ARTICLE ONE: The name of the corporation is (include …...Capacity Builders Inc’s CPA is...

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TYPE OR PRINT IE(IBLV FILEt,

Nonprofit Corporation °‘P’a FEB— 8ARTICLES OF AMENDMENT

TO THE ARTICLES OF INCORPoRATION

Pursuant to the provisions of the New Mexico Nonprofit Corporation Act, the undersignedcorporation adopts the following Articles otAmeadment for the purpose of amending its Articles ofincorporation:

ARTICLE ONE: The name of the corporation is (include NMPRC#): The Grant Experts

ARTICLE TWo: The following articles are amended as set fbrth here: (ldent((v by article number andattach additional pages ((necessary)

Article I is amended as toUws The name of the non-profit corporation Is changed to Capacity Builders. Inc.

ARTICLE THREE: (select the appropriate action taken)

X The date of the meeting of members at which the amendment was adopted was_November 9.2011A quorum of the members entitled to vote was present and the amendment received at least

two-thirds (2/3) of the votes which members present at the meeting or represented by proxy wereentitled to cast.OR

The amendment was adopted by a consent in writing signed by all members entitled to Vote thereon.

OR— The date of the meeting of the board of directors at which the amendment was adoptedwas The corporation has no members, or no members entitled tovote thereon, tlrcfore the amendment was adopted by a majority of the board of directors inoffice.

ARTICLE FO1JR: If these Articles of Amendment are not to be effective upon filing with thecommission, the effective date is: ((fan effective date Is spec (fled here. it cannot be a date prior to tiredate the articles are received liv the commtssion)__

__________________

Dated: 01/30/2012

The Grant ExpertsName of orporation

Two offlce mast .cn: 8YA?JSignature of Authorized ificer

By “f_-t1ture oTAuthorOIEr

Form DNP-AM(revised 07/03)

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I

NEW MEXICO PUBLIC REGULATION COMMISSION

Certificate OfAmendment

OF

CAPACITY BUILDERS, INC.

7517122

NEW MEXICO

The Public Regulation Commission certifies thgt the Articles Of Amendment, duly signed and verifiedpursuant to the provisinns of the

Nonprofit Corporation Act (53-8-1 To 53-8-99 NM$A 1978)

have been received by It and are found to conform to law. Accordingly, by vlrtu of the authorityvested In it by law, the Public Regulation Commission issues this Certificate Of Amendment andattjch hereto a duplicate of the Articles Of Amendment.

Dated February 8, 2012

In testimony whcreof, the Pubiic Regulation CO,flmts5iofl of the State or NewMxieo has caused this certificate to ho sIgned by Its Chairman end the seal ofsaid Commission to be affised at tho CIty of Santa Fe.

7t.

Bureau Chief Chairman

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INTERNAL REVENUE SERVICE DEPARThENT OF THE TREASURYP. 0. BOX 2508CINCINNATI, OH 45201

Employer Identification Number:Date: S

‘26-1077416

JVL -“ DLN;17053292338019

THE GRANT EXPERTS INC Contact Person:7330 Tt3SCANY WAY MS. MEDINA 104 52444FARNINGTQN, NM 87402 Contact Telephone Number:

(877) 829-5500Accounting Period Ending:

December 3Public Charity Status:

170(b) (1) (A) (vi)Form 990 Required:

YESEffective Date of Exemption;

August 15, 2007Contribution Deductibility:

YESAddendum Applies:

YES

Dear Applicant:

We are pleased to inform you that upon review of your application for taxexempt status we have determined that you are exempt from Federal income taxunder section 501(c) (3) of the Intenial Revenue Code. Contributions to you aredeductible under section 170 of the Code. You are also qualified to receivetax deductible bequests, devises, transfers or gifts under sectIon 2055, 2106or 2522 of the Code. Because this letter could help resolve any questionsregarding your exempt status, you should keep it in your permanent records.

organizations exempt under section 501(c) (3) of the Code are further classifiedas either public charities or private foundations. We determined that you area public charity under the Code section(s) listed in the heading of thisletter.

Please see enclosed Publication 4221-PC, Compliance Guide for 501(c) (3) PublicCharities, for some helpful information about your responsibilities as anexempt organization.

Letter 947 (D0/CG)

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THE GRA3T EXPERTS INC

Pursuant to section 301.9100-2 of the Income Tax Regulations, an extension ofthe filing period fixed by section 1.508-1(a) (2) of the regulations has beengranted. Accordingly, the organization’s exemption under Section 501(cH3) ofthe Code will be effective from August 15, 2007, the date yourorganization was formed.

Letter 947 (DO/CG)

OFFICE Of THEPUBLIC REGULATION COMMISSION

RESTATEC CEATIFICTE OF INCOORATICy

THE GRRNT EXPERTS, INC.

I 370175

The Public Regulation ConIasien certifies that pira:eortginals of Restated Artitles of XncorporatSn attaciedhereto, duly signed and verified pursuant t the prcvscruof the

NONPROFIT CCRPORETTCN ACT(S38—I. to 53—5—99 3PtSA 17179)

have been rcecivcd by it and are found to c?Eore to law.

Accczdingiy by virtue f the authority vosted in it bylaw the Public Regulation Caneission isnues this RestatedCertificate of Ineorpcrstien and attaches hercto a duplicateCelejeal of the Restatci Articles of Inccrperation.

)atedl NOVEMBER 12, 2009

In iestimen’ ehereat, the PubIj Re5uhitisn at theStale at See Me baa cuuscaj this cerilliesie to beained by Ita 1 inata and the seat ci saidCoiflUtsala it3 ci Santa F

—

athEutcau C)def

I

TYPE OR PRI LEGInLY LEONonprofit Corporation

6ARTICLES OF AMENDMENTlU ‘[lIE ARTICLES OF INCORPORA’I’ION

Pursuant to the provisions of the New Mexico Nonprofit Corporation Act, the undersignedcorporation adopts the toliuwing Articles of Amendment for the purpose otamending its Artides ofIncorporation:

ARTICLE ONE: The name of the corporation is (include NMPRC): The Grant Experts

ARTICLE TWO: The following articles are amended as set [bi-th here: (ident(fr by article nu,nber andattach additional pages (1 necesswy)

Article I is amended as ftllows The name of the non-profit corporation Is changed to Capacity fluiIde,s, Inc.

ARTICLE THREE: (srleci the appropriate action taken)

X The date of the meeting of members at which the amendment was adopted was November 9.2011A quorum of the tnembers entitled to vote was present and the amendment received at leasttwo-thirds (213) of the votes which inetnbers present at the meeting or represented by proxy wereentitled to cast,

OR— The amendment was adopted by a consent in writing signed by all members entitled to vote thereon.

OR— The date of the meeting of the board of directors at which the amendment was adoptedwas

_________________

The corporation has no members, or no members entitled tovote thereon, thrcfbre the amendment was adopted by a motity of the board of directors inoffice.

ARTICLE FOUR: If these Articles of Amendment are not to be effective upon filing with thecommission, the effective date is: (fan effective date Cc spec!fled here, it cannot be a date prior to thedate the articles are received by the commi33ion,l— - —

Dated: 01/30/2012

The Grant ExpertsName ofCorporation

Two officers mutt sign: By_/h1,.,Jf (Z2Signature of Authocizet,ófflcer

gnaturt a Authorize 0

Form DNP-AM(revised 07/03)

-.

.; i) ?Ol

NEW MEXICO PUBLIC REGULATION COMMISSION

Certificate OfAmendment

OF

CAPACITY BUILDERS, INC.

7517122

NEW MEXICO

The Public Requlatlon Commission certifies that the Articles Of Amendment, duly signed and yenNedpursuant to the provisions of the

Nonprofit Corporation Act (53-8-i To 53-8-99 NMSA 1978)

have been received by It and arc found to conform to law. Accordingly, by vIrtue of the authorItyvested in It by law, the Public Regulation CommissIon Issues this Certilicate Of Amendmeflt andattaches hereto a duplicate of the Articles Of Amendment.

Dated Febru8fy 8, 2012

In testimony whereof, the Public Regulation CommissIon of the State of NowMexiCo has caused this ceetiticate to be signed by Its ChaIrman and the scSi ofsOld Commission to be affixed at the City of Santa Fe.

4,sMJz.,wo 1% /1.

Bureau Chief Chairman

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DOCKET NO. 16-00069.TR-M CERTIFICATEIPRC NO. 56885

NEW MEXICOPUBLIC REGULATION

COM MISSIONC’omrnii’sioners

flI.ctricl 1 Karent.. Montoya District 2 Patrick HJrYRRI District 3 jcrig.fjnoaxDistrict 4 LygRLoveo Districts Sondy Jones

CAPACITY BUILDERS INCDIB/A LOU GO’S

418 W. BROADWAYFARMJNGTON, NEW MEXICO 87401

SERVICE: NON SChEDULED AUTHORITY: GENERAL TAXICABROUTE: IRREGULAR SERVICE

DESCRIPTION:

A Certificate/a provide “General Taxicab Service” (as defined by the Commission’s tstotorCarrier Rules and the New Mexico Motor Carrier Act), 10 and from points and places in theSlate of New Mexico PROVIDED THAT this certificate does not authorize transportation ofpassengers between poinrs and places within the two-county area of Bernalillo and SandovalCounties. Nothing in this endorsement prevepts the carrier from transporting passengers infoor oat of the hvo-connty area offlernalillo and Sssdovnl Counties. PROVIDED THAT thiscertificate does sot astliorize transportation of passengers: ( I) between points and placeswithin the municipal limits of the City of Santa Fe on the one hand and the AlbuquerqueInternational Sunport on the other; or (2) between points and places within the municipallimits of the City of Santa Fe. PROVIDED THAT this certificate restricts the operating forgeneral taxicab service to only three (3) taxicabs for a total of three years from the date of thesettlement stipulation, and no amendment to its general taxicab certificste furs municipalcertificate may be applied for until after the three year period. Should KB Cab ceaseoperation as municipal taxicab service provider prior to the end of the three year period, anamendment to its general asicab certificate may be requested at the time. Equipment to bettationed at 418W. Osoadway, farnsington, New Mexico 87401.

TIllS CERTIFICATE ShALL REMAIN IN EFFECT FROM AND AFTERDATE IRItUjOF, SUBJECT TO APPIJCAELE PROVISIONS OF THE NEWMEXICO MOTOR CARRIER ACT AND THtt RULES, REGULATIONS ANDREQUIREMENTS PRESCRIBED THEREUNDER AND ISSUED PURSUANTTO TIlE COMMISSION’S FINAL ORDER DATED

DONETIDS 9a_DAYOFSeptemhcr2Ol6. -

Avelino A. Gtttierrez, Transpor(ion Division Director .‘

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CAPACITYBuitwi1e,ttae a C Ct5 CaflhUflt

Capacity Builders Inc’s CPA is currently working to finish the 2017 and 2018 audits. Please find theattached Audits that were completed in 2016 and 2015. They are the most recently completed audits.We expect to have the 2017 and 2018 audits completed soon.

CAPNITVS3UILDERS INFO

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CAPACITY BUILDERS, INC.FINANCIAL STATEMENTS

Years EndedDecember 31, 2016 and 2015

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INDEX TO FINANCIAL STATEMENTS

Independent Auditor’s Report 2

Financial Statements:Statements of Financial Position 4

Statements of Activities 5

Statement of Functional Expenses - Year Ended December 31, 2016 6

Statement of Functional Expenses - Year Ended December 31, 2015 7

Statement of Cash Flows 8

Notes to Financial Statements 9

Single Audit Section:Schedule of Expenditures of Federal Awards 18

Notes to the Schedule of Expenditures of Federal Awards 19

Independent Auditor’s Report on Internal Control Over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernmental Auditing Standards 20

Independent Auditor’s Report on Compliance with RequirementsApplicable to Each Major Program and Internal Control OverCompliance Required by the Uniform Guidance 22

Schedule of Findings and Questioned Costs 25

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DA VII) BERR Y, CPA, PC 305 N Behrend, Farmington, Now Mexico 87401

omaiI david@dberlycpa cornCERTIFIED PUBLIC ACCOUNTANT! SMALL BUSINESS CONSULTANT 505-320-6670

INDEPENDENT AUDITOR’S REPORT

To the BoardCapacity Builders, Inc.Farmington, New Mexico

Report on the Financial StatementsWe have audited the accompanying financial statements of Capacity Builders, Inc. (a nonprofitorganization), which comprise the statements of financial position as of December 31, 2016 and2015, and the related statements of activities, functional expenses, and cash flows for the years thenended, and the related notes to the financial statements.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; thisincludes the design, implementation, and maintenance of internal control relevant to the preparationand fair presentation of financial statements that are free from material misstatement, whether due tofraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

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Page Two

OpinionIn our opinion, the financial statements referted to above present fairly, in all material respects, thefinancial position of Capacity Builders. Inc. as of December 31, 2015 and 2014, and the changes inits net assets and its cash flows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

Other MattersOther InformationOur audit was conducted for the purpose of forming an opinion on the financial statements as awhole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S.Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, CostsPrinciples, and Audit Requirements for Federal Awards, is presented for purposes of additionalanalysis and is not a required part of the financial statements. Such information is the responsibilityof management and was derived from and relates directly to the underlying accounting and otherrecords used to prepare the financial statements. The information has been subjected to the auditingprocedures applied in the audit of the financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting and otherrecords used to prepare the financial statements or to the financial statements themselves, and otheradditional procedures in accordance with auditing standards generally accepted in the United Statesof America. In our opinion, the information is fairly stated, in all material respects, in relation to thefinancial statements as a whole.

Other Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued our report datedSeptember 24, 2018, on our consideration of Capacity Builders, Inc. internal control over financialreporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,and grant agreements and other matters. The purpose of that report is to describe the scope of ourtesting of internal control over financial reporting and compliance and the results of that testing, andnot to provide an opinion on internal control over financial reporting or on compliance. That report isan integral part of an audit performed in accordance with Government Auditing Standards inconsidering Capacity Builders, Inc. internal control over financial reporting and compliance.

Va

Farmington, New MexicoSeptember 24, 2018

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CAPACITY BUILDERS, INC.STATEMENTS OF FINANCIAL POSITION

ASSETSCURRENT ASSETS:

Cash and cash equivalentsGrants receivableOther current assets

Total Current Assets

PROPERTY AND EQUIPMENT,net of accumulated depreciationof $146,500 and $122,220

NONCURRENT ASSETSLoans receivable

Total Assets

LIABILITIES AND NET ASSETSCURRENT LIABILITIES:

Current portion of long-term debtAccounts payableAccrued liabilitiesAccrued interest payableDeferred grant revenue

Total Current Liabilities

LONG-TERM DEBT, net of current portion

Total Liabilities

NET ASSETS:Temporarily restricted net assetsPermanently restricted net assetsUnrestricted net assets (deficiency)

Total Net Assets

December 31,2016 2015

$ 81,337263,992

$ 191,137294,578

345,329 485,715

427,297 451,577

20,311 18,000

$ 792,937 $ 955,292

$347,664 105,187

57,706 36,85146,996 35,311

111,741 -

564,107 177,349

389,518 389,518

953,625 566,867

(160688) 388,425

(160,688) 368,425

$ 792,937 $ 955,292

SEE ACCOMPANYING NOTES4-

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CAPACITY BUILDERS, INC.STATEMENTS OF ACTIVITIES

UNRESTRICTED SUPPORT AND REVENUES:Support:Government grants and contractsDonationsIn-kind donations

Total unrestricted revenues

Revenues:Program service feesRental incomeOther income

Total unrestricted revenues

Total Unrestricted Support and Revenues

Expenses:Program servicesManagement and general

Total Expenses

INCREASE (DECREASE) INUNRESTRICTED NET ASSETS

NET ASSETS, beginning

NET ASSETS, ending

Year Ended December 31,2016 2015

88,195 190,17926,936 59,64432,227 32,840

147,358 282,663

3,522,888 3,414,198

3,169,724 2,912,049902,277 378,930

4,072,001 3,290,979

(549,113) 123,219

388,425 265,206

$ (160,688) $ 388,425

$ 2,736,63014,234

624,6663,375,530

$ 2,684,5256,463

440,5473,131,535

SEE ACCOMPANYING NOTES-5-

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CAPACITY BUILDERS, INC.STATEMENT OF FUNCTIONAL EXPENSESYear Ended December 31, 2016

Program ManagementServices and General

Program expense - direct $ 237,240 $ -

Salaries and wages- officers 211,509 113,889Salaries and wages - other 816,954 439,898Employee benefits 172,637 92,959Payroll taxes 74,054 39,875Feesforservices 623,181 71,391Accounting and legal - 19,711Advertising and promotion 34,347 3,816Office expenses 450,022 60,305Information technology 25,709 2,700Occupancy 243,482 27,054Facility and equipment rental 58,847 6,538Equipment rental - in-kind - -

Travel 115,655 12,851Training 4,470 -

Depreciation 21,852 2,428Insurance 65,279 7,253Interestexpense 10,517 1,169License and registration fees 3,946 438Bank charges and wire fees 23 2Other expenses - -

Totals


Total

$ 237,240325,398

1,256,852265,596113,929694,572

19,71138,163

510,32728,409

270,53665,385

128,5064,470

24,28072,53211,6864,384

25

$ 4,072001S 3,169724 $ 902,277

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CAPACITY BUILDERS, INC.STATEMENT OF FUNCTIONAL EXPENSESYear Ended December 31, 2015

Program ManagementServices and General Total

Programexpense-direct $ 351,427 $ - $ 351,427Salaries and wages - officers 249,215 96,917 346,132Salaries and wages - other 929,436 103,271 1,032,707Employee benefits 98,561 15,281 113,842Payroll taxes 111,222 8,372 119,594Fees for services 355,361 34,528 389,889Accounting and legal - 12,753 12,753Advertising and promotion 49,954 8,132 58,086Office expenses 288,194 46,915 335,109Information technology 57,930 4,360 62,290Occupancy 176,197 28,683 204,880Facility and equipment rental 125,769 9,466 135,235Equipment rental - in-kind - - -

Travel 52,338 3,939 56,277Depreciation 26,098 2,900 28,998Insurance 24,718 1,860 26,578Interestexpense 10,517 1,169 11,686License and registration fees 4,430 333 4,763Bank charges and wire fees 682 51 733Other expenses - - -

Totals $ 2,912,049 $ 378,930 $ 3,290,979


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CAPACITY BUILDERS, INC.STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:Increase (decrease) in net assetsAdjustments to reconcile change in net assets

to net cash provided by operating activities:DepreciationChanges in:

Grants receivableAccounts payableAccrued liabilitiesAccrued interest payable

Deferred grant revenue

Net Cash Provided By Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from disposal of fixed assetsAcquisition of depreciable assets

Net Cash Used By Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:Loan advances under RBEG programPrincipal payments on long-term debt

Net Cash Used By Financing Activities

NET INCREASE (DECREASE) INCASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning

CASH AND CASH EQUIVALENTS, ending

Year Ended December 31,2016 2015

$ (549,113) $ 123,219

(107,489) 69,051

(2,311) (18,000)

(2,311) (18,000)

(109,800) 51,051

191137 140,086

$ 81,337 $ 191,137


24,280

30,586242,47720,85511,685

111141

28,998

(190,541)91,862

3,82711,686

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CAPACITY BUILDERS, INC.NOTES TO FINANCIAL STATEMENTSYears Ended December 31, 2016 and 2015

NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of OrganizationCapacity Builders, Inc. is a nonprofit organization headquartered in Farmington, NewMexico, since 1995. The organization works to improve the quality of life for the poorestand neediest tribal communities as well as assistance to other nonprofits. Althoughmost of the assistance provided by the organization is in the south western region of theUnited States, the organization provides grant evaluation services, professionaldevelopment, and other grant management services to other nonprofit and educationalinstitutions throughout the United States. Its services include building support anddirect services leading to job creation, economic independence, weliness, and successand promotion of youth. It connects education agencies with grant funding to betterserve children, students of all ages, and educators.

Funding for specific programs is provided primarily by the Health and Human ServicesDepartment of the Federal government, and the United States Department ofAgriculture. Health and Human Services funds the following programs: Navajo YouthBuilders Program, Physical Education Program, Americorps Program, YouthConservation Corp, Drug Free Communities Program, Community EconomicDevelopment training programs in both Farmington, New Mexico, and Winslow, Arizona.The United States Department of Agriculture funds the Native Projects including RuralBusiness Economic Development Program, and the Social Economic DevelopmentProgram.

Basis of AccountingThe Organization prepares its financial statements on the accrual basis of accounting inaccordance with accounting principles generally accepted in the United States ofAmerica. Revenues and gains are recognized when earned, and expenses and lossesare recognized when incurred.

Financial Statement PresentationThe accompanying financial statements include the assets, liabilities, and net assets ofthe Organization. The Organization is required to report information regarding itsfinancial position and activities according to three classes of net assets based on theexistence or absence of donor imposed restrictions and the nature of those restrictions.The Organization had no temporarily or permanently restricted net assets to report.

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Cash and Cash EquivalentsFor purposes of the statements of cash flows, the Organization considers all highlyliquid investments available for current use with an initial maturity of three months orless to be cash equivalents. Cash and cash equivaTents consist of on demand bankdeposits.

Receivables and Revenue RecognitionReceivables are recorded net of an allowance for doubtful accounts. The allowance isestimated from historical performance and projections of trends. At December 31, 2016and 2015, the allowance for doubtful accounts was $0.

In Kind ContributionsDonated consultant services and equipment tents were received and recorded.Donated services are recognized at fair value when received if such services (a) createor enhance assets or (b) require specialized skills, are provided by individualspossessing those skills, and (c) would typically need to be purchased if not donated.During the year ended December 31, 2016 and 2015, the contribution value of the inkind donations of $624,666 and $440,547 has been included in revenues and expensesas follows:

1213112016 1213112015Facility and equipment rental S 62,719 $ 119,759Fees for services 385,202 299,122Advertising 22,026 9,300Supplies 134,830 11,350Travel 5.889 1,016

lotal $ b%4,bbtt $ 44U,b41

Property and EquipmentPurchased equipment is stated at cost. Donated equipment is stated at the estimatedfair market value at the time of acquisition. The Organization follows the practice ofcapitalizing, at cost, all expenditures for fixed assets in excess of $5,000. Maintenance,repairs and renewals which neither materially add to the value of the property norappreciably prolong its life are charged to expense as incurred.

The Organization depreciates buildings over their estimated useful life of 39.5 yearsusing the straight-line method of depreciation. Equipment (vehicle) is depreciated overthe estimated useful life of five years using the double declining balance method fordepreciation.

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

Functional Allocation of ExpensesThe costs of providing the various programs and other activities have been summarizedon a functional basis in the statement of activities. Certain costs have been allocated toprograms based on the allowable program’s administrative purpose, not the allocablebenefit of that cost to the program served.

Income TaxesThe Internal Revenue Service has determined that the Organization meets therequirements of the Internal Revenue Code and is exempt from federal income taxunder section 5Olfc)(3) of the code. In addition, the Organization has been determinedby the Internal Revenue Service not to be a “private foundation” within the meaning ofSection 509(a) of the Internal Revenue Code.

Management of the Organization believes its activities allow it to continue to beclassified as an organization exempt from income tax under Section 501(c)(3) of theInternal Revenue Code and believes there are no activities subject to unrelatedbusiness income tax. The Organization files federal Form 990 with the InternalRevenue Service and copies of Form 990 with states in which the Organization isregistered, as required. The statute of limitations for examination of the Organization’sreturns expires three years from the due date of the return or the date filed, whichever islater. The Organization’s returns for the years ended December 31, 2013 through 2015,are still open for examination and management anticipates the statute of limitations forthe return for the year ended December 31, 2016, will expire in November 2020.

Fair Value of Financial InstrumentsThe carrying amount of cash and cash equivalents, receivables and liabilitiesapproximate fair value because of the short maturities of these instruments.

ReclassificationsCertain amounts in the 2015 financial statements have been reclassified to conform tothe 2016 presentation.

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NOTE 2—GRANTS RECEIVABLE

After a grant is awarded for a large specific amount covering a period usually of one tothree years, the Organization, depending upon the terms of the grant, makes primarilybi-monthly or monthly drawdowns. These are payments requests to the funder’s grantpayment system to recover allowable grant program expenses incurred. Normally, thefunder’s grant payment is immediate, and funds from the grant are posted to cash andgrant revenue. The amount of grants receivable consists of support earned under thecontracts through December 31, 2016 and 2015, of $263,992 and $294,578,respectively, based on the reimbursement terms of the contracts.

NOTE 3— PROPERTY AND EQUIPMENT

Property and equipment consist of the following as of December 31:

1213112016 1213112015Land and building $ 459.974 $ 459,974Furniture 11,000 11,000Vehicle 102,823 102,823

Total 573,797 573,797Less accumulated depreciation (146.500) (122,220)

Property and equipment, net $ 427,297 $ 451,577

NOTE 4— LOANS RECEIVABLE

Loans receivable (RBEG MicroLoan) represents money received from the NativeProject that was lent out in 2016 ($2,311) and 2015 ($18,000) for small business loansto help native Americans to begin new business enterprises. This money was receivedto make business loans to encourage economic development in the Native NavajoCommunity. Interest rate on these loans is at 5% charged on a monthly basis.

Loans are stated at unpaid principal balances, less the allowance for loan losses andnet deferred loan fees and unearned discounts. The accrual of interest on loans isdiscontinued at the time the loan is 90 days past due unless the credit is well-securedand in process of collection. Past due status is based on contractual terms of the loan.In all cases, loans are placed on nonaccrual or charged off at an earlier date if collectionof principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or chargedoff is reversed against interest income. The interest on these loans is accounted for onthe cash-basis or cost-recovery method, until qualifying for return to accrual. Loans arereturned to accrual status when all the principal and interest amounts contractually dueare brought current and future payments are reasonably assured.

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Allowance for Loan LossesThe allowance for loan losses is a valuation allowance for probable incurred creditlosses. Loan losses are charged against the allowance when management believes theuncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, arecredited to the allowance. Management estimates the allowance balance requiredusing past loan loss experience, the nature and volume of the portfolio, informationabout specific borrower situations and estimated collateral values, economic conditions,and other factors. Allocations of the allowance may be made for specific loans, but theentire allowance is available for any loan that, in management’s judgment, should becharged off. Charge-offs of loans are made by portfolio segment at the time that thecollection of the full principal, in management’s judgment, is doubtful. This methodologyfor determining charge-offs is consistently applied to each segment.

NOTE 5— LONG-TERM DEBT

This represents amounts loaned by an individual (Deborah Montgomery) for purchaseof land and building. The loan agreement dated April 1, 2010, has not been perfected,and is currently due in full on April 1, 2025, with interest payable annually at a rate of3%. The loan is secured by the real estate known as the Butler Building in Farmington,New Mexico.

Interest expense for the year ended December 31, 2016 and 2015 was $11,686 eachyear. The interest amounts are an accrued liability. The balance of the accrued interestpayable is $46,996 and $35,311 as of December 31, 2016 and 2015, respectively.

NOTE 6 — SUPPLEMENTAL CASH FLOW DISCLOSURES

Interest payments during the years ended December 31,2016 and 2015, were $0.

There was no income tax payments during the years ended December 31, 2016 and2015.

NOTE 7— RELATED PARTY TRANSACTIONS

The Organization began with monies advanced by Deborah Montgomery I Abramsenwho is currently serving as the Organization’s vice president. Deborah Montgomery IAbramsen is the 100% shareholder of a “for-profit” corporation (Resource Associates,Inc.). Resource Associates, Inc. continues, to a lesser degree, to assist theOrganization by funding expenditures for the Organization when cash flow is low.These expenditures are reimbursed when funding is received. The balance recorded inaccounts payable represents amounts due to Resource Associates, Inc. forexpenditures advanced.

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The Organization paid Resource Associates, Inc. $158,363 for contracted servicesduring the year ended December 31, 2016.

The amount recorded as long-term debt represents funds advanced by DeborahMontgomery for purchase of a building (Butler). The Organization moved to its newlocation, and pays rent to Resource Associates, Inc. for the use of its current facilities.The Organization collects rental income on the purchased real estate (Butler) and usesthis funding for paying for exempt purpose expenditures.

Rental properties and related leasehold improvements described in “Note 9 — Leases”were owned by ACT Investments, formerly a limited liability company wholly owned byDeborah Montgomery I Abramsen in 2016, and now an S Corp for which Mrs.Montgomery! Abramsen is the CEO.

NOTE 8 - CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Organization to concentrations of creditrisk consist principally of financial institution deposits, grants receivable and loanreceivables.

The Organization maintains various deposit accounts in one financial institution. As ofDecember 31, 2016 and 2015, the Organization had deposits which are covered by$250,000 of deposit insurance. The Organization has not experienced any losses insuch accounts and believes it is not exposed to any significant credit risk.

The ability to collect grants receivable resulting from grant agreements is affected bygeneral economic conditions of the governmental agencies. The Organization hasreviewed its grants receivable for concentrations of credit risk and has determined thatthere is no material concentration of credit risk to the Organization. Actual losses havehistorically been zero.

The Organization grants small business loans primarily in the Native Navajo Communityin New Mexico. The ability to collect loans receivable resuTting from loan agreements isaffected by general economic conditions of its debtors’ and their ability to honor theircontracts which is dependent upon the employment and economic conditions within thearea. The Organization has reviewed its loans receivable for concentrations of creditrisk and has determined that there is no material concentration of credit risk to theOrganization. Actual losses have historically been zero.

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NOTE 9— LEASES

Depending upon program need of rental space programs pay varying amounts [ormonthly lease expense. Lease contracts were signed in 2016 designating monthlyrental amounts as follows: Lease payments were contracted at $3,486 monthly for 414W Broadway, $8,421 monthly for 410 W Broadway and $5,191 monthly for 418 W.Broadway (all located in Farmington, New Mexico). Lease amount of $1,944 monthlywas contracted for 115 Kinsley, Winslow, Arizona. In 2015, similar amounts were paidfor rent of $15,627 for the Broadway properties, and no rent for 115 Kinsley in Winslow,Arizona.

Lease expense for real estate was included in occupancy expense in the amounts of$164,902 and $170,814 for the years ended December 31, 2016 and 2015,respectively.

NOTE 10 - MAJOR SOURCE OF FUNDING

For the years ended December 31, 2016 and 2015, the Organization receivedapproximately 81 percent and 86 percent, respectively, of its revenues from contractswith federal agencies.

NOTE If - CONTINGENCIES AND COMMITMENTS

GrantsThe Organization receives financial assistance from federal and state sources in theform of grants. The disbursements of the funds received are generally limited tospecific compliance requirements as specified in the grant agreement. The federal andstate agencies reserve the right to review the scope of the audit and conduct a follow-upreview if deemed necessary. Any disallowed claims resulting from such audits couldbecome a liability of the Organization. The Organization, however, believes thatliabilities resulting from disallowed claims, if any, will not have a material effect on thefinancial position.

NOTE 12— SUBSEQUENT EVENTS

As of September 24, 2018 (date the financial statements were available to be issued),the Organization has evaluated events and transactions occurring subsequent toDecember 31, 2016. Subsequent events occurring after September 24, 2018 have notbeen evaluated by management. No material events have occurred since December31, 2016 that requires recognition or disclosure in the financial statements.

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NOTE 13— RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers,which requires an entity to recognize revenue to depict the transfer of promised goodsor services to customers in an amount that reflects the consideration to which the entityexpects to be entitled in exchange for those goods or services. An entity also shoulddisclose sufficient quantitative and qualitative information to enable users of financialstatements to understand the nature, timing, and uncertainty of revenue and cash flowsarising from contracts with customers. The new standard is effective for theOrganization for annual periods in fiscal years beginning after December 15, 2018 (asamended in August 2015 by ASU 2015-14, Deferral of the Effective Date). TheOrganization has not yet determined the effect of the new standard on its currentpolicies for revenue recognition.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), whichsupersedes FASB ASC Topic 840, Leases, and makes other conforming amendmentsto U.S. GAAP. ASU 2016-02 requires, among other changes to the lease accountingguidance, lessees to recognize most leases on-balance sheet via a right of use assetand lease liability, and additional qualitative and quantitative disclosures. ASU 2016-02is effective for the Organization for annual periods in fiscal years beginning afterDecember 15, 2019, permits early adoption, and mandates a modified retrospectivetransition method. While the Organization expects ASU 2016-02 to add significant right-of-use asserts and lease liabilities to the balance sheets, it is evaluating other effectsthat the new standard will have on the financial statements.

In August 2016, the FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958):Presentation of Financial Statements of Not-for-Profit Entities. ASU 2016-14 simplifiesand improves how not-for-profit entities classify net assets as well as the informationpresented in financial statements and notes about liquidity, financial performance, andcash flows. ASU 2016-14 is effective for the Organization for fiscal years beginningafter December 15, 2017, and permits early adoption. While the Organization expectsASU 2016-14 to add significant disclosures to the financial statements, it is evaluatingother effects that the new standard will have on the financial statements presentation.

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SINGLE AUDIT SECTION

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Capacity Builders IncSchedule of Expenditures of Federal Awards

For the Year Ended December 31,2016

Federal Grantor/Program or Cluster Title Federal CFDA Pass-through Grantor! Number FederalNumber Expenditures

Other ProgramsCorporation for National and Community Service

AmenCorps 93006 N/A 211476Total Corporation for National and Community Service 211,476

United States Department of JusticeJustice Systems Response to Families 16 021 N!A 13,165Juvenile Justice and Delinquency Prevention 16540 NM Governors OITrce ot Youth NA 54.173Children of Incarcerated Parents 16 631 NA 64,934

Total United States Department of Justice 132,342

Department of LaborYouthBuild 17274 NA 23,289

Total Department of Labor 23,289

Department at EducationFeed for the Improvement of Educalion 64 215 NA 409,030

Total Department of Education 409,030

Department of Health and Human ServicesAffordable Care Act (ACA) Personal Responsibility Education Program 93092 NA 35,585Title V State Sexual Risk Avoidance Edscalion (Title V State SRAE) 93 235 NM Department at Health,f’L’A 300Substance Abuse and Mental Health Services Proiecls at Regional and NationalSignificance 93243 N/A 133,419Drug-Free Communities Support Program Grants 93 276 N/A 123,609Community Servicen Block Grant Discretionary Awards 93570 N/A 399,801Native American Programs 93612 N-A 259,133Children’s Health Insurance Program 93767 NA 33,280

Total Department of Health and Human Services 985,327

Small Business AdministrationPrime Technical Assistance 59 050 N-A 9.393

Total Small Business Adminisfration 9,393

United States Department at AgricuhureFarmers Market Promotion Program 10168 NA 36,678Rural Business Development Grant 10351 NM USDA,N!A 126,809Rural Cortvnunrty Development Initiative 10446 NM USOA,N’A 51,377

To tat United Slates Department olAgnculture 214,864

Tor3l Expenditures of Federal Awards S 1985,721

SEE NOTES TD ThE SCHEDULE OF EXPENDIThRES OF FEDERAL AWARDS-18-

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CAPACIATY BUILDERS, INC.NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSYear Ended December 31, 2016

NOTE I — BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards (the Schedule) includesthe federal award activity of Capacity Builders, Inc. under programs of the federalgovernment for the year ended December 31, 2016. The information in this Schedule ispresented in accordance with the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Because the Schedule presentsonly a selected portion of the operations of Capacity Builders, Inc., it is not intended toand does not present the financial position, changes in net assets, or cash flows ofCapacity Builders, Inc.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) Expenditures reported on the Schedule are reported on the accrual basis ofaccounting. Such expenditures are recognized following the cost principlescontained in the Uniform Guidance, wherein certain types of expenditures are notallowable or are limited as to reimbursement.

(B) Capacity Builders, Inc. has elected to use the 10 percent de minimis indirect costrate as allowed under the Uniform Guidance.

(C) The Organization did not provide any federal awards to subrecipients during theyear.

(D) There were no federal loans or loan guarantees outstanding at year-end.

NOTE 3 — RECONCILIATION OF SCHEDULE OF EXPENDITURES OF FEDERALAWARDS TO FINANCIAL STATEMENTS

Total federal awards expended per Schedule ofExpenditures of Federal Awards $1,985,721

Total expenditures funded by other sources 2,086,280

Total expenditures $4.072.001

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DA VII) BERR Y, CPA, PC 305 N Behrend, Farminton, New Mexico 87401

e-mail daviddbenycpa cornCERTIFIED PUBLIC ACCOUNTANT! SMALL BUSINESS CONSULTANT 505-320-6670

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with the auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards issued by the Comptroller General of the United States, the financial statements ofCapacity Builders, Inc. (a nonprofit organization), which comprise the statement of financial positionas of December 31, 2016, and the related statements of activities, and cash flows for the year thenended, and the related notes to the financial statements, and have issued our report thereon datedSeptember 24, 2018.

Internal Control Over Financial ReportingIn planning and performing our audit of the financial statements, we considered the Organization’sinternal control over financial reporting (internal control) to determine the audit procedures that areappropriate in the circumstances for the purpose of expressing our opinion on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of theOrganization’s internal control. Accordingly, we do not express an opinion on the effectiveness of theOrganization’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, to prevent,or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or acombination of deficiencies, in internal control, such that there is a reasonable possibility that amaterial misstatement of the entity’s financial statements will not be prevented, or detected andcorrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,in internal control that is less severe than a material weakness, yet important enough to meritattention by those charged with governance.

Our consideration of intemal control was for the limited purpose described in the first paragraph ofthis section and was not designed to identify all deficiencies in intemal control that might be materialweaknesses or significant deficiencies and therefore, material weaknesses or significant deficienciesmay exist that have not been identified. We did identify certain deficiencies in internal control,described in the accompanying schedule of findings and questioned costs that we consider to bematerial weaknesses. (2016-001, 2016-002 and 2016-003)

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Page Two

Compliance and Other MattersAs part of obtaining reasonable assurance about whether the Organization’s financial statements arefree from material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinionon compliance with those provisions was not an objective of our audit, and accordingly, we do notexpress such an opinion. The results of our tests disclosed no instances of noncompliance or othermatters that is required to be reported under Government Auditing Standards.

Organization’s Response to FindingThe Organization’s response to the findings identified in our audit is described in the accompanyingschedule of findings and questioned costs. The Organization’s response was not subjected to theauditing procedures applied in the audit of the financial statements and, accordingly, we express noopinion on it.

Purpose of this ReportThe purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness of theOrganization’s internal control or on compliance. This report is an integral part of an audit performedin accordance with Government Auditing Standards in considering the Organization’s internal controland compliance. Accordingly, this communication is not suitable for any other purpose.

e eFarmington, New MexicoSeptember 24, 2018

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DA VID BERR Y, CPA, PC 305 N Behrend, Fwmington, Naw Mexico 87401

e-mail david@dbenycpacomCERTIFIED PUBLIC ACCOUNTANT I SMALL BUSINESS CONSULTANT 505-320-6670

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACHMAJOR PROGRAM AND ON INTERNAL CONTROL OVERCOMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE


Report on Compliance for Each Major Federal ProgramWe have audited Capacity Builders, Inc. compliance with the types of compliance requirementsdescribed in the 0MB Compliance Supplement that could have a direct and material effect on eachof the Organization’s major federal programs for the year ended December 31, 2016. TheOrganization’s major federal programs are identified in the summary of auditor’s results section ofthe accompanying schedule of findings and questioned costs.

Management’s ResponsibilityManagement is responsible for compliance with the requirements of laws, regulations, contracts, andgrants applicable to its federal programs.

Auditor’s ResponsibilityOur responsibility is to express an opinion on compliance for each of the Organization’s majorfederal programs based on our audit of the types of compliance requirements referred to above. Weconducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States; and the auditrequirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform AdministrativeRequirements, Cost Principles, and Audit requirements for Federal Awards (Uniform Guidance).Those standards and the Uniform Guidance require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the types of compliance requirementsreferred to above that could have a direct and material effect on a major federal program occurred.An audit includes examining, on a test basis, evidence about the Organization’s compliance withthose requirements and performing such other procedures as we considered necessary in thecircumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each majorfederal program. However, our audit does not provide a legal determination of the Organization’scompliance.

Opinion on Each Major Federal ProgramIn our opinion, the Organization complied, in all material respects, with the types of compliancerequirements referred to above that could have a direct and material effect on each of its majorfederal programs for the year ended December 31. 2016.

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Page Two

Other MattersThe results of our auditing procedures disclosed other instances of noncompliance, which arerequited to be reported in accotdance with the Uniform Guidance and which are described in theaccompanying schedule of findings and questioned costs as item 2015-002. Our opinion on eachmajor federal program is not modified with respect to these matters.

The Organization’s response to the noncompliance findings identified in out audit is described in theaccompanying schedule of findings and questioned costs. The Organization’s response was notsubjected to the auditing ptocedutes applied in the audit of compliance and, accordingly, we expressno opinion on the response.

Report on Internal Control Over ComplianceManagement of the Organization is responsible for establishing and maintaining effective internalcontrol over compliance with the types of compliance requirements referred to above. In planningand performing our audit of compliance, we considered the Organization’s internal control overcompliance with the types of requirements that could have a direct and material effect on each majorfederal program to determine the auditing procedures that are appropriate in the circumstances forthe purpose of expressing an opinion on compliance for each major federal program and to test andreport on internal control over compliance in accordance with the Uniform Guidance, but not for thepurpose of expressing an opinion on the effectiveness of internal control over compliance.Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal controlover compliance.

A deficiency in internal control over compliance exists when the design or operation of a control overcompliance does not allow management or employees, in the normal course of performing theirassigned functions, to prevent, or detect and correct, noncompliance with a type of compliancerequirement of a federal program on a timely basis. A material weakness in internal control overcompliance is a deficiency, or combination of deficiencies, in internal control over compliance, suchthat there is a reasonable possibility that material noncompliance with a type of compliancerequirement of a federal program will not be prevented, or detected and corrected, on a timely basis.A significant deficiency in internal control over compliance is a deficiency, or a combination ofdeficiencies, in internal control over compliance with a type of compliance requirement of a federalprogram that is less severe than a material weakness in internal control over compliance, yetimportant enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in thefirst paragraph ot this section and was not designed to identify all deficiencies in internal control overcompliance that might be material weaknesses or significant deficiencies and therefore, materialweaknesses may exist that were not identified. We did not identify any deficiencies in internal controlover compliance that we consider to be material weaknesses. However, we identified certaindeficiencies in internal control over compliance, as described in the accompanying schedule offindings and questioned costs as item 2015-001 that we consider to be a material weakness.

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Page three

Organization’s Response to FindingThe Organizations response to the internal control over compliance findings identified in our audit isdescribed in the accompanying schedule of findings and questioned costs. The Organization’sresponse was not subjected to the auditing procedures applied in the audit of compliance and,accordingly, we express no opinion on the response.

The purpose of this report on intemal control over compliance is solely to describe the scope of ourtesting of internal control over compliance and the results of that testing based on the requirementsof the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Vacid &Farmington, New MexicoSeptember 24, 2018

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CAPACIATY BUILDERS, INC.SCHEDULE OF FINDINGS AND QUESTIONED COSTSYear Ended December 31, 2016

A. SUMMARY OF AUDIT RESULTS

Financial Statements:1. Type of auditor’s report issued Unmodified

2. Internal control over financial reporting:a. Material weakness identified7 Yesb. Significant deficiencies identified not considered to be

material weaknesses7 Noc. Noncompliance material to financial statements noted’ None noted

Federal Awards:1. Internal control over major programs:a. Material weakness identified’ Yesb. Significant deficiencies identified not considered to be

material weaknesses’ No

2. Type of auditor’s report issued on compliance for major programs Unmodified

3. Any audit findings disclosed that are required to be reported inaccordance with Uniform Guidance Yes

4. The programs tested as major programs included:

Direct Award:Corporation for National and Community Service:

Americorp - CFDA#94.006 $ 211,476U.S. Department of Education:

Fund for the Improvement of Education (PEP) - CFDA84.215 409,030U.S. Department of Health and Human Services:

Native American Programs - CFDN93.612 259,733Community Services Block Grant — Discretionary

Awards — CFDA #93.570 399,801Total

5. The threshold for distinguishing Types A and B programs was $750,000

6. Auditee qualified as low-risk auditee’ No

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B. FINDINGS — FINANCIAL STATEMENTS AUDITPrior Year Findings:201 4-002 — Resolved in current year and not repeated.

Current Year Findings:

2016-001 —General Ledger Accounts not Reconciled (Material Weakness)

ConditionThe Organization did not reconcile all of the general ledger balances on a timely basis.Cash, receivables, prepaid expenses, accounts payable and deferred grant revenueaccounts were not reconciled on a timely basis.

CriteriaThe Organization should establish and maintain an internal control structure to providemanagement with reasonable assurance that assets, liabilities and equity accounts arereconciled on a timely basis to safeguard assets and permit the preparation of financialstatements in accordance with GAP.

CauseThe Organization does not have procedures in place to ensure that year-end assetbalances, liability balances and equity balances are recorded and reconciled on a timelybasis.

EffectGeneral ledger asset, liability and equity account balances were misstated on thegeneral ledger and the preparation of financial statements was not be in accordancewith GAAP.

RecommendationThe Organization should establish and maintain an internal control structure to providemanagement with reasonable assurance that assets, liabilities and equity accounts arereconciled on a timely basis to safeguard assets and permit the preparation of financialstatements in accordance with GAAP. The Organization should review COSO’s InternalControl — Integrated Framework (the COSO framework) which defines and describesfive components of internal control.

Management ResponseCash has been and are being reconciled monthly and all other accounts have been andare being reconciled on a quarterly basis in 2017 and 2018. Management and Board in2017 reviewed the policies and COSO’s Internal Control Framework to make additionsand changes to the Policies and Procedures. Management and Board will again do thesame thing, in addition to contracting with a CPA for the same thing.

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2016-002 — Reporting Schedule of Expenditures of Federal Awards (SEFA)(Material Weakness)

ConditionThe SEFA as originally prepared by management was not reconciled to general ledgerexpenditures. This resulted in significant delays in being able to obtain a finalcompleted SEFA and related supporting documentation.

CriteriaSection 49 Code of Federal Regulations (CFR) Section 18.20(b)(2) and 2 CFR Section200.302(b), as applicable, require that grantees have internal control procedures inplace to provide reasonable assurance that reliable, accurate, and complete disclosureof the expenditures of federal awards of grants are presented in the SEFA.

CauseThe Organization has experienced staff turnover and has implemented a newaccounting system in the last couple of years.

EffectThe staff turnover and implementation of the new accounting system has caused theexpenditures not be reconciled timely and caused the delays in obtaining the finalcompleted SEFA.

RecommendationThe Organization should continue to train existing staff and implement, and monitor,internal control procedures in place to provide reasonable assurance that reliable,accurate, and complete disclosure of the expenditures of federal awards of grants arepresented in the SEFA.

Management ResponseThe Organization did change from QuickBooks to a fund accounting system. Since2016 and early 2017 the Organization has not been experiencing staff turnover inFinance as much as in the past. All Finance staff have been cross-trained onBlackBaud and internal processes and internal controls and will continue to do so in thefuture.

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2016-003 — Processed Checks not Released (Material Weakness)

ConditionThe Organization prepared checks but did not release the checks on a timely basis dueto cash flow requirements. Some checks were held over six months and needed to bevoided because the bank would not clear stale (old) checks. New checks were issuedfor the expenses for the voided checks.

CriteriaThe Organization should establish written policies and procedures to record expenses inthe proper accounting period based on accrual basis of accounting and release thechecks when dated.

CauseThe Organization prepared checks but did not release the checks on a timely basis dueto cash flow requirements. Some checks were held over six months and needed to bevoided

EffectMaterial errors could occur and not be discovered on a timely basis.

RecommendationThe Organization should establish written policies and procedures to record expenses inthe proper accounting period based on accrual basis of accounting and release thechecks when dated.

Management ResponseOpen checks are reviewed monthly and addressed as to whether the invoice can bepaid or whether it should go into a note payable account rather than into accountspayable. The Organizations Policies and Procedures will be reviewed and updated ifnecessary by Management, Board and an outside CPA consultant.

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C. FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDITPrior Year Findings:201 5-001 — Not resolved in current year and repeated.2015-002 — Not resolved in current year and repeated.

Current Year Findings

2015-001 — Inadequate Documentation of Internal Control Components OverUniform Guidance and 0MB Compliance Supplement (Material Weakness)

ConditionThe Organization does not have adequate documentation of its internal controlcomponents over the Uniform Guidance requirements and 0MB ComplianceSupplement.

CriteriaThe Organization should establish and maintain an internal control structure to providemanagement with reasonable assurance that the Organization is compliant with therequirements of the Uniform Guidance and 0MB Compliance Supplement.

CauseThe Organization has not adequately documented its internal control components.

EffectThe Organization could be out of compliance with the types of compliance requirementsof the 0MB Compliance Supplement and the Uniform Guidance. The Organization isresponsible for internal control over compliance with the types of requirements thatcould have a direct and material effect on each major federal program

RecommendationThe Organization should establish and maintain an internal control structure to providemanagement with reasonable assurance that the Organization is compliant with therequirements of the Uniform Guidance and 0MB Compliance Supplement. TheOrganization should review COSO’s Internal Control — Integrated Framework (theCOSO framework) which defines and describes five components of internal control.The integrated internal control framework should be consistent with the Standardsestablished in the GAO “Green Book.”

Management ResponseManagement, Board and now an outside CPA will continue to review, develop, anddocument more thoroughly our internal control policies and procedures over the UniformGuidance and 0MB Compliance, and continue to include program and Finance staff intrainings, as well as review their work regularly for compliance.

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2015-002 — Late Filing of Federal Clearing House Reporting (Other Matters)

ConditionThe December 31, 2016 audit report and data collection form were not sent to theFederal Clearing House before the due date of either 30 days after the date of the auditreport or nine months after the year end.

CriteriaThe Uniform Guidance requires the Federal Clearing House Data Collection Form andthe audit report be filed either one month after the date of the audit report release, ornine months after the year end.

CauseInformation required to complete the audit was not available from the Organization.

EffectThe audit report was not available for the filing of the Federal Clearing House report ona timely basis.

RecommendationWe recommend that all information be made available to the auditor on a timely basis.

Management ResponseManagement will make every effort to ensure that all information requested by theauditor will be provided on a timely basis to allow for earlier completion of the audit.

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.4 UOt C

CAPACITYBtd&iei;i0 2514 4ft’,s.ts,,

AUDIT OF 2016CORRECTION ACTION PLAN

2016—001: GLAccounts not Reconciled.Recommendation: The organization should establish and maintain an internal control structure toprovide management with reasonable assurance that assets, liabilities and equity accounts arereconciled on a timely basis to safeguard assets and permit the preparation of financial statements inaccordance with GMP. The Organization should review COSO’s Internal Control-Integrated Framework(the COSO framework) which defines and describes five components of internal control.Action Taken: Processes have changed since 2016. Cash is reconciled monthly and all other accountsare being reconciled on a quarterly basis in 2017 and 2018. Management and Board have reviewed thepolicies in light of COSO’s Internal Control Framework in 2017 and made changes to the forms,processes and CBI Policies and Procedures. However, Management and Board in an effort of continuousimprovement will review again the internal controls set in place, as well as the CBI Policies andProcedures and the COSO’s Internal Control Framework again by November 30, 2018 and make anychanges and additions necessary, and make sure pertinent staff are trained on any changes made. Staffare being trained and cross-trained weekly one-on-one and in group sessions. One of the topics that willbe covered in the future will be the COSO Framework/Five Components of Internal Control. The GrantsFiscal Administrator in finance will notify Management monthly of any needed changes orimprovements for discussion, then add those changes to the Policies and Procedures, and then notify allpertinent staff of same. Management is currently reviewing on-line information and contacting CPAfirms in New Mexico who have expertise in federal funding, nonprofit organizations, internal controls,and auditing. We anticipate finishing the interviews and selecting someone to contract with byNovember 15 to review our processes, policies and procedures for any deficiencies and advise onchanges, and our trainings. Those changes will be published and all CBI staff will be provided a copy andreturn/sign a form to verify they have read and understand the Policies and Procedures. Financemanagement and senior grant management staff will provide staff with training on current and newpolicies.

2016-002 — Reporting Schedule of Expenditures of Federal Awards:Recommendation: The Organization should continue to train existing staff and implement and monitorthe internal control procedures in place to provide reasonable assurance that reliable, accurate andcomplete disclosure of the expenditures of federal awards of grants are presented in the SEFA.Action Taken: After review of several types of systems, CBI did change to a fund accounting system(BlackBaud) in late 2015 to more efficiently financially manage multiple grants that Quick8ooks was notable to handle. Plus the new system is more time efficient, and would directly tie expense requests tothe accounting system and not rely on information through, for example, Excel spreadsheets to betransferred manually to the accounting system. While transferring data and setting up our new system,

transforming communities one grant at a time

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the program was customized by BlackBaud, therefore, some of their new user trainings were notapplicable. But Finance arranged for on-site trainings in 2016 to offset the learning curve thatBlackBaud and other fund accounting systems noted would happen. Since early 2017, CBl hasexperienced less staff turnover in Finance. All Finance staff have been cross-trained on BlackBaud,internal processes and internal controls to the extent that if someone were to suddenly leave, one ormore staff could take over any departing employee’s duties smoothly and efficiently. There continuesto be weekly one-on-one and group training and cross training of all Finance staff by our Grants FiscalAdministrator. The Grants Fiscal Administrator and Executive Director will periodically monitor thestaff’s performance and the internal control methods to make sure the processes are working properly.If they are not, the staff will be trained, and if the issue is the process itself, then it will be discussedinternally, and if necessary, an outside CPA, to change roles, processes, forms, etc. to ensureexpenditures are reconciled timely and accurately. Topics covered in the past year include contractmanagement, budget management and analysis, Blackbaud processes, internal controls, financialpreparation and analysis. CBI Finance staff will continue to have up to date training and review ofprocesses to ensure accurate reporting to the program officer and executive director. Future trainingswill include accrual based accounting, the GAO “Green Book”, grant contract budgets, constructingbudgets, preparation of FFR’s, funder financial statements, COSO Framework/five components ofinternal controls, and our internal controls. The Grants Fiscal Administrator, Finance staff and theExecutive Director also review and update the Finance Department instructional manual quarterly. AllCBI staff are given a copy of the updated CBI Policies and Procedures annually, new staff are given acopy to read as part of the on-boarding, interim changes are published via email and meetings, andmanagement staff have an open door policy and are always available for questions.

20 16-003 — Processed Checks not ReleasedRecommendation: The Organization should establish written policies and procedures to recordexpenses in the proper accounting period based on accrual basis of accounting and release the checkswhen dated.Action Taken: The process has changed since 2016. CBI stop holding checks in 2017. CBI Policies andProcedures will be reviewed and updated if necessary, as well as Finance Department staff Blackbaudinstructional documents.

2015—001— Inadequate Documentation of Internal Control Components Over Uniform Guidance and0MB Compliance Supplement.Recommendation: The Organization should establish and maintain an internal control structure toprovide management with reasonable assurance that the Organization is compliant with therequirements of the Uniform Guidance and 0MB Compliance Supplement. The Organization shouldreview COSO’s Internal Control—Integrated Framework (the COSO framework) which defines anddescribes five components of internal control. The integrated internal control framework should beconsistent with the Standards established in the GAO “Green Book”.

FLtO€R$ fO

CAPACITYBiI1)ei;:;transforming communiPes one grant at a time

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4U1 . .wt C

cAPACrTv?3dpei;1 .Action Taken: CBI continua ly reviews internal policies an Finance epartment procedures. All Financetransform1,10 Cornmtiflitf1S one cirant at.a time . , .staff are required upon hire to compieteihe on-line grants Mnanciai Management Training’ provided

by the U. S. Department of Justice. They also receive on the job training and instruction on theprocesses and procedures of CBI Finance Department and BlackBaud usage. Management updated thePolicies and Procedures in 2017 in light of the GOA “Green Book’. However, in an effort for continuousimprovement, as stated above, Management, the Board and an outside CPA consultant will review,develop, and document more thoroughly our internal control policies and procedures over the UniformGuidance and 0MB Compliance, continue to include Program and Finance staff in trainings, as well asregularly test the processes and review staff work for compliance.

CAPACICVaUIW€RS ‘WQ

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812t2019 1O;41I9AM Capacity Builders Inc. Page 1

Income StatementLOU GOS

Actual11112017 to1213112017

CBt-LOIJ CO - CR1-Lou Go Cab Company

Revenues

10-43452 Donations for CBI Program $215600

lt(-47200 Program income 562,226.1610-47230 Membership Dues ($248 50)10-47250 Lou Go’s Revenue $220,588.47

Total Revenues $303,722.13

Expenses

10-60900 Business Registration Fees $315.0010-61100 Bank Service Charges $L57$ 2010-62100 Contract Services $283.8510-62185 Auto Repairs & Maintenance $lO.344,2910-6284t) Equip Maintenance and Rental $7,940.77

10-62891 Utilities $40.9010-65000 Operations $78 4510-65010 Subscriptions & Background/Reference CIte $9536410-65040 Supplies $9,372.95

10-65050 Telephone, Telecommunications 52590.0310-65 130 insurance - Auto $13,493.52

10-65171) Insurance - Medical 52.3000010-65210 Advertising/Printing $743.3110-65310 Vendor BoolWRegistralion Fees $474.85

10-65350 Conferences and Events $759.0010-66000 Payroll E\penscs $3.32$.0010-66800 Fringe Benefits $582.7210-67001) Contractual $94,944.01

10-67051) Contractual Other/l0)0 $948 89

10-67100 Advertising $11,961.12tO-674t) I Other/Consultant Fees $5,000,111)1(1-6760(1 Veb Hosting $800.0010-68300 Travel and Meetings $80.0010-683 tO Meals 5466,121(1-68320 fuel $29,445.53

10-68330 Mileage $t7SMO

10-68350 Motel/Hotel/Lodging $1,942.5010-68360 Air/Train/Car - Fare 53.885,01

Total Expenses $204,833.66

NET SURPLUS/(DEFlC1T $99,888.47

8123/2019 104t,S8AM Capacity Builders Inc. Page 1

Income StatementLOU GO’S

Actual111/2018 to12/31/2018

CR1-LOU GO - CBI-Lou Go Cab Company

Revenues

tt)-43452 Donations for CBI Program $3,573 0010.47200 Program Income $30,750.291047250 Lou Go’s Revenue $263207981047251 Taxi Top Resenuc $2,200.0010-47252 Medical Transport Rccmtc $191.9510-47254 Limousine Revenue S 1,966.15

Total Revenues S302,t89.37

Expenses

1(1-61)904) Business Registration Fees $20004)10-61100 Bank Service Charges $4lt).0{)10-62100 Contract Senices $400.0010-6214(1 Legal Fees 51.593.2%tO-62l55 Merchant Fees $225.00lt)—62 185 Atito Repairs & Maintenance $ 16.881 3610-62800 Facilities and Equipment $1,592 4t)10-62840 Equip Maintenance and Rental SI3.41)7.9510-62890 Rent $5,400.0010-64621 Credit Card Fees $3,750.5810-65(10(1 Operations $1,671 20

10-65020 Postage. Mailing Service $2.6610-65040 Supplies $8.55 1.8810-65050 Telephone. Telecommunicalions $9.0 14.5%I0-65 130 Insurance. Auto $2l.%57.I910-652 It) Advertising/Printing 54.1923310-6531)) Vendor Booth/Registration Fees $520.00J0-6535t) Conferences and Events $87.5010-66000 Payroll Expenses $520.0010-66300 Stipends $590.04)10—6635(4 Incentive $2,100.0010-66800 fringe Benefits $72.4504-67000 Contractual $134318.6910-67100 Advertising $505.0010-68310 MeaTs $256.04)10-68320 Fuel 537.094 02I0-68330 Mileage $102.4010-68350 Motel/HoteULodging $418.85

Total Expenses 5259.735.32

8/23/2019 10:4158AM Capacity Builders Inc. Page2

Income StatementLOU GO’S

Actual111/2018 to12/31/2018

NET SURPLUS/(DEFICIT) $42,454.05

Satehae!

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Show Quads

1

4hti*z• N2:

49o170

San Juan County, New Mexico (2017 American Community Survey)

Elliiiicity Population %Category

Black 1,181 2%Hispanic (not 25,580 20%counted as arace) 20%Hispanic,80% non-Hispanic. for100%

Asian or 49 1%PacificIslanderAmericsti 50,014 39%Indian orAlaskanNativeWhite 5,216 51%Other ],16$ 1%

* 100%

% Populatlo Seniors & Personsn with Disability

Category1% 11,470 Seniors (no disabiLity)

14.80% 18,662 Persons withDisabilities (includingseniors)

6% )5,574 Other (everyone else)

100%

Gallup CCD, New Mexico (2017 American Community Survey)

Ethnicity Population %Category

Black 309 1%Hispanic (not 1,982 33%counted as arace) 33%Hispanic.67% non-Hispanic, for100%

Asian or [74PacificIslanderAmerican 10,642 4%Indian orAlaskanNativeWhite i,512Other 3,143 13%

* tOO%

% Populatto eniols & Persons withu tisability Category

6% 1,470 Seniors (no disability)

15.4% 3,701 ersons tvith Disabilitiesincluding seniors)

78.6% 18,909 )ther(eveiyone else

100%

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Line# Categoty 2018 2019* 2020Projected

1 Aimual Ridership 0* 0* 2,400

2 Annual Mileage 0* 0* 36,000

3 Annual Vehicle Hours 0* Q* 26,400

*This is a new service that has not been offered by Lou Go’s in the proposed service areas. Ourestimates are based off our current programming that is being offered now in a different service area.

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Program coordination was conducted for this service area. However, no response was received.

Lou Go’s reached out to Navajo Transit specifically.

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CAPACITYfltik)transfwma’g tomnoratms on, grant at a t,ma

August 23, 2019

New Mexico Department of TransportationTransit and Rail DivisionP.O. Box 1149Santa Fe, New Mexico87504-1149

To Whom It May Concern:

As the Authorized Organizational Representative for Capacity Builders, Inc., (CBI) I am offeringthis letter to confirm the source and amount of matching funds for the Section 5310 and 5311funding. The matching funds (5280,240) will be from CBI sources.

Of the total match 5172,491.62 will be dedicated to 5311 projects and $107,747.71 will bededicated to 5310 projects. Each match is for the appropriate minimum match for each project.The total requested funds from NMDOT is $1,025,481. The match amount meets therequirements for each project. If there are further questions concerning the CB] match amountand sources, please contact me at 505-326-4245 or by email at aorcapacitybuilders.info

Sincerely,

Merrissa Johnson, Executive DirectorCapacity Builders, Inc.

Natte; flcucjc’lRural 1ta1Cooperati’ns ,

a t ‘S— bi ‘j’ n N,ti’io ‘t S

0)Victor C. Snover

_______

Austin R. Randall

_______________________

Sherri A. SipeMayor Pto-TcniRosalyn A. Fry

Mark E. Lewis

A desirable placc to bee, work and play: rich i,, hixto, and .cmoll town values!

August 20, 2019

Ms. Deborah BachRural Transit Programs ManagerNMDOT Transit and Rail DivisionP0 Box 1149Santa Fe, New Mexico, 87504-1149

Ms. Bach,

On behalf of The City of Aztec, I am pleased to offer this letter of support for CapacityBuilders, Inc. in their application for the FY 21 5310 and 5311 grant to provideparatransit services to the residents of San Juan County.

Capacity Builders, Inc. is well-positioned to coordinate the interests and efforts ofcommunity groups to address the transportation needs for all residents of San JuanCounty as they enhance strategies for implementation to provide improved access tothe community. This committee-based team approach with other communityorganizations will identify gaps and solutions, and be ready to implement strategic plansthat address transportation needs in our area — especially for the disabled and elderly.

We know that reliable transportation can be one of the greatest obstacles for the elderlyand disabled individuals in our area and we know that this can lead to negative healthoutcomes.

The City of Aztec offers its support and encourages Community Leaders to supportCapacity Builders, Inc.’s initiative to make our community a better place to live and workby improving transportation for the elderly and disabled In Farmington, Aztec,Bloomfield and the rest of San Juan County.

Sin

Mayor, City of Aztec

201 W. Chaco St. + Aztec, New Mexico 87410 + (505) 334-7600 + Fax: (505) 334-7609www.aztecnm.gov + + + Winner All American City Award + + + www.aztecnm.com

efti iIrxcrr $i1f2 $imtte

RANKING MEMBER; h . Conservation

MEMBEREducation

SENATOR WilliAM E. SHARER -0)5cc (50s) 32.j-5O,R-San Juan-i Homc (505) 564-5640

P0 Box 203Fax t505) 327-9167

Farrnington, NM 87499 August 16, 2019

Deborah BachRural Transit Programs ManagerNMDOI Transit and Rail DivisionP0 Box 1149Santa Fe, NM 87504-1149

RE; Capacity Builders, Inc Application for FY21, 5310 and 5311 Grants

Dear Ms. Bach,

lam pleased to offer this letter of support for Capacity Builders, Inc. in their application for the FY21

5310 and 5211 grants.

Capacity Builders, Inc. is well-positioned to coordinate the interests and effort of community groups toaddress the transportation needs of all residents of San Juan County as they enhance strategies for

implementation to provide improved access to the community. This committee-based team approachwith other community organizations will identify gaps and solutions and be ready to implement strategicplans that address transportation need in our area — especially for the disable and elderly.

As a New Mexico State Senator, I am a strong supporter of Capacity Builders. I know that reliabletransportation is one of the most important issues for people in our area. We all know that lack oftransportation can lend to negative health and economic outcomes.

It is my hope that you will help us, through these grants, to make our community a better place to liveand work by improving the transit in Farmington, Aztec, Bloomfield and the rest of San Juan County.

Sincerely,

William SharerState Senate, District 1

Program Justification

Capacity Btiilders, Inc. (CBI). a nonprofit based in farmington. New Mexico, is

requesting 5310 and 5311 funding to provide much needed transportation services for senior

citizens and individuals who are disabled as we address the needs of both Fannington and Gallup

New Mexico. Both communities are comprised of significant aging populations as well as people

with disabilities that do not have access to transportation services. The benefits of this proposed

project are significant and important to seniors, people with disabilities, and low-income

individuals within the target area by increasing access to transportation for essential needs.

According to the U.S. Census Bureau QuickFacts. the population of the target area

includes San Juan County, New Mexico at 126,926 (includes the population of farmington at

45,450). and McKinley County, New Mexico at 75.564. tVithin this region 14.3% in San Juan

Count-v are 65 years and over, and 11.8% in McKinley County. Collectively these percentages

represent an estimated 32,280 seniors in the target area. In addition, 9.5% of people in San Juan

County have a disability, and 10.3% in McKinley County. These percentages represent an

estimated 19,806 peopLe with disabilities. There is a significant portion of the total population

that vi1l benefit from improved transportation services. What makes these numbers even more

important is the vast land mass of the target area covering a total of 12,992.41 square miles. (The

population per square mile in San Juan County (includes the city of fannington at 1.456 per

square mile) is 23.6 and 13.1 in McKinley County.) Additionally, the proposed service region for

this project borders the Navajo Nation (N.N.) which has extremely dire needs in regards of

transportation as only 24% of N.N. residents over the age of 1$ have access to a vehicle. These

very important projects aim to serve the areas not being provided paratransit services.

560170

Data from a recent community transportation survey of indicates that 40% of the survey

respondents were unable to travel to medical/dental appointments because they did not have

access to transportation. In another question. 40% of survey respondents shared that over the

next 1-3 years the destinations tvhere they will need transportation is to medical/dental

appointments. Arguably, there is a tremendous need transportation services for low income

seniors and individuals who are disabled. The proposed program will greatly improve mobility

for seniors and individuals with disabilities by removing barriers to transportation service and

expanding transportation mobility optiotis. This program supports transportation services

planned, designed, and carried out to meet the special transportation needs of seniors and

individuals with disabilities.

Transportation options are limited outside of the immediate farmington area and for the

Navajo Nation in particular. For example, if a bus route is scheduled to come to the reservation

each day, the only pick-up time may be at 6:00 AM and the only return time 6:00 PM. Therefore,

if a person has an hour-long doctor’s appointment, they must wait for hours until time for their

appointment and then wait hours before returning home. Added to this dilemma is the lack of

trust or tvillingness of the Navajo to collaborate with entities outside the Tribe. Another primary

barrier to accessing transportation services is the cost. Providing transportation services in

farmington are affordable or sometimes free. For people living out in the vast rural areas, this is

not the case. Transportation costs for these people are prohibitive! It has been reported that

people living only 10-11 miles away from their destination have had to pay S60 for round trip

services.

Sincel995, Capacity Builders. Inc. (CBI) has been diligently serving the development

needs of nonprofits, Tribes, and governmental agencies. Since its inception, CBI has successfully

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brought in numerous federal, state, and regional grant funds to the region, striving always

towards the ultimate goal of increasing local capacity to address local needs to the point of

becoming irrelevant and unnecessary as a non-profit. As we worked to initially address the

transportation needs within the community, we created Lou Go’s--a state certified taxi and ground

tfavel service with quick, reliable, professional and affordable transportation solutions. Lou Gos

is a DBA of Capacity Builders, Inc. Please see attached tionprofit documentation. Lou Go’s 24-

hour services extend to the areas of Shiprock, Kirtland. Aztec and Bloomfield and incLudes most

regions of the Navajo Nation (up to 550 miles from Farmington).These flansportation services have

recently evolved into a contract with the city of Farmington fur the daily operations of Red Apple

Transit. Lou Go’s is now the transit branch of CR1 and is contracted to administer the city’s

transit system. Responsibilities within this contract include making sure the routes run on time,

hiring drivers and handling complaints, providing paratransit services, reporting issues and

managing the fleet. To date, the Red Apple project has been a smooth transition and the city’s

leadership has been pleased with our efforts and has commended CBl on the fact that we are a

local organization that understands the needs of the community.

Within each unique CBI program and initiative, tvhether the project involves social

services or the provision of much needed transportation services, we actively work to establish

new and desperately needed solutions in our comirnmnities, led by highly qualified, culturally

competent professionals. Lou Go’s and Red Apple Transit efforts are a pritne example as they

provide much needed employment services in the region in addition to addressing the

transportation needs within the region. Currently, Lou Go’s employs a majority of contractual

drivers that identi’ both as Veterans and Navajo; and qualil’ing veterans are given hiring

preference throughout our programs.

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With these 5310 and 5311 hinds, Lou Go’s plans to extend paratransit services to the

areas of San Juan County and the City of Gallup where services are not currently provided.

Through multiple capital project investments which include the expansion to a new 6,000 sq ft

facility htib (please see picture attached) and the purchase of three buses hilly equipped with

surveillance equipment, we can expand transportation services to those iii need. Capital

expenditure projects also include the purchase of ADP hardware/software, graphics/furniture,

Fare Boxes, insurance, registration and supplies (fire extinguishers, first aid kits, and triangles).

funds are also being requested for Operations and Administration costs which include salary and

fringe costs for two Managers. four Dispatchers, and six Drivers. Lou Go’s aims to cover fuel

costs, bus repairs, utilities, building repairs for the new hub, legal fees, accounting fees, cleaning

expenses for operations of the netv service area.

It is important to note that the vehicles acquired through funding tvill be used in the

transportation of residents needing services as defined through these program regulations

including individuals who are disabled (physically andlor mentally), seniors, and minorities.

Since many of our clients are confmed to wheelchairs all buses will be equipped with a lift and

will be compatible for wheelchairs as we address the special needs of our service population.

Most importantly, the proposed transportation services will ensure that senior citizens and

disabled conununity members in Farmington and Gallup have access to doctors’ appointments

and other needed services throughout the community.

We are looking forward to our partnership with the NMDOT as we work to expand

needed transportation services in our region.

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4W

j9

________

Whatever. Whenever.

Conte ntsOrganizational Structure 2

Mission Statement 2

Brief Description of Transit Program 2

Administrative Employees 2

Operations Employees: Managers, Drivers, Mechanics and Dispatchers 4

Vehicle fleet 7

Accident/Incident Reporting Procedures 8

Passenger Conduct Policy 9

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.‘ Whatever. Uheoever.

Organizational StructureLou Go’s is a DBA of Capacity Builder’s Inc. a NM based 501c3 non profit which currentlyholds the contract for Red Apple Transit for the City of fannington.

Mission StatementThe mission of CBI is to assist tribal. govermuental, and nonprofit agencies who serveculturally diverse and at-risk populations build their organizational and financial capacityso they have the resources available to them and the skill sets required. to improve thequality of life for those they serve and are able to be successful in accomplishing theirgoals.

Brief Description of Transit Program(a) Route designThe service area for paratransit service is available within San Juan and MckinleyCotuities.

(b) Schedule (days and hours of operation)Paratransit rides are available five (5) days a tveek (Monday through Friday),excluding holidays, from 7:00 am to 7:00 pm.

(c) fare structure (amounts, how set and by whom?)Each one-way trip is S5.00 (cash only) to Aztec and Bloomfield S 10.00 to Shiprock Altaccompanying guests pay the applicable fare. Drivers will collect exact fares uponboarding as they cannot give change.

(d) Advertising1marketingAdvertising and Marketing is done through local media outlets which include thefarniington Daily Times, Navajo Times, and The Gallup Independent. Radio andTelevisioti outlets are leveraged. Digital media is also leveraged through social mediaoutlets such as facebook.

Administrative Employees(a) Title and job description

CBl has secured and will maintain nonprofit status under the regulations of the InternalRevenue Service that governs nonprofit corporations and their status. CBI is organized asa private not-for-profit agency with a federal 50l(c)3 IRS tax-exempt designation.A Board of Directors governs the organization. It is the goal of the Board that 51% of themembership isNative American. The Board employs an Executive Director who administers the day-today business of the agency. If the Executive Director position is unfilled, the Grant and

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#PWhatever. Whenevec

Progranunatic Management Officer (GPMO) or the Human Resources & fiscal Officer(HRFO) shall temporarily take responsibility for the Executive Director’s activities andduties as outlined in this manual. The Board of Directors meets no less than four times ayear, or on a quarterly basis. Under special circumstances, the Board can approve not tohold a meeting within a quarter. At these meetings, the Board reviews and approves whenrequired minutes of prior meetings, financial statements, program reports, agency policiesand procedures, and any other items that require Board approval as sununarized in thesepolicies and procedtires. The Board approves an operating budget on an annual basis assubmitted by theExecutive Director. CBf s budget period is Janttaty I through December 31 of each year.Minutes shall be kept for each Board meeting. Minutes shall include date of the fleeting.names of those present at the meeting, topics discussed, any decisions made, and anyaction taken. For copies of agency Bylaws and Articles of Incorporation, please requestsame from the Board President.

The Executive Director is selected by and is accountable to the Board of Directors in allmatters. The Executive Director has been delegated with the authority and responsibilityof establishing a workable administrative organization and of ensuring the properimplementation of the personnel polices enumerated herein, including staff supervision.staff performance. program operations, fiscal accountability, and internal monitoring.

(b) Code of Conduct PolicyIt has been and shall remain the policy of CBI that all activities are carried on by CBIstaff, contractors anct Board Officers in accordance with the highest professional andethical standards. C3I staff contractors, and Board Officers shall uphold the professionalwell-being of the organization and pursue its mission. It is understood that some officersmay have less than arms-length ties tvith CBI (as employees) and companies thatmaintain similar employees, contractors, and/or officers. The reason for this lies in thefact that it is challenging to recruit Board officers with capacity building experience inFarmington and the areas where the agency operates. In such cases, the Board ofDirectors shall refer to the guidance of its Bylaws. Articles of Incorporation, its Conflictof Interest Policy, and the above referenced 2 CfR 200 Guidelines documents to drivedecision making and contracts so that it does not violate federal law. Membership on theBoard of Directors shall not be used for personal or professional gain. Confidentialityshall be respected and maintained in all of CBI’s dealings. Confidentiality includes alltypes of communication (written, spoken, electronic, or otherwise). The Board ofDirectors shall respect the right of the Board President. Executive Director, and staff tomake positive statements reflecting CB1’S position on particular issues. The Board ofDirectors does not tolerate slander against the agency. CBI staff members, contractorsand Board officers shall not engage in activities constituting a conflict of interest, asdescribed below, with the mission of CBI, or communications that may harni CBI’s grantfunding or relationship with donors. Officers of the Board of Directors against whom acomplaint of ethics violation has been lodged in writing shall be reported to the Board ofDirectors. The Board shall conduct an investigation and make reconunendations to thefull Board of Directors as to the process and timeline recommended to address the ethicsviolation, to include a solution.

(c) Training Plan/Record Keeping Policy and Procedures

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J

_________

Whatevet Whenever.

Our current training curriculum includes a classroom manual, gnides, writtentests, one-on-one and group engagement and a skills assessment. Classroomspecifics include, but are not limited to, Introduction, safety, NSC defensivedriving, trip inspections ADA and fare collection. CBI also understands theimportance of ongoing training and refreshers. Every quarter, it will be arequirement for all operators to complete four hours of refresher training. ThiswiLl take place once every’ four months, and attendance is mandatory’. CPR / FirstAid certifications will be renewed, as needed. Drivers’ skills will also bereevaluated periodically by the Manager to ensure safety. Evaluations will consistof, but not be limited to, the following: Pie-trip habits; Boarding and discharge;Defensive driving; Brake use and stopping distance; Lane change andpassing;Turinng and intersections; Backing up; Rail road crossing procedures. The hubof operations is Dispatch, and dispatchers manage many facets of the operation —

thus, they need additional support and care during training. They have contactwith operators. the public and management, simultaneously. They nmst always becourteous and on their game tvhile they handle a multitude of tasks. includingscheduling. Dispatchers go through the same training as Operators. and they alsospend a week shadowing another, experienced employee. A highly competentsupervisor is skilled with operations and staff Training includes, but is not limitedto: supervisory I management courses at San Juan College; online training; one-on-one mentoring the Executive Director; Sexual harassment and sensitivitytraining, and shadowing all positions within the company to gain understanding,insight and empathy for staff. The Supervisor of Driver Training must be ahighly-competent supervisor, advocate, and trainer. supervisor is skilled withoperations and staff. Training for this position includes, but is not limited to,required driver training courses, on-the-road supervision, accident!incidentinvestigation. Sensitivity’ training is especially relevant when working with thepublic and ADA passengers. It is crucial to akvays maintain a culture of respect,empathy and dignity. Subjects in classroom and online training include, but arenot limited to, how to interact xvith passengers, sensitivity to medical conditions.confidentiality. Sensitivity training will also address interactions between peopleof all cultures, races, sexnal orientations, status of disability and children.Additional Responsibilities: Additional responsibilities of Supervisors includesuch activities as developing staff, mentoring and providing career coaching:motivating staff, individually and as a group; understanding and supportingdiversity; and establishing an effective team.

Operations Employees: Managers, Drivers, Mechanics and Dispatchers(a) Titles and Job descriptionsBriana Smith, Transportation Manager - Capacity Builders. Briana bringsexceptional management, organizational and leadership skills to CapacityBuilders, Inc. She manages the overall perfonnance of the transportation program,including the taxi fleet, company vehicles, van and limousines and non-emergency medical transport vehicles. Using implementation strategies, Briana

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j-________ ‘.

Whatever, Wheoever.

brought change to the policy and procedures at CBI by establishing several checksand balance systems. Which helped to save time and money where needed.Within the first year of operating Lou Go’s. Briana helped increase annual salesby 470%, and continues to increase sales by an average of 61% per month. Thecompany fleet goes through daily safety procedures and inspections to maintaintheir 100% compliance level for audit purposes. As a manager, Briana is veryfamiliar with DOT, ADA and NMPRC rules and regulations. Briana activelyrecruits and maintains updated driver documentation for audit reporting. Shemanages a dispatch team and driver schedules while maintaining superb levels ofcustomer service among all her staff. Her knowledge in labor laws, humanresources, budgeting, marketing. scheduling and financial management has helpedlead to the success of the transportation operations.

Assistant Transportation Manager Assists the Transportation Manager. Ensureefficient and effective operations through close monitoring, responsiblesupervision. and sound timely decision making. Duties and responsibilitiesinclude, hut are not limited to. supervise. hire and system plan. train personnel,safety training, make recommendations for budget control and perform additionaltasks as assiened. Train, supervise. andevaluate all driver personnel, plans, recommend, monitor, and evaluate bus andvati service levels, policies and procedures. Investigate complaints and accidents.take public complaints and administer disposition if required, assist withtelephone inquiries, investigate, take photos, complete documents, FTA regtilationsof reporting. follow CBI policies and procedtires along with DOT postaccidentDrug & Alcohol reqtiirements. Monitor all shelters and bus stops and equipmentensuring that locations of shelters and signs are safe. Repair and/or replaces whenneeded. Schedule and monitor daily bus operator schedttles. Perform safetytraining of new hires and current employees and all current FIA safetyrequirements. Certify passenger applications for demand response van service.Monitor and review all revenue handling procedures and security policies.Review and complete scheduling and weekly time sheets. Monitor buildings andgrounds and recommends maintenance requirements. Assist TransportationManager in the completion of the department evaluations, review for operationalstatus, project future status and recommend plan of action. Attend variouscommittee meetings, public hearings, etc. Drive buses and pam-transit when needed.Special events and Bus 101 training to the public.

(b) Hiring procedures tie) background check, driving record, valid driver’s licenseC31 believes that a high quality program requires tiigh standards for theindividuals who operate the services. Our hiring process has produced successfulteams for dozens of initiatives, and has been streamlined for efficiency andeffectiveness. We will work cooperatively to hire qualified incumbent staff,giving us the opportunity to bring in knowledgeable personnel. The followingsteps are takin to begin recruitment for an open position:

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1. Human Resources receives an order from Supervisor staff to place an ad in allappropriate job listing in local job advertisement channels,

2. Human Recourses collects responses and resumes from applicants and screensthem based on the set criteria:

3. Human Resources forwards qualified applications to Supervisor’s office forreview4. Supervisor replies to Human Resources with the applicants they desire forinterviews. Human Resources contacts individual for an interview.5. Applicants come in for interviews; Supervisory asks appropriate interviewquestions.6. Supervisor makes a decision on whether or not to hire.7. Applicants recommended to be hired are referred to Human Resources tofill out a hiring packet.

(c) Training Plan/Record Keeping Policy and ProceduresCapacity Builders, Inc. focuses on safety in all of its operations. CBPsadministrative team includes the Transit Manager, who will oversee all drivertraining and safety policy activities. Our Safety Program includes accidentprevention, accident investigation, retraining gtiidelines and procedures, criteriafor determining preventability of accidents, program for internal safety meetingsto re-enforce safety importance, and participation of Capacity Builders in safetyrelated organizations. Initial training curriculum covers all critical safety topics(including assault atvareness, passenger relations, defensive driving. andinclement weather driving) and these topics are reinforced at monthly safetymeetings and mandatory in-service training sessions. This excellent programinspires safe behavior among employees at all levels by:• Generating system-wide participation in safety issues• Encouraging employees to take otvnership for safety results• Engaging executives and managers at all levels, and encouraging theiractive participation in safety management and communication• Sharing safety results at the location level or with individuals bycelebrating success stories• Awarding safe driving with monthly awards and incentives. Theseprocesses reduce the frequency of unsafe behaviors, occurrence ofcollisions, and compensable injuries. We will create an atvareness of safety-related issues while providing continuous education andcommunication through the following mechanisms:• Posters, banners, and pennants• Handouts amid promotional items• Monthly driver recognition• Newsletters and safety radio messages• Quarterly safety bonuses• Mandatory monthly safety meetings

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• Safe driver awards and incentives• Executive visits to the field• Regular audits• Quarterly accident and emergency response drills(U) Code of Conduct PolicyGENERAL POLICYEvery employee of CIII should act in the following manner:• Respect all co-workers and otiter individuals without regard to race, color.religion, creed, sexual orientation, national origin, sex, age, veteran status.or disability or handicap condition.• Support equal employment opportunity programs throughout CIII.

Refuse to engage in or tolerate in others any fomi of sexual harassment, asprovided in agency policy.• Treat all consumers or those applying to be consumers in a maimer whichis fair, dignified, humane, legal, ethical and safe. Protect confidentiality orprivacy and not be intrusive.• Only solicit from consumers or those applying to be consumers,information necessary for CBI to best serve their needs.• Ensure to (lie best of your ability that consumers have a clear understandingof what ntay be expected and what many not be expected from the services

provided.

(e) Drug & Alcohol Policy for Safety Sensitive Employees (Required for alt 5311applicants atid those 5310 applicants using program vehicles requiring CDL drivers

DRUG AND ALCOHOL POLICYLou Go’s and Capacity Builders Inc. maintains a drug and alcohol free workplace.“Drug and Alcohol Testing Policy for Transit contractor” establishes procedures forimplementing the requirements of the Omnibus Transportation Employee Testing Act of1991 and Federal Transit Administration Reculations 49 CFR Parts 655 and 40 withregards to certain Transit employees performing “safety sensitive functions,” as thatterm is defmed in federal law and in this policy.

Vehicle fleet(a) Update in BlackCat - all vehicle inventories must be updated within 3 months of

application due date. This includes recalls and accident reporting.Accidents can be very unnerving for all of those involved. Vlien an accident or incidentoccurs, the situation needs to be handled in a professional, calm manner. In the event ofan accident or incident involving a Transit vehicle during contracted service hours, thefollowing process will be followed:An accident occurs.

1. Ttie accident is immediately reported to the dispatcher and theproper responding authorities.2. Written protocol is followed pertaining to securing the scene andinteracting with passengers and emergency personnel.3. The driver supervisor and’or Transportation Manager review the scene andcomplete all required papenvork.

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4. Capacity Builders Inc.’s safety personnel are notified of all detailspertaining to the accident. Post-accident safety-sensitive employee testing isadministered as appropriate.6. Capacity Builders Inc.’s safety personnel, human resources, and corporate staffthoroughly debrief driver, as well as passengers as necessaxy.7. After review and investigation, a determination of preventability will bemade.S. Dependent upon test results and investigation findings, the driver will becounseled or retrained; drivers involved in a preventable accident willreceive a minimum of four hours of retraining9. Results of investigation findings will be stored electronically and available topersonnel.

(b) Maintenance schedulesCBI drivers will be trained to recognize symptoms of maintenance issues during theirfifteen-minute daily vehicle inspections which are absolutely critical to ensure safety foroperators and passengers. and to make sure we are in compliance with all applicable stateand federal latvs, CBI transit employees will perform and record vehicle inspectionsbefore every shift, using a Daily Vehicle Inspection form. Inspections include thefollowing: Brake, tail, and back-up lights Oil level and pressure, Brakes (foot and hand)and brake fluid Door and window operationHeadlights, on both high and lotv beams Fare collection equipment, Windshield tvipersMirrors. Turn signals and emergency flashers Horn, Interior lights Wheelchair lift orramp, tie downs, Steering Heater(s) and defroster, Radio system (to and from dispatch)Air conditioning system. Cleanliness, interior and exterior Safety equipment, Amount offuel and other fluid levels Tires (inflation and tread wear), Battery fluid, cables, andcorrosion Vault pulling and replacement. Body damage. Maintenance concerns willimmediately be reported to the Transportation Manager. Alt vehicles will also be on aregular maintenance schedule as tracked by mileage. Safety’ is paramount.

(c) Inspection proceduresCBI drivers will be trained to recognize symptoms of maintenance issues during theirfifteen-minute daily vehicle inspections which are absolutely critical to ensure safety foroperators and passengers, and to make sure we are in compliance with all applicable stateand federal laws.

(d) Fleet Replacement Plan for FY21Lou Go’s is working to finalize its Fleet Replacement Plan for fl 21.

Accident/Incident Reporting Procedures(a) Procedures to include accident reporting and documentation in the corresponding

vehicle inventory record in BlackCatAccidents can he very unnerving for all of those involved. When an accident or incidentoccurs, the situation needs to be handled in a professional, calm manner. In the event ofan accident or incident involving a Transit vehicle during contracted service hours, thefollowing process will be followed:An accident occurs.

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1. The accident is irmuediately reported to the dispatcher and theproper responding authorities.2. Written protocol is followed pertaining to securing the scene andinteracting with passengers and emergency personnel.3. The driver supervisor andior Transponation Manager review the scene andcomplete all required paperwork.4. Capacity Builders Inc.’s safety personnel are notified of all detailspertaining to the accident. Post-accident safety-sensitive employee testing isadministered as appropriate.6. Capacity Builders Inc.’s safety personnel, human resources, and corporate staffthoroughly debrief driver, as well as passengers as necessary.7. After review and investigation, a determination of preventability will bemade.$. Dependent upon test results and investigation findings, the driver will becounseled or retrained; drivers involved in a preventable accident willreceive a minimum of four hours of retrainitig9. Results of investigation findings will be stored electronically and available topersonnel.

(b) Insurance forms, Accident’incident reporting forms in vehicleMI requited insurance forms are kept in the vehicles. Accidentincident reporting formsare kept in the vehicles in the case of such an evetit occurring.

Passenger Conduct PolicyCONDUCT TOWARD THE PUBLICLou Go’s is in business for one reason only to provide public transportation services forthcitizens of Farmingtoii and the greater San Juan Cottnty. The Lott Go’s Operator’sresponsibility is:

• To provide passengers with safe and dependable service,• To always be courteous to passengers, even tvhen the passenger is in the wrong.• To show a genuine concern for passetigers and their needs.• To convey a helpful and professional attitude toward passengers.• To provide service that makes passengers want to ride again.

In order to maintain good customer relations, the operator shall:• Maintain a neat, professional appearance.• Drive safely and smoothly at all times.

Provide a comfortable climate (e.g. turning on the air conditioner or heater asneeded), turn on rear dome lights before or after daylight hours, and keep the interior ofthe hsts clean.• Stay on schedstle. NEVER be ahead of schedstle, and try to avoid being needlesslybehind schedstle.• Deal with passengers so that they believe the Lou Go’s operators are concerned withtheir personal well-being.• Go out of the way to be lielpftil.• Support and explain company policies when dealing with a passenger. If an operatordoes not agree with a company policy. he/she should discttss it with supervisor. notwith passengers.

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• Maintain a constant, conscious effort to be courteous to all passengers. even thedifficult ones.• Maintain a cheerful and helpful attitude and always keep control temper.An operator shall not allow personal troubles to interfere with his/her responsibility asan operator.• Explain why he/she can or cannot do something.• Be concerned for the safety and convenience of hisher passengers.• Know the route. Keep up-to-date on landmarks, hotels, places of interest, majorbusinesses, streets, connecting or intersecting bus lines, locations of street numbers onroute, and intersecting streets.• Help passengers understand how to use the bus service. Give out accurate informationand thoroughly explain whatever customer information materials are available. Anoperator should never alarm passengers by spreading nunors about changes in service.• NEVER EMBARRASS ANYONE. Quietly, and respectfully. discuss the problem orissue with the goal of helping to resolve it.• NEVER PASS ANYONE UP. Ifni doubt whether the person is waiting for the bus,stop and ask.• Take the time to understand passenger questions and make sure passengersunderstand the answers.• Politely discourage passengers from talking excessively to him/her while the busies inmotion.• Be a courteous driver. Other motorists and pedestrians are potential riders.• A void argtlments with passengers at all costs, The operator shall be firm, but politeand consistent in enforcing passenger titles.Passengers have the right to file complaints and/or compliments with managementregarding the behavior, or perceived behavior, of an operator. Its hall be managementsresponsibility to investigate in the event of complaint and to determine appropriatedisciplinary actions, if necessary, Aton time shall an operator confront the complainantabout the report or the allegations therein.

Lou Go’s passengers are our customers and only through their lax dollars and the support ofother citizens is it possible for this system to continue operating. Goodwill and common sensemust prevail. for the most part, passengers will simply get on the bus, pay their fare, and ridequietly to their destination. However, at times you may encounter an individual or a group ofpassengers whose actions are detrimental or annoying to you and others on your bus. Whenresponding to these situations, you must put the safety of yourself and your passengers first.Keeping the peace should be your first consideration when deciding how to react to anypotentially volatile occurrence. Most instances must be handled on an individual basis, andyou should use good judgment, pulling safety first. You need to know how to effectivelyhandle these situations as tvetl.DISPUTESAvoid arguments, no matter what the provocation. Don’t take comments personally.Remember, in a tense situation your first statement tvill influence the attitude of thepassenger. Make it as courteous, factual, and positive as possible.Arguing will only provoke a dispute and minimize your ability to handle the situation. Do notphysically intervene in disputes or assaults between passengers.At the first indication of possible violence, discretely call the Dispatcher for assistance.Continue operating normally as you feel the situation allows. If the situation gets worse, usegood judgment. Take appropriate action to ensure safety and defuse the incident. Such action

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could include stopping, securing the bus, and opening all doors. A good nile of thumb is: ifyou cannot resolve the siniation from the driver’s seat, then call the Dispatcher or a Lou Go’sLine Supervisor for help.ADULT MISCONDUCTFor acts of misconduct such as vandalism, criminal activity, or passenger disputes call theDispatcher for assistance. When reporting an incident of this nature, remember:

• Remain calm, speak slowly and clearly.• Notify the Dispatcher.• Give your location and do not move your bus.• Give your bus and route name.• Do not attempt to detain or chase the suspect(s).• Note features and mannerisms of the suspects) for future identification.• Complete an Accidentflncident Report detailing the occurrence.

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ARTICLE ONE: The name of the corporation is (include …...Capacity Builders Inc’s CPA is...

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Transcript of ARTICLE ONE: The name of the corporation is (include …...Capacity Builders Inc’s CPA is...