LUTHER SPEIGHT & COMPANY, LLC - app.lla.state.la.us · LUTHER SPEIGHT & COMPANY, LLC Certified...

LUTHER SPEIGHT & COMPANY, LLC Certified Public Accountants and Consultants

NOLA BUSINESS ALLIANCE (A Nonprofit Organization)

FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT

DECEMBER 31, 2014 AND 2013

TABLE OF CONTENTS

Page

INDEPENDENT AUDITOR'S REPORT 1-2

Financial Statements

Statements of Financial Position - Years Ended December 31, 2014 and 2013 3

Statements of Financial Activities and Changes in Net Assets - Years Ended December 31, 2014 and 2013 4

Statements of Functional Expenses- Years Ended December 31,2014 and 2013 5-6

Statements of Cash Flows- Years Ended December 31, 2014 and 2013 7

Notes to the Financial Statements

For Years Ended December 31, 2014 and 2013 8-13

Supplementary Information

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 14-15

Schedule of Findings and Management's Responses 16-17

Status of Prior Findings 18

Schedule of Compensation. Benefits and Other Payments to Agency Head or Chief Executiye Officer 19-20

LUTHER SPEIGHT & COMPANY CertifieA Public Accountants and Consiiltantf^

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of NOLA Business Alliance New Orleans, Louisiana

Report on the Financial Statements

We have audited the accompanying financial statements of NOLA Business Alliance (a nonprofit organization) (the Organization) as of December 31, 2014 and 2013 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 of these fmancial 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 fmancial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fmancial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the fmancial statements, whether due to fraud or error, hi 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 tliat 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

New Orleans Office: 1100 Poydras Street, Suite 1225/New Orleans, LA 70163/ (504)561-8600 Baton Rouge Office: 2900 Westfork Drive, Suite 401/Baton Rouge, LA 70827/(225)275-9100

Continued,

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NOLA Business Alliance as of December 31, 2014 and 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 8, 2015, on our consideration of the organization's internal control over financial reporting 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 our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 the organization's internal control over financial reporting and compliance.

Other Matters

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Compensation, Benefits and Other Payments to Agency Head or Chief Executive Officer 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 fi-om 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 information is fairly stated in all material respects in relation to the financial statements as a whole.

Luther Speight & Company CPAs

New Orleans, Louisiana May 8, 2015

NOLA BUSINESS ALLIANCE NEW ORLEANS, LOUISIANA

STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31,2014 AND 2013

LIABILITIES & NET ASSETS

Liabilities

Accounts Payable

Deferred Revenue

Payroll Liabilities

Defen'ed Rent Liability

Total Liabilities

Unrestricted Temporarily Restricted

Total Net Assets

TOTAL LIABILITIES & NET ASSETS

2014 2013 ASSETS

Cash and cash equivalents $ 1,369,312 $ 858,659

Grant Receivable 317,468 59,001

Pledges Receivable, net of allowance 38,425 101,320

of $325 and $4,000, respectively

Prepaid Expenses 47,469 31,883

Fixed Assets, net 54,984 85,671

Deposits 6,785 6,755

TOTAL ASSETS 1,834,443 1,143,289

336,763 30,513

622,141 525,000

59,707 89,810

11,963 14,387

1,030,574 659,710

714,194 387,529 89,675 96,050

803,869 483,579

$ 1,834,443 $ 1,143,289

The accompanying notes are an integral part of these fmancial statements. 3


STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2014 and 2013

2014 2013

Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted

REVENUE AND OTHER SUPPORT Grant Revenue $ 2,258,672 $ $ 2,258,672 $ 1,946,644 $ Private Contributions 343,794 81,625 425,419 382,653 29,585 In-kind Contributions 61,371 - 61,371 90,423 -Miscellaneous Revenue 21,638 - 21,638 2,472 -Releases from Restrictions 51,625 (51,625) - - -

Total Revenues and Other Support 2,737,100 30,000 2,767,100 2,422,192 29,585

EXPENSES Program Services 1,660,481 - 1,660,481 1,650,464 -Management and General 505,378 - 505,378 490,231 -Fundraising 280,951 - 280,951 232,633 -

Total Expenses 2,446,810 - 2,446,810 2,373,328 -

CHANGE IN NET ASSETS 290,290 30,000 320,290 48,864 29,585

Net assets, beginning of year 387,529 96,050 483,579 338,665 66,465 Net assset adjustment 36,375 (36,375) - - -Net assets, end of year 714,194 89,675 803,869 387,529 96,050

Total

1,946,644 412,238

90,423 2,472

2,451,777

1,650,464 490,231 232,633

2,373,328

78,449

405,130

483,579

The accompanying notes ai'e an integral part of these financial statements 4

NOLA BUSINESS ALLIANCE NEW OIULEANS, LOUISIANA

STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31,2014

2014 Program Service

Management and General Fundraising Total

Staffing Expense $ 875,568 $ 335,833 $ 203,648 $ 1,415,049 Professional Services 393,140 52,171 33,346 478,657 Sub-Recipient Expense 100,881 - - 100,881 Meetings and Events 102,306 5,684 10,488 118,478 Rent Expense 71,524 26,249 9,513 107,286 Travel and Business Development 44,218 1,615 9,868 55,701 Uncollectible Pledge Provision - 52,790 - 52,790 Depreciation Expense 20,948 7,688 2,786 31,422 Communication Expenses 15,876 5,826 2,111 23,813 Insurance Expense 10,475 3,844 1,393 15,712 Office Expense 4,931 1,525 3,907 10,363 Office Supplies 2,884 1,058 384 4,326 Continued Education and Training 2,535 4,584 700 7,819 Equipment Leases 6,600 - - 6,600 Printing and Reproduction 2,953 2,608 873 6,434 Advertising - 575 - 575 Dues/Memberships/Subscriptions 2,746 1,940 891 5,577 Repairs and Maintenance 2,105 773 280 3,158 Postage and Delivery Charges 791 297 763 1,851 Loss on Disposal - - - -Bank charges - 280 - 280 Tax & Licenses - 38 - 38

$ 1,660,481 $ 505,378 $ 280,951 $ : 2,446,810

The accompanying notes are an integral part of these financial statements 5


STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31,2013

Program Management 2013 Service and General Fundraising Total

Staffing Expense $ 839,508 $ 335,229 $ 181,468 $ 1,356,205 Professional Services 439,372 68,371 18,736 526,479 Meetings and Events 140,152 5,465 5,519 151,136 Rent Expense 54,922 18,839 8,596 82,357 Travel and Business Development 75,302 9,017 6,501 90,820 Uncollectible Pledge Provision - 14,052 - 14,052 Depreciation Expense 23,422 8,034 3,666 35,122 Communication Expenses 15,659 5,371 2,451 23,481 Insurance Expense 11,656 3,998 1,824 17,478 Office Expense 1,638 8,102 35 9,775 Office Supplies 4,581 1,571 717 6,869 Continued Education and Training - 1,414 1,048 2,462 Equipment Leases 12,850 - - 12,850 Printing and Reproduction 18,378 6,165 1,438 25,981 Advertising - 1,100 - 1,100 Dues/Memberships/Subscriptions 2,269 2,673 180 5,122 Repairs and Maintenance 5,918 - - 5,918 Postage and Delivery Charges 1,384 745 454 2,583 Loss on Disposal 3,453 - - 3,453 Bank charges - 75 - 75 Tax & Licenses - 10 - 10

$ 1,650,464 $ 490,231 $ 232,633 $ : 2,373,328

The accompanying notes are an integral part of these financial statements 6


STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,2014 AND 2013

2014 2013 CASH FLOWS FROM OPERATING ACTTVITIES

Net Income $ 320,290 $ 78,449 Adjustments to reconcile net income to net cash:

Depreciation 31,422 35,122 Loss on sale of fixed assets - 3,453 Uncollectible pledge provision 52,790 14,052 Changes in assets and liabilities

Grant Receivable (258,467) 41,769 Pledges receivable, net of discount 10,105 (11,407) Prepaid expenses (15,585) (15,773) Deposits (30) -Accounts payable 306,250 (42,746)

Deferred revenue 97,141 150,000 Payroll liabilities (30,104) 33,401 Deferred rent liability (2,424) (1,005)

Net cash flow from operating activities 511,388 285,315

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (735) (9,185)

Proceeds from sale of fixed assets - 8,250 Net cash used in Livesting Activities (735) (935)

NET CHANGE IN CASH AND EQUIVALENTS 510,653 284,380

Cash and cash equivalents - beginning of period 858,659 574,279

Cash and cash equivalents - end of period 1,369,312 858,659

The accompanying notes are an integral part to these financial statements. 7


NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2014 and 2013

1. Nature of Activities

NOLA Business Alliance (NOLABA, or the Organization) is a 501(c) (3) exempt organization. NOLABA was incorporated in the State of Louisiana in 2010 and is the official non-profit organization tasked with leading the economic development initiative for the City of New Orleans. Operations of the Organization began in fiscal year 2011.

2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accordingly, revenues are recognized when earned and expenses are recorded when incurred. Contributions are recognized when received or unconditionally promised. In-kind donations are recognized at their fair market value when received.

Basis of presentation

The organization reports information regarding its financial position and activities according to three classes of net assets, as applicable: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. When a restriction is satisfied or expires, temporarily restricted net assets are reclassified to unrestricted net assets.

Use of estimates

The preparation of financial statements in conformity with U.S. 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Deferred revenues

The Organization records revenues in the period the revenues are earned. As of December 31, 2014 and 2013, the Organization recorded deferred revenue of $622,141 and $525,000, respectively in the Statements of Financial Position.



2. Summary of Significant Accounting Policies (continued!

Income taxes

The Organization is a non-profit corporation that is exempt firom federal income tax under Section 501 (c) (3) of the Internal Revenue Code and qualifies as an organization that is not a private foundation as defined in Section 509 (a) of the Code. It is exempt firom Louisiana income tax under the Section 121(5) of Title 47 of the Louisiana Revised Statues of 1950. The Organization paid no federal income tax for the years ended December 31, 2014 and 2013.

Accounting Standards Codification (ASC) Accounting for Uncertainty in Income Taxes policy, clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements. It also clarifies the application of accounting for income taxes by defining a criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an entity's financial statements. The interpretation requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The adoption of the provisions of the interpretation had no material impact on the Organization's financial statements. The organization's tax returns for the years ended 2013, 2012, and 2011 remain open and subject to examination by taxing authorities. The organization's 2014 tax return has not yet been filed as of the report date and is on valid extension.

Cash and cash equivalents

For the purposes of reporting cash flows, cash consists of cash and cash equivalents. The Organization considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.

Grant receivable

Grant receivable is comprised of amounts due firom the State of Louisiana-Department of Education, the Surdna Foundation and the U. S. Department of Commerce-Economic Development Agency (EDA). The total amounts of grant receivable as of December 31, 2014 and 2013 are $317,468 and $59,001, respectively. No allowance for doubtful accounts is recorded against this receivable.



2, Summary of Significant Accounting Policies (continuedl

Property and egmpment

All acquisitions of property and equipment in excess of $500 and all expenditures for repairs, maintenance, renewals and betterments that materially prolong the useful lives of assets are capitalized. Property and equipment are recorded at cost when purchased. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and depreciated over the shorter of the life of the asset or the life of the lease. When items of equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss included in the statement of activities.

Impairment of long-lived assets is tested whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized only if the carrying amount is not recoverable and exceeds its fair value. There were no impairments recognized during 2014 or 2013.

Contributions

Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support based on the existence and/or nature of any donor restrictions. Donor restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. Temporarily restricted net assets at December 31, 2014 and 2013 consist of pledges receivable of $89,675 and $96,050, respectively.

In-kind contributions

In-kind contributions are recognized if the services create or enhance nonfinancial assets or require specialized skills, are performed by people with those skills, and would otherwise be purchased by the Organization. Management has estimated the value of in-kind contributions to be $61,370 and $90,423 for the years ended December 31, 2014 and 2013, respectively.

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2. Summary of Significant Accounting Policies (continued)

Promises to give Unconditional promises to give are recognized as revenues or gains in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized only when conditions on which they depends are substantially met and the promises become unconditional. The organization provides for estimated uncollectible for pledges receivable based on management's analysis of specific promises made. The allowance for pledges receivable was $325 and $4,000, respectively, at December 31, 2014 and 2013. Promises to give that are expected to be collected in future years are recorded at the present value of estimated future cash flows.

Advertising Advertising costs are expensed in the period in which the advertising occurs. During 2014 and 2013, advertising costs totaled $575 and $1,100, respectively.

Ftmctional expenses

Generally, expenses are charged to each program or function based on direct expenditures incurred. Expenditures not directly chargeable are allocated to programs or functions based on the estimated percentage of time spent by the organization's employees or the space utilized.

Note 3: Property and Equipment Property and equipment consisted of the following at December 31,2014:

Useful Lives 2014 2013 Furniture & Fixtures 7 years $ ; 19,727 $ 19,727 Ofl&ce Equ^nient 3-5 years 103,919 103,919 Leasehold m^Jrovements 7 years 30,256 29,521

153,902 153,167 Accumulated depreciation (98,918) (67,496)

S 1 54,984 $ 85,671

Depreciation expense for fiscal year ended December 31, 2014 and 2013 was $31,422 and $35,122, respectively.

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Note 4; ComTnifments and Contingencies

Lease Commitments

The Organization leases office space. The office space lease is for seventy five months. As the lease agreement has an escalation clause, the Organization has accrued deferred rent to normalize the annual lease payments over the terms of the lease. Deferred rent at December 31, 2014 and 2013 is $11,963 and $14,387, respectively and is included in non-current liabilities of the accompanying statements of financial position.

Future obligations under operating lease agreements are as follows at December 31, 2014:

Fiscal Years Amounts 2015 $ 104,067 2016 105,249 2017 106,667 2018 20,978

Note 5: Financial Instruments and Credit Concentration

The Organization maintains its cash balance in two financial intuitions in New Orleans, Louisiana. The balance is insured by the Federal Deposit Insurance Corporation up to $250,000. The Organization's uninsured cash balance totaled $533,564 and $462,287, respectively, at December 31, 2014 and 2013.

Note 6: Cooperative Endeavor Agreement

The Organization and the City of New Orleans entered into a cooperative endeavor agreement (CEA) effective April 1, 2011 for the Organization to provide strategic planning, business retention and expansion, business development and overall economic development to the City of New Orleans. In 2014, the organization renewed the agreement for the twelve month period beginning April 1, 2014. The CEA provides for the City to fund $1,500,000 to the Organization as compensation for the economic development services to be provided over the term of one year. The Organization agrees to raise a minimum of $500,000 annually through fundraising activities. For the years ended December 31, 2014 and 2013, the Organization recognized $1,500,000 and $1,500,000 of grant revenue from the City.

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Note 7: Grants

During 2012, the Organization received a grant trom the Department of Commerce Economic Development Administration (EDA) in the amount of $1,000,000. The EDA funds will be used, over a period of 3 years, to create an economic development strategic plan and build the organizational capacity of the NOLABA. During 2014, total EDA grant funds amounted to $ 311,932. Grant revenue at December 31, 2014:

2014 City of New Orleans $ 1,500,000 U. S. Economic Development Administration 311,932 JPMorgaii Chase Foundation 120,832 W. K. Kellogg Foundation 107,208 State of Louisiana 101,168 Surdna Foundation 100,000 U. S. Environmental Protection Agency 14,886 Greater New Orleans, Inc. 2,646

$ 2,258,672

Note 8: Line of Credit

During the 2012 fiscal year, the Organization entered into a line of credit with a financial institution. The maximum amount available on the line was $250,000 at December 31, 2014. The interest rate was 5% with a zero balance on the line of credit at year end. The line of credit has no expiration date.

Note 9: Net Asset Adjustment

The Organization's temporarily restricted net assets reflected releases from restrictions that included releases related to the prior year. Accordingly, the Organization recorded a net asset adjustment totaling $36,375. The adjustment had no effect on total net assets, rather only represented an increase in unrestricted net assets and a corresponding decrease in temporarily restricted net assets.

Note 10: Subsequent Events

Management has evaluated subsequent events through the date that the financial statements were available to be issued, May 8, 2015 and determined that there were no other items for disclosure.

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SUPPLEMENTARY INFORMATION

LUTHER SPEIGHT & COMPANY Certifjp.d Public. Accountantf} and Cnn.niLlt.nn.tft

INDEPENDENT AUDITOR'S 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

To the Board of Directors of NOLA Business Alliance

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 NOLA Business Alliance, Inc. (a nonprofit organization)(the Organization), which comprise the statement of financial position as of December 31, 2014 and 2013, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated May 8, 2015.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Organization's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.

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 a 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. 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.

Our consideration of internal control 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 material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

New Orleans Office: 1100 Poydras Street, Suite 1225/New Orleans, LA 70163/(504)561-8600 Baton Rouge Office: 2900 Westfork Drive, Suite 401/Baton Rouge, LA 70827/(225)275-9100

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Organization's financial statements are free fi-om 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 an instance of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and responses as item 14-01.

Organization's Response to Finding

The Organization's response to the findings identified in our audit is described in the accompanying schedule of findings and responses. The Organization's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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.

Luther Speight & Company CPAs

New Orleans, Louisiana May 8, 2015

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SCHEDULE OF FINDINGS AND MANAGEMENT'S RESPONSES


SCHEDULE OF FINDINGS AND RESPONSES DECEMBER 31,2014

FINDING #14-01 ENHANCED GRANT MONITORING PROCEDURES NEEDED

CONDITION:

The Organization was awarded a federal grant from the Carl Perkins grant program. The funds received under this grant were disbursed to several schools in Orleans Parish as sub-grants with an administrative fee earned by NOLABA. The Organization's monitoring procedures included reviews of all sub-recipient expenditure documentation prior to requisitioning funds from the grantor and making disbursements to the sub-recipients. However the monitoring procedures did not include reviews of sub-recipient independent audits and other available information to determine if the sub-recipient internal control systems were effective and appeared adequate to mitigate the risks of noncompliance by any of the sub-recipients. Noncompliance by any of the sub-recipients could represent potential financial exposure to NOLABA. During the audit period grant revenues totaled $101,168 while disbursements to sub-recipients totaled $100,881

CAUSE:

The Organization did not have a comprehensive sub-recipient monitoring plan developed and procedures implemented.

EFFECT:

Monitoring procedures were not adequate to mitigate the risks to NOLABA of potential sub-recipient noncompliance and ineligible expenditures.

CRITERIA:

The Office of Management and Budget (0MB) requires that any non-federal recipient of federal assistance that passes that assistance, whether in part or in total, to another recipient (known as pass-through entities and sub-recipients, respectively) is responsible to monitor the federal assistance activities of that sub-recipient, as well as assure that they are both complying with laws and regulations. This requirement is based on the fact that they are both equally responsible for federal funds received.

RECOMMENDATION:

We recommend that NOLABA develop and implement a comprehensive sub-recipient monitoring policy. The policy should include reviewing sub-recipient independent audit reports and other available information.

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SCHEDULE OF FINDINGS AND RESPONSES DECEMBER 31,2014

FINDING #14-01 ENHANCED GRANT MONITORING PROCEDURES NEEDED

MANAGEMENT'S RESPONSE:

NOLABA recognizes that we do have a strong internal control structure in place that all grant funding and disbursements are subject to. With that recognition, NOLABA understands that monitoring sub-recipient awardees of grant funding is a necessary procedure and we plan to document and enhance our grant monitoring procedures as recommended. NOLABA will obtain the most recent audit reports from all sub-recipient (schools) that have received current awards to ensure there are no material weaknesses, no internal control issues, and identify where the grant funds are reported. Going forward, all schools submitting applications for sub-recipient grants will need to submit their most recent audit report prior to being awarded the funding.

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STATUS OF PRIOR FINDINGS AND RESPONSES DECEMBER 31,2014

There were no findings or questioned costs noted in the prior audit report.

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SCHEDULE OF COMPENSATION, BENEFITS, AND OTHER PAYMENTS TO AGENCY HEAD OR CHIEF EXECUTIVE OFFICER

DECEMBER 31,2014

Agency Head Name: Rod Miller, sers^ed January 1 - August 31, 2014

Purpose Amount Salary 180,127.27 Benefits-insurance 8,108.64 Benefits-retirement 7,629.48 Benefits-executive parking 1,344.00 Car allowance 5,964.29 Vehicle provided by government N/A Per diem N/A Reimbursements N/A Travel N/A Registration fees 295.00 Conference travel 1,036.27 Continuing professional education fees

N/A

Housing N/A Unvouchered expenses N/A Special meals N/A

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SCHEDULE OF COMPENSATION, BENEFITS, AND OTHER PAYMENTS TO AGENCY HEAD OR CHIEF EXECUTIVE OFFICER

DECEMBER 31,2014

Agency Head Name: Melissa Ehlinger, served September 1 - December 31, 2014

Purpose Amount Salary 64,544.45 Benefits-insurance 1,810.92 Benefits-retirement 2,158.85 Benefits-executive parking 760.00 Car allowance N/A Vehicle provided by government N/A Per diem N/A Reimbursements N/A Travel N/A Registration fees 695.00 Conference travel 1,249.20 Continuing professional education fees

N/A

Housing N/A Unvouchered expenses N/A Special meals N/A

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