Baton Rouge Area Alcohol and Drug Center...

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30,2016 AND 2015

TABLE OF CONTENTS

Independent Auditors'Report 1-2

Financial Statements ,

Statements of Financial Position 3

Statements of Activities and Changes in Net Assets 4-5

Statements of Functional Expenses 6-7

Statements of Cash Flows 8

Notes to the Financial Statements, 9-13

Supplementary Information

Schedule of E)q>enditures of Federal Awards 14

Notes to Schedule of Expenditures of Federal Awards 15

Schedule of Compensation, Benefits, and Other Payments to the Executive Director .16

Report on Internal Control Over Financial Reporting and on' Compliance. and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 17-18

Report on Compliance For Each Major Program and Internal Control-Over Compliance Required By The Uniform Guidance 19-20

Schedule of Findings and Questioned Costs 21-22

A Professional Accounting Corporation Certified Public Accountants

MDEPElSnDENT AUDITORS" REPORT

To the Board of Directors " -Baton Rouge Area Alcohol and Drug Center, Inc. Baton Rouge, Louisiana

Report on the Financial Statements

We have audited the accompanying financial statements of Baton Rouge Area Alcohol and Drug Center, Inc. (a non-profit organization), which comprise The statements of financial position as of June 30,2016 and 2015, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation ofthese financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to finud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are. appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion; An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the fmancial statements.

We belieye that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opmion

In our opinion the fmancial statements referred to above present fairly, in all material respects, the financial position of Baton Rouge Area Alcohol and Drug Center, Inc. as of June 30,2016 and 2015 and-the results of its net assets and cashflows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

910 S. Acadian Thruway • Baton Rouge, LA 70806 • Ph: (225) 927-3760 • Fax: (225) 927-3761

Other Matters

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. 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, Cost Principles, and Audit Requirements for Federal Awards and Schedule of Compensation, Benefits and Other.Payments to the Executive Director, as required by the Louisiana Legislative Auditor is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the. financial statements. The information has. been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. Iii our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2016, on our consideration of Baton Rouge Area Alcohol and Drug Center, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over finmicial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Baton Rouge Area Alcohol and Drug Center, Inc.'s internal control over financial reporting and compliance.

Baton Rouge, Louisiana December 30,2016

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENTS OF FINANCIAL POSITION JUNE 30,2016 AND 2015

2016 2015 Assets

Current Assets -Cash Accounts receivable

Total Current Assets

Property, plant and equipment (net)

Other Assets

Total Assets ; '

Liabilities

Current liabilities Bank overdraft Accounts payable and other current liabilities Payroll liabilities Accrued liabilities Line of credit Current portion of long term debt

Total Current Liabilities

Long term debt, net of current portion

Total Liabilities

Net Assets • , Unrestricted net assets

Total Net Assets

Total Liabilities and Net Assets

479.472

479,472

2.572.076

3.086

258 19,266 12,987 17,813 40,630 82.781

173,735

1.655.936

1,829,671

1.224.963

14,541 328.939

343,480

2.646.527

1.945

$_3..a5A63.4 $_2.,9^_l,9_5.2

53,856 5,322

28,355 42,036 78.498

208,067

1.733.114

1,941,181

1.050.771

1,224,963 1,050,771

See accompanying notes and independent auditors' report.

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30,2016

Unrestricted Revenues

Temporarily Restricted Total

Grants and contracts Capital Area Human Services District City of Baton Rouge/Parish of East Baton Rouge United Way Access to Recovery Housing' Opportunity for Persons with Aids

Medicaid Client generated revenue. Donations and contributions Other income

Total Revenues

436,260 390,000 81,000 57,370

617,301 117,129 155,235 183.136 7.218

2.044.649

436,260 390,000 81,000 57,370

617,301 117,129 155,235 183,136 7.218

2.044.649

Operating Expenses

Program service Management and general'

Total operating expenses

1,484,417 386.040

1.870.457

1,484,417 386.040

1.870.457

Change in net assets

Net Assets - beginning of year Net Assets - end of year

174,192

1.050.771 $_1.22^,63. 1

174,192

1.050.771


BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30,2015

Unrestricted Revenues

Temporarily Restricted Total

Grants and contracts Capital Area Human Services District City of Baton Rouge/Parish' of East Baton Rouge United Way Access to Recovery Housing Opportunity for Persons with Aids

Medicaid Client generated revenue' Donations and contributions Other income

Total Revenues

565,860 312,000 81,000 27,110

243,584 289,054 176,365 206,284 26,467

1.927.724

565,860 312,000

81,000 27,110

243,584 289,054 176,365 206,284 26.467

1.927.724

Operating Expenses

Program service Management and general

Total operating expenses

1,459,836 412.857

1.872,693

1,459,836 412.857

1.872.693

Change in net assets 55,031 55,031

Net Assets - beginning of year Net Assets— end of year

995.740 .$-^.0.5.0.JJJ t

995.740 $__LQ5.0.J71


BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30,2016

Program . Management Services and General Total

Accounting $ 25,830 • $ 25,830 $ 51,660 Advertising and dues - 13,005 13,005 Auto maintenance 3,743 1,384 5,127 Communications " 991 367 1,358 Depreciation 63,284 23,407 86,691 Food services 253,141 - 253,141 Insurance 49,518 18,315 67,833 Interest 83,496 30,882 114,378 Laxmdry 20,692 - 20,692 License fees 869 321 1,190 Maintenance and repairs 7,622 2,819 10,441 Medical supplies 39,023 - 39,023 Miscellaneous 7,034 2,602 9,636 Payroll taxes 46,903 17,348 64,251 Printing and office expense 23,704 8,767 32,471 Professional expense 206,994 - 206,994 Rent and occupancy 60,281 22,296 82,577 Salaries and wages 579,619 214,380 793,999 Supplies 945 349 1,294 Travel 10.728 3.968 14.696

$. ..i.4M.4i7- S 386.040 S__1.87.QA5J.


BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JUNE 30,2015

Program Management Services and General Total

Accounting $ 7,041 S 7,041 $. 14,082 Advertising and dues - 1,604 1,604 Auto maintenance 3,300 1,220 4,520 Client fund expense 5,255 - 5,255 Communication? 18,765 6,941 25,706 Depreciation 64,410 23,823 88,233 Food services 192,461 - 192,461 Insurance 72,612 26,857 99,469 Interest 66,638 24,647 91,285 Laundry 21,243 - 21,243 License fees 1,594 589 2,183 Maintenance and repairs. 18,550 6,861 25,411 Medical supplies 69,720 . - 69,720 Miscellaneous 1,948 721 2,669 Payroll taxes 52,174 19,297 71,471 Printing and office expense 15,960 5,903 21,863 Professional expense 71,250 - 71,250 Rent and occupancy 81,026 . 29,969 110,995 Salaries and wages , 676,769 250,312 • 927,081 Supplies ^ 6,928 2,562 9,490 Travel 12.192 4.510 16.702'

$-J.A59^Z3.6. . S 412.857 $_L87-2.6R3.

See accompanymg notes and independent auditors' report.

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30,2016 AND 2015

2016 2015 Cash Flows From Operating Activities

Change in net assets

Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities:

Depreciation (Increase) decrease in accounts receivable Increase in other assets Increase (decrease) in accounts payable Decrease in accrued liabilities Net cash provided by (used in) operating activities

Cash Flows From Investing Activities

Cash payments from purchase of property Net cash used in investing activities

Cash Flows From Financing Activities

Proceeds from draws on line of credit Principal payments on line of credit Principal payments on long term debt

Net cash provided by (used in) financing activities

Decrease in Cash and Cash Equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year

$ 174,192 3 ; .55,031

'86,691 88,233'. (150,533) (225,205)

(1,140) -(34,590) 38,019

C2.878^ (20.276) 71,741 (64,198)

n2.240') r40.1221 (12,240) (40,122)

48,859 (1,406) (6,823)

r72.8941 m.l781 (74,300) (33,142)

(14,799) (137,462) 14.541 152.003

S 1-2581 14.541

Supplemental disclosure - cash paid for interest S 114.378 S 91.285


BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2016 AND 2015

1. Summary of Significant Accounting Policies

-Nature of Operations " -

Baton Rouge Area Alcohol and Drug Center, Inc. (the Organization) operates a social and medical detoxification center fiiat offers in-patient, residential, and out-patient services. The Organization has two locations in the Baton Rouge area with a combined in-patient capacity of 82 beds. Both locations are open 24 hours a day, 7 days a week and offer in-patient and outpatient medical and social detoxification programs, residential detoxification programs, individual and group counseling, treatment assessments, drug screenings, and other services. The Organization was incorporated as a non-profit corporation on Augusts, 1972.

Basis of Accounting ' .

The financial statements of Baton Rouge Area Alcohol and Drug Center, Inc. have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and other liabilities.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual restilts could differ fi-om those estimates.

Revenue recognition

The Organization receives revenue firom federal, state, and local governments, as well as, from individuals, corporations, and other non-profit organizations. Revenues are generated from providing medical and non-medical detoxification services on a . reimbursement basis. The Organization also receives a significant amount of cash and noncash funding in the form of donations and contributions. Revenue from services fees are recognized when earned and revenue firom contributions and donations are recognized when received.

Cash

Cash includes all monies held with banks.

Accounts Receivable . •

Accounts receivable consists of amounts due from federal, state and local governments, as well as, other non-profit organizations. Management believes that all accounts receivable as of the balance sheet date are collectible and thus no allowance for doubtful accounts is necessary. Any receivables deemed uncollectible are charged to the year that the determination is made.

Income Tax

The Organization is exempt fi-om income taxes under Internal Revenue Code Section 501(c)(3).

. The Organization accounts for income taxes in accordance with FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. Management believes it has no material uncertain tax positions and, accordingly has not recognized a liability for any unrecognized tax benefits.

Advertising

. Baton Rouge Area Alcohol and Drug Center, Inc. expenses its advertising costs as incurred. Advertising expense was SO and $1,119 for the years ended June 30,2016 and 2015, respectively.


1. Suirunary of Significant Accoimting Policies (continued)

Net assets

Financial statement presentation follows the recommendations of the Financial Accounting Standards Board's (FASB) Accounting Standard Codification (ASC) 958, Not-for-Prqfit Entities. Under FASB ASC 958, ihe Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Net assets, revenues, expenses, gains and losses are classified based on the existence orabsence of contributor imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:

Unrestricted Net Assets: Unrestricted net assets are for general use with no restrictions.

Temporarily Restricted Net Assets: Temporarily restricted net assets can be expended currently, but only for a specified purpose designated by the grantor. The Organization did not have any temporarily restricted net assets at June 30,2016 and 2015.

Permanently Restricted Net Assets: Net assets permanently restricted for future use by the grantor or the board of directors. The Organization did not have any permanently restricted net assets at June 30,2016 and 2015.

Functional Expenses

The Organization allocates its expenses on a functional basis between management and general or program services. Expenses that can be identified with program service are allocated directly according to their natural expense classification.

Subsequent Events

The Organization has evaluated subsequent events through December 30,2016, the date the financial statements were available to be issued,, for recording and disclosure.

2. Property and Equipment

All acquisitions of property and equipment in excess of-$500 and all expenditures for betterments that materially prolong the useful lives of assets are capitalized and are carried at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:

Building and improvements 37.5 years Furniture and equipment 5-7 years Vehicles 5 years

Property and equipment consists of the following: 2016 2015

Buildings and improvements S 2,701,529 S 2,689,289 Furniture and equipment 131,346 131,346 Vehicles 38.949 38.949

2,871,824 2,859,584 Accumulated depreciation (299jm r213.057^

$. 2JJ.2.m.6. $ 2.M6^527

10


2. Property and Equipment (continued)

The Organization purchased a building during the year ended June 30, 2013 for the purposes of expanding its operations. The building underwent significant renovations before officially opening for service on January 6, 2015. This new location has a capacity of 48 beds and has also allowed the Center to expand its out-patient service with larger meeting spaces for group counseling sessions. The Center began recording depreciation expense on the building as of January 6, 2015.

3. Notes Payable

Long term notes payable consists of the following: • 2016 2015

Note dated July 26, 2012 with an original balance of $1,320,000, . due in monthly payments of $9,255 on the 26^ of the month with an interest rate of5.65% and is secured byreal property. '$ 1,165,140 $ 1,204,978

Construction line of credit dated October 10,2013 with an amount not to exceed"$639,200, with monthly interest only payments followed by 157 payments of principal and interest of $6,HTbeginning July 26,2014. The note bears an interest rate of 4.09% during the interest only portion and 6.53% thereafter. This note is secured by real property • . " 573.577 606.634

. 1,738,717 1,811,612 Less current installments (82.781) ' (78.498)

$_^.65_5_.9_16. $_J.J3.3JA4

Maturities of long term notes payable are as follows:

2017 . • $ 82,781 2018 89,546 2019 ' 94,285 2020 - ,99,997 2021 106,377 Thereafter 1.265.731

• £ 1.738.717

The-Organization also has an available line of credit up to $50,000, payable to Regions Bank, interest paid monthly and computed at 6.25% annually. .At June 30, 201-6 and 2015 the Organization had $40,630 and $42,036 outstanding, on the line of credit, respectively.

4. Commitments and Contingencies

The Organization receives a portion of its revenues from federal, state, and local government grants and contracts, many of which are subject to audit by the federal, state, or local government., The ultimate determination of amounts received under these programs generally is based upon allowable costs reported to, and audited by, the government. Until such audits have

' been completed and a final settlement reached, there exists a contingency to refund any amount received in excess of allowable costs. Management is not aware of any pending audits or proposed adjustments, and no provisions for estimated retroactive adjustments have been made.

II


5. Accrued Vacation Payable , •

Annual leave is accrued beginning with the first month of employment but is not taken until an employee has been with the Organization for six months. The annual accrual varies with the employee's years of service and there is a limitation on the amount of leave which can be carried over to the next year. The payable for accrued vacation at June 30,2016 and 2015 was $17,812 and $28,355, respectively.

6. In-Kind Contributions

The Organization occupies facilities provided by the City-Parish of East Baton Rouge at no cost to the Organization. For the year ending June 30, 2016 and 2015 the rent and occupancy was valued at $48,968 and $55,635, respectively, and repairs and maintenance were valued at $2,530 and $2,858, respectively. These in-kind contributions are reported with other donations and contributions the offset recorded as an expense..

The Organization also received food from the Baton Rouge Food Bank in the amount of $115,003 and $99,493 for the years ended June 30,2016 and 2015, respectively.

7. Concentrations

Concentrations of revenue for the Organization for the years ended June 30, 2016 and 2015 is as follows:

2016 2015 Capital Area Human Services District 21% ,30%

• City of Baton Rouge/Parish of East Baton Rouge 27% 25% Housing Opportunities for Persons with Aids 30% 13% Client Generated Revenue 8% 9%

- Medicaid 6% 15%

. Concentrations of accounts receivable for the Organization for the years ended June 30,2016 and 2015 is as follows:

2016 2015 Capital Area Human Services District 8% 14% Housing Opportunities for Persons with Aids 90% 74% ATR 2% 0% Medicaid 0% 12%

Financial instruments, which potentially subject the center to concentration of credit risk, consist principally of cash accounts. From time to time the Organization has cash accounts held with banks in excess of the Federal Deposit Insurance Corporation limit of $250,000. The Organization does not believe that it is exposed to any significant credit risk on uninsured amounts.

12

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30,2016

8. Client Generated Revenue

With the addition of a second location the Organization has increased their capacity to cover a larger population of clients. Services provided at the Center are typically provided at little to no cost to the client with the costs for these services covered by a grant, contract, or insurance when possible. '\^en a client does not meet the eligibility or availability requirements for a grant Or contract and does not have insurance coverage the client is responsible for the payment of services out of pocket. Rates for out of pocket services, vary based on the service provided and is typically less expensive than a comparable program at a hospital or for profit program. For the years ended June 30,2016 and 2015 client generated revenue was. $155,235 and $176,365, respectively.

9. Medicaid Revenue

In 2012, the Organization was licensed and approved by the state of Louisiana to bill Medicaid for certain treatments and services they provide related to addictive disorders. Since 2012, claims were submitted to and paid by Magellan Services with whom the State had contracted to service the portion of the Medicaid, program that relates to the type of services pro vided by the Organization. Magellan's contract with the State was not renewed when it expired at December 1, 2015. The State entered into an agreement with a new healthcare service provider group, Bayou Health insurance companies. To be able to successfully have their claims processed and paid, the Organization would have to apply to each of the five service providers within the Bayou Health group. These applications were submitted by the Director in October and November of 2015 but as of December 30, 2016, have yet to be approved. This has resulted in the Organization being unable to recognize any Medicaid claim revenue or receivables for any claims originating from December 1,2015 to date. For the years ended June 30,2016 and 2015 Medicaid , revenue was $ 117,129 and $289,054, respectively.

13

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30,2016

Federal Grantor/Pass-through or Cluster Title

U.S-. Department of Health and Human Services direct programs:

Substance Abuse and Mental Health Services-Access to Recovery

Subtotal Department of Health and Human Services direct programs

Pass-through programs from:

Capital Area Human Services District

Block Grants for Prevention and Treatment of Substance Abuse

City of Baton Rouge-Parish of East Baton Rouge Office of Community Development

Federal CFDA

Number

93.275

Pass-through Entity

Identifying Number

N/A

93.959 SA50015

& SA50025

Federal Expenditures

$ 57.370

57.370

436.260

Total U.S Department of Health and Human Services

U.S. Department of Housing and Urban Development pass-through programs from:

City of Baton Rouge-Parish of East Baton Rouge Office of Community Development

Housing Opportunities for Persons with AIDS 14.241 N/A

493.630

617.301

Total Department of Housing and Urban Development pass-through programs

Total expenditures of federal awards

617,301

$_1.JJ.Q..9-31

See accompanying notes and independent auditors' report

14

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30,2016

1. Basis of Presentation

The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Baton Rouge Area Alcohol and Drug Center, Inc. (the Organization) under programs of the federal government for the year ended June 30,2016. The information in this Schedule is presented in accordance wilh the requirements of Title 2 U.S. Code of Federal Regulations Part .200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.

2. Summary of Significant Accounting Policies

a) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the. cost principles contained in Title 2"U.S. Code of Federal Regulations Part 200, Cost Principles, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

b) Pass-through entity identifying numbers are presented where available.

15

BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. SCHEDULE OF COMPENSATION, BENEFITS, AND OTHER PAYMENTS TO THE EXECUTIVE DIRECTOR FOR THE YEAR ENDED JUNE 30,2016

Executive Director L. Bailey

Salary . , $ 71,500 Benefits-insurance 5,400 Reimbursed expenses 13.901

$__9_Q.g_Ql

See accompanying notes and independent auditors' report

16


INDEPENDENT ATJDTTORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FTNANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Directors Baton Rouge Area Alcohol and Drug Center, Inc. Baton Rouge, Louisiana ' • ,

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Baton Rouge Area Alcohol and Drug Center, Inc., (a non-profit organi2ation), which comprise the statement of financial position as of June 30,2016 and the related statements of activities, and cashflows for the' year then ended, and the related notes to the financial statements, and have issued our report thereon dated December 30,2016.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered Baton Rouge Area Alcohol and Drug Center, IncP.s internal control over financial reporting (internal control) to determine the audit procedures'that are appropriate in the circumstances for the purpose of ejtpressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Baton Rouge Area Alcohol and Drug Center, Inc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal-control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in the internal control that mi^t be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be a material weakness.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a • material misstatement of the entity-s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying schedule of findings and questioned costs to be a material weakness. This instance is reported as finding 2016-1. •

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Baton Rouge Area Alcohol and Drug Center, Inc. 's financial statements are free.ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we dp not express such an opinion. The results.of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

17

910 S. Acadian Thruway -Baton Rouge, LA 70806 - Ph: (225) 927-3760 - Fax: (225) 927-3761

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

This report is intended solely for tlie information and use of the Board of Directors, management, others within the organization, the Legislative Auditor, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Baton Rouge,-Louisiana December 30, 2016

18


TND1?,?ENPENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM . . -AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNTFQRM GUIDANCE

To the Board of Directors Baton Rouge-Area Alcohol and Drug Center, Inc. Baton Rouge, Louisiana , '

Report on Compliance for Each Major Federal Program

We have audited Baton Rouge Area Alcohol and Drug Center, Inc's. (a non-profit organization) compliance with the types of " compliance requirements described in the 0MB Compliance Supplement that could have a direct and material effect on each of Baton Rouge Area Alcohol and Drug Center, Inc.'s major federal programs for the year ended June 30, 2016. Baton Rouge-. Area Alcohol and Drug Center, Inc.'s major federal programs are identified in the summary of auditors' reports section of tile accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with requirements of laws, regulations, contracts and grants applicable to each of its major federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Baton Rouge Area Alcohol and Drug Center, Inc.'s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of -compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the'audit requirements ofTitle2U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above That could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Baton Rouge Area Alcohol and Drug Center, Inc.'s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination on Baton Rouge Area Alcohol and Drug.Center, Inc.'s compliance.

Opinion on Each Major Federal Program

In'our opinion. Baton Rouge Area Alcohol and Drug Center, Inc. complied, in all material respects with the compliance . requirements referred to above that could have.a direct and material effect on each of its major federal programs for the year ended Jime 30,2016.

Report on Internal Control over Compliance

Management of Baton Rouge Area Alcohol and Drug Center, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and perfonning our audit of compliance, we considered Baton Rouge Area AJcohoiand Drug Center, Inc.'s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine ourduditing procedures that are appropriate in the circumstances for the. purpose of expressing our opinion on compliance for each maj or federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance^ but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the organization's internal control over'compliance.

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910 S. Acadian Thruway' Baton Rouge, LA 70806 • Ph: (225) 927-3760 • Fax: (225) 927-3761

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

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be a material weakness or a significant deficiency. However, as described in the accompanying' schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be a material weakness. This instance is reported as finding 2016-1. We did not audit Baton Rouge Area Alcohol and Dnig Center, Inc.'s response and, accordingly, we express no opinion on the response.

This report, is intended solely for the information and use of the Board of Directors, management, others within the organization, tlie Legislative Auditor, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Baton Rouge, Louisiana December 30, 2016

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BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED JUNE 30,2016

We have audited the financial statements of Baton Rouge Area Alcohol and Drug Center, Inc., as of June 30,2016, and for the year then ended, and have issued our report thereon dated December 30,2016. We conducted our audit in accordance with auditing standards generally accepted in the United States of Aonerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the provisions of 0MB Compliance Supplement. Our audit of the financial, statements as of June 30,2016 resulted in an unqualified opinion.

Summary of Auditor's Reports

a. 'Report on Internal Control and Compliance Material to the Financial Statements • Internal Control ...

Material Weaknesses ^Yes No , Significant Deficiencies _YesXNo Compliance

Compliance Material to Financial Statements _YesXNo

b. Federal Awards Internal Control , • ,

Material Weaknesses _X.Yes„No Significant Deficiencies _YesXNo

Type ofOpinion On Compliance For Major Programs X Unqualified; Qualified _ Disclaimer Adverse

Are there findings required to be reported m accordance with Circular A-133, Section 510(a) Yes No

Was a management letter issued? _Yes X No

c. Identification of Major Programs: CFDA Number(s) Name of Federal Program (or Cluster)

14.241 Housing Opportunities for Persons with AIDS

Dollar threshold used to distinguish between Type A and Type B Programs: $ 750.000

Is the auditee a Tow-risk' auditee, a:s defined by 0MB Compliance Supplement? Yes XNo

Findinss — Financial Statement Audit

Finding 2016-1 - Accounting Review and Financial Statement Preparation

The Organization has improved its accounting review and financial statement preparation by outsourcing some of the. accounting functions to an accounting firm. However, due to the limited services the accounting firm is providing there are still material misstatements that have gone undetected in the monthly financial statements.

Recommendations

We recommend management expand the procedures currently being performed by the accounting firm to include monthly compilations. This would increase the overall accuracy of the financial statements.

Management's Response

Management will consider the cost of these additional services in comparison to the additional benefits that would be received.

Questioned Costs There are no questioned costs for the year ended June 30,2016.

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BATON ROUGE AREA ALCOHOL AND DRUG CENTER, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED JUNE 30,2015

Summary of Prior Year Audit Findinffs

Finding 2015-.1 - Accounting Review and Financial Statement Preparation

Status: The findings related to accounting review and the financial statement preparation have been restated as finding 2016-1

Finding 2015-2 - Late Filing

Status: The June 30, 2016 audit will be filed by January 3,2017. .

Finding 2015-3 - Documentation and Data Management

Status: The findings related to" documentation and data management have been resolved.

Questioned Costs There are no questioned costs for the year ended June 30,2015.

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