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FINANCIAL STATEMENTS ANDINDEPENDENT AUDITOR'S REPORT

CAPITAL POST-CONVICTION PROJECT OF LOUISIANA

DECEMBER 31, 2005 AND 2004

Release


TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT 3

FINANCIAL STATEMENTS:

STATEMENTS OF FINANCIAL POSITION 4

STATEMENTS OF ACTIVITIES 5

STATEMENTS OF FUNCTIONAL EXPENSES 6-7

STATEMENTS OF CASH FLOWS 8

NOTES TO FINANCIAL STATEMENTS 9

REPORT ON COMPLIANCE AND ON INTERNAL CONTROLOVER FINANCIAL REPORTING BASED ON AN AUDITOF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITH GOVERNMENT AUDITING STANDARDS 17

meunieR and uiAnc, LL.P.Certified Public Accountants

frionoqement Consultants

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors ofCapital Post-Conviction Project of Louisiana

We have audited the accompanying statements of financial position of CapitalPost-Conviction Project of Louisiana (a non-profit organization) as of December 31,2005 and 2004, and the related statements of activities, functional expenses, and cashflows for the years then ended. These financial statements are the responsibility of theOrganization's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted inthe United States of America and the standards applicable to financial audits containedin Government Auditing Standards, issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessingthe accounting principles used and the significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in atl materialrespects, the financial position of Capital Post-Conviction Project of Louisiana as ofDecember 31, 2005 and 2004, and the changes in its net assets and its cash flows forthe years then ended in conformity with accounting principles generally accepted in theUnited States of America.

In accordance with Government Auditing Standards, we have also issued our reportdated Jufy 7, 2006, on our conisderation of Capital Post-Conviction Project ofLouisiana's internal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants. That report is an integralpart of an audit performed in accordance with Government Auditing Standards andshould be read in conjunction with this report in considering the results of our audit.

Metairie, LouisianaJuly 7, 2006

3421 N, Causeway Blvd., Suite 701 « Metairie, I,A 70002 • Telephone (504) 837-0770 • Fax (504)837-7102

.Member of

Member Firms in Principal Cities * PCAOB - Public Cotnpiny Accounfine Overaitht Board

AIC'PA: CtMtr f«r Public Company Amltl Firms <SEC)* Governmental Audit Quality Center » Privme Companies Practice Section (PCPS)


STATEMENTS OF FINANCIAL POSITION

December 31,

2005

ASSETS

Current AssetsCash and Cash EquivalentsGrants ReceivablePrepaid Expenses

Total Current Assets

Property and EquipmentEquipment and FurnitureLess: Accumulated Depreciation

Total Property and Equipment

Other AssetsSecurity Deposits

Total Other Assets

Total Assets

LIABILITIES AND NET ASSETS

Current LiabilitiesGrants PayableAccrued LiabilitiesPayroll Taxes Payable

Total Current Liabilities

Contingencies

Net AssetsUnrestricted

Total Liabilities and Net Assets

910,607

2004

$ 354,346 $560,0004.412

918,758

133,221(96,381)

36,840

1,8521,852

271,664440,0004.412

716.076

130,951(76,103)

54,848

1,8521.852

$ 957.450 $ 772,776

$ 40,000 $977

7,820

46,843

41.065977

4.267

44.355

728,421

$ 957,450 $ 772,776

See accountant's report and notes to financial statements4


STATEMENTS OF ACTIVITIES

For the years ended December 31,

2005 2004

UNRESTRICTED NET ASSETSUnrestricted Revenues

Government GrantsTotal Unrestricted Revenues

ExpensesProgram ServicesSupporting Services

Total Expenses

Increase in Unrestricted Net Assets Before Other Income

Other IncomeInterest IncomeKatrina Revenue

Total Other Income

Increase (Decrease) in Unrestricted Net Assets

Increase (Decrease) in Net Assets

Net Assets at Beginning of Year

Net Assets at End of Year

$ 1.000.000 $ 880,000

1,000,000

620,295200,898

821,193

178.807

2.3541.025

3.379

182.186

182,186

728,421

$ 910,607 $

880,000

835,173261,159

1.096.332

(216,332)

2.7830

2,783

(213.549)

(213,549)

941,970

728.421



STATEMENT OF FUNCTIONAL EXPENSES

For the year ended December 31,2005

Salaries and WagesGrants to OthersExpert Witness FeesInvestigation ExpensesCase Expenses - GeneralFringe BenefitsPayroll TaxesAccounting FeesComputer Consultant FeesOccupancyTelephoneDepreciationComputer ExpensesOffice ExpensesPublicationsConferences and MeetingsContinuing Education and DuesInsurance

Total Expenses

Total

$ 416,321 $112.56232.10333,3044.146

36,02033,0506,000

18,14743,85210,01020,27811,41632,030

1,0142,1333,1345,673

$ 821,193 $

Program

Services

333,057 $112,56232,10333,3044,146

28,81626,440

00

35,0828,008

00

5,7631.014

000

620,295 $

SupportingServices

83,2640000

7,2046,6106,000

18,1478,7702,002

20.27811.41626,267

02.1333.1345.673

200,898



STATEMENT OF FUNCTIONAL EXPENSES


Salaries and WagesGrants to OthersReimbursements of ExpensesExpert Witness FeesInvestigation ExpensesCase Expenses - GeneralFringe BenefitsPayroll TaxesAccounting FeesComputer Consultant FeesProfessional FeesOccupancyTelephoneDepreciationComputer ExpensesOffice ExpensesPublicationsConferences and MeetingsContinuing Education and DuesInsurance

Total Expenses

Total

$ 459,676 $171,438115,16961,466

1.3101.994

37.09840.229

9,00046.94018.02852,69610.62120.21313,37018.9191.4672,0147,4857,199

$ 1.096.332 $

ProgramsServices

367,741 $171,438115,16961,466

1,3101,994

29,67832.183

000

42.1578.497

00

2.0731,467

000

835,173 $

SupportingServices

91,93500000

7,4208,0469,000

46,94018,02810.5392,124

20.21313.37016.846

02.0147,4857,199

261,159



STATEMENTS OF CASH FLOWS

For the years ended December 31,

2005 2004

CASH FLOWS FROM OPERATING ACTIVITIES

Increase (Decrease) in Net Assets

Adjustments to reconcile increase in net assets to net cashprovided by operating activities:Depredation and amortization(Increase) decrease in operating assets:

Grants ReceivablePrepaid ExpensesConsent Judgment Receivable

Increase (decrease) in operating liabilities:Grants PayableAccrued Liabilities

Total adjustments

Net cash provided (used) by operating activities

CASH FLOWS FROM INVESTING ACTIVITIESCash payments for the purchase of property

Net cash provided (used) by investing activities

Net increase (decrease) in cash and equivalentsCash and equivalents, beginning of year

Cash and equivalents, end of year

$ 182.186 $ (213.549)

20,278 20.213

(120,000)00

(1.065)3,553

(97,234)

84,952

(2,270)

(2,270)

82,682271.664

$ 354,346 $

(50,000)637

46,940

(6,435)3,42814,783

(198,766)

00

(198.766)470,430

271,664



NOTES TO FINANCIAL STATEMENTS


NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities

Capital Post-Conviction Project of Louisiana (the Organization) is a non-profitcorporation organized exclusively for charitable, scientific and educational purposes,including, but not limited to, providing legal representation to indigent persons inLouisiana under the sentence of death, and to providing consultation services,educational materials, and seminars to lawyers who represent indigent persons facingor under a sentence of death.

The Organization is supported primarily through government contracts and privategrants and does not engage in fundraising activities.

Promises to Give

Contributions are recognized when the donor makes a promise to give to theOrganization that is, in substance, unconditional. Contributions that are restricted bythe donor are reported as increases in unrestricted net assets if the restrictions expirein the fiscal year in which the contributions are recognized. Any other donor-restrictedcontributions are reported as increases in temporarily or permanently restricted netassets depending on the nature of the restrictions. When a restriction expires,temporarily restricted net assets are reclassified to unrestricted net assets. AtDecember 31,2005, the Organization has no temporarily or permanently restricted netassets.

Estimates

The preparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptions thataffect certain reported amounts and disclosures. Accordingly, actual results could differfrom those estimates.

Property and Equipment

It is the Organization's policy to capitalize property and equipment with an expected lifeof three or more years and a cost of $500 or more. Property and equipment aredepredated using the straight-line method over a five to ten year depreciable life.




NOTE A - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)

Financial Statement Presentation

The Organization has adopted Statement of Rnancial Accounting Standards (SFAS)No. 117, Financial Statements of Not-for-profit Organizations. Under SFAS No. 117,the Organization is required to report information regarding the financial position andactivities according to three classes of net assets: unrestricted net assets, temporarilyrestricted net assets, and permanently restricted net assets. As permitted by thestatement, the Organization does not use fund accounting.

Contributions

The Organization has adopted SFAS No. 116, Accounting for Contributions Receivedand Contributions Made. Contributions received are recorded as unrestricted,temporarily restricted, or permanently restricted support depending on the existence ornature of any donor restrictions.

Income Taxes

The Organization is a not-for-profit organization that is exempt from income taxes underSection 501(c)(3) of the Internal Revenue Code and classified by the Internal RevenueService as other than a private foundation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Organization considers all highly liquidinvestments available for current use with an initial maturity of three months or less tobe cash equivalents.

Concentration of Credit Risk

The Organization occasionally maintains deposits in excess of federally insured limits.Statement of Financial Accounting Standards No. 105 identifies these items as aconcentration of credit risk requiring disclosure, regardless of the degree of risk. Therisk is mitigated by maintaining all deposits in high quality financial institutions. In 2003the Organization entered into a security agreement with Hibemia National Bank for thecollateralization of public funds in excess of federally insured limits.

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NOTE B - FINANCIAL ASSISTANCE

State of Louisiana Contracts

The Organization has been awarded grants from the Louisiana Indigent DefenseAssistance Board (LIDAB) to be used exclusively to defray the expenses of establishingand maintaining a capital post-conviction office, including contract amounts forattorneys, staff, office expenses, overhead and out-of-pocket expenses. The Fundsfrom these grants are not intended to defray, in whole or in part, the expensesassociated with any trial or appeal as of right filed by or on behalf of a defendantsentenced to death. The scope of the contracts does not include litigation orproceedings arising out of or involving tort or worker's compensation.

For the year ended December 31,2005, the following LIDAB agreements are reflectedin the financial statements:

Contract Period July 1.2004 through June 30.2005

Capital Post-Conviction Project of Louisiana received a grant in the amount of$880,000. The entire contract amount was recorded as Income in 2004.Monthly installments were received from July through December, 2004, and theremaining contract amount, or $440,000, was recorded on the Statement ofFinancial Position as Grants Receivable. The balance of $440,000 wasreceived in monthly installments from January through June, 2005.

Contract Period July 1.2005 through June 30. 2006

Capital Post-Conviction Project of Louisiana received a grant in the amount of$1.000,000. During the year ended December 31,2005, the entire contractamount was recorded as income. The grant was paid in monthly installmentsfrom July through December, 2005, and the remaining contract amount, or$560,000, is shown on the Statement of Financial Position as GrantsReceivable.

Contract Period December 1. 2002 through June 30. 2004

Capital Post-Conviction Project of Louisiana received a grant in the amount of$300,000 for post-conviction services on behalf of indlgents in Louisiana.Payment was made in one lump sum payment during 2003.

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NOTE B - FINANCIAL ASSISTANCE (CONTINUED)

State of Louisiana Contracts (Continued)

The grant funds shall be used exclusively by the CPCPL to:

a) Provide training, consultation services, legal resource support, expert andinvestigative assistance, as well as miscellaneous litigation costs, for therepresentation of indigents in capital post-conviction proceedings related to legalissues raised in Atkins v. Virginia.

b) Make funds available to resource attorneys providing capital post-convictionservices to indigents and provide training and support to attorneys representingindigents in capital post-conviction proceedings on a pro bono basis.

c) Acquisitions of additional office equipment, provide upgrades to software andtelecommunications, supplement employee salaries and offset the cost ofestablishing an employee benefit program.

d) The scope of this grant does not include litigation or proceedings arising outof or involving tort or worker's compensation.

NOTE C • GRANTS TO OTHERS

For the year ended December 31,2005, the following agreements are reflected in thefinancial statements:

Center for Equal Justice - General Contract (7-1 -04 to 6-30-05)

Capital Post-Conviction Project of Louisiana entered into a contract agreementwith the Center for Equal Justice to provide $95,000 for legal representation instate post-conviction proceedings for indigent death-sentenced individuals inLouisiana. This contract is for the period July 1,2004 through June 30.2005.

The entire contract amount was recorded in 2004, and the unpaid balanceof $41,065 was reflected on the Statements of Financial Position as GrantsPayable. The remaining contract amount was paid in 2005.

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NOTE C • GRANTS TO OTHERS (CONTINUED)

Center for Equal Justice - General Contract (7-1-05 to 6-30-06)

Capital Post-Conviction Project of Louisiana entered into a contract agreementwith the Center for Equal Justice to provide $80,000 for legal representation instate post-conviction proceedings for indigent death-sentenced individuals inLouisiana. This contract is for the period July 1,2005 through June 30,2006.

The entire contract amount was recorded in 2005, and the unpaid balanceof $40,000 is reflected on the Statements of Financial Position as GrantsPayable.

NOTE D • CONTINGENCIES

During the year ended December 31,2005, the organization was a party to thefollowing agreements for legal representation payable as invoiced:

Center for Equal Justice - Case Specific Contract

Capital Post-Conviction Project of Louisiana entered into an additionalagreement with the Center for Equal Justice in 2004 to provide $25,000 for legalrepresentation of a specific Louisiana state post-conviction case at a rate of $75per attorney hour and reimbursement for case expenses. The entire amountunder the agreement was paid in 2004.

Danaivnn Recer

During 2002, Capital Post-Conviction Project of Louisiana entered into anagreement with Danalynn Recer to provide resource assistance to appointedcounsel in the Louisiana state post-conviction proceedings of two specifiedindividuals at a rate of $75 per attorney hour and reimbursement for caseexpenses, up to a maximum of $15,000 per case, or a total of $30,000. As ofDecember 31,2005, a balance of $3,274 remains on this agreement.

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NOTE D - CONTINGENCIES (CONTINUED)

Jimmy Lohman

During 2002, Capital Post-Conviction Project of Louisiana entered into anagreement with Jimmy Lohman to provide resource assistance to appointedcounsel in the Louisiana state post-conviction proceedings of a specifiedindividual at a rate of $75 per attorney hour and reimbursement for caseexpenses, up to a maximum of $15,000. As of December 31,2005. a balanceof $3,454 remains on this agreement.

Paula Montonve

During 2005, Capital Post-Conviction Project of Louisiana entered into anagreement with Paula Montonye to provide resource assistance on threespecific Louisiana state post-conviction case, up to a maximum amount of$20,000. As of December 31,2005, a balance of $20,000 remains under thisagreement.

NOTE E - DESCRIPTION OF LEASING ARRANGEMENTS

Elk Place Professional Plaza

The Organization entered into an agreement with Elk Place Professional Plaza in 2001for the rental of office space. The lease term was to expire in February, 2007.However, the lease was terminated by Elk Place Professional Plaza effectiveAugust 29,2005, the date of Hurricane Katrina, due to damages which substantiallyimpaired the economic operations of the building.

The Organization secured a lease for office space elsewhere, with an effective date ofJanuary 1,2006. The details of this lease are described in Note H - SubsequentEvents.

The Organization is also a party to an agreement with New South Communications fornetwork services. The term of the lease is for two years, expiring in February, 2006.Upon expiration of the minimum term commitment, the agreement will automaticallyrenew on a month-to-month basis until 30-day notice of termination by either party isgiven. Minimum lease payments are as follows:

2006

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NOTE E - DESCRIPTION OF LEASING ARRANGEMENTS (CONTINUED)

Gulf Coast Office Products

An additional agreement was entered into with Gulf Coast Office Products, effectiveJanuary 1,2006, for the lease of a digital copier/scanner. The term of the lease is forfive years, expiring December 31,2010. Upon expiration of the minimum termcommitment, CPCPL will have the option to purchase the equipment at its then fairmarket value.

Minimum lease payments are as follows:

2006 $ 4,1402007 4,1402008 4,1402009 4,1402010 4.140

Total

Lease with Continental Povdras Corporation

The Organization entered into a lease with Continental Poydras Corporation onDecember 31,2005 for office space. The term of the lease is for a term of five years,ending on December 31,2010. The base monthly rent of $4,696 has been waived forthe first six months of occupancy.

Minimum payments under the lease are as follows:

2006 $ 28,1762007 56,3522008 56.3522009 56,3522010 56.352

Total $253,584

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NOTE F - CONSENT JUDGMENT

During the year ended December 31,2002, it was discovered by CPCPL that anindividual employed by their organization as Chief Financial Officer hadmisappropriated funds. The individual was terminated in July, 2002, admittedwrongdoing, and agreed to make restitution to CPCPL In the amount of $44,325.Consent Judgments In this amount were secured in both Orleans Parish and JeffersonParish against the individual and in favor of CPCPL.

As a result of the above, a Consent Judgment Receivable was booked as an OtherAsset, and Income was recognized in 2002 in the amount of $44,325. During 2003,interest in the amount of $2,615 was added to the receivable and recorded as interestincome.

In 2004, the individual's personal property was sold at auction, but after payment ofpriority debts, there were no proceeds remaining to cover the amount due to CPCPL.The Board has determined that this amount is now uncollectible, and therefore, theentire amount was recorded as a Bad Debt in 2004.

NOTE G-401(K) PLAN

The Organization became a participant in the ABA Members Retirement Program withan effective date of January 1,2003. Eligible employees were allowed to makedeferred compensation contributions to the plan beginning in 2003, and there were noemployer contributions made during the year. All employees who have attained the ageof 21 are allowed to participate.

The ABA conducted discrimination testing on the plan, and reported full compliance forthe year ended December 31,2005.

NOTE H - NOTICE OF INTENT

Louisiana Indigent Defense Assistance Board

The Organization was advised that an additional grant of $300,000 had been approvedby the Louisiana Indigent Defense Assistance Board. The grant was to effective as ofJuly 1,2005. No funds were received in 2005, and there has been no furthercommunication regarding this grant. Because it appears uncertain whether or not thegrant will be received, no revenue was booked in 2005.

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PAILBT, meiine d LeBiAnc, L.L.P.Certified Public Accountants

management Consultants

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIALREPORTING BASED ON AN AUDIT OF RNANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited the financial statements of Capital Post-Conviction Project ofLouisiana (a non-profit organization) as of and for the year ended December 31. 2005,and have issued our report thereon dated July 7, 2006. We conducted our audit inaccordance with auditing standards generally accepted in the United States of Americaand the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States.

Compliance

As part of obtaining reasonable assurance about whether Capital Post-ConvictionProject of Louisiana's financial statements are free of material mlsstatement, weperformed tests of its compliance with certain provisions of laws, regulations, contracts,and grants, noncompliance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion oncompliance with those provisions was not an objective of our audit, and accordingly, wedo not express such an opinion. The results of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

Internal Control over Financial Reporting

In planning and performing our audit, we considered Capital Post-Conviction Project ofLouisiana's internal control over financial reporting in order to determine our auditingprocedures for the purpose of expressing our opinion on the financial statements andnot to provide assurance on the internal control over financial reporting. Our

3421 N. Causeway Blvd., Suite 70! • Metalrie, LA 70002 • Telephone (504) 837-0770 • Pax (504) 837-7102

Q Member ofMember Firm* !• Principal Cltttt • PCAOB - PabUc Campaoy AcceoBtfaf Ovcntgbl Beard

AICPA: Center for Public Campa»y Audit Firms (SEC) * Govenuaratal Audit Quality Center • Private Compute* Practice Settle* (PCPS)


consideration on the internal control over financial reporting would not necessarilydisclose all matters in the internal control over financial reporting that might be materialweaknesses. A material weakness is a condition in which the design or operation ofone or more of the internal control components does not reduce to a relatively low levelthe risk that misstatements in amounts that would be material in relation to the financialstatements being audited may occur and not be detected within a timely period byemployees in the normal course of performing their assigned functions. We noted nomatters involving the internal control over financial reporting and its operation that weconsidered to be weaknesses.

This report is intended solely for the information and use of the Legislative Auditor,audit committee, management, others within the organization and grant awardingagencies and is not intended to be and should not be used by anyone other than thesespecified parties. Under Louisiana Revised Statute 24:513, this report is distributed bythe Legislative Auditor as a public document.

Metairie, LouisianaJuly 7, 2006

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