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FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REPORT

EARLY LEARNING COALITION OF THE NATURE COAST, INC.

CRYSTAL RIVER, FLORIDA

JUNE 30, 2012

FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REPORT

EARLY LEARNING COALITION OF THE NATURE COAST, INC. CRYSTAL RIVER, FLORIDA

JUNE 30, 2012

TABLE OF CONTENTS

Independent Auditors' Report ................................................................................................................ 1-2 Financial Statements Statement of Financial Position ................................................................................................................. 3 Statement of Activities .............................................................................................................................. 4 Statement of Functional Expenses............................................................................................................. 5 Statement of Cash Flows ........................................................................................................................... 6 Notes to Financial Statements .............................................................................................................. 7-10 Additional Elements of Report Prepared in Accordance with Government Auditing Standards, Issued by the Comptroller General of the United States; and the Provisions of Office of

Management and Budget (OMB) Circular A-133; and the Rules of the Auditor General of the State of Florida

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 .................................................................................................. 11-12 Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Program and State Project and on Internal Control Over Compliance in Accordance with OMB Circular A-133 and the Florida Department of Financial Services, State Projects Compliance Supplement ....................................................................................... 13-14 Schedule of Expenditures of Federal Awards and State Financial Assistance ................................................................................................................ 15 Note to Schedule of Expenditures of Federal Awards and State Financial Assistance ................................................................................................................ 16 Schedule of Findings and Questioned Costs - Federal Award Programs and State Financial Assistance .................................................................................... 17-18

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INDEPENDENT AUDITORS' REPORT Board of Directors Early Learning Coalition of the Nature Coast, Inc. Crystal River, Florida We have audited the accompanying statement of financial position of Early Learning Coalition of the Nature Coast, Inc. (the Coalition), a nonprofit organization, as of the year ended June 30, 2012, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the Coalition's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the Coalition’s 2011 financial statements and, in our report dated January 23, 2012, we expressed an unqualified opinion on those financial statements. We conducted our audit 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Coalition as of June 30, 2012, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2012, on our consideration of the Coalition's internal control over financial reporting and 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 our testing of internal control over financial 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 and should be considered in assessing the results of our audit.

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Board of Directors Early Learning Coalition of the Nature Coast, Inc. Crystal River, Florida

INDEPENDENT AUDITORS' REPORT (Concluded)

Our audit was conducted for the purpose of forming an opinion on the financial as a whole. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for the purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and Chapter 10.650, Rules of the Auditor General, and is not a required part of the basic financial statements. Such information is the responsibility of management and 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. In our opinion, the schedule of expenditures of federal awards and state financial assistance is fairly stated in all material respects in relation to the financial statements as a whole. December 19, 2012 Ocala, Florida

See accompanying notes.3

STATEMENT OF FINANCIAL POSITION JUNE 30, 2012,

WITH COMPARATIVE TOTALS FOR JUNE 30, 2011EARLY LEARNING COALITION OF THE NATURE COAST, INC.


ASSETS2012 2011

Current AssetsCash and Cash Equivalents 192,769$ 138,369$ Grants Receivable 760,278 1,004,155 Prepaid Expenses 29,372 23,968 Deposits 9,923 9,673

Total Current Assets 992,342 1,176,165

Property and Equipment, Net of Accumulated Depreciation 26,508 35,544

Total Assets 1,018,850 1,211,709

LIABILITIES AND NET ASSETS

Current LiabilitiesAccounts Payable and Accrued Expenses 746,837 881,597

Total Current Liabilities 746,837 881,597

Net AssetsUnrestricted 272,013 330,112

Total Net Assets 272,013 330,112

Total Liabilities and Net Assets 1,018,850$ 1,211,709$


STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2012,



2012 2011

Unrestricted Net Assets

Operating RevenuesOffice of Early Learning Grant/Contract:

School Readiness Program 7,858,116$ 7,991,906$ Voluntary Pre-Kindergarten Program 4,399,902 4,268,143 Voluntary Pre-Kindergarten Outreach

and Awareness Grant 11,148 10,710 Mid-Florida Community Services 0 450,061

Other Program Revenues 125,004 136,445 Total Operating Revenues 12,394,170 12,857,265

Operating ExpensesProgram Services:

School Readiness Program 7,808,539 8,096,222 Voluntary Pre-Kindergarten Program 4,270,324 4,163,034 Voluntary Pre-Kindergarten Outreach and Awareness 11,148 10,710

General and Administrative 362,258 435,618 (Total Operating Expenses) (12,452,269) (12,705,584)

(Decrease) Increase in Unrestricted Net Assets (58,099) 151,681

Net Assets, Beginning of Year 330,112 178,431

Net Assets, End of Year 272,013$ 330,112$


STATEMENT OF FUNCTIONAL EXPENSESFOR THE YEAR ENDED JUNE 30, 2012,



SupportingServices

Voluntary Pre-School Voluntary Pre- Kindergarten General

Readiness Kindergarten Outreach & and 2012 2011Program Program Awareness Administrative Total Total

Functional ExpensesContracted Children Services 6,416,156$ 4,230,674$ 0$ 0$ 10,646,830$ 10,224,672$ Contracted Children Services -

Mid-Florida Community Services 0 0 0 0 0 288,668 Provider Grants 0 0 0 0 0 6,823 Advertising 4,083 0 0 2,033 6,116 5,835 Salaries and Benefits 1,148,600 32,125 11,148 255,475 1,447,348 1,628,872 Salaries and Benefits -

Mid-Florida Community Services 0 0 0 0 0 63,922 Professional Fees 3,923 170 0 19,322 23,415 22,813 Staff Development

and Training 912 43 0 18,680 19,635 1,717 Insurance 2,214 28 0 3,464 5,706 5,708 Internet/Computer

Expense 7,710 239 0 1,904 9,853 17,456 Office Lease 87,911 2,608 0 17,918 108,437 111,471 Office Supplies 15,514 496 0 3,100 19,110 25,697 Publications 1,333 40 0 1,500 2,873 1,164 Telephone 17,325 499 0 3,441 21,265 25,559 Travel 19,304 515 0 3,134 22,953 30,610 Depreciation 0 0 0 9,036 9,036 16,944 Printing and Postage 11,865 652 0 4,617 17,134 17,508 Utilities 19,473 588 0 3,865 23,926 27,647 Small Equipment 4,270 150 0 829 5,249 19,779 Maintenance 47,946 1,497 0 9,406 58,849 108,082 Quality Development 0 0 0 0 0 44,846 Other Miscellaneous 0 0 0 4,534 4,534 9,791

Total Functional Expenses 7,808,539$ 4,270,324$ 11,148$ 362,258$ 12,452,269$ 12,705,584$

ServicesProgram


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED JUNE 30, 2012,



2012 2011

Cash Flows from Operating ActivitiesSupport and Revenue Collected:

Contract and Grant Fees 12,632,393$ 12,437,745$ Payments for Expenses:

Vendors and Suppliers (11,130,645) (10,724,236) Employees (1,447,348) (1,692,794)

Net Cash Provided by (Used in) Operating Activities 54,400 20,715

Cash Flows from Investing ActivitiesProperty and Equipment Purchases 0 (11,077)

Net Cash Provided by (Used in) Investing Activities 0 (11,077)

Cash Flows from Financing ActivitiesRepayment of Line of Credit 0 (150,000)

Net Cash Provided by (Used in) Financing Activities 0 (150,000)

Net Increase (Decrease) in Cash and Cash Equivalents 54,400 (140,362)

Cash and Cash Equivalents, Beginning of Year 138,369 278,731

Cash and Cash Equivalents, End of Year 192,769$ 138,369$

Reconciliation of Change in Net Assets to Net CashProvided by (Used in) Operating Activities

Increase (Decrease) in Net Assets (58,099)$ 151,681$ Reconciling Adjustments:

Depreciation 9,036 16,944 (Increase) Decrease in Operating Assets: Grants Receivable 243,877 (427,311) Prepaid Expenses (5,404) 7,791 Deposits (250) 0 Increase (Decrease) in Operating Liabilities

Accounts Payable and Accrued Expenses (134,760) 271,610 Net Cash Provided by (Used in) Operating Activities 54,400$ 20,715$

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NOTES TO FINANCIAL STATEMENTS EARLY LEARNING COALITION OF THE NATURE COAST, INC.


Note 1 - Summary of Significant Accounting Policies A summary of the significant accounting policies applied in the preparation of the accompanying

financial statements is as follows: Reporting Entity Early Learning Coalition of the Nature Coast, Inc. (the Coalition) is a nonprofit organization

created under the provisions of Section 411.01, Florida Statutes. On July 1, 2005, the Coalition merged with Dixie Gilchrist Levy School Readiness Coalition, Inc. and now services these counties. This merger occurred as directed by Section 411.01, Florida Statutes. The assets of the Dixie Gilchrist Levy School Readiness Coalition were transferred in July 2006.

The Coalition is established to prepare preschool children to enter kindergarten ready to learn,

as measured by criteria established by the Florida Partnership for School Readiness (the Partnership). Effective January 1, 2005, the Partnership became the Office of Early Learning (the Office) and placed under the direction of the Agency for Workforce Innovation by Florida Statutes, Section 1002. In 2011, the Office became a separate entity, placed under the direction of the Governor of the State of Florida. Under Florida Statutes, Section 411.01, the Coalition is required to develop and implement a plan for comprehensive, accessible, affordable, and high quality early education and child care services for children birth to age five in Citrus, Dixie, Gilchrist, Levy, and Sumter Counties in Florida. The Coalition is primarily supported by grants from the Office passed through from the Department of Health and Human Services.

Programs Operated The Coalition operates the following programs: ■ School Readiness Program Provides financial assistance for child care costs to families who meet the qualifying

guidelines, including after school care for school age children and provides early education services primarily to four year olds.

■ Voluntary Pre-Kindergarten Program Provides children who reside in Florida and will attain the age of four years on or before

September 1 of the school year a voluntary Pre-Kindergarten education program. All programs of the Coalition were provided through subcontracts with outside agencies. In

June 2010, the Coalition began providing these services in-house. Financial Statement Presentation Net assets of the Corporation and changes therein are classified and reported as follows: ■ Unrestricted Net Assets—Net assets that are not subject to donor-imposed stipulations. ■ Temporarily Restricted Net Assets—Net assets subject to donor-imposed stipulations

that may or will be met either by passage of time nor can be fulfilled or otherwise removed by actions of the Corporation.

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CRYSTAL RIVER, FLORIDA (Continued)

Note 1 - Summary of Significant Accounting Principles (Continued) Basis of Accounting For financial reporting purposes, the Coalition uses the accrual basis of accounting, which

recognizes revenue when earned and expenses as incurred. Federal and state government grants are recorded as support when performance occurs under the terms of the grant agreement.

Revenues Revenues from federal and state grants and contracts are recorded based upon terms of the

grantor allotment which generally provide that revenues are earned when the allowable costs of the specific grant provisions have been incurred. Revenues are subject to audit by the grantor and, if the examination results in a disallowance of any expenditure, repayment could be required. Management believes that all monies have been earned as of June 30, 2012. For the year ended June 30, 2012, 100% of the Coalition’s revenues are from one funding agency.

Functional Cost Allocation Management allocates certain management and general costs among the various programs.

Indirect costs for School Readiness and VPK are included in management and general. Costs subject to allocation include certain salaries and payroll taxes, telephone and utilities, insurance, repairs and maintenance, and professional fees. Direct costs are specifically charged to the program which incurred the costs.

Property and Equipment Property and equipment are recorded at cost. The Coalition capitalizes all property and

equipment having an original cost of $1,000 or greater. Depreciation is provided over their estimated lives (five years for equipment) using the straight-line method.

Grants Receivable Receivables are recorded by the Coalition for funds to be received from various federal and

state grants as revenues are earned. An allowance for uncollectible receivables has not been recorded, as all amounts are deemed collectible.

Income Taxes The Corporation is exempt from income taxes under Section 501(c)(3) of the Internal Revenue

Code. Accordingly, the financial statements do not reflect a provision for income taxes. It is the policy of management to evaluate its tax positions on an ongoing basis and to disclose

any such positions it believes would have a material impact on the financial statements and related notes. Management also believes that no such required disclosures currently exist.

The Coalition is no longer subject to U.S. federal and state income tax examinations by tax

authorities for years before 2009. The Coalition would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties, if any, in operating expenses.

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CRYSTAL RIVER, FLORIDA (Continued)

Note 1 - Summary of Significant Accounting Principles (Concluded) Cash and Cash Equivalents The Coalition considers cash and cash equivalents to include cash deposits and investments with

original maturities of three months or less. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents and grants receivable are at fair value. Management’s Review Early Learning Coalition of the Nature Coast, Inc. has evaluated subsequent events and

transactions for potential recognition or disclosure in the financial statements through December 19, 2012, the date the financial statements were available to be issued.

Comparative Financial Statements The financial statements include certain prior-year summarized information in total, but not by

net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended June 30, 2011, from which the summarized information was derived. Certain amounts in the prior year financial statements have been reclassified for comparative purposes to conform with the presentation in the current year financial statements. In the 2011 year, $97,471 of revenue was reported as temporary restricted and has subsequently determined to be unrestricted and has been reclassified from temporarily restricted to unrestricted net assets, in the accompanying 2011 summarized information.

Note 2 - Cash and Cash Equivalents At June 30, 2012, the carrying amount of cash on hand and on deposit with banks was $192,769

and the related bank balance was $202,776. The Coalition occasionally maintains deposit balances in excess of those insured up to the Federal Deposit Insurance Corporation limits. Additionally, the Coalition believes that deposits are covered under Florida Statute 280 and has filed the related forms. The Coalition has no investments.

Note 3 - Property and Equipment The following is a schedule of property and equipment owned by the Coalition at June 30, 2012: Office Equipment $ 45,929 Computer Equipment 35,913 81,842 (Accumulated Depreciation) (55,334) Property and Equipment, Net $ 26,508 Depreciation expense for the year ended June 30, 2012 is $9,036.

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CRYSTAL RIVER, FLORIDA (Concluded)

Note 4 - Retirement The Coalition maintains a Voluntary Retirement Annuity Plan 403(b) (the Plan) for its

employees. All employees are eligible for participation and employer matching contributions to the Plan on the date of employment. Contributions to the Plan are matched based on percentage of employee salaries. In 2012, the Coalition contributed $96,759 to the Plan on behalf of the employees.

Note 5 - Operating Lease The Coalition currently has a lease for office space for their Crystal River location for a five-

year period ending June 30, 2014. The Coalition has a year-to-year lease agreement for office space for the Chiefland location through June 30, 2012, and a lease agreement for office space in Sumter County, which expires March 31, 2014. Rent expense for the year ended June 30, 2012, is $108,438. The future minimum lease payments are as follows:

Year Minimum Ending Annual June 30 Rent 2013 $ 91,794 2014 79,104 2015 11,062 2016 11,062 2017 7,375 Note 6 - Subsidized Services Program Matching Requirements The Coalition's contract with the Office of Early Learning includes a provision requiring a

local match for the subsidized childcare program; the Coaltion obtained the required match. Note 7 - Commitments and Contingencies Concentrations The Coalition receives a substantial amount of its support from federal and state grants. A

significant reduction in the level of this support, if this were to occur, may have an effect on the Coalition's programs and activities.

Grant Compliance Grants require the fulfillment of certain conditions set forth in the instrument of the grant.

Failure to fulfill the conditions could result in the return of the funds to grantors. Although this is a possibility, the Board of Directors deem the contingency remote, since by accepting the grants and their terms, it has accommodated the objectives of the Corporation to the provisions of the grants.

Line of Credit The Coalition has available a $150,000 line of credit at an interest rate of 3.25%. As of

June 30, 2012, no amount has been drawn on the line of credit.

ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS,

ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; AND THE PROVISIONS OF OFFICE OF

MANAGEMENT AND BUDGET (OMB) CIRCULAR A-133; AND THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

11

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

Board of Directors Early Learning Coalition of the Nature Coast, Inc. Crystal River, Florida We have audited the financial statements of Early Learning Coalition of the Nature Coast, Inc. (the Coalition), a nonprofit organization, as of and for the year ended June 30, 2012, and have issued our report thereon dated December 19, 2012. We conducted our audit 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. Internal Control Over Financial Reporting Management of the Coalition is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Coalition's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Coalition’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Coalition’s internal control over financial reporting. 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. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Coalition's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do 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.

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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

(Concluded)

This report is intended solely for the information and use of the Coalition, management, 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. December 19, 2012 Ocala, Florida

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INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT

ON EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH

OMB CIRCULAR A-133 AND THE FLORIDA DEPARTMENT OF FINANCIAL SERVICES, STATE PROJECTS COMPLIANCE SUPPLEMENT

Board of Directors Early Learning Coalition of the Nature Coast, Inc. Crystal River, Florida Compliance We have audited the Early Learning Coalition of the Nature Coast, Inc. (the Coalition), a nonprofit organization, compliance with the types of compliance requirements described in OMB Circular A-133, Compliance Supplement, and the requirements described in the Florida Department of Financial Services, State Projects Compliance Supplement, that could have a direct and material effect on each of the Coalition’s major federal programs and state projects for the year ended June 30, 2012. The Coalition's major federal programs and state projects are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs and major state projects is the responsibility of the Coalition’s management. Our responsibility is to express an opinion on the Coalition's compliance based on our audit. 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; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 69I-5, Rules of the Florida Department of Financial Services, and Chapter 10.650, Rules of the Auditor General. Those standards and OMB Circular A-133, and Chapter 10.650, Rules of the Auditor General, 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 or state project occurred. An audit includes examining, on a test basis, evidence about the Coalition's compliance with those requirements and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Coalition's compliance with those requirements. In our opinion, the Coalition complied, in all material respects, with the requirements referred to above that that could have a direct and material effect on each of its major federal programs and major state projects for the year ended June 30, 2012.

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INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT

ON EACH MAJOR FEDERAL PROGRAM AND STATE PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH

OMB CIRCULAR A-133 AND THE FLORIDA DEPARTMENT OF FINANCIAL SERVICES, STATE PROJECTS COMPLIANCE SUPPLEMENT

(Concluded) Compliance (Concluded) Additionally, our audit was conducted in accordance with the special audit guidance provided by the Office of Early Learning, which among other things requires the auditor to test the Coalition’s monthly reconciliation of its financial records to the statewide School Readiness data and reporting system. Our audit indicates the Coalition has complied with this requirement. Internal Control Over Compliance Management of the Coalition is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs and state projects. In planning and performing our audit, we considered the Coalition's internal control over compliance with requirements that could have a direct and material effect on a major federal program or state project to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, Chapter 69I-5, Rules of the Florida Department of Financial Services, and Chapter 10.650, Rules of the Auditor General, 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 Coalition’s internal control over compliance. A deficiency in internal control over compliance exists when the 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 or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of 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 or state project will not be prevented or detected and corrected on a timely basis. Our consideration of the 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 deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended for the information and use of the Coalition, management, federal awarding agencies, and pass-through entities, and is not intended to be and should not be used by anyone other than those specified parties. December 19, 2012 Ocala, Florida

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AND STATE FINANCIAL ASSISTANCEFOR THE YEAR ENDED JUNE 30, 2012

EARLY LEARNING COALITION OF THE NATURE COAST, INC.CRYSTAL RIVER, FLORIDA

Program orGrantor/Pass-Through CFDA/CSFA Contract Award

Program Title Number Number Amount Expenditures

Federal Awards

U.S. Department of Health and Human ServicesPassed Through the Office of Early Learning

Social Service Block Grant 93.667 SR12 15,625$ 15,625$

Temporary Assistance for Needy Families (TANF) 93.558 SR12 2,389,955 2,389,955

Child Care Development Fund Cluster:Child Care and Development Block Grant 93.575 SR12 3,273,762 3,273,762 Child Care Mandatory and Matching Funds

of the Child Care Development Fund 93.596 SR12 2,178,774 2,178,774 Total Child Care Development Fund Cluster 5,452,536 5,452,536

Total U.S. Department of Health and Human Services 7,858,116 7,858,116

Total Expenditures of Federal Awards 7,858,116 7,858,116

State Financial Assistance

Department of Children and FamiliesPassed Through Kids Central, Inc.

Community Based Care Supports 60.094 45,000 45,000

Office of Early LearningVoluntary Pre-Kindergarten 75.007 SV12/OA12 4,399,902 4,399,902

Total Expenditures of State Financial Assistance 4,444,902 4,444,902

Total Expenditures of Federal Awards and State Assistance 12,303,018$ 12,303,018$

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

16

NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FOR THE YEAR ENDED JUNE 30, 2012


Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant

activity of Early Learning Coalition of the Nature Coast, Inc. and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 69I-5, Rules of the Florida Department of Financial Services, and Chapter 10.650, Rules of the Auditor General. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, the preparation of the financial statements.

17

SCHEDULE OF FINDINGS AND QUESTIONED COSTS FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE


PART A - SUMMARY OF AUDIT RESULTS

1. The independent auditors' report expresses an unqualified opinion on the financial statements of the Early Learning Coalition of the Nature Coast, Inc.

2. No significant deficiencies relating to the audit of the financial statements are reported in

the report on internal control over financial reporting and on compliance and other matters based on an audit of the basic financial statements of Early Learning Coalition of the Nature Coast, Inc.

3. No instances of noncompliance material to the financial statements of Early Learning

Coalition of the Nature Coast, Inc. were disclosed during the audit (same report as No. 2 above).

4. No significant deficiencies relating to the audit of the major federal programs and state

projects are reported in the report on compliance with requirements that could have a direct and material effect on each major federal program and state project and on internal control over compliance in accordance with OMB Circular A-133 and the Florida Department of Financial Services, State Projects Compliance Supplement.

5. The auditors' report on compliance for the major federal and state award programs for Early

Learning Coalition of the Nature Coast, Inc. expresses an unqualified opinion (same report as No. 4 above).

6. The audit disclosed no findings required to be reported in accordance with Section 510(a)

of OMB Circular A-133 or Chapter 10.650, Rules of the Auditor General, relative to the major federal programs and state projects for Early Learning Coalition of the Nature Coast, Inc.

7. The programs/projects tested as major programs/projects included the following: ■ Federal: ● U.S. Department of Health and Human Services: ► Child Care Development Fund Cluster:

Child Care and Development Block Grant; CFDA No. 93.575 Child Care Mandatory and Matching Funds of the Child Care and Development Fund CFDA No. 93.596

► Temporary Assistance for Needy Families (TANF); CFDA No. 93.558

■ State:

● Office of Early Learning: ► Voluntary Pre-Kindergarten Education Program—CSFA No.75.007 8. The threshold for distinguishing Type A and Type B programs/projects was $300,000 for

major federal award programs and state projects.

9. Early Learning Coalition of the Nature Coast, Inc. did not qualify as a low-risk auditee pursuant to OMB Circular A-133.

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS FEDERAL AWARD PROGRAMS AND STATE FINANCIAL ASSISTANCE


(Concluded)

PART B - FINDINGS - FINANCIAL STATEMENTS

1. No matters were reported.

PART C - FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS 1. No matters were reported.

PART D - FINDINGS AND QUESTIONED COSTS - MAJOR STATE FINANCIAL ASSISTANCE PROJECTS 1. No matters were reported.

PART E - OTHER ISSUES 1. No summary Schedule of Prior Audit Findings is required because there were no prior

audit findings related to federal programs or state projects. 2. No Corrective Action Plan is required because there were no findings required to be

reported under the Federal or Florida Single Audit Acts.

3. No Management Letter has been included in the report because no findings or comments were noted pursuant to Chapter 10.650, Rules of the Auditor General.

FINANCIAL STATEMENTS AND INDEPENDENT … rpts/2012 early... · financial statements and independent...

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