the louisiana forestry associationapp1.lla.la.gov/publicreports.nsf/f28bc1ff89406aee... ·...

73^^'

The Louisiana Forestry Association

Alexandria, Louisiana

Financial Statements

December 3 L 2009

Under provisions of state law. this report IS a public document. Acopy ofthe report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office ofthe Legislative Auditor and, where appropriate, at the office of theparish clert< of court.

Release Date

Table of Contents

Independent Auditors'Report 1

Statement of Financial Position 3

Statement of Activities 4

Statement of Cash Flows 5

Notes to Financial Statements 6

Supplementary Data

Schedule of Revenues and Support 13

Schedule of Expenses 14

Report on Internal Control over Financial Reporting and on Comphance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 17

Schedule of Findings and Responses 19

Managements Corrective Action Plan 24

< < Knight Masden

A Professional Accounting Corporation

K. Martin Masden, CPA

John E. Therlot II, CPA

Dona C. Manual, CPA

Coan I. Knight, Jr., CPA ,

Stephanie R. Lemoine, CPA

March 1,2010

Independent Anditors* Report

Board of Directors The Louisiana Forestry Association Alexandria, Louisiana

We have audited the accompanying statement of financial position of The Louisiana Forestry Association (a nonprofit organization) as of December 31, 2009, and the related statement of activities and cash flows for the year then ended. These financial statements are the responsibility ofthe Louisiana Forestry Association's management Our responsibihty is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived fi-om Louisiana Forestry Association's 2008 financial statements and, in our report dated March 24, 2009 we expressed an unqualified opinion on those financial statements.

We conducted the audit in accordance with auditing standards generally accepted in the United States.of America and the standards apphcable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America, Those standards require that we plan and perform the audit to obtain reasonable assurance about whetha* the financial statements are free of materia] misstatement An audit includes examining, on a test basis, evidence supporting the ainounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statem^it presentation. We beheve that our audit provides a reasonable basis for our opinion.

In our opinion, the fmancial statements referred to above present fairly, in all material respects, the financial position of The Louisiana Forestry Association as of December 31, 2009, and the changes in net assets and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated March 1,2010 on our consideration ofthe Association's internal control over financial reporting and our tests of its comphance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of infernal control over financial reporting and con^)liance and the results of that testing, and not to provide an opinion on the intemal control over financial

5615 J Jackson Street

Alexandria, Louisiana 71303

PH: 318-445-9334

FAX: 318-445-0996

www.knightmasden.com

http://www.knightmasden.com

reporting or on compliance. That report is an integral part of an audit preformed in accordance with Government Auditing Standards and should be considered in assessing the results of oxu* audit.

Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary data schedules are presented for the purpose of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied m the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

^ W KnightMasden Accoufitlnfl CoTpomBon

The Louisiana Forestry Association Statement of Financial Position

December 31,2009

Assets

Current Assets Cash and cash equivalents Certificates of deposit Accounts receivable - advertising Accounts receivable - other Prepaid expenses Accrued interest receivable

Total Current Assets

Property and Equipment, net

Other Assets Cash surrender value Marketable securities

Total Other Assete

Total Assets

2009

$ 242,926

310,153

7,656

48,870

242 1,142

610,989

212,802

152,283

99,732

252,015

$ 1,075,806

2008

Summarized

$

—

$_

Tot^i

263,535

296,203

7,899

38,228

3,781

2,999

612,645

234,039

104,243

76,456

180,699

1,027,383

Liabihties and Net Assets

Current Liabilities Accounts payable Accrued payroll taxes Payable to Children's Miracle Network Deferred revenues

Total Current Liabilities

$ 8,164 $

1,678

2,295

146,725

21,533

1,981

2.655

131,037

158,862 157,206

Net Assets Unrestricted Temporarily restricted

Total Net Assets

891,701 25,243

916,944

858,439

11,738

870,177

Total Liabilities and Net Assets $ 1,075,806 $ 1,027,383

The accompanying notes are an integral part ofthe financial statements.

The Louisiana Forestry Association Statement of Activities

For the Year Ended December 31,2009

evenues and Support Membership dues Annual meetmg Programs Programs - donated services Tree farm Public information Forests & People magazine Legislative Investment income Other revenue Sustained forestry initiative Logging council

Total Revenue and Support

Unrestncted

$ 383,086 118,095

8,334 -

18,072 -

50,579 -

62,573 4,032

118,165 44,815

807,751

2009 Temporarily Restricted

$ -

290,971 336,221

-5,106

-4,500

-7,674

--

644,472

Total

$ 383,086 118,095 299,305 336,221

18,072 5,106

50,579 4,500

62,573 11,706

118,165 44,815

1,452,223

2008 Summarized

Total

$ 424,982 147,051 160,727 74,758 22,199 4,861

58,475 4,210

(79,123) 8,050

116,603 43,708

S 986,501

Net Assets Released from Restrictions

Expense Program Services

Annual meeting Programs Tree farm Pubhc information Forests <& People magazine Legislative Sustained forestry initiative Logging council

Total Program Services Management, general and membership development

Total Expenses

630,967 (630,967)

140,849 644,245 51,881 47397 95,257 49,613

138,037 52,024

1,219,303 186,153

1.405,456

140,849 644,245 51,881 47,397 95,257 49,613

138,037 52,024

- 1,219,303 186,153

- 1,405,456

139,795 263,780

52,689 47,901 88,447 43,684

148,058 37,866

822,220 205,800

1,028,020

Changes in Net Assets

Net Assets, Beginning of Year

33,262 13,505 46,767 (41,519)

858,439 11,738 870,177 911,696

Net Assets, ̂ d of Year $ 891,701 $ 25,243 $ 916,944 $ 870,177

The accompanying notes are an integral part ofthe fmancial statements.

The Louisiana Forestry Association Statement of Cash Flows


Cash flows from operating activities Change m net assets Adjustments to reconcile change in net assets to

net cash from operating activities: Depreciation expense Net unreahzed (gain) loss on investments Decrease in accoimts receivable - advertising Increase in accounts receivable - other Decrease (increase) in prepaid expenses Decrease in accrued interest receivable Increase (decrease) in accounts payable Decrease in accrued payroll taxes Increase (decrease) in payable to Children's Miracle Network Increase in deferred revenue

Net cash provided by operating activities

2008 Summarized

2009 Total

$ 46,767 $ (41,519)

25,090

(54,218)

243 (10,642)

3,539

1,857

(13,369)

(303)

(360)

15,688

22,037

99,812

2,917

(29,430)

(3,581)

2,032

6,193

(2,162)

1,800

3,681

14,292 61,780

Cash flows from investing activities Purchase of plant and equipment Purchase of certificates of deposit Purchase of investments

Net cash used in investing activities

(3,853) (58,556) (13,950) (90,185) (17,098) (28,792)

(34,901) (177,533)

Net decrease in cash and cash equivalents (20,609) (115,753)

Cash and cash equivalents at beginning of year: 263,535 379,288

Cash and cash equivalents at end of year $ 242,926 $ 263,535

Si^)plemental disclosure of cash paid during the year: Interest

Income Tax ^ i

The accompanying notes are an integral part of the financial statements.

The Louisiana Forestry Association Notes to Financial Statements

December 31,2009

Note 1 - Summary of Significant Accounting Policies

Organization The Louisiana Forestry Association (the Association) is a nonprofit organization. Its purpose is to

advance the cause of forestry and the wood products industry in Louisiana. One ofthe Association's major programs is the implementation of Louisiana's Sustainable Forestry Initiative developed to meet the needs ofthe present forestry industry without compromising the fixture ofthe industry. Financial Statement Presentation

The Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted, temporarily restricted and permanently restricted. Temporarily restricted net assets are reclassified to unrestricted net assets upon satisfaction ofthe time or purpose restrictions.

Revenue and Expense Recognition Program service fees and unrestricted revenues are recorded when earned and expenses are

recorded when incurred. Unrestricted contributions and contributions restricted by donor for particular operating purposes are deemed to be eamed and reported as support when received. Grant revenues are reported as support when awarded in the case of non-reimbursable grants. For reimbursable grants, revenues are reported as support when the terms ofthe grant have been met.

Dues are assessed on a calendar year basis. Dues received for fiiture years are reported as deferred revenues. Revenues of Forests & People magazine are from non-member subscriptions and advertising. Advertising revenues are recorded when earned. Members automatically receive a magazine subscription but none ofthe m^nbership dues are allocated to magazine revenues for financial statement purposes.

Estimates The preparation of financial statements in conformity with generally accepted accounting principles

require management to make estimates and assumptions that affect certain rq)orted amounts and disclosures. Accordingly, actual results could differ from those estimates.

Propertv and Depreciation Property, equipment, major rq)lacements and repairs are c^italized at cost. Repairs, maintenance

and minor replacements are charged to operations as incurred. Depreciation is provided over the estimated usefiil hves ofthe respective assets on a straight-line basis. Contributed assets are recorded at fan: value.

Accounts Receivable Based on past experience, the management of the Association considers all accounts receivable as

collectible; therefore, no allowance for doubtful accoimts has been estabUshed. Receivables are considered past due after thirty days. Infi^ueaifly, a receivable does become uncollectible and it is written off at that time. Accounts receivable are recorded net of any apphcable discounts.


December 31,2009

Note 1 - Summary of Significant Accounting Policies, continued

Income Taxes The Association is a 501(c)(6) nonprofit organization and does not incur federal or state income

taxes, except for any unrelated business income which would occur as a result of Forests & People magazine operations. For 2009, a small tax loss was incurred on the magazine. The Association does incur a proxy tax on any quahfying Section 162(e) lobbying expenses.

Cash and Cash Equivalents The Association considers all highly liquid investments available for current use with an initial

maturity of less than three months to be cash equivalents.

Investments The Association currently has two types of investments; Certificates of deposit and marketable

securities. The certificates of deposit are held at various banks, with an initial maturity of three to twelve months.

The marketable securities, with readily determinable fair values and all investments in debt securities, are valued at their feir values in the statement of financial position. Unreahzed gains and losses are included m the change in net assets. The cost basis of maricetable securities is reflected in Note 11, There are no known material unrecorded permanent maricet value declines in marketable securities. The poUcy set by the board of directors is to invest aU money received for fifetime members into maiketable securities.

Note 2 - Property and Equipment

Description

Land Building Building improvements Furniture and equipment Automobiles Total

Life Cost

$11,720 40yrs 41,717 10-39 yrs 181,389 5-10 yrs 92,089 5vrs 30,413

$357,321

Accumulated Depreciation

$ 41,717 42,754 48,650 11,405

$144,526

Net

$11,720 -

138,635 43,439 19,008

$212,802

Depreciation expense for the year was $25,090.


December 31,2009

Note 3 - Deferred Revenues

This amount represents membership dues and other revenues collected in advance for calendar year 2009. The total deferral will be taken into income in 2010.

Type of Revalue Amount

Membership dues $133,916 Subscription 25 Advertising 559 Sustahied Forestry Initiative 500 Logging Council dues 1L725

Total Deferred Revenues $146.725

Note 4 - Cash and Cash Equivalents

The cash and cash equivalents as of December 31,2009 are as follows:

Issuer and Tvpe of Account Amount Interest Rate

Cash on Hand $ 100 Red River Bank - Checking - Logging Council 99,427 Red River Bank - Checking - Operating 19,320 Red River Bank - Sweep - Operating 123,940 Earnings Subject to Market AG Edwards - Money Market 139 Earnings Subject to Market

Total Cash $242.926

Cash and cash equivalent balances include monies designated to specific programs controlled by committees estabhshed by the Board of Directors.

Note 5 - Contributed Services

Substantial numbers of unpaid volunteers have made significant contributions of their time to the Association. The value of this contributed time is not reflected in these statements since it is not susceptible to objective measurement or valuation.

In connection with Project Leammg Tree and Wildland Urban Interface Project, the Louisiana Department of Agriculture and Forestry provided in kind services valued at $336,221. This is reflected in the statement of activities as donated services. The corresponding expenses are reflected in the statement of activities as program services.


December 31,2009

Note 6 - Related Party

The Association and the Louisiana Forestry Foundation have many of the same Board Members. Both organizations are involved in the Forestry Industry. In addition, the Association and the Southern Forest Heritage Museum and Research Center share several Board Members and the Association was instrumental in estabhshing the Museum, The Association continues to provide administrative support to both the Museum and the Foundation.

Note 7 - Pension Plan

The Association has adopted a simpUfied employee pension plan (profit-sharing) for all employees with more than one year of service. The Association is under no obligation to make annual contributions to the plan. In 2009, the Association made voluntary contributions of $31,944 to tiie plan, which is included in fiinge benefit expense.

Note 8 - Deferred Compensation Program

The Association has adopted an Executive Retention Program in which the Executive Director participates. At the discretion ofthe Board of Directors, the Association may make a contribution on behalf ofthe OTiployee. In 2009, tiie Association made a $12,000 contribution to a hfe insurance policy for the Executive Director. The Louisiana Forestry Association is the beneficiary. It is the intention ofthe Board of Directors that the cash value of this policy be transferred to the Executive Director in the event of his retirement or the proceeds to his spouse in the event of his death. The yearly contribution is included in the cash surrender value of this policy which is $152,283 and is reflected in other assets. In 2009, the cash surrender value increased by $36,040, excluding the $12,000 payment. This is recorded as an unrealized gain on investments.

Note 9 - Concentration of Risk

Financial instruments that potentially subject the Association to credit risk include investments in Money Market and mutual funds. Future changes in economic conditions may make the investments less valuable.

The Association maintains its cash and cash equivalents and certificates of deposit in several local banks. These balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Cash and cash equivalents and certificates of deposit balances at December 31, 2009 exceeded FDIC insurance at one institution by $3,200. However, as of the report date, the financial mstitution was m operation and the FDIC insurance had not been utiHzed.

The Association's primary source ofincome is fix)m the forestry, timber and logging industries. It is dependent on sustained activity in these industries. In 2009, nineteen member companies made up 45.4% of total dues revenues


December 31,2009

Note 10 - Restricted Net Assets

Temporarily restricted net assets consist of $25,243 of donor restricted contributions which reflect $6,761 for Teachers Tour and $18,482 for PLT grants from Am^can Forest Foundation, The contributions were not spent and are temporarily restricted for the future. As of December 31, 2009 the Association has no permanently restricted net assets.

In addition, the Board of Directors does voluntarily set aside funds for future equipment replacement and any surplus monies eamed by Sustained Forestry Initiative, Project Learning Tree, and the Logging Council. As of December 31, 2009 the remaining surplus for equipment replacement is $6,185, SFI surplus is $63,289, PLT is $55,106 and Loggmg Council is $114,427. The PLT amount includes tiie temporarily restricted amount of $25,243 and the remaining funds are part of unrestricted net assets.

Note 11 - Investments

Certificates of Deposit The Certificates of Deposit held by the Association at December 31,2009 are as follows:

Issuer

Wells Fargo Union Bank Union Bank Chase Sabine State Bank Capital One Bank Capital One Bank

Amount Interest Rate MaturitvDate

$ 27,000 39,493 55,620 55,588 15,549 49,440 67,463

1.10% 2.00% 2.00%

.20% 1.70% 1.00% .80%

10/29/2010 06/10/2010 12/09/2010 08/14/2010 01/22/2010 05/22/2010 09/15/2010

Total Certificates of Deposit $310.153

Marketable Securities Investments held by the Association at December 31,2009 are as follows:

Mutual Funds Cost JP Morgan Portfoho Holdings $ 63,320 Legg Mason Value Trust Fund 28,307 Vanguard 500 Mdex Fund 25,990

Totals $117.617

Market Value $60,962

16,577 22,193

$99.732

JPMorgan Portfoho Holdings, Legg Mason Value Trust Fund and Vanguard 500 Index Fund are recorded at market value which decreased $18,178 in 2009 excluding purchases and the reinvested dividends. This is recorded as unreahzed gain on investments.

10


December 31,2009

Note 11 - Investments, continued

Marketable Securities, continued Total portfoho income for 2009 consists ofthe following:

Interest income $ 6,257 Dividend distributions from mutual funds 2,098 Unreahzed gain on investments 18,178 Unrealized gain on cash surrender value 36.040

Presented in the Statement of Activities as: Investment income and unrealized gains $62^573

Note 12 - Subsequent Events

The Louisiana Forestry Associations has no material subsequent events that would require disclosure. Subsequent events have been evaluated through March 24,2010.

Note 13 - Fair Value Measurements

Statement of Financial Accounting Standards No. 157, 'Tair Value Measurements" (FAS 157) requires disclosures for financial assets and habilities that are re-measured at fair value at lease annually. FAS 157 estabUshes a three-tier fair value hierarchy, which prioritizes the inputs used m measuring feir value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets: Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirecfly observable: and Level 3, defined as unobservable inputs in which Httle or no market data exists, therefore requiring an entity to develop its own assumptions. All uivestments are valued using quoted market prices (referred to as Level 1).

11

SUPPLEMENTARY DATA

12

The Louisiana Forestry Association Schedule of Revenues and Support


Membership dues

Annual meeting

Programs Project Learning Tree and Teachers Tour Donated services, materials and other Lower MS Watershed Project Grant WFUI Grant Forest Awareness and other

Total

Tree farm

Pubhc information

Forests & People magazine Non-member subscriptions Advertising income

Total

Legislative

Other Revenue and Support Investment income Unreahzed gain (loss) on investment Executive meetings Other revenue

Total

Sustained Forestry Initiative

Logging Council

Unrestricted

$ 383,086

118,095

5,932

2,402

8,334

18,072

-

728 49,851

50,579

-

8,355 54,218

4,032

66fi05

118,165

44,815

20Q9

Temporarily Restricted

$ - $

-

57,825 336,221 25,085

204,961 3,100

627,192

-

5,106

-

-

4,500

7,674

7,674

-

_

Total

383,086

118,095

63,757 336,221 25,085

204,961 5,502

635,526

18,072

5,106

728 49,851

50,579

4,500

8,355 54,218 7,674 4,032

74,279

118,165

44,815

2008

Summarized Total

$ 424,982

147,051

47,664 74,758 26,909 80,873 5,281

235,485

22,199

4,861

924 57,551

58,475

4,210

20,689 (99,812)

8,025 25

(71,073)

116,603

43,708

Total Revenues and Support $ 807,751 $ 644,472 $ 1,452,223 $ 986,501

13

The Louisiana Forestry Association Schedule of Expenses


Armual Meeting Annual meeting expenses Fringe benefits Payroll taxes Postage Salaries Travel

Total

2009

$ 87,766 8,498 2,917 2,878

38,010 780

2008 Summarized

$

Total

90,899 6,519 2,763 3,336

35,503 775

140,849 139,795

Programs Fringe benefits Lower MS Watershed Project WFUI Grant Expenses Payroll taxes Postage Project Learning Tree and Teachers Tour Salaries Special projects & Forest Awareness Week Travel

Total

7,436 22,585

509,644 2,917

600 60,454 35,086

5,523 -

6,948 24,418

121,597 2,551

936 67,000 32,772 7,087

471

644,245 263,780

Tree Farm Fringe benefits Payroll taxes Postage Salaries Telephone Travel Tree farm expenses

Total

4,249 2,244

700 32,162

440 2.508 9,578

3,970 2,338

700 30,041

420 1,785

13,435

51,881 52,689

Public Information Fringe benefits Payroll taxes Postage Printing and photography Public information Salaries Travel

Total

4,912 1,439 8,533 3,722 4,927

23,391 473

4,721 1,561 9,910 4,906 3,952

21,848 1,003

47,397 47,901

14

1,212 7,130 2,231 2,466

10,134 30,733 39,717

440 1,194

-6,452 1,922 2,551

10,875 32,096 32,772

580 1,199

The Louisiana Forestry Association Schedule of Expenses


Forests & People Magazine Equipment Rental Fringe benefits Miscellaneous Payroll taxes Postage Printing and photography Salaries Telephone Travel

Total 95,257 88,447

Legislative Expenses Education and information Fringe benefits Payroll taxes Postage Salaries Travel Telephone

Total 49,613 43,684

Sustained Forestry Initiative Computer and website expense Equipment maintenance Fringe benefits Meeting OfiHce suppUes and postage Outreach Payroll taxes Program and materials Salaries Telephone Travel

Total 138,037 148,058

7,559 7,643 2,261

400 29,238

1,776 736

4,304 6,948 2,125

200 27,310

1,896 901

286 1,905 2,995

70 4,253

33,325 3,700

33,087 50,922

2,075 5,419

3,083 4,920 2,812

985 3,822

37,578 3,708

28,665 51,890

1,762 8,833

15

The Louisiaim Forestry Association Schedule of Expenses


Logging Council Area concept Awards and memorials Equipment maintenance Meetings Miscellaneous Office supplies aiid dues Postage Printing and photography Special projects and MLC program Telephone Travel

Total

465 474 348

1,104 4,425 4,916 3,349

12,788 12,511

982 10,662

-1,046

859 705

4,783 4,729 7,451

11,057 2,587

901 3,748

52,024 37,866

Management, General and Membership Development Area concept Awards and memorials Bad debts Bank and credit card charges Computer expenses Depreciation Dues and subscriptions Equipment rent Executive and other meetings Fringe benefits Insurance Janitor and lawn maintenance Maintenance and repairs Miscellaneous Office supplies Payroll taxes Postage Printing and photography Professional services Salaries Telephone Training and professional development Travel and entertainment Utihties

Total

Total Expenses

4,012 1,836

429 4,506 3,915

25,090 4,357 2,073

13,267 12,720 9,741 5,917 1,390 2,372 7,909 3,289 9,513

409 6,956

44,017 1,771

-15,129 5,535

186,153

$1,405,456

6,237 3,096

432 5,112 5,193

22,037 4,705 5,461

15,152 8,941

10,440 4,080

186 6,513 9,437 3,388 6,527

409 15,970 43,983

1,522 240

20,362 6,377

205,800

$ 1,028,020

16

< <

K. Martin Masden, CPA John E. Thertot II, CPA Dona C. Manuel, CPA

A Professional Accounting Corporation ^

KnightMasden

Coan I. Knight, Jr., CPA . Stephanie R. Lemoine, CPA

Report on Intemal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

March 1,2010

Louisiana Forestry Association P.O. Box 5067 Alexandria, LA 71301

To the Board of Directors and Buck Vandersteen, Executive Director of Louisiana Forestry Association

We have audited the basic financial statements of Louisiana Forestry Association as of and for the year ended December 31, 2009 and have issued our report thereon dated March I, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United Sates of America and the standards applicable to financial audits contained in Government Auditing Standards, issue by the Comptroller General of the United States.

Intemal Control Over Financial Reporting

In planning and performing our audit, we consid«^d Louisiana Forestry Association's intemal control over financial reporting (intemal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial istatements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's intemal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's intemal control over financial reporting.

Our consideration of intemal control over financial reporting was for the Umited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in intemal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in intemal control over fmancial reporting that we consider to be significant deficiencies.

A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency or combination of control deficiencies, that adversely affects the organization's ahihty to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the organization's financial statements that is more than inconsequential will not he prevented or detected by the organization's intemal control. We consider the deficiencies described in the accompanying schedule of findings and responses to be significant deficiencies in intemal control over fmancial reporting.

B615 J Jackson Street Alexandria, Louisiana 71303 PH: 316-445-9334 FAX: 318-445-0996

17 www.knlghtnnasden.com

http://www.knlghtnnasden.com

A material weakness is significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's intemal control.

Our consideration of the intemal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in intemal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we believe that none of the significant deficiencies described above is a material weakness.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Louisiana Forestry Association's basic financial statements are free of 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 determination of financial statement amounts. However, providing an opinion of compliance with those provisions was not an objective of our audit and, accordingly, we do not express such and opinion. The results of our tests disclosed no instances of noncon^liance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of management, the Board of Directors, others within the entity, the Legislative Auditor, and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana statutes, this report is distributed by the Legislative Auditor a public document.

^ ^ KnightMasden 18 . . . . .y, , . . . I Accounting Corporation

The Louisiana Forestry Association Schedule of Findings and Responses

For file Year Ended December 31,2009

Summary of Auditors' Results

1. The auditors' report expresses an unqualified opinion on the financial statements of The Louisiana Forestry Association.

2. Five control deficiencies disclosed during the audit ofthe financial statements are reported in the Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. None of these conditions are considered material weaknesses.

3. No instances of noncompliance material to the financial statements of The Louisiana Forestry Association, which would be required to be reported in accordance with Government Auditing Standards^ were disclosed during the audit.

19



B. Findings - Financial Statement Audit

INTERNAL CONTROL FINDINGS

2009-01 Grant Activity

Condition: The year end financial statements for audit are not prepared in accordance with generally accepted accounting principles in respect to the recording of grants.

Criteria:

The year end fmancial statements for audit should record ail non - reimbursable grants when awarded m accordance with generally accqjted accounting principles.

Effect:

Financial statements used m management flmctions and decisions do not properly reflect the financial position ofthe Association in accordance with generally accepted accounting principles.

Cause:

Entries necessary for financial statements to be presented in accordance with generally accepted accoimting principles are not being posted. Specifically entries related to record all non - reimbursable grants not being made.

Recommendation:

The Association should have a quahfied staff member record all grants in according to generally accepted accounting principles.

Response:

See Management's Corrective Action Plan for their response.

2009-02 Recording of Temporarilv Restricted Net Assets

Condition:

The Association does not have procedures in place for recording Temporarily Restricted Net Assets.

20


For die Year Ended December 31,2009

Criteria:

The Association must monitor, track and record restrictions placed on funds by donors and grantors.

Effect:

The Association does not record the temporarily restricted funds that are remaining for certain purposes as required by donors or grantors.

Cause:

Procedures for recording restrictions are not in place.

Recommendation:

Develop a method for recording restrictions and report to the Board on a regular basis.

Response:


2009-03 Segregation of Duties

Condition:

Most accounting functions are being performed in one position.

Criteria:

Organizations should create and implement controls including separation of duties that will allow for review and monitoring by someone other than the person who performed the work.

Effect:

Financial functions and reporting lack controls that could cause inaccuracies to go undetected.

Cause:

There is only one employee who essentially does most ofthe accounting functions.

21


For tiie Year Ended December 31, 2009

Recommendation:

The Association should explore ways to separated the accounting duties and strengthen controls.

Response:


2009-04 Compensated Absences Not Recorded

Condition:

Compensated absences are not being recorded according to generally accepted accounting principles.

Criteria:

There should be a set of well written procedures for the vacation and sick pay policies ofthe Association.

Effect:

Compensated absences are not being recorded due to a lack of a detailed poticy.

Cause:

The Association does not have a detailed pohcy that addresses the payment of any unused vacation time in the case of a termination or resignation nor does it address sick leave for employees.

Recommendation:

The Association should rewrite their compensated absences policy and have it approved by the Board of Directors.

Response:


22


For die Year Ended December 31,2009

2009-05 Control over Cash Receipts and Deposits

Condition:

Deposits are bemg made only a few times a month. In addition, policies to insure better controls over cash receipts are not being followed on all deposits.

Criteria:

A large volume of receipts are collected by the Association on a monthly basis. PoUcies have been instituted by the Association to insure better controls over cash; however, these policies are not always followed and documented.

Effect:

Control over cash not complete.

Cause:

Procedures set up to improve controls not always being followed.

Recommendation:

The Association should make deposits more frequently. In addition, policies instituted to hnprove control over receipts should be carried through all on deposits.

Response:


23

The Louisiana Forestry Association Management's Corrective Action Plan


2009-01 Grant Activity

Recommendation:

The Association should have a qualified staff member record all grants in according to generally accepted accounting principles.

Response:

The accountant will carefully review all grants awarded and record m accordance with generally accepted accounting principles.

Implementation Date:

January 1,2010

Contact:

Charles Vandersteen, Executive Du-ector (318) 443-2558

2009-02 Recording of Temporarilv Restricted Net Assets

Recommendation:

Develop a method for recording restrictions and report to the Board on a regular basis.

Response:

The accountant will try to develop a way to report the temporarily restricted assets to the Board using the sofiware they currently have.


June 1,2010

Contact:

Charles Vandersteen, Executive Durector (318) 443-2558

24


For die Year Ended December 31, 2009

2009-3 Segregation of Duties:

Recommendation:

The Association should explore ways to separated the accounting duties and strengthen controls.

Response:

Management has developed a policy for one employee to open all the mail and make a Hsting of aU large checks. Another employee will make the deposits and record in tiie general ledger. Procedures are m place to compare the deposits made to the general ledger postmgs to the original list to insure all large checks are accounted for.


April 1,2009

Contact:

Charles Vanderteen, Executive Director (318) 443-2558

2009-4 Compensated Absences Not Recorded

Recommendation:

The Association should rewrite their compensated absences pohcy and have it approved by the Board of Directors.

Response:

The Executive Director has rewritten the compensated absences pohcy and is m the process of havmg it approved by the Board of Directors.


April 1,2010

Contact:

Charles Vandersteen, Executive Dkector (318) 443-2558

25


For the Year Ended December 3 L 2009

2009-5 Control over Cash Receipts and Deposits

Recommendation:

The Association should make deposits more frequently. In addition, poficies instituted to improve control over receipts should be carried through all on deposits.

Response:

The accountant will try to do this more effectively.


April I, 2010

Contact:

Buck Vandersteen, Executive Director (318) 443-2558

26

the louisiana forestry associationapp1.lla.la.gov/publicreports.nsf/f28bc1ff89406aee... ·...

Documents