - - - 863 - 863 - - 863 - Management fee - - - - - - - 22,580 (22,580) - -

Total other costs 130,420 38,864 800 170,084 445,037 3,378 618,499 36,865 (22,580) 632,784 601,086

Total operating expenses 3,551,488$ 1,356,602$ 115,560$ 5,023,650$ 944,406$ 68,411$ 6,036,467$ 389,418$ (32,580)$ 6,393,305$ 5,350,387$

2020Thrive

Program Services



Combining Statement of Functional ExpensesFor the Year Ended June 30, 2019

Youth and Social Total General

Residential Family and Program and Total CombiningServices Services Recreation Services Administrative Fundraising Thrive GMPD Eliminations Total

Operating Expenses:Personnel costs:

Salaries and wages 1,947,822$ 529,001$ 83,892$ 2,560,715$ 242,003$ 74,051$ 2,876,769$ 58,766$ -$ 2,935,535$ Employee benefits and payroll taxes 380,635 130,878 7,612 519,125 66,472 1,783 587,380 22,652 - 610,032 Temporary help and contracted services - - - - 78,701 15,450 94,151 12,790 - 106,941

Total personnel costs 2,328,457 659,879 91,504 3,079,840 387,176 91,284 3,558,300 94,208 - 3,652,508

Occupancy:Repairs and maintenance 42,254 106 - 42,360 28,839 - 71,199 125,231 - 196,430 Rent 40,564 41,889 - 82,453 32,129 12,106 126,688 10,168 (10,168) 126,688 Property insurance 52,628 5,093 - 57,721 18,419 - 76,140 17,190 - 93,330 Building depreciation 7,114 - - 7,114 - - 7,114 71,087 - 78,201 Utilities 8,777 301 - 9,078 13,737 - 22,815 34,306 - 57,121 Interest 9,668 - - 9,668 - - 9,668 44,808 - 54,476

Total occupancy 161,005 47,389 - 208,394 93,124 12,106 313,624 302,790 (10,168) 606,246

Direct program costs:Stipends - 164,391 - 164,391 - - 164,391 - - 164,391 Food 127,888 1,723 485 130,096 7,727 - 137,823 - - 137,823 Vehicle operating costs 55,365 8,908 9,743 74,016 1,666 - 75,682 - - 75,682 Recreation 8,529 31,519 23,029 63,077 4,778 - 67,855 - - 67,855 Travel 197 16,998 - 17,195 1,243 - 18,438 - - 18,438 Vehicle depreciation 5,551 - - 5,551 - - 5,551 - - 5,551 Training 5,502 13,809 200 19,511 1,296 - 20,807 - - 20,807

Total direct program costs 203,032 237,348 33,457 473,837 16,710 - 490,547 - - 490,547

Other costs:Professional fees - - - - 210,685 - 210,685 7,650 - 218,335 Office supplies and postage 22,549 11,013 147 33,709 36,392 6,163 76,264 1,819 - 78,083 Data processing 3,926 - - 3,926 37,981 - 41,907 - - 41,907 Telephone 20,726 3,379 652 24,757 9,327 - 34,084 - - 34,084 Advertising - 191 - 191 56,055 - 56,246 - - 56,246 Consultants 58,352 7,192 760 66,304 28,767 - 95,071 - - 95,071 Dues and publications 1,796 1,837 1,105 4,738 36,108 - 40,846 - - 40,846 Equipment depreciation and amortization 18,515 - - 18,515 568 - 19,083 3,978 - 23,061 Miscellaneous 362 2,554 - 2,916 468 3,060 6,444 3,288 - 9,732 Insurance - - - - 3,506 - 3,506 - - 3,506 Special event - - - - - 215 215 - - 215 Management fee - - - - - - - 22,303 (22,303) -

Total other costs 126,226 26,166 2,664 155,056 419,857 9,438 584,351 39,038 (22,303) 601,086

Total operating expenses 2,818,720$ 970,782$ 127,625$ 3,917,127$ 916,867$ 112,828$ 4,946,822$ 436,036$ (32,471)$ 5,350,387$

ThriveProgram Services


THRIVE SUPPORT AND ADVOCACY, INC. AND AFFILIATE Notes to Combining Financial Statements June 30, 2020 and 2019

Page 7

1. OPERATIONS AND NONPROFIT STATUS

Operations

Thrive Support & Advocacy, Inc. (Thrive) empowers children and adults with developmental disabilities, and their families, to lead rich, active and self-directed lives. Since 1973, Thrive has provided high-quality residential, social, recreational and family support services in the greater Metrowest area. Today Thrive helps more than 500 individuals achieve their goals as active and contributing members of their communities. While Thrive continues to expand both spectrum of services and geographic reach, they are a tight-knit community that efficiently utilizes its resources to produce positive outcomes for the people they are privileged to serve. Thrive continued to evolve to meet emerging needs in a growing number of communities in fiscal year 2020. Now serving forty-six Massachusetts cities and towns, Thrive significantly increased the outreach to underserved populations and geographic areas. Thrive’s youth services expanded dramatically, including the expansion of Thrive’s groundbreaking LEAD youth leadership initiative. Thrive has formed GMP Development, Corp. (GMPD), a Massachusetts not-for-profit organization, to own and manage two housing projects owned by Thrive and regulated by the U.S. Department of Housing and Urban Development (HUD) (see Note 3). Effective March 29, 2012, ownership of all assets and liabilities of the two housing projects were transferred to GMPD. Thrive’s Board of Directors is related to GMPD through common Board membership. Collectively, the entities are referred to as “the Organization”. Nonprofit Status

Thrive and GMPD are exempt from Federal income taxes as organizations (not private foundations) formed for charitable purposes under Section 501(c)(3) of the Internal Revenue Code (IRC). Thrive and GMPD are also exempt from state income taxes. Donors may deduct contributions made to Thrive and GMPD within the requirements of the IRC.

2. SIGNIFICANT ACCOUNTING POLICIES

The Organization prepares its combining financial statements in accordance with generally accepted accounting standards and principles (U.S. GAAP) established by the Financial Accounting Standards Board (FASB). References to U.S. GAAP in these notes are to the FASB Accounting Standards Codification (ASC).

Principles of Combination The combining financial statements include the activities and net assets of Thrive and GMPD. All significant balances between classes of net assets and intercompany balances and transactions have been eliminated in the accompanying combining financial statements. Recently Adopted Accounting Pronouncements Effective July 1, 2019, the Organization adopted FASB's Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and requires the reporting entity to recognize revenues when control of promised goods or services is transferred to customers and at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.


Page 8

2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Recently Adopted Accounting Pronouncements (Continued)

The Organization adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of July 1, 2019 (the practical expedient elected). Results for reporting periods beginning after July 1, 2019, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Organization’s historic accounting under Topic 605. As a result, the fiscal year 2019 combining financial statements are not restated and there was no cumulative-effect adjustment to opening net assets as of July 1, 2019. In addition, there was no impact to the recognition of revenue earned under Topic 606 as compared to 2019.

During fiscal year 2020, the Organization also adopted FASB’s ASU 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. This ASU assists organizations in evaluating whether transactions should be accounted for as contributions (nonreciprocal transactions) or as exchange (reciprocal) transactions. In addition, it clarifies whether a contribution is conditional. As a result, it enhances comparability of financial information among not-for-profit entities. The Organization adopted ASU 2018-08 using a modified prospective method effective July 1, 2019. Under the modified prospective method, this ASU only applies to agreements not completed or entered into (revenue or expense that has not yet been recognized) as of July 1, 2019. As a result, the fiscal year 2019 combining financial statements are not restated and there was no cumulative-effect adjustment to opening net assets as of July 1, 2019.

In fiscal year 2020, the Organization adopted FASB’s ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU amends the presentation of restricted cash within the combining statement of cash flows. The new guidance requires that restricted cash be added to cash and cash equivalents for purposes of the combining statement of cash flows. This ASU has been applied retrospectively to all periods presented.

The adoption of ASU 2016-18 resulted in the following changes to the Organization's cash flow classification for the year ended June 30, 2019:

Combining Statement of Cash Flows

2019 As Previously Reported

Effect of Adoption

2019

As Adjusted

Operating activities $ 46,335 $ (48) $ 46,287 Investing activities (9,503) (10,072) (19,575) Financing activities (33,227) -

(33,227)

Net change in cash and cash equivalents and restricted cash

$ 3,605

$ (10,120)

$ (6,515)

Revenue Recognition The Organization’s main sources of revenue are from state contracts and government grants (contracts), rents, client fees, and grants and contributions. Amounts received under contacts with various Commonwealth of Massachusetts and Federal agencies have been recorded in accordance with ASC Topic 958 (see page 9). These conditional contributions are recognized when conditions have been met. Client fees are recognized as services are provided or as costs are incurred (see page 9).


Page 9

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (Continued) In accordance with ASC Subtopic 958-605, Revenue Recognition, the Organization must determine whether a contribution (or a promise) is conditional or unconditional for transactions deemed to be a contribution. A contribution is considered to be a conditional contribution if an agreement includes a barrier that must be overcome and either a right of return of assets or a right of release of a promise to transfer assets exists. Indicators of a barrier include measurable performance-related barrier or other measurable barriers, a stipulation that limits discretion by the recipient on the conduct of an activity, and stipulations that are related to the purpose of the agreement. Topic 958 prescribes that the Organization should not consider probability of compliance with the barrier when determining if such awards are conditional and should be reported as conditional grant advance liabilities until such conditions are met. See Note 17 for conditional grant disclosure. A portion of the Organization’s revenue is derived from cost-reimbursable and unit-rate Federal and state contracts, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. The unit-rate contract revenue is recognized based on the number of individuals served. Cost-reimbursable contract revenue is recognized to the extent of expenditures incurred. Amounts received are recognized as revenue when the Organization has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as deferred revenue in the combining statements of financial position. These contracts are considered nonreciprocal transactions because the general public receives the benefit as a result of the assets transferred. The contracts have been recorded under ASC Topic 958 and deemed conditional contributions. At June 30, 2020, all conditions have been met on the contracts. Grants and contributions are recorded as revenue when received or unconditionally pledged. Thrive reports gifts of cash and other assets as net assets with donor restrictions if they are received with donor stipulations that limit the use of the donated assets. When a donor’s time restriction ends or purpose restriction is accomplished, net assets with donor restrictions are transferred to net assets without donor restrictions. The Organization generally measures revenue from exchange transactions based on the amount of consideration the Organization expects to be entitled for the transfer of goods or services to a customer, then recognizes this revenue when or as the Organization satisfies its performance obligations under a contract, except in transactions where U.S. GAAP provides other applicable guidance. The Organization evaluates its revenue recognition based on the five-step model under Topic 606: (1) Identify the contract with the customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to separate performance obligations; and (5) Recognize revenue when (or as) each performance obligation is satisfied. Client fees earned from program and group activities are considered revenues from contracts with customers. The performance obligation of providing programs is simultaneously received and consumed by clients, therefore, the revenue is recognized evenly as services are provided over the term of the contracts. Rental income is recorded over the rental period of one year or less. Advance receipts of rental income are deferred and classified as prepaid revenue until earned. GMPD receives subsidies from HUD for qualifying tenants. Interest and other revenue are recorded in the period in which they are earned. Special events revenue consists of sponsorships that qualify as contributions and are recognized in accordance with ASC Subtopic 958-605.


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2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Estimates

The preparation of combining financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combining financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Advertising The Organization expenses advertising costs as they are incurred.

Property and Equipment and Depreciation

Purchased property and equipment are recorded at cost. Renewals and betterments are capitalized as additions to the related asset accounts, while repairs and maintenance are expensed as incurred. In-kind property donations are recorded at fair value at the time of donation. Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements 5 - 40 years Vehicles 3 - 5 years Furniture and equipment 3 - 10 years

Depreciation expense was $95,992 and $88,298 for fiscal years 2020 and 2019, respectively. The Organization accounts for the carrying value of its long-lived assets in accordance with the requirements of ASC Topic, Property, Plant, and Equipment. The carrying value is evaluated annually for impairment and no impairment loss was recognized in fiscal year 2020 or 2019.

Website Development and Software Thrive purchased a participant electronic records system and created a new website as part of a rebranding project, which are recorded at its cost and are being amortized over three to ten years. Amortization expense for the years ended June 30, 2020 and 2019, was $18,952 and $18,515, respectively, and is included in equipment depreciation and amortization in the accompanying combining statements of functional expenses. Accumulated amortization was $22,162 and $43,149 as of June 30, 2020 and 2019, respectively. Cash and Cash Equivalents

The Organization considers all highly liquid investments with a maturity of three months or less to be cash and cash equivalents for the purpose of the combining statements of cash flows.

Contracts and Grants Receivable Contracts and grants receivable at June 30, 2020 and 2019, consist of amounts due for program services provided. The allowance for doubtful accounts is recorded based on management’s analysis of specific contracts and grants receivable and their estimate of amounts that may become uncollectible. Amounts are written off when they are determined to be uncollectible and are recorded as bad debt.


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2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Debt Issuance Costs Debt issuance costs are amortized over the period the related obligation is outstanding using the straight-line method, which approximates the effective interest method. Amortization expense was $2,796 for fiscal years 2020 and 2019, and is included in interest expense in the accompanying combining statements of functional expenses.

Expense Allocation

Certain categories of expenses are attributable to more than one program or supporting function and are allocated according to the Organization’s cost allocation plan. For expenses related to staffing, a full-time equivalent allocation is used. Personnel who work in multiple cost centers evaluate their time annually so that their cost can be represented in the appropriate cost center. General support costs are allocated based on overall direct cost of each functional area. For facility related expenses, items are allocated by approximate square footage. Fair Value Measurements

The Organization follows the accounting and disclosure standards pertaining to ASC Topic, Fair Value Measurements, for qualifying assets and liabilities. Fair value is defined as the price that the Organization would receive upon selling an asset or pay to settle a liability in an orderly transaction between market participants.

The Organization uses a framework for measuring fair value that includes a hierarchy that categorizes and prioritizes the sources used to measure and disclose fair value. This hierarchy is broken down into three levels based on inputs that market participants would use in valuing the financial instruments based on market data obtained from sources independent of the Organization. Inputs refer broadly to the assumptions that market participants would use in pricing the financial instrument, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the financial instrument developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset developed based on the best information available. The three-tier hierarchy of inputs is summarized in the three broad levels as follows:

Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets at

the measurement date. Level 2 - Inputs other than quoted prices that are observable for the asset either directly or

indirectly, including inputs in markets that are not considered to be active. Level 3 - Inputs that are unobservable and which require significant judgment or estimation.

An asset or liability's level within the framework is based upon the lowest level of any input that is significant to the fair value measurement. All Assets and Liabilities

The carrying value of all assets and liabilities does not differ materially from its estimated fair value and are considered Level 1 in the fair value hierarchy.


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2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes The Organization accounts for uncertainty in income taxes in accordance with ASC Topic, Income Taxes. This standard clarifies the accounting for uncertainty in tax positions and prescribes a recognition threshold and measurement attribute for the combining financial statements regarding a tax position taken or expected to be taken in a tax return. The Organization has determined that there are no uncertain tax positions which qualify for either recognition or disclosure in the combining financial statements at June 30, 2020 and 2019. The Organization’s information returns are subject to examination by Federal and state jurisdictions.

Combining Statements of Activities and Changes in Net Assets Transactions deemed by management to be ongoing, major, or central to the provision of program services are reported as operating revenue and support and operating expenses in the accompanying combining statements of activities and changes in net assets. Peripheral or incidental transactions are reported as non-operating items. Subsequent Events Subsequent events have been evaluated through February 26, 2021, which is the date the combining financial statements were available to be issued. Events that met the criteria for recognition or disclosure in the combining financial statements are included in Notes 9 and 12.

3. FAIRMOUNT HILL AND PLEASANT STREET PROJECTS

GMPD owns two properties, Fairmount Hill and Pleasant Street (the Homes), that provide twenty units of housing to individuals with developmental disabilities. The Homes are regulated by HUD as to rent charges, operating methods, and cash escrows (see Note 4). The Homes have agreements to receive rent subsidies from HUD on behalf of qualified tenants through August 2033, and have a shared mortgage insured by HUD (see Note 12).

4. RESTRICTED CASH Restricted cash consisted of the following at June 30:

2020 2019 Replacement reserves $ 100,173 $ 86,951 Rep-payee funds 53,338 17,855 Residual receipts reserve 12,223 12,216 Escrow deposits 5,671 5,838 $ 171,405 $ 122,860

Restricted loan proceeds consist of amounts restricted for the Organization’s forgivable loan (see Note 13). Replacement reserves consist of funds held by GMPD for repairs and betterments to the Homes, in accordance with the regulatory agreement with HUD. Residual receipts reserve consists of surplus cash, as computed according to HUD regulations. Escrow deposits consist of funds which are restricted for property and mortgage insurance. The Organization acts as a custodian of various bank accounts on behalf of certain clients, and are included in rep-payee funds.


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5. LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS

The Organization’s financial assets available within one year from the combining statements of financial position date for general operating expenses are as follows as of June 30:

2020 Thrive GMPD

Total

Cash and cash equivalents, less security deposits

$ 853,630

$ 27,391

$ 881,021

Contracts and grants receivable, net 807,975 1,627 809,602 Escrow deposits - 5,671 5,671 Prepaid expenses and other assets (short- term investments)

4,317

-

4,317

Financial assets available to meet cash

needs for general expenditures within one year

$ 1,665,922

$ 34,689

$ 1,700,611

2019

Thrive GMPD Total

Cash and cash equivalents, less security deposits

$ 689,901

$ 12,364

$ 702,265

Contracts and grants receivable, net 337,847 461 338,308 Escrow deposits - 5,838 5,838 Prepaid expenses and other assets (short- term investments)

1,733

-

1,733

Financial assets available to meet cash

needs for general expenditures within one year

$ 1,029,481

$ 18,663

$ 1,048,144

The Organization has a policy to structure its financial assets to be available and liquid as its obligations become due. The Organization has certain donor restricted assets limited to use which are available for general operations. Accordingly, these assets have been included in the financial assets available to meet cash needs for general expenditure within one year. The Organization also had a line of credit (see Note 9) which could be accessed for cash flow needs as of June 30, 2019. As of June 30, 2020 and 2019, the Organization has financial assets equal to approximately two months of operating expenses.

6. NET ASSETS

Net Assets Without Donor Restrictions

Net assets without donor restrictions are those net resources that bear no external restrictions and are generally available for use by the Organization. The Organization has grouped its net assets without donor restrictions into the following categories:

Operating net assets represent funds available to carry on the Organization’s operations.

Property and equipment net assets reflect the activities relating to the Organization’s

property and equipment, website development and software, and replacement reserves, net of related debt.


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6. NET ASSETS (Continued) Net Assets With Donor Restrictions

Net assets with donor restrictions include donor-restricted funds designated for specific program purposes. These amounts are recorded as net assets with donor restrictions until they are expended for their designated purposes. Net assets with donor restrictions are purpose restricted as of June 30, 2020 and 2019.

7. STATEMENTS OF FUNCTIONAL EXPENSES

The below tables present GMPD’s expenses by both their nature and function the years ended June 30:

2020

Program Services

General and

Adminis- trative

Total Operating expenses:

Personnel costs: Salaries and wages $ - $ 48,582 $ 48,582 Temporary help and contracted services - 21,507 21,507 Employee benefits and payroll taxes - 11,533 11,533

Total personnel costs

- 81,622 81,622

Occupancy: Repairs and maintenance 88,549 - 88,549 Building depreciation 74,003 - 74,003 Interest 44,228 - 44,228 Utilities 30,291 - 30,291 Property insurance 14,792 - 14,792 Rent - 10,000 10,000

Total occupancy

251,863 10,000 261,863

Direct program costs: Vehicle operating costs 9,068 - 9,068

Other costs:

Management fee - 22,580 22,580 Professional fees - 12,026 12,026 Office supplies and postage - 1,197 1,197 Equipment depreciation and amortization 918 - 918 Miscellaneous - 144 144

Total other costs

918 35,947 38,865

Total operating expenses $ 261,849 $ 127,569 $ 389,418


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7. STATEMENTS OF FUNCTIONAL EXPENSES (Continued)

2019

Program Services

General and

Adminis‐ trative Total

Operating expenses: Personnel costs:

Salaries and wages $ ‐ $ 58,766 $ 58,766Temporary help and contracted services ‐ 12,790 12,790Employee benefits and payroll taxes ‐ 22,652 22,652

Total personnel costs

‐ 94,208 94,208

Occupancy: Repairs and maintenance 125,231 ‐ 125,231Building depreciation 71,087 ‐ 71,087Interest 44,808 ‐ 44,808Utilities 34,306 ‐ 34,306Property insurance 17,190 ‐ 17,190Rent ‐ 10,168 10,168

Total occupancy

292,622 10,168 302,790

Other costs: Management fee ‐ 22,303 22,303Professional fees ‐ 7,650 7,650Office supplies and postage 750 1,069 1,819Equipment depreciation and amortization 3,978 ‐ 3,978Miscellaneous ‐ 3,288 3,288

Total other costs

4,728 34,310 39,038

Total operating expenses $ 297,350 $ 138,686 $ 436,036 8. FUNDING

The Organization receives a significant portion of its total operating revenue and support (approximately 84% and 82% during fiscal years 2020 and 2019, respectively) from the Massachusetts Department of Developmental Services (DDS) under unit‐rate and cost‐reimbursable contracts. These reimbursements are subject to audit by DDS. In the opinion of management, the results of such audits, if any, will not have a material effect on the combining financial position of the Organization as of June 30, 2020 and 2019, or on the changes in their net assets for the years then ended. At June 30, 2020 and 2019, approximately 97% and 93%, respectively, of total contracts and grants receivable are due from DDS.

9. LINE OF CREDIT Thrive had available a $75,000 revolving line of credit with a bank. Borrowings were due on

demand and interest was payable monthly at the Wall Street Journal's prime rate (5.5% at June 30, 2019), plus 0.5%, subject to a floor rate of 4.0%. This line of credit was secured by certain vehicles of Thrive. There was no outstanding balance as June 30, 2019. The line of credit was converted to a note payable in fiscal year 2020 (see Note 12).


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9. LINE OF CREDIT (Continued) In December 2020, Thrive entered into an agreement with the same bank for a new revolving line of

credit with maximum borrowings up to $150,000. Borrowings are due on demand and interest is payable monthly at the Wall Street Journal's prime rate, plus 1.25%, subject to a floor rate of 4.5%. This line of credit is secured by all business assets now owned or acquired during the term of the agreement. Thrive used proceeds from the line of credit to pay off a note payable (see Note 12).

10. RELATED PARTY TRANSACTIONS

GMPD is related to Thrive through common Board of Director membership. Thrive provides property management services to GMPD. Under the terms of the agreement, Thrive is entitled to a management fee equal to 6% of gross potential rent collected. Thrive billed GMPD the following amounts as of June 30:

2020 2019

Supervisor salaries and accounting services $ 60,115 $ 81,418 Management fee 22,580 22,303 Rent 10,000 10,168 $ 92,695 $ 113,889

The management fees and rent have been eliminated in the accompanying combining financial statements.

Due from - related party and due to - related party consist of the following as of June 30:

2020 2019

Office rent, program and other services $ 3,918 $ 14,307 Superintendent salary and benefits 3,175 1,661 Property management services 1,859

2,967

$ 8,952 $ 18,935

The following are additional related party transactions during fiscal years 2020 and 2019:

• A member of the Board is an employee at Main Street Bank, where Thrive and GMPD

maintain their cash accounts. • A member of the Board works at Triton Financial Group, which manages Thrive’s retirement

plan (see Note 16). 11. IN-KIND CONTRIBUTIONS Thrive records the fair value of in-kind contributions, as determined by the donors, in the

accompanying combining financial statements of $24,570 for the years ended June 30, 2020 and 2019, for donated space.


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12. LONG-TERM DEBT

Long-term debt consists of the following at June 30:

2020 2019

3.45% HUD-insured mortgage payable with Walker & Dunlop, Inc., payable in monthly installments of principal and interest of $5,654 through April 1, 2047. This note is secured by a first mortgage on GMPD’s property (see Note 3), as well as an assignment of its leases, rents and accounts receivable. The mortgage agreement contains certain financial and non-financial covenants with which GMPD must comply. At June 30, 2020 and 2019, GMPD was in compliance with these covenants.

$ 1,186,355

$ 1,212,772

4.25% note payable to a bank, due in monthly principal and interest installments of $1,421 through May 8, 2038. Every sixty months, the interest rate is to be adjusted to two hundred basis points higher than the Boston Federal Home Loan Bank Five-Year Classic Advance Rate. This note is secured by a first mortgage on land and a building. The note agreement contains certain financial and non-financial covenants with which Thrive must comply. At June 30, 2020 and 2019, Thrive was in compliance with these covenants.

212,667

220,355

4.25% note payable to a bank drawn on April 15, 2020, and due on June 14, 2020. Thrive is in the process of establishing a line of credit agreement to replace this note. The note continues to accrue interest until the principal balance is paid. This note is secured by all assets. The loan was paid in full in December 2020 (see Note 9).

75,000

- 1,474,022 1,433,127

Less - unamortized debt issuance costs 74,797 77,594 Less - current portion 110,438 34,156

$ 1,288,787 $ 1,321,377

Principal payments on long-term debt and amortization of debt issuance costs over the next five years are as follows:

Fiscal Year

Principal

Payments

Amortization of Debt

Issuance Costs

2021 $ 110,438 $ 2,796 2022 $ 36,768 $ 2,796 2023 $ 38,148 $ 2,796 2024 $ 39,582 $ 2,796 2025 $ 41,070 $ 2,796


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13. CONTINGENT DEBT

Thrive applied for and was awarded a forgivable loan of $734,900 on June 17, 2020, from the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) through a bank. The funds will be used to pay certain payroll costs, including benefits, as well as rent and utilities during the covered period as defined in the CARES Act. A portion of these funds may be forgiven, as defined in the agreement, at the end of the covered period and the remainder of the funds will be due over a five-year period with interest at 1%. Any repayment will be deferred for a period of ten months from the end of the covered period, when the note, plus interest, will be due in equal monthly payments through the maturity date, as defined by the bank. There are no covenants with which to comply and the note is not secured by any collateral as of June 30, 2020. There was no accrued interest on the note payable as of June 30, 2020, as it would be immaterial to the overall combining financial statements. As of February 26, 2021, Thrive has not submitted the application for forgiveness. However, Thrive anticipates the note payable will be forgiven in full and, therefore, the balance has been classified as long-term in the accompanying combining statement of financial position as of June 30, 2020. The future minimum payments will not be disclosed for the contingent debt as it is expected to be forgiven.

14. LEASES

Facilities Thrive has a lease agreement with required monthly payments of $7,368 that was amended in fiscal year 2019 to include additional space for an additional $1,765 in monthly payments for office space through December 2024. Required monthly payments were $9,133 through September 2019 and are $9,624 thereafter. Thrive is also responsible for certain shared costs as part of the agreement. Total rent and shared costs incurred by Thrive for fiscal years 2020 and 2019 were $137,113 and $121,902, respectively, and are included in rent in the accompanying combining statements of functional expenses. Thrive also leased storage space for $4,366 and $4,786 during fiscal years 2020 and 2019, respectively, which is included in rent in the accompanying combining statements of functional expenses.

Office Equipment Thrive leased copiers under an operating lease agreement, due in monthly payments of $779 through April 2020. Thrive also leased a telephone system under an operating lease agreement, due in monthly payments of $710 through September 2019. Total office equipment lease payments for fiscal years 2020 and 2019 were $20,898 and $22,080, respectively, and are included in repairs and maintenance in the accompanying combining statements of functional expenses.

Vehicles Thrive leases seven vans and a bus under multiple operating lease agreements expiring through June 2024. Current aggregate monthly payments are $3,418, with a final payment of $6,651 due in June 2024. Total vehicle lease payments for fiscal years 2020 and 2019 were $50,778 and $44,205, respectively, and are included in vehicle operating costs in the accompanying combining statements of functional expenses.


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14. LEASES (Continued) Future minimum lease payments are as follows:

Fiscal Year

Facilities Vehicles Total

2021 $ 115,490 $ 7,807 $ 123,297 2022 115,490 7,807 123,297 2023 115,490 7,538 123,028 2024 115,490 11,816 127,306 2025 52,933 - 52,933

Total $ 514,893 $ 34,968 $ 549,861

15. CONTINGENCIES

During fiscal year 2020, COVID-19 was recognized as a global pandemic. Federal, state and local governments in the United States have imposed restrictions on travel and business operations. Temporary closures of certain businesses were also ordered in certain jurisdictions. Consequently, the COVID-19 outbreak severely restricted the level of economic activity. The adverse impact of COVID-19 on the Organization’s businesses, operating results, cash flows, and financial condition primarily will be driven by the severity and duration of the pandemic; the timing, scope and impact of stimulus legislation, and other Federal, state and local governmental responses to the pandemic. As a result, the adverse impact COVID-19 will have on the Organization’s businesses, operating results, cash flows, and financial condition is uncertain, but the adverse impact could be material. Management of the Organization continues to monitor the COVID-19 events closely to assess any additional financial impact of the situation and determine appropriate courses of action. In response, the Organization applied for and was awarded a Small Business Administration (SBA) PPP loan in the amount of $734,900 (see Note 13) under the CARES Act. These loan funds may be forgiven provided that the Organization expends the proceeds on qualifying costs, as defined in the agreement.

16. PENSION PLAN

Thrive has a defined contribution pension plan covering all eligible employees. Employees become eligible to participate after completing six months of employment. The plan provides for an employer match of $0.50 for each employee dollar contributed, with a three-year vesting schedule. The employer match is made up to the first 4% of annual compensation. For fiscal years 2020 and 2019, pension costs were $23,861 and $21,132, respectively, and are included in employee benefits and payroll taxes in the accompanying combining statements of functional expenses.

17. CONDITIONAL GRANT

In fiscal year 2019, the Organization was awarded a conditional grant from a private foundation totaling $250,000, of which $25,000 was recognized during fiscal years 2020 and 2019. The remaining balance of the grant is conditional, as future payments are subject to the funder’s assessment of the Organization’s program and the Organization achieving specific benchmarks as defined in the grant agreement. Accordingly, this conditional grant will be recorded as revenue when the funder’s conditions are met. The remaining balance of this grant is expected to be received, if conditions are met, in equal installments over the next eight years.


Schedule of Expenditures of Federal AwardsFor the Year Ended June 30, 2020

Pass-ThroughFederal EntityCFDA Identifying Federal

Number Number Expenditures

U.S. Department of Housing and Urban Development:

Direct Programs:

Mortgage Insurance for the Purchase or Refinancingof Existing Multifamily Housing Projects 14.155 N/A 1,212,772$

Section 8 Project-Based Cluster:Lower Income Housing Assistance Program

Section 8 Moderate Rehabilitation 14.856 N/A 286,832

Total Expenditures of Federal Awards 1,499,604$

Note 1. Basis of Presentation

Note 2. Loan Outstanding

Note 3. Indirect Cost Rate

The Organization has elected not to use the 10% de minimis cost rate for its Federal programs.

The Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projectslisted above represents the outstanding loan balance at June 30, 2019. The outstanding balance ofthis loan at June 30, 2020, is $1,186,355.

Federal Grantor/Pass-Through Grantor/Program or Cluster Title

The above Schedule of Expenditures of Federal Awards includes the Federal assistance activity ofthe Organization and is presented on the accrual basis of accounting. The information in thisschedule is presented in accordance with the requirements of Title 2 U.S. Code of FederalRegulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards.

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Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Combining Financial Statements Performed in

Accordance With Government Auditing Standards

Independent Auditor’s Report To the Board of Directors of

Thrive Support and Advocacy, Inc. and Affiliate: We have audited, in accordance with the 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, the combining financial statements of Thrive Support and Advocacy, Inc. and Affiliate (collectively, the Organization), which comprise the combining statement of financial position as of June 30, 2020, and the related combining statements of activities and changes in net assets, cash flows and functional expenses for the year then ended, and the related notes to the combining financial statements, and have issued our report thereon dated February 26, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the combining financial statements, we considered the Organization’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the combining financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control. 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 combining financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.


Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization’s combining financial statements are free from material misstatement, 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 the combining financial statements. 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 of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Westborough, Massachusetts February 26, 2021

Report on Compliance for Each Major Federal Program and Report on Internal Control

Over Compliance Required by the Uniform Guidance

Independent Auditor’s Report

To the Board of Directors of

Thrive Support and Advocacy, Inc. and Affiliate: Report on Compliance for Each Major Federal Program We have audited Thrive Support and Advocacy, Inc. and Affiliate’s (collectively, the Organization) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the Organization’s major Federal program for the year ended June 30, 2020. The Organization’s major Federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the Federal statutes, regulations, and the terms and conditions of its Federal awards applicable to its Federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the Organization’s major Federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Organization’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major Federal program. However, our audit does not provide a legal determination of the Organization’s compliance. Opinion on Each Major Federal Program In our opinion, the Organization complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major Federal program for the year ended June 30, 2020.


Report on Internal Control Over Compliance Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to on the previous page. In planning and performing our audit of compliance, we considered the Organization’s internal control over compliance with the types of requirements that could have a direct and material effect on the major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major Federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Westborough, Massachusetts February 26, 2021

THRIVE SUPPORT AND ADVOCACY, INC. AND AFFILIATE Schedule of Findings and Questioned Costs June 30, 2020

Page 25

1. SUMMARY OF AUDITOR’S RESULTS Combining Financial Statements

Type of auditor’s report issued on whether the combining financial statements audited were prepared in accordance with U.S. GAAP: Unmodified Is a “going concern” emphasis-of-matter paragraph included in the auditor’s report?

Yes X

No

Internal control over financial reporting:

• Material weakness(es) identified?

Yes

X

No

• Significant deficiency(ies) identified?

Yes

X

None reported

Noncompliance material to combining financial statements noted?

Yes

X

No

Federal Awards Internal control over the major Federal program:

• Material weakness(es) identified?

Yes

X

No

• Significant deficiency(ies) identified?

Yes

X

None reported

Type of auditor’s report issued on compliance for the major Federal program: Unmodified

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)?

Yes

X

No

Identification of the major Federal program: Name of Federal Program or Cluster

CFDA Number

Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects

14.155

Dollar threshold used to distinguish between Type A and Type B programs: $750,000.

Auditee qualified as low-risk auditee?

X Yes

No

THRIVE SUPPORT AND ADVOCACY, INC. AND AFFILIATE Schedule of Findings and Questioned Costs June 30, 2020

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2. COMBINING FINANCIAL STATEMENT FINDINGS

None 3. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

None

and affiliate

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