volunteers of america of greater baton rouge,...

VOLUNTEERS OF AMERICA.GREATER BATON ROUGE. INC.

HUMAN SERVICES OF GREATERBATON ROUGE. INC. AND BATON ROUGEHOUSING DEVELOPMENT CORPORATION

JUNE 30. 20QS

BATON ROUGE. LOUISIANA

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court

Release Date //— *7

CONTENTS

Audited Financial Statements:

Independent Auditor's Report Page 1 - 2

Combining Statement of Financial Position 3

Combining Statement of Activities 4-5

Combining Statement of Functional Expenses 6

Combining Statement of Cash Flows 7

Notes to Financial Statements 8 - 1 8

Supplementary Information:

Statement of Activities for Special Programs 19

Schedule of Expenditures of Federal Awards 20 - 21

National Administrative Fees Calculation Form 22

Independent Auditor's Report on Internal Control Over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards 23 - 24

Independent Auditor's Report on Compliance with RequirementsApplicable to Each Major Program and Internal Control OverCompliance in Accordance with OMB Circular A-133 25 - 26

Schedule of Findings and Questioned Costs 27

Summary Schedule of Prior Audit Findings 28

SmisLBourgcoisJLPCertified Public Accountants

RundyJ. Bonnecazc, CPA* 2322 Tremont Drive Members American Institute ofJoseph D. Richard, Jr., CPA- Baton ROUCC LA 70809 Certified Public Accountants

Pr^P.SrTLW* Phone: (225) 928-4770 „, „ c l l i t , n.. .. • ™., ^- ___ ,-, ,,,,, ^rt , ,- 1 175 Del hste Avenue, Sutc iiStephen M. Huggins. CPA- Fa x L (225 926-0945 n*»l»m Cr,rinrtc I A VnfiMonica L. Zumo, CPA- V Denham Springs, LA 70726Ronald L. Gagnct, CPA* -Douglas J. Nelson, CPA* WWW.htbcpa.comCeleste D. Viator, CPA*Russell J. Reswcbcr, CPA*Laura E. Monroe, CPA*R. David Waseom, CPA"

-.4 /w™/,™,,,^ en*™** August 9, 2005 (except for Note 1 5, as to whichdate is September 24, 2005)

Independent Auditor's Report

Board of DirectorsVolunteers of America, Greater Baton Rouge, Inc.,

Human Services of Greater Baton Rouge, Inc.,and Baton Rouge Housing DevelopmentCorporation

Baton Rouge, Louisiana

We have audited the accompanying Combining Statement of Financial Position of Volunteers of America,Greater Baton Rouge, Inc., Human Services of Greater Baton Rouge, Inc. and Baton Rouge HousingDevelopment Corporation as of June 30, 2005, and the related Combining Statements of Activities,Functional Expenses, and Cash Flows for the year then ended. These financial statements are theresponsibility of the Organizations' management. Our responsibility is to express an opinion on thesefinancial statements based on our audit. Information for the year ended June 30, 2004 is presented forcomparative purposes only and was extracted from the financial statements for that year, on which anunqualified opinion dated August 10, 2004, was expressed.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica 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 performthe audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying financial statements referred to above present fairly, in all materialrespects, the financial position of Volunteers of America, Greater Baton Rouge, Inc., Human Services ofGreater Baton Rouge, Me., and Baton Rouge Housing Development Corporation as of June 30, 2005, andthe changes in net assets and cash flows for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated August 9,2005on our consideration of the Volunteers of America, Greater Baton Rouge, Inc.'s internal control overfinancial reporting and our tests of its compliance with certain provisions of laws, regulations, contractsand grant agreements and other matters. The purpose of that report is to describe the scope of our testing ofinternal control over financial reporting and compliance and the results of that testing and not to provide anopinion on the internal control over financial reporting or on compliance. That report is an integral part ofour audit performed in accordance with Government Auditing Standards and should be considered inassessing the results of our audit.

Our audit was performed for the purpose of forming an opinion on the financial statements of theOrganizations taken as a whole. Tlie accompanying Schedule of Expenditures of Federal Awards (asrequired by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments,and Non-Profit Organizations) and the Statement of Activities for Special Programs and NationalAdministrative Fees Calculation Form are presented for purposes of additional analysis and are not arequired part of the financial statements of Volunteers of America, Greater Baton Rouge, Inc. Suchinformation has been subjected to the auditing procedures applied in the audit of the financial statementsand, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as awhole.

Respectfully submitted,

7? BwAttaJ LL?

VOLUNTEERS OF AMERICA, GREATER BATON ROUGE, INC.,HUMAN SERVICES OF GREATER BATON ROUGE, INC. ANDBATON ROUGE HOUSING DEVELOPMENT CORPORATION

COMBINING STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30,2005 WITH COMPARATIVE TOTALS FOR 2004

ASSETS

Current Assets:CashAccounts Receivable Less

Allowance of $25,000 in 2005 and 2004Pledges Receivable, NetPrepaid Expenses

Total Current AssetsLand, Buildings and Equipment, at Cost Less

Accumulated Depreciation of $1,697,320and $1,248,041 for 2005 and 2004

Baton Rouge Area Foundation, at Fair ValueOther Assets

Total Assets

LIABILITIES AND NET ASSETS

Current Liabilities:Accounts PayableAccrued ExpensesLine of CreditOther LiabilitiesContract AdvanceCurrent Portion of Long-Term Debt

Total Current Liabilities

Long-Term Liabilities:Long-Term Debt

Net Assets:UnrestrictedTemporarily RestrictedPermanently Restricted

Total Net Assets

Total Liabilities and Net Assets

The accompanying notes are an integral part of this statement.3

Volunteers ofAmerica,

Greater BatonRouge, Inc.

$ 192,545

2,339,718183,476

4,003

2,719,742

1,875,231332,861162,666

$ 5,090,500

$ 196,453534,198151,068475,65396,038

176,281

1,629,691

307,565

2,670,442354,610128,192

3,153,244

$ 5,090,500

Human Servicesof Greater Baton

Rouge, Inc.

$ 12,023

---

12,023

834,148-

400

$ 846,571

$ 191,189--

4,368-

40,788

236,345

624,310

(14,084)--

(14,084)

$ 846,571

Baton RougeHousing

DevelopmentCorporation

$ 2,241

2,241

$ 2,241

$ 34,438

2005Combined

Eliminations Totals

$ - $ 206,809

(225,273) 2,114,445183,476

4,003

(225,273) 2,508,733

2,709,379332,861163,066

$ (225,273) $ 5,714,039

(225,273) $ 196,807534,198151,068480,02196,038

217,069

2004Combined

Totals

$ 106,497

1,876,221192,507

5,753

2,180,978

2,592,768274,453231,757

$ 5,279,956

$ 184,892488,066214,515244,68096,038

224,261

34,438

(32,197)

(32,197)

(225,273) 1,675,201

931,875

2,624,161354,610128,192

3,106,963

1,452,452

1,016,790

2,184,720507,480118,514

2,810,714

$ 2,241 $ (225,273) $ 5,714,039 $ 5,279,956


COMBINING STATEMENT OF ACTIVITIES

Revenues from Operations:Public Support Received Directly:

ContributionsContributions, In-Kind

Public Support Received Indirectly:United WayVolunteers of America ,

Total Public SupportRevenue and Grants from

AgenciesOther Revenue:

Program Service FeesRental IncomeMiscellaneous

Total Other RevenueNet Assets Released from Restrictions

Total Revenues from Operations

Operating Expenses:Encouraging Positive DevelopmentFostering IndependencePromoting Self-Sufficiency

Total Program ServicesManagement and GeneralFund Raising

Total Supporting ServicesAdministrative Fees Paid to National

Organization

Total Operating Expenses

Excess (Deficit) from Operations

IDED JUNE 30, 2005 WITH COMPARATIVE TOTALS FOR 2004

Unrestricted

:ctly:$ 623,437

246,229

434,033irds and Grants 25,477

1,329,176

13,132,105

1,400,784

162,908

1,563,692strictions 395,034

rations 16,420,007

?ment 3,478,7987,669,4872,641,305

13,789,5901,286,957

670,835

1,957,792

304,138

16,051,520

rations 368,487

Volunteers of America,Greater Baton Rouge, Inc.Temporarily PermanentlyRestricted Restricted

$ 231,219 $ 7,178

-

231,219 7,178

-

-

_

(395,034)

(163,815) 7,178

-

-

-

_

_

(163,815) 7,178

Total

$ 861,834246,229

434,03325,477

1,567,573

13,132,105

1,400,784

162,908

1,563,692

16,263,370

3,478,7987,669,4872,641,305

13,789,5901,286,957

670,835

1,957,792

304,138

16,051,520

211,850(CONTINUED)

4

Human Services Baton Rougeof Greater

Baton Rouge,Inc.

Unrestricted

$ 9,600

HousingDevelopmentCorporation

Unrestricted

$

9,600

172,1592,421

174,580

184,180

178,720

178,72033,667

33,667

212,387

(28,207)

1,592

1,592

1,592

(1,592)

2005Combined

Totals

434,03325,477

1,577,173

1,400,784172,159165,329

1,738,272

3,478,7987,669,4872,820,025

13,968,3101,322,216

670,835

1,993,051

304,138

2004Combined

Totals

$ 871,434 $ 861,735246,229 218,555

402,700

1,482,990

13,132,105 11,737,002

610,077174,024229,051

1,013,152

16,447,550 14,233,144

2,184,8907,082,7212,679,694

11,947,3051,102,699

626,149

1,728,848

264,811

16,265,499 13,940,964

182,051 292,180

Non-Operating Gains (Losses) and OtherIncome:

Interest Income (Net of Expenses of $4,608)Gain (Loss) on Sale of AssetUnrealized Gain (Loss) on Investments

Excess (Deficit) from Other Activities

Change in Net Assets

Net Assets - Beginning of YearTransfer of Baton Rouge Youth, Inc.

Net Assets - End of Year

Volunteers of America,Greater Baton Rouge, Inc.

Unrestricted

4,5847,0127,885

19,481

387,968

2,201,23681,238

TemporarilyRestricted

2,813

3,624

6,437

(157,378)

507,4804,508

PermanentlyRestricted

-

_

7,178

118,5142,500

Total

7,3977,012

11,509

25,918

237,768

2,827,23088,246

$ 2,670,442 $ 354,610 $ 128,192 $ 3,153,244


Human Services Baton Rougeof Greater

Baton Rouge,Inc.

Unrestricted

34

34

(28,173)

14,089

HousingDevelopmentCorporation

Unrestricted Eliminations

-

_

(1,592)

(30,605)

2005Combined

Totals

7,4317,012

11,509

25,952

208,003

2,810,71488,246

2004Combined

Totals

8,16452,67436,223

97,061

389,241

2,421,473

$ (14,084) $ (32,197) $ $ 3,106,963 $2,810,714


COMBINING STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED JUNE 30, 2005 WITH COMPARATIVE TOTALS FOR 2004

Volunteers of America, Greater Baton Rouge, Inc.

SalariesPensionEmployee BenefitsPayroll taxesLegal FeesAccounting FeesOther Professional FeesSupplies and ExpensesTelecommunicationsPostageOccupancy ExpensesInterestInsuranceEquipment Rental and MaintenancePrinting and PublicationsTravel and TransportationConferences and MeetingsSpecific Assistance to IndividualsOtherDepreciation and Amortization

Total Functional Expenses

Program Services

EncouragingPositive

Development

$ 1,530,17528,387

106,013111,374

6924,100

892,775169,11945,74018,954

141,4866,686

47,733: 24,207

15,68184,14018,297

118,09339,77075376

FosteringIndependence

$ 4,732,953100,232300,087337,321

50-

385,783155,755109,02722,709

291,42621,671

10335861,64810,911

244,97528,144

631,72571,18960,523

PromotingSelf-

Sufficiency

$1331,18536,55280,07096,404

127-

38,147110,00040,425

1,510174,627

6,01262,5629,7564,067

79,7485,276

506,52214,28644,029

Total

$ 7,594,313165,171486,170545,099

8694,100

1316,705434,874195,19243,173

607,53934,369

213,65395,61130,659

408,86351,717

1 ,256340125,245179,928

Supporting Services

Managementand General

$ 694,29431,13137,10135,7369,754

18,500141,27761,77322,8197,419

77,98211,38918,38513,36911,2768,049

18,71781

51,51716,388

FundRaising

$171,6194,285

10,76712,401

--

2063895,6284,1868,2117,998

--490

17,8341,2913,570

151,26958,7126,185

$ 3,478,798 $ 7,669,487 $2,641,305 $13,789,590 $ 1,286,957 $670,835

Administrative Fee Paid To National Organization

Total Expenses

The accompanying notes are an integral part of this statement.

6

Human Services of Greater Baton Rouge, Inc.

Total

$ 865,91335,41647,86848,137

9,75418,500

347,66667,40127,00515,63085,98011,38918,38513,85929,1109,340

22,287151,350110,22922,573

$1,957,792

2005 TotalProgram andSupportingServicesExpenses

S 8,460,226200,587534,038593,236

10,62322,600

1,664,371502,275222,19758,803

693,51945,758

232,038109,47059,769

418,20374,004

1,407,690235,474202,501

$15,747,382

304,138

ProgramServices

PromotingSelf-

Sufficiency

$---

1,112---

1,428-

75,92110,68322,7876,654

----

1,86958,266

$ 178,720

SupportServices

Managementand General

$ 14,69311393

1,116-

1,850-522--

15,280---------

$ 33,667

Total Programand Supporting

ServicesExpenses

$ 14,69311393

1,1161,1121,850

-522

1,428-

91,20110,68322,787

6,654----

1,86958,266

$ 212,387

Baton RougeHousing


ProgramServices

2005Management Combinedand General Total

$ - $ 8,474,919200,700534,131594,352

11,7351,450 25,900

1,664,371502,797223,62558,803

142 784,86256,441

254,825116,12459,769

418,20374,004

1,407,690237,343260,767

$ 1,592 $ 15,961,361

304,138

2004Combined

Total

$ 7,204,335176,442494,335505,877

4,77120,350

1,281,501441,465216,85957,105

669,87571,939

203,784103,11963,765

310,65991,746

1,423,537124,322210,367

$13,676,153

264,811

$16,051,520 $ 16,265,499 $13,940,964


COMBINING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30,2005WITH COMPARATIVE TOTALS FOR 2004

Cash Flows From Operating Activities:

Change in Net AssetsAdjustments to Reconcile Change in

Net Cash Provided by (Used in) Operating Activities:Depreciation

Net Unrealized (Gain) Loss on Long-Term Investment(Gain) Loss on Sale of AssetProvision for Bad DebtsChanges in Current Assets and Liabilities:

(Increase) Decrease in Accounts Receivable(Increase) Decrease in Pledges Receivable(Increase) Decrease in Other Assets(Increase) Decrease in Prepaid ExpenseIncrease (Decrease) in Accounts PayableIncrease (Decrease) in Other Liabilities/Contract AdvancesIncrease (Decrease) in Accrued Expenses

Net Cash Provided by (Used in) Operating Activities

Cash Flows From Investing Activities:Purchases of Fixed AssetsProceeds From Sale of Fixed AssetsPurchases of Investments

Net Cash Used in Investing Activities

Cash Flows From Financing Activities:Proceeds from Issuance of Long-Term DebtRepayment of Notes PayableNet Draws (Repayments) on Line of Credit

Net Cash Used In Financing ActivitiesNet Increase (Decrease) in Cash and Cash EquivalentsTransfer of Cash from Baton Rouge Youth, Inc.Cash and Cash Equivalents - Beginning of Year

Cash and Cash Equivalents - End of Year

Supplemental Disclosure of Cash Flow Information:

Cash Payments for Interest

Merger of Baton Rouge Youth, Inc.:Accounts ReceivablePrepaid ExpensesFixed AssetsAccrued ExpensesNotes PayableDeferred IncomeNet Assets

Net Cash Transferred In

Volunteers ofAmerica,


$ 237,768

HumanServices of


Baton RougeHousing



(28,173) $ (1,592)

202,501(11,510)(7,012)69,680

(337,497)9,03163,7861,750

1 1,620

; 236,90646,132

523,155

(224,389)19,221(46,898)

58,266---

456---

29,432(1,565)

-

58,416

(18,696)--

----

.-

--

--

-(1,592)

---

(252,066)

314,517(454,736)(63.447)

(18,696)

(40,287)

(203,666) (40,287)67,42335,04890,074

(567)

12,590

(1,592)

3,833

192,545 12,023 $ 2,241

45,699 10,687 $

58,5557,506

146,501(45,964)(88,400)(25,000)(88,246)

(35,048)

Eliminations

2005Combined

Totals

$ 208,003

2004Combined

Totals

J 389,241

29,137

(29,137)

260,767(11,510)(7,012)69,680

(307,904)9,031

63,7861,750

11,915235,34146.132

579,979

210,367(36,223)(52,674)48,090

239,565132,644

(4,306)(453)

(127,357)108,77366.185

973,852

(243,085)19,221

(46,898)

(270,762)

(525,395)77,100(6,590)

(454,885)

314,517(495,023)(63,447)

(243.953)65,26435,048

106.497

$ 206,809

371,653(317,269)(681,972)

(627,588)(108,621)

215.118

$ 106,497

$ 56,386 $ 74,276


NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

Note 1 - Summary of Significant Accounting Policies -

Organization

Volunteers of America, Greater Baton Rouge, Inc. ('the Organization*) is a nonprofit spiritually basedhuman services organization, recognized as a church, incorporated in the State of Louisiana thatprovides social services within the Greater Baton Rouge and Southwest Louisiana areas under a charterfrom Volunteers of America, Inc., a national nonprofit spiritually based organization providing localhuman service programs, and opportunities for individual and community involvement. HumanServices of Greater Baton Rouge, Inc. ('the Organization') is a nonprofit organization incorporated inthe State of Louisiana which operates as a property holding corporation for Volunteers of America,Greater Baton Rouge, Inc. Effective July 1, 1997 the operations of the Baton Rouge HousingDevelopment Corporation were transferred over to Volunteers of America, Greater Baton Rouge, Inc.Baton Rouge Housing Development Corporation ('the Organization') is a nonprofit organizationincorporated in the State of Louisiana which operates as a property holding corporation of low incomesingle family dwellings held for resale to qualified individuals.

Following is a list of the Impact Area and the program services provided in each:

Encouraging Positive Development

Within the impact area of encouraging positive development, Volunteers of America, Greater BatonRouge, Inc. provides services to promote healthy development of children, adolescents and theirfamilies through a continuum of services from early prevention to intensive intervention approaches.This affiliate provides children and jouth services.

Fostering Independence

Through programs designed to provide care where needed, while supporting independence to thedegree possible, Volunteers of America, Greater Baton Rouge, Inc. offers services to the elderly, and tothose with disabilities, mental illness and HIV/AIDS. This affiliate provides disabilities, elderly, healthcare, housing, and mental health services.

Promoting Self-sufficiency

Volunteers of America, Greater Baton Rouge, Inc., works to promote the self-sufficiency of those whohave experienced homelessness, or other personal crisis and involvement with the corrections system.This affiliate provides community enhancement, correction, health care, homeless and housing services.

Operations

The Organizations define operations as all program and supporting service activities undertaken asdescribed above. Revenues that result from these activities, and theirrelated expenses, are reported asoperations. Gains, losses and other revenue that results from ancillary activities, such as investingliquid assets and disposing of fixed or other assets, are reported as non-operating

Principles of Combination

The financial statements include the accounts of Volunteers of America, Greater Baton Rouge, Inc. andthe related organizations, Human Services of Greater Baton Rouge, Inc. and Baton Rouge HousingDevelopment Corporation and have been combined in accordance with Statement of Position 94-3,Reporting of Related Entities by Not-for-Prqfit Organizations.

Basis of Accounting

The Organizations prepare their financial statements on the accrual basis of accounting. Accordingly,revenues are recognized when earned and expenses are recognized when incurred.

Basis of Presentation

Financial statement presentation follows the recommendation of the Financial Accounting StandardsBoard on its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements ofNot-for-profit Organizations, Under SFAS No. 117, the Organizations are required to reportinformation regarding their financial position and activities according to three classes of net assets;unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets, asapplicable.

Certain balances for the prior year have been reclassified to conform to the current year's financialstatement presentation.

Property and Equipment

Land, buildings and equipment purchased by the Organizations are recorded at cost. The Organizationsfollow the practice of capitalizing all expenditures for land, buildings and equipment in excess of $500;the fair value of donated fixed assets is similarly capitalized. Depreciation is provided on the straight-line method based upon the estimated useful lives of the assets.

The Organizations expense purchases of property bought with funds from cost reimbursement grantsfrom various State and Federal agencies. Special provisions contained in the State contracts specify thatownership of all property purchased shall revert back to the grantor after a specified term or undercertain conditions pursuant to the contractual agreement.

Land and Buildings Held for Resale

Land and Buildings of Baton Rouge Housing Development Corporation are held for resale. Theseassets are valued at cost which approximates market. During the year ended June 30, 2003, allremaining held for sale properties were sold.

Cash Equivalents

The Organizations consider all highly liquid investments with a maturity of three months or less whenpurchased to be cash equivalents, unless held for reinvestment as part of the investment portfolio,pledged to secure loan agreements or otherwise encumbered.

Investments

Investments in all debt and equity securities with readily determinable fair values are reported at theirfair value. All other investments are reported at historical cost, if purchased, or, if contributed, at fairvalue at the date of contribution.

Contributions

Contributions are generally recorded only upon receipt, unless evidence or an unconditional promise togive has been received. Unconditional promises to give that are expected to be collected in future yearsare recorded at the present value for the amounts expected to be collected. Conditional promises togive are not included as support until such time as the conditions are substantially met. Allcontributions are considered available for unrestricted use unless specifically restricted by the donor.

Promises to Give

Unconditional promises to give are recognized as revenues or gains in the period received as assets,decreases of liabilities, or expenses depending on the form of the benefits received. Conditionalpromises to give are recognized when the conditions on which they depend are substantially met.

Volunteers of America, Greater Baton Rouge, foe. uses the allowance method to determineuncollectible promises for unconditional promises receivable. The allowance is based on prior years'experience and management's analysis of specific promises made.

Net Assets

The Organizations classify assets into three categories: unrestricted, temporarily restricted andpermanently restricted. All net assets are considered to be available for unrestricted use unlessspecifically restricted by the donor or by law. Temporarily restricted net assets include contributionswith temporary, donor-imposed time or purpose restrictions. Temporarily restricted net assets becomeunrestricted and are reported in the statement of activities as net assets released from restrictions whenthe time restrictions expire or the contributions are used for the restricted purpose. Permanentlyrestricted net assets include contributions with donor-imposed restrictions requiring resources to bemaintained in perpetuity, but permitting use of all or part of the investment income earned on thecontributions.

Contributed Services

The Organizations recognize contribution revenue for certain services received at the fair value of thoseservices provided those services create or enhance nonfinancial assets or require specialized skillswhich are provided by individuals possessing those skills and would typically need to be purchased ifnot provided by donation. During the year ended June 30, 2005 and 2004, the value of contributedservices meeting the requirements for recognition in the financial statements was not material and hasnot been recorded.

10

Allocation of Expenses

The costs of providing the various program services and supporting activities have been summarized ona functional basis in the Statement of Activities. Accordingly, certain costs have been allocated amongthe various functions.

Summary Financial Information for 2004

The financial statements include certain prior year summarized comparative information in total but notby net asset class. Such information does not include sufficient detail to constitute a presentation inconformity with generally accepted accounting principles. Accordingly, such information should beread in conjunction with the organizations' financial statements for the year ended June 30,2004, fromwhich the summarized information was derived.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted inthe United States of America requires management to make estimates and assumptions that affectcertain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Federal Income Taxes

Volunteers of America, Greater Baton Rouge, Inc., Human Services of Greater Baton Rouge, Inc., andBaton Rouge Housing Development Corporation are exempt from federal income taxes as subordinateunits of Volunteers of America, Inc. Volunteers of America, Inc. is exempt from federal income taxesunder Section 501 (a) of the Internal Revenue Code as a religious organization described in Section501 (c)(3). There were no unrelated business activities for the year ended June 30,2005. Accordingly,no tax expense was incurred during the year ended June 30,2005.

Note 2 - Related Parties -

Volunteers of America, Greater Baton Rouge, Inc. is affiliated with Volunteers of America, Inc. whichprovides administrative services to the Organization for a fee. Administrative fees for the fiscal yearended June 30, 2005 totaled $304,138. The Organization owes Volunteers of America, Inc. fees of$53,633 at June 30, 2005, which is included in accounts payable as reflected in these financialstatements. The Organization also participates in the direct mail and scholastic book campaignsponsored by Volunteers of America, Inc.

Human Services of Greater Baton Rouge, Inc. has recorded land, buildings, and leaseholdimprovements of the America Street, Balis Street, Harry Drive, Brownlee Street, Garfield, MidCity andRiver Oaks properties in its financial statements. At June 30,2005, Human Services of Greater BatonRouge, Inc. owed Volunteers of America, Greater Baton Rouge, Inc. $ 190,835. This amount has beeneliminated in these combining financial statements.

Baton Rouge Housing Development Corporation acts as a property holding corporation of low incomesingle family dwellings held for resale. At June 30, 2005 Baton Rouge Housing DevelopmentCorporation owes Volunteers of America, Greater Baton Rouge, Inc. $34,438. This amount has beeneliminated in these combining financial statements.

11

Furthermore, Volunteers of America, Greater Baton Rouge, Inc. acts as a management agent for variousU.S. Department of Housing and Urban Development (HUD) housing complexes. The following is alisting of those entities with amounts due to Volunteers of America, Greater Baton Rouge, Inc. as ofJune 30,2005:

Baton Rouge VGA Living Centers, Inc. $ 35,302Baton Rouge Residential Center, Inc. 1,595Welsh Elderly Housing, Inc. 29,392Elton VGA Living Center, Inc. 10,567Dumas House Corporation 14,665

$ 91,521

The amounts listed above are included in accounts receivable as reflected in these financial statements.

Note 3 - Notes Payable -

Notes Payable of Volunteers of America, Greater Baton Rouge, Inc. are detailed as follows:

Due Within Due AfterOne Year One Year

Note dated May 12, 1986 with an original balance of $145,000 payablein monthly installments of $1,448 during the first twelve monthperiod. Interest fluctuates annually based on the weekly average yieldon U. S. Treasury Securities. The current rate is 5.0%. The maximumaggregate amount of increase or decrease in the interest rate pajableduring the term of the loan shall not be greater than 5!£%; also, theincrease or decrease in any given year shall not be greater than 2Vi%.This note matures June 1,2006 and is collateralized by property at 827America St. held by Human Services of Greater Baton Rouge, Inc. $ 13,972 $

Note dated September 1, 1992 (refinanced April 2,2001 with anadditional $70,000 for Leasehold Improvements) with an originalprincipal balance of $122,500 payablein 120 monthly installmentsof $1,787 which includes interest at a rate of 5.75%. Thenoteiscollateralized by land and building on Drusilla Lane. 14,600 82,027

Note dated March 31,2003 with an original principal balanceof $180,000 payable in 180 monthly installments of $1,523 whichincludes a variable interest rate based on the U.S. Dollar Swap Rateplus 2.79% (current rate of 5.95%). The note is collateralized by landand building on Wooddale Boulevard. 8,488 153,486

Note dated April 7,2004 with an original principal balance of $38,340payable in 60 monthly installments of $752 which includes interest ata rate of 6.5%. The note is collateralized by a 2004 Chevrolet Bus. 7,233 23,271

Note dated December 16,2002 with an original principal balance of$25,177 payable in 48 monthly installments of $588 which includesinterest at a rate of 5.7%. The note is collateraliasd by a 2003 Dodgevan. 6,592 3,474

(CONTINUED)12


Note dated June 13,2001 with an original principal balance of $46,261payable in 60 monthly installments of $927 which includes interest at arate of 7.395%. The note is collateralized by a 2001 Chevrolet Bus. 9,928 667

Note dated June 14,2002 with an original principal balance of $18,132payable on demand, or if no demand is made, in 60 monthly installmentsof $383 which includes interest at a rate of 9.6%. The note iscollateralized by a 2001 Dodge Van. 3,886 4,362

Note dated December 8,2004 with an original principal balance of$ 15,926 payable on demand, or if no demand is made, in 24 monthlyinstallments of $718 which includes interest at a rate of 7.2%. This noteis collateralized by a 2004 Chevrolet Venture Van. 8,656 4,198

Note dated August 14,2001 with an original principal balance of$46,281 payable on demand, or if no demand is made, in 60 monthlyinstallments of $927 which includes interest at a rate of 7.4%. Thenote is collateralized by a 2002 Chevrolet Bus. 9,797 2,506

Note dated February 7,2005 with an original balance of $17,540payable on demand, or if no demand is made, in 36 monthlyinstallments of $546 which includes interest at a rate of 7.2%. Thisnote is collateralized by a 2004 Chevrolet Astro Van 5,551 10,742

Note dated September 28, 2004 with an original balance of $26,014payable on demand, of if no demand is made, in 36 monthlyinstallments of $796 which includes interest at a rate of 6.25%. Thisnote is collateralized by a 2004 Dodge 2500 Truck. 8,483 12,179

Note dated April 5, 2005 with an original balance of $16,000 payablein 36 monthly installments of $496 which includes interest at a rate of6.8%. The note is collateralized by a 2005 Dodge 1500 Truck. 5,024 10,653

Note dated October 3,2001, with an original principal balance of$19,648 payable in 48 monthly installments of $488 which includesinterest at a rate of 8.95%. The note is collateralized by a 2002Dodge Van. 1,966

Note dated December 9,2003 with an original principal balance of$86,428 payable in 23 monthly installments of $1,140 which includesinterest at a rate of 6.0% and the balance due on the last installmentdate. The note is collateralized by land and building at 2110 and2019 Government Street. 72.105 -

$176,281 $307,565

13

Notes Payable of Human Services of Greater Baton Rouge, Inc. are detailed as follows:


Note dated May 26, 1992 with the City of Baton Rouge-Parish ofEast Baton Rouge with an original principal balance of $96,000and a 0% interest rate. This is a deferred payment loan for whichno payments are due for the first ten years of the loan. During thesecond 10 year period, l/10th of the loan will be permanentlyforgiven each year that the building continues to be used fortransitional housing or other related purposes. The note iscollateralized by land and building on Brownlee Street. $ 9,600 $ 57,600

Note dated May 23, 1994 with the City of Baton Rouge-Parish ofEast Baton Rouge with an original principal balance of $88,000and a 0% interest rate. Loan term is 240 months beginning with thefirst payment due on or by April 1, 1995. Semi-annual paymentsare due on October 1, and April 1, thereafter. The note iscollateralized by land and building on Balis Street. 4,400 37,400

Note dated December 29, 1994 with the City of Baton Rouge-Parish of East Baton Rouge with an original principal balance of$198,646 and a 0% interest rate. Loan term is 240 months beginningwith the first payment due on or by January 1,2004. The note iscollateralized by land and building on Harry Drive. 9,932 172,944

Note dated March 31,2003 with Hibemia National Bank with anoriginal principal balance of $192,000 payable in 180 monthlyinstallments of $ 1,624 which includes a variable interest rate basedon the U.S. Dollar Swap Rate plus 2.79% (current rate is 5.95%).The note is collateralized by land and building on River Road. 9,305 163,614

Note dated October 10, 2000 with the City of Baton Rouge - Parish ofEast Baton Rouge with an original principal balance of $233,024 and a0% interest rate. Loan term is 240 months with the first payment dueon or by April 1,2001. The note is collateralized by land and buildingon Garfield Street. 7.551 192.752

$40,788 $624,310

There were no notes payable outstanding for Baton Rouge Housing Development Corporation as ofJune 30,2005.

Note obligation maturities in years ended June 30, are as follows:

14

Volunteers Of Human ServicesAmerica, Greater Of GreaterBaton Rouge. Inc. Baton Rouge. Inc.

2007 $ 68,047 $ 41,3652008 47,621 41,9532009 34,886 42,6272010 29,462 43,318Thereafter 127.549 455.047

$307,565 $624,310

Interest expense for the year ended June 30, 2005 amounted to $45,758 for Volunteers of America,Greater Baton Rouge, Inc., $10,683 for Human Services of Greater Baton Rouge, Inc., and $-0- forBaton Rouge Housing Development Corporation.

Note 4 - Line of Credit -

Volunteers of America, Greater Baton Rouge, Inc. has a revolving line of credit with Hibernia NationalBank with a stated maximum of $ 1,100,000 which expires on February 7,2006. The line of credit bearsa variable interest rate based on the Wall Street Journal Prime Rate plus 1 % (current rate 6.5%) and issecured by Accounts Receivable. As of June 30,2005 the line of credit had an outstanding balance of$151,068.

Note 5 - Minimum Lease Commitments -

The following is a schedule by years of future minimum rental payments required under operating leasesthat have initial or remaining noncancelable lease terms in excess of one year as of June 30,2005:

Volunteers of AmericaGreater Baton Rouge. Inc.

Year Ending June 30,2006 $ 197,2502007 105,8002008 45,0002009 1.650

$ 349,700

Total rental expenses for the year ended June 30, 2005 for all operating leases was $310,126 forVolunteers of America, Greater Baton Rouge, Inc., $-0- for Human Services of Greater Baton Rouge,Inc., and $-0- for Baton Rouge Housing Development Corporation.

Note 6 - Unconditional Promises to Give -

The Organization conducts an annual "Cherish the Children" fund-raising campaign. This campaign isto benefit the Children Crisis Center Program (Parker House).

The Organization conducted a Capital Campaign to benefit the Children Crisis Center Program (ParkerHouse) in the previous years. Remaining unconditional promises to give under this program areincluded below.

15

In addition, the Organization also has the "Family Fund" fundraising campaign whereby interestearnings can be used for various programs as stipulated by the donors.

The Organization also has the Partners In Caring Campaign whereby pledges received under thiscampaign are unrestricted.

Unconditional promises to give are as follows:Volunteers of AmericaGreater Baton Rouge. Inc.

Receivables Due in Less Than One Year $ 268,3 77Receivables Due in One to Five Years 118.095

Total Unconditional Promises to Give 386,472Less: Allowance for Uncollectible Amounts (61,647)Less: Discount to Present Value (23.255)

Net Unconditional Promises to Give at June 30, 2005 $ 301,570

The long-term portion of the pledges receivables are included in Other Assets on the Statement ofFinancial Position.

Note 7 - Restrictions on Net Assets -

Temporarily restricted net assets are available for the followingpurposes:Volunteers of AmericaGreater Baton Roupe^ Inc.

Capital Outlay $ 63,372Program Services 25,495Local Churches 8,242Cherish the Children 252,910Clothing for Residents 4.591

$354,610

Permanently restricted net assets consist of the following:

Family Fund Endowment $ 125,692Clothing for Residents 2,500

$ 128,192

Note 8 - Net Assets Released from Restrictions -

Net assets released from donor restrictions for incurring expenses satisfying the restricted purpose are asfollows:

Volunteers ofAmerica, GreaterBaton Rouee. Inc.

Capital Outlay $ 96,307Local Churches 93,727Cherish the Children 203,304VOA Awards and Development Grant 1.696

$ 395,034

16

Note 9 - Investments -

In accordance with SFAS No. 124 'Accounting for Certain Investments held by Not-For-ProfitOrganizations', investments are stated at market value. At June 30,2005, investments have a marketvalue of $332,861 and a cumulative unrealized gain of $61,115 since adoption of SFAS No. 124. Thenet increase in the unrealized gains at June 30, 2005 as compared to June 30, 2004 of $11,509 andinterest income of $6,869 earned on this investment in the current year are reflected in the Statement ofActivities. There were no investments held by Human Services of Greater Baton Rouge, Inc. and BatonRouge Housing Development Corporation as of June 30, 2005.

Note 10 - Accrued Annual Leave -

Volunteers of America, Greater Baton Rouge, Inc. has recorded an estimated liability for accrued leaveof an amount based on the total hours of leave accumulated at June 30, 2005, times the employees'hourly rate at June 30,2005. Employees accrue hours based upon their length of service. No more thanone hundred forty-four hours of leave can be carried over from one year to another. Accrued leave inthe amount of $225,259 is included in the accrued expenses account on the Statement of FinancialPosition.

Note 11 - Pension Plan for Ministers -

Volunteers of America, Greater Baton Rouge, Inc. participates in a noncontributory defined benefitpension and retirement plan. The plan is administered through a commercial insurance company andcovers all commissioned ministers. Pension plan expense was $28,355 for the year ended June 30,2005.

Because the plan is a multi-employer plan, the accumulated benefits and net assets available for benefitsas they relate solely to Volunteers of America, Greater Baton Rouge, Inc. are not readily available.

Note 12 - Thrift Plan for Employees -

Volunteers of America, Greater Baton Rouge, Inc. established a Section 403(b) Thrift Plan effectiveJanuary 1, 1992. The plan covers all employees with a minimum of one year of service. TheOrganization will contribute 3.25% of all participants' compensation and will match an amount equal to50% of the basic employee contributions made by each participant limited to 1% of their wages.Employees will be 100% vested in the employer contribution upon completion of five years of service.The expense for the year ended June 30,2005 was $172,232.

Note 13 - Concentration of Credit Risk -

Included in receivables are amounts due for program services provided to various agencies of the Stateof Louisiana and grant funds due from federal and state agencies. Allowances are provided for amountsestimated by management as uncollectible.

The Organizations maintain cash accounts with commercial banks which are insured by the FederalDeposit Insurance Corporation up to $100,000. Periodically, cash may exceed the federally insuredamount.

17

Note 14 - Merger Agreement with Baton Rouge Youth, Inc. -

The Organization had previously entered into a management agreement with Baton Rouge Youth, Inc.effective January 2002. Based upon that agreement, Baton Rouge Youth, Inc. remained a separateoperating entity with a separate board of directors. At the approval of both entities' board of directors,effective July 1, 2004, the Organization and Baton Rouge Youth, Inc. entered into a joint mergeragreement. Pursuant to this agreement the previous management agreement was terminated and bothentities merged into one entity with the Organization being the surviving entity. All assets, liabilities,net assets, and operations of Baton Rouge Youth, Inc. were then transferred to the Organizationeffective July 1, 2004. Futhermore, separate existence of Baton Rouge Youth, Inc. ceased on theeffective date of the merger agreement.

Note 15 - Subsequent Events - Hurricanes Katrina and Rita -

Subsequent to our report date, but prior to the final issuance of our report, Hurricane Katrina hit thecoasts of southeast Louisiana, Mississippi and Alabama on August 29, 2005. Hurricane Rita hit thecoasts of southwest Louisiana and southeast Texas on September 24,2005. Damages due to wind andflooding are catastrophic in these areas. At this time the Organization's management is unable toevaluate the effect, if any, that those events may have on the Organization.

18

SUPPLEMENTARY INFORMATION

VOLUNTEERS OF AMERICA,GREATER BATON ROUGE, INC.

STATEMENT OF ACTIVITIES FOR SPECIAL PROGRAMS*

FOR THE YEAR ENDED JUNE 30, 2005

Revenues from Operations:Public SupportGovernment Grants and FeesUnited Way AllocationOther

Total Revenues from Operations

Operating Expenses:SalariesEmployee BenefitsPayroll TaxesProfessional FeesSupplies and Office ExpensesAdministrative ExpensesOccupancyInsuranceInterestEquipment Rental and MaintenancePrinting and PublicationsTravelClient Cash SubsidyDepreciation

Total Operating Expenses

$ 201,2641,160,273

434,0339.811

1,805,381

961,72071,83270,42977,767

134,164199,299112,89642,907

5,2959,4873,546

39,43134,27261.838

1,824,883

Change in Net Assets $ (19,502)

* Includes all programs of Volunteers of America, Greater Baton Rouge, Inc. which receivedCapital Area United Way Funding.

19


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

FOR THE YEAR ENDED JUNE 30,2005

Federal Grantor/Pass - Through Grantor/

Program Title

U.S. Department of Housing and Urban Development

Direct Program

Rural Supportive Housing Program

Passed Through City Parish

Emergency Shelter Grants ProgramSupportive Housing Program

Passed Through Emergency Food and Shelter NationalBoard Program

Emergency Food and Shelter Program

Passed Through Louisiana Department of Health andHospitals, Office of Mental Health

PATH

Total U.S. Department of Housing and UrbanDevelopment

U.S. Department of Veterans Affairs

V.A. Homeless Grant

Total U.S. Department of Veterans Affairs

U.S. Department of Health and Human Services

Passed Through Louisiana Department ofSocial Services, Office of CommunityServices

Family Based Services Reunification

FederalCFDA

Number

14.235

14.23114.235

14.231

N/A

64.024

FederalExpenses

$468,571

91,786234,880

6,312

136.887

938,436

86,509

86,509

93.667 139,457

(CONTINUED)20

Federal Grantor/Pass - Through Grantor/

Program Title

Family Based Services, Family Resource Center

Passed Through Louisiana Department of Social Services,Office of Family Support

TANF - Homeless Assistance

Child Care and Development

Passed Through HIV/AIDS Alliance for Region Two, Inc.

HIV Prevention

HIV Emergency Relief

Total U.S. Department of Health andHuman Services

Federal Emergency Management Agency

Passed Through Louisiana Department of Health andHospitals

Disaster Relief

Total Federal Emergency Management Agency

Total Federal Assistance

FederalCFDA

Number

93.556

83.539

FederalExpenses

189,196

93.558

93.575

93.940

93.914

267,094

158,212

113,467

1.096.289

1,963,715

52.094

52,094

$ 3,040,754

21


NATIONAL ADMINISTRATIVE FEESCALCULATION FORM


1. Total accrual revenue from auditedfinancial statement $ 16,473,502

1 a. Plus: Pledges Receivable, June 30,2004 356,647

Ib. Less: Pledges Receivable, June 30, 2005 (341.576)

16,488,573

2. Less: Allowable ExclusionsAmount

Explanation of each exclusion:A. Duplicated revenues $ 750,246B. In-kind revenues 273,124C. Capital contributions/grantsD. Encumbered FinancingE. Acquired 501(c)(3)F. Custodial or Third Party Financing 206,876G. Donor Restricted Contributions 25,477H. Investment Earnings/Net Capital

Gains 25,951I. Phase out of Prior Exclusions -

3. Total Allowable Exclusions (1.281.674)

4. Adjusted Revenue $15,206,899

Calculate Affiliate Fees:

5. Enter Line 4x2.0% up to a Maximum of $25,000,000. IfLine 4 <$25,000,000 Enter Amount Calculated on Une 7. $ 304,138

6. If Line 4 < $25,000,000, go to Line 7, or else Calculate Fee Basedon 1998 Sliding Scale. Multiply this Amount by 1.20 andEnter in Line 6. Enter Lesser of Line 5 or Line 6 in Line 7. -

7. Affiliate Fees 304,138

8. Amount due to national office as of June 30,2004 47,808

9. Total cash payments to national office for fiscal year June 30, 2005 298,313

10. Amount due to national office as of June 30, 2005 $ 53,633

22

INDEPENDENT AUDITOR'S REPORT ON INTERNALCONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDITOF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS

HawislSourgcoisJlPCertified Public Accountants

Randy J. Bonneeazc, CPA' 2322 Tretnont Drive Members American Institute ofJoseph D. Richard, Jr., CPA* Baton Rouge LA 70809 Certified Public AccountantsRonnie E. Stamper, CPA* ° 'Fcrnand P. Genre, CPA* Phone: (225) 928-4770 , , - 7 < r , i c , A c f uS,cphcn M. Hugsins,CPA' Fax' (225) 926-0945 1175 Del Este Avenue SmtcBMonica UZumo CPA' l ' Denham Spnngs, LA 70726Ronald 1.. Gagnet, CPA'Douglas J. Nelson, CPA* www.htbcpa.comCeleste D. Viator, CPA'Russell J. Reswcbcr, CPA*Laura E. Monroe, CPA*R. David Witscom. CPA*

•A PeuftuuoHal Actmuitinn Cuffonuion A _ , n *f\f\fAugust 9,2005

Board of DirectorsVolunteers of America, Greater Baton Rouge, Inc.Baton Rouge, Louisiana

We have audited the financial statements of Volunteers of America, Greater Baton Rouge, Inc. as of andfor the year ended June 30,2005, and have issued our report thereon dated August 9,2005. We conductedour audit in accordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Volunteers of America, Greater Baton Rouge,Inc.'s financial statements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which couldhave a direct and material effect on the determination of financial statement amounts. However, providingan opinion on compliance with those provisions was not an objective of our audit and, accordingly, we donot express such an opinion. The results of our tests disclosed no instances of noncompliance or othermatters that are required to be reported under Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Volunteers of America, Greater Baton Rouge, Inc. 'sinternal control over financial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide an opinion on the internal controlover financial reporting. jOur consideration of the internal control over financial reporting would notnecessarily disclose all matters in the internal control over financial reporting that might be materialweaknesses. A material weakness is a reportable condition in which the design or operation of one or moreof the internal control components does not reduce to a relatively low level the risk that misstatementscaused by error or fraud in amounts that would be material in relation to the financial statements beingaudited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over financialreporting and its operation that we consider to be material weaknesses.

23

This report is intended for the Board of Directors, management, the Office of the Louisiana LegislativeAuditor and any cognizant agency and is not intended to be and should not be used by anyone other thanthese specified parties. However, under the provisions of Louisiana Revised Statute 24:513, this report isdistributed by the legislative auditor as a public document and its distribution is not limited.


T*.

24

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCEWITH REQUIREMENTS APPLICABLE TO EACH MAJOR

PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE INACCORDANCE WITH OMB CIRCULAR A-133

Certified Public Accountants

Randy J. Bonnecaze. CPA* 2322 Tremotlt Drive Members American Institute of

Joseph D. Richard. Jr., CPA* Baton RoUEC LA 70809 Certified Public AccountantsRonnie E. Stamper, CPA* ° 'FmandRCcnre,CPA* Phone: (225) 928-4770Stephen M, Huggms, CPA* Fax" (275^ 926-0945 r, • -,*-,-,,Monica L. Zumo, CPA* • ' Dcnham Springs, LA 70726

Ronald L. Gagnet, CPA*Douglas J. Nelson, CPA* www.htbcpa.comCeleste D. Vialor, CPA*Russull S. Rcswcber, CPA*l.aura I-'. Monroe, ('PA*R. Uaviil Wascom, CPA*

•A 1'rofi-isiaaai Acfoiinliag Otrptiralion August 9,2005

Board of DirectorsVolunteers of America, Greater BatonRouge, Inc.Baton Rouge, Louisiana

Compliance

We have audited the compliance of Volunteers of America, Greater Baton Rouge, Inc. with the types ofcompliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133Compliance Supplement that are applicable to each of its major federal programs for the year endedJune 30,2005. Volunteers of America, Greater Baton Rouge, Inc. 's major federal programs are identifiedin the summary of auditors results section of the accompanying Schedule of Findings and QuestionedCosts. Compliance with the requirements of laws, regulations, contracts and grants applicable to its majorfederal programs are the responsibility of Volunteers of America, Greater Baton Rouge, Inc.'smanagement. Our responsibility is to express an opinion on Volunteers of America, Greater Baton Rouge,Inc.'s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133require that we plan and perform the audit to obtain reasonable assurance about whether noncompliancewith the types of compliance requirements referred to above that could have a direct and material effect ona major federal program occurred. An audit includes examining, on a test basis, evidence about Volunteersof America, Greater Baton Rouge, Inc. 's compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion. Our audit does not provide a legal determination on Volunteers ofAmerica, Greater Baton Rouge, Inc.'s compliance with those requirements.

25

In our opinion, Volunteers of America, Greater Baton Rouge, Inc. complied, in all material respects, withthe requirements referred to above that are applicable to each of its major federal programs for the yearended June 30, 2005.

Internal Control Over Compliance

The management of Volunteers of America, Greater Baton Rouge, Inc. is responsible for establishing andmaintaining effective internal control over compliance with requirements oflaws, regulations, contractsand grants applicable to federal programs. In planning and performing our audit, we considered Volunteersof America, Greater Baton Rouge, Inc.'s internal control over compliance with requirements that couldhave a direct and material effect on a major federal program in order to determine our auditing proceduresfor the purpose of expressing our opinion on compliance and to test and report on internal control overcompliance in accordance with OMB Circular A-133.

Our consideration of the internal control over compliance would not necessarily disclose all matters in theinternal control that might be material weaknesses. A material weakness is a reportable condition in whichthe design or operation of one or more of the internal control components does not reduce to a relativelylow level the risk that noncompliance with applicable requirements of laws, regulations, contracts andgrants caused by error or fraud that would be material in relation to a major federal program being auditedmay occur and not be detected within a timely period by employees in the normal course of performingtheir assigned functions. We noted no matters involving the internal control over compliance and itsoperation that we consider to be material weaknesses.

This report is intended for the Board of Directors, management, the Office of the Louisiana LegislativeAuditor and any cognizant agency, and is not intended to be and should not be used by anyone other thanthese specified parties. However, under the provisions of Louisiana Revised Statute 24:513, this report isdistributed by the legislative auditor as a public document and its distribution is not limited.


T\ BtoAftotoJj LLP

26


SCHEDULE OF FINDINGS AND QUESTIONED COSTS


As required by U.S. Office of Management and Budget Circular A-133, Audits of States, LocalGovernments, and Non-Profit Organizations, the following is a summary of the results of our audit:

* Type of report issued on financial statements - unqualified.

* Type of report issued on compliance for major programs - unqualified.

* The results of audit procedures disclosed no material noncompliance in the major program.

* The results of audit procedures disclosed no questioned costs.

* Our audit disclosed no findings which are required to be reported under Section 510(a).

* The following programs were determined to be Type A major programs:

CFDA Number

U.S. Department of Housing and Urban DevelopmentRural Supportive Housing Program 14.235

Passed Through City ParishSupportive Housing Program 14.235

U.S. Department of Health and Human ServicesPassed Through Louisiana Department of SocialServices, Office of Community Services

Family Based Services, Family Resource Center 93.556

* The dollar threshold used to distinguish between Type A and Type B programs was $300,000 asspecified under Section 520(b).

* Volunteers of America, Greater Baton Rouge, Inc. qualified as a low risk auditee under Section530.

27


SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


No prior year audit findings.

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