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ASSOCIATION FOR RETARDED CITIZENS/OUACHITA

JUNE 30,2005

TABLE OF CONTENTS

Independent Auditors' Report — 1

Statement of Financial Position 3

Statement of Activities 4

Statement of Functional Expenses 5

Statement of Cash Flows 7

Notes to Financial Statements 8

OTHER SUPPLEMENTARY DATA

Schedule 1 - Combining Schedule of Financial Position 15

Schedule 2 - Combining Schedule of Activities 17

SUPPLEMENTARY INFORMATION-GRANT ACTIVITY

Schedule of Expenditures of Federal Awards 22

Schedule of Expenditures of State Awards 23

Notes to Schedule of Expenditures of Federal and State Awards 24

Independent Auditors' Report on Compliance and Internal Control over FinancialReporting Based on an Audit of Financial Statements Performed inAccordance With Government Auditing Standards 25

Schedule of Findings 27

Francis I. Huffman, CPAI I iff f^V L- Fred Monroe- CPAi_VJ 1 1 ^ y Esther Atteberr CPAEsther Atteberry CPA

John L. Luffey. MBA, CPA (1963-2002)

& Monroe(A Professional Accounting Corporation)

C E R T I F I E D P U B L I C A C C O U N T A N T S

INDEPENDENT AUDITORS' REPORT

The Board of DirectorsThe Association for Retarded Citizens/OuachitaMonroe, Louisiana

We have audited the accompanying statement of financial position of The AssociationFor Retarded Citizens/Ouachita (a nonprofit organization - the Association) as of June30, 2005, and the related statements of activities, functional expenses and cash flows forthe year then ended. These financial statements are the responsibility of the Association'smanagement. Our responsibility is to express an opinion on these financial statementsbased on our audit.

We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America; the standards for financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States and theLouisiana Governmental Audit Guide published by the Society of Louisiana Certified PublicAccountants and the Louisiana Legislative Auditor. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimatesmade 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 materialrespects, the financial position of the Association as of June 30, 2005, and the changes inits net assets and its cash flows for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report datedDecember 15,2005, on our consideration of the Association's internal control over financialreporting and our tests of its compliance with certain provisions of laws, regulations,contracts and grants. That report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunction with this report inconsidering the results of our audit.

(318) 387-2672 • FAX (318) 322-8866 • www.lhm-cpas.com1100 N 18th ST*PO Box 4745 • Monroe LA 71211-4745

MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors of Association forRetarded Citizens/Ouachita

Our audit was made for the purpose of forming an opinion on the financial statementstaken as a whole. The information included as "Other Supplementary Data" and"Supplementary Information - Grant Activity" in the Table of Contents is presented forpurposes of additional analysis and is not a required part of the basic financial statementsof the Association. Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, is fairly stated inall material respects in relation to the basic financial statements taken as a whole.

(A Professional Accounting Corporation)

December 15, 2005

ASSOCIATION FOR RETARDED CITIZENS/OUACHITASTATEMENT OF FINANCIAL POSITION

JUNE 30, 2005

ASSETS

CashAccounts Receivable

MembershipsServicesOtherUnited Way

Prepaid ExpensesLand, Building and EquipmentAccumulated DepreciationOther Deposits

TOTAL ASSETS

LIABILITIES AND NET ASSETS

LiabilitiesAccounts PayablePayroll Taxes PayableAccrued PayrollNotes PayableConditional Transfers

Total Liabilities

Net AssetsUnrestrictedTemporarily Restricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

Unrestricted

421,478 $

20,939221,202

99,369-

1,234405,978

(241,371)5,375

934,204 $

71,336 $5,562

131,60288,22148,980

345,701

588,503-

588,503

934,204 $

TemporarilyRestricted

2,040

-

--

190,315-

241,276(182,222)

-

251,409

-----

.251,409251,409

251,409

Total

423,518

20,939221,20299,369190,3151,234

647,254(423,593)

5,375

1,185,613

71,3365,562

131,60288,22148,980345,701

588,503251,409839,912

1,185,613

The accompanying notes are an integral part of this statement.

ASSOCIATION FOR RETARDED CITIZENS/OUACHITASTATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2005

Support and RevenueIntergovernmentalCharges for ServicesUnited Way AllocationContributionsMembership DuesContributions and Net Revenue from

Special EventsContributionsSpecial Event RevenueCosts of Direct Benefits to Donors

Other RevenuesTotal

Net Assets Released from Time Restrictions

Total Support and Revenue

ExpensesProgram Services

Adult HabilitationVocational RehabilitationSupported Work ContractsSupported/Independent LivingCommunity Home:

Mallard HomeRespiteEarly Intervention

Total Program ServicesSupporting Services

Management and GeneralFund Raising

Total Supporting Services

Total Expenses

Increase (Decrease) in Net Assets

Net Assets at Beginning of Year

NET ASSETS AT END OF YEAR

TemporarilyUnrestricted Restricted

2,982,219 $ - $253,261

286,76958,61466,351

111,751187,048

(187,048)15,145

3,487,341 286,769

191,699 (191,699)

3,679,040 95,070

580,73418,762

165,7891,721,768

305,825

416,8193,209,697

416,07799,154

515,231

3,724,928

(45,888) 95,070

634,391 156,339

588,503 $ 251,409 $

Total

2,982,219253,261286,769

58,61466,351

111,751187,048

(187,048)15,145

3,774,110

_

3,774,110

580,73418,762

165,7891,721,768

305,825

416,8193,209,697

416,07799,154

515,231

3,724,928

49,182

790,730

839,912



STATEMENT OF FUNCTIONAL EXPENSESFOR THE YEAR ENDED JUNE 30,2005

PROGRAM SERVICES

SalariesPayroll TaxesPension

Total Salaries andRelated Expenses

Dues and SubscriptionsFoodInsuranceInterestLicenses and InspectionsMaintenanceMedicalMiscellaneousOffice Supplies and PostageProfessional FeesPublic AwarenessRentSuppliesTelephoneTrainingTransportationTravelUtilities

Total

Depreciation of Buildingsand Equipment

TOTAL FUNCTIONALEXPENSES

Allocation of Central OfficeOverhead to Programs

TOTAL FUNCTIONALEXPENSES AFTERALLOCATION OFCENTRAL OFFICEOVERHEAD

AdultHabilitation

371,816 328,332

5,620

405,768

1,2325,486

48,581599666

3,9601,6692,1052,592

9613,012

11,7582,0029,9241,637

42,7079,6915,742

560,092

20,642

580,734

60,639

VocationalRehabilitation

! 12,256 3972193

13,421

42188

1,667-

2313647728933

10340369

34156

1,466333197

18,686

76

18,762

2,083

SupportedWork

Contracts

i 103,449 !661

-

104,110

_

37613,769

-104365

-3,161

551-

7,18017,62515,806

954400

38-

135164,574

1,215

165,789

,

Supported/Independent

Living

E 1,338,035 $103,44516,487

1,457,967

2,5532,394

130,9341,1643,3197,4924,3282,6975,0773,006

14,82311,059

1,5834,1916,3111,367

50,4168,972

1,719,653

2,115

1,721,768

185,886

MallardHome

125,4219,8132,037

137,271

4988,311

21,3324,1241,0123,9094,250

32,1411,0114,945

238715

8,3641,655

55,0564,913

7417,156

297,642

8,183

305,825

32,700

641,373 $ 20,845 $ 165.789 $ 1,907,654 $ 338,525


SUPPORTING SERVICES

EarlyIntervention

$ 90,114 37,1081,635

98,857

5941,3848,094

125410

6,150425

2,6102,718

231,7023,040

38,6991,1305,4167,258

3462,3364,964

416,258

561

416,819

46,598

TotalProgramServices

E 2,041,091 $150,33125,972

2,217,394

4,91918,139

224,3776,0125,534

22,01210,71942,78612,038

240,64728,39680,25928,95422,48170,71850,83763,51727,166

3,176,905

32,792

3,209,697

327,906

Managementand General

224,895 $16,0906,027

247,012

2,3123,675

19,12932948

11,85527

12,4266,733

52,4174,925

21,6915,6215,2962,585

-3,9025,580

405,563

10,514

416,077

(327,906)

FundRaising

46,980 $3,366

840

51,186

2725,7924,992

(21)22

1,95722

78810,9893,0466,7057,913

8351,543

183-

4151,257

97,896

1,258

99,154

_

TotalSupporting

Services

271,87519,4566,867

298,198

2,5849,467

24,12130870

13,81249

13,21417,72255,46311,63029,6046,4566,8392,768

-4,3176,837

503,459

11,772

515,231

(327,906)

TotalExpenses

2,312,966169,78732,839

2,515,592

7,50327,606

248,4986,3205,604

35,82410,76856,00029,760

296,11040,026

109,86335,41029,32073,48650,83767,83434,003

3,680,364

44,564

3,724,928

463.417 $ 3,537,603 $ 88,171 $ 99,154 $ 187,325 $ 3,724,928

ASSOCIATION FOR RETARDED CITIZENS/OUACHITASTATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30,2005

Cash Flows From Operating ActivitiesIncrease in Net AssetsAdjustments to reconcile increase in net

assets to net cash provided by operating activities:DepreciationLoss on fixed assetsChanges in assets and liabilities

Accounts receivableOther assetsAccounts payable and accrued expenses

Net cash provided by operating activities

Cash Flows From Investing ActivitiesPurchases of equipment

Net cash used by investing activities

Cash Flows From Financing ActivitiesPayments on notes payable

Net cash used by financing activities

Net Decrease in Cash

Cash at Beginning of Year

CASH AT END OF YEAR

49,182

44,564951

(127,356)7,674

37,16912,184

(80,483)(80,483)

(15,699)(15,699)

(83,998)

507,516

423,518

Supplemental Disclosures:

Cash paid for interest 6,320


THE ASSOCIATION FOR RETARDED CITIZEN S/OUACHITANOTES TO FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30,2005

Note 1 - Description of Organization

The Association for Retarded Citizens/Ouachita (the Association) dba ARCO wasestablished in 1954 to promote the general welfare of all persons with developmentaldisabilities within its service area which generally includes the Northeast portion ofLouisiana. Their programs are designed to assist and train clients to become independentcitizens within their service area. The principal programs consist of vocational training,residential living, temporary care of clients, and early intervention.

Note 2 - Summary of Significant Accounting Policies

A. Basis of Presentation

The financial statements have been prepared on an accrual basis and in conformitywith the standards promulgated by the American Institute of Certified PublicAccountants in its Audit Guide for Not-For-Profit Organizations.

The financial statements of the Association are presented as recommended by theFinancial Accounting Standards Board in Statement of Financial AccountingStandards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations.Under SFAS No. 117, the Association is required to report information regarding itsfinancial position and activities according to three classes of net assets: unrestrictednet assets, temporarily restricted net assets, and permanently restricted net assets. AtJune 30, 2005, the Association had no permanently restricted net assets.

B. Contributions

The Association has also adopted SFAS No. 116, Accounting for ContributionsReceived and Contributions Made. In accordance with SFAS No. 116, contributionsreceived are recorded as unrestricted, temporarily restricted, or permanently restrictedsupport depending on the existence or nature of any donor restrictions. At June 30,2005 the Association had a receivable of $190,315 representing United Waycontributions awarded during fiscal year ending June 30, 2005 that will be receivedduring the subsequent fiscal year. Under SFAS No 116, such contributions arerequired to be reported as temporarily restricted support and are then reclassified tounrestricted net assets upon expiration of the related time restrictions.

THE ASSOCIATION FOR RETARDED CITIZENS/OUACHITANOTES TO FINANCIAL STATEMENTSFOR THE YEAR ENDED JUNE 30,2005

C. Donated Services

Members, agencies, business firms, volunteers and others contribute substantialservices toward the fulfillment of projects initiated by the Association. No amountshave been recognized in the Statement of Activities because the criteria forrecognition of such volunteer effort under SFAS No 116 have not been satisfied.

D. Land, Buildings and Equipment

Land, buildings and equipment are stated at cost. All donated capital assets arerecorded at fair market value on the date of the donation. Depreciation is computedon a straight-line basis over the useful lives of the assets using the followingestimated lives:

YearsBuildings 15-30Furniture and Equipment 3-10Vehicles 5

E. Compensated A bsences

The financial statements do not include any accrual for vacation or sick pay. TheAssociation's policy is that vacation days are taken or compensated prior to year end.Sick days may be accumulated to a maximum of 15 days; however, employees are notpaid for any unused sick days upon termination.

F. Functional Expenses

Expenses that can be identified with a specific program and support service areallocated directly according to their natural expenditure classification. Otherexpenses that are common to several functions are allocated by various statisticalbases.

G. Programs

The Association's principal programs and primary funding sources are:

Adult Habilitation - The Adult Habitation's income is derived from the LouisianaDepartment of Health and Hospitals, Community Development Block Grants, and theUnited Way. These funds are used to train clients in vocational and prevocationalactivities and supportive services. Service fees charged Community Homes' clientsfor training in the amount of $53,675 are included in charges for services.


Vocational Rehabilitation - Vocational Rehabilitation's income is derived from theDepartment of Social Services, Office of Louisiana Rehabilitative Services. Thisprogram provides vocational training support to clients placed in jobs within thecommunity.

Supported Work Contracts - Supported Work Contract's income is derived fromcleaning and document destruction services by clients.

Supported/Independent Living - Supported Independent Living's income is derivedfrom the Louisiana Department of Health and Hospitals, United Way, and OuachitaCouncil of Governments. This program, similar to Community Homes, helps theindividual clients become more independent by providing support and training intheir residences within the community.

Mallard Home - Mallard Home's income is derived from the Louisiana Departmentof Health and Hospitals. Clients pay a pro-rata share of the costs based on theirincome. This program provides clients with a home environment within thecommunity and helps them become more independent citizens. Clients in MallardHome are trained in the Adult Habitation Program. Included hi the expense is$55,293 for this service.

Early Intervention - Early Intervention's income is derived from the LouisianaDepartment of Health and Hospitals, United Way, United States Department ofEducation and charges for therapeutic services (private insurance). This programprovides training and therapeutic services to disabled infants, ages 0-3 years.

H. Tax-Exempt Status

The Association is exempt from income tax under Section 501(c)(3) of the InternalRevenue Code and, therefore, has no provision for Federal income taxes.Contributions to the Association are tax deductible within the limitations prescribedby the Code.

/. Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Association considers demanddeposits, time deposits and certificates of deposit with an original maturity of threemonths or less to be cash equivalents.

J. Accounting Estimates

The preparation of financial statements in conformity with generally accepted

10


accounting principles requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ fromthose estimates.

Note 3 - Land, Building and Equipment

Land, Building and Equipment consisted of the following at June 30, 2005;

Buildings and Improvements $ 193,624Furniture and Equipment 128,423Vehicles 282,069Land 43,138Less: Accumulated Depreciation (423,593)

Net Land, Building and Equipmen $ 223,661

Included in vehicles above are eight vehicles that cost a total of $241,276 that wereacquired through Federal grants. The Association retains title to those vehicles as long asthey are kept, maintained and used for the Association's designated purpose. Thosevehicles are not to be sold or disposed of either during their useful lives (5 years or100,000 miles) or without the state's permission; therefore, these vehicles and relatedaccumulated depreciation are shown as temporarily restricted.

Note 4 - Notes Payable

Notes payable consisted of three notes at June 30, 2005, as follows;

Ouachita Independent Bank $ 34,395Ouachita Independent Bank 39,940General Motors Acceptance Corporation (GMAC) 13,886TOTAL $ 88,221

Both of the notes with Ouachita Independent Bank are mortgage notes with fixed interestrates of 6.25% and 6.50% respectively. They are secured by real estate and mature in2007. The monthly installments are $618 and $621 respectively, including interest, withballoon payments due in 2007.

11


The note with GMAC has an interest rate of 5.99% and is secured by a vehicle. Monthlyinstallment payments are $500, including interest, and the note matures in 2008.

The aggregate principal payments of indebtedness maturing during the next five years areas follows: 2006 - $14,849; 2007- $69,944; and 2008 - $3,428.

A letter of credit in the amount of $100,000 was issued by Hibernia National Bank. It issecured by all funds on deposit with them and provides a variable simple interest rate tobe adjusted monthly to one percent (1%) over the Wall Street Journal prime rate. Therewas no outstanding debt on this line of credit at June 30, 2005 and nothing has beenadvanced to the Organization since then. The line of credit is subject to annual renewal inDecember of each year.

Note 5 - Temporarily Restricted Net Assets

The following summarizes net assets that are temporarily restricted as of June 30,2005:

Cash - Building Fund $ 2,040Accounts Receivable - United Way (Note 2-B) 190,315Vehicles - DOTD 241,276Less: Accumulated Depreciation (182,222)

Total $ 251,409

During the year ended June 30, 2004, the Kitty DeGree Foundation pledged and paid amatching grant of $50,000 for ARCO's Building Program. Those funds are to be earnedbased on other donations that are received and dedicated to the Building Program. A totalof $1,020 was donated during the year ended June 30,2004. Therefore, a total of $2,040of cash is included in temporarily restricted net assets and the unearned portion of thematching grant of $48,980 is reported as conditional transfers which will be recognized asincome to the Building Fund as qualifying donations are received.

Note 6 - Disclosures About Concentrations

The Association's cash and cash investments are on deposit with two Federally insuredfinancial institutions. The amounts on deposit totaled $426,162 of which $226,162 wasnot insured at June 30, 2005.

12


The Association's contracts are primarily with government agencies; therefore, a majorityof its revenue and accounts receivable are derived from that source.

Note 7 - Operating Leases

Total rent expense for the year was $109,863. The Association has several leasecommitments. However, these leases are either on a month-to-month basis or contain"funding-out" clauses which allow the agreements to be cancelled.

Note 8 - Commitments and Contingencies

The Association receives the majority of its revenue based on contracts with variousFederal and State agencies. These contracts are subject to review by the respectiveagencies which could result in disallowed costs.

Note 9 - Related Party Transactions

The matching grant from the Kitty DeGree Foundation, described in Note 5 above, is arelated party transaction since Ms. Kitty DeGree serves on the Board of Directors and asan officer of the Association.

Note 10 - Subsequent Events

A catastrophic natural disaster was caused by Hurricanes Katrina and Rita which occurredin the southern region of Louisiana in August and September of 2005. The financialeffects, if any, of this disaster have not been determined and can not be reasonablyestimated by management at this time. However, it is recognized that the disaster couldimpact the Association's cash flows for collections of Accounts Receivable from the Stateof Louisiana, the United Way, and the annual membership drive.

13

OTHER SUPPLEMENTARY DATA

14


COMBINING SCHEDULE OF FINANCIAL POSITION

JUNE 30,2005

SCHEDULE 1

ASSETS

CashAccounts Receivable

MembershipsServicesOtherUnited Way

Due From Other FundsFixed AssetsAccumulated DepreciationLandPrepaid ExpensesOther Deposits

TOTAL ASSETS

GeneralFund

VocationalFund

SupportedWork

Contracts


Living

$ 422,922 $

20,939

150 $

11,314

200 $

5,792

26

127,31499,369190,31559,217225,341(147,539)35,1381,2342,975

909,911 $

--

23,217212,382(153,328)

---

93,735 $

---

8,100(1,215)

---

12,877 $

---

41,338(40,897)

---

127,781

LIABILITIES AND NET ASSETS

Liabilities

Accounts PayableDue to Other FundsPayroll Taxes PayableAccrued PayrollNotes PayableConditional Transfers

Total Liabilities

Net Assets

UnrestrictedTemporarily Restricted

Total Net Assets

TOTAL LIABILITIESAND NET ASSETS

19,877 $23,217(3,674)6,258

34,39548,980

9,277 $-

1,90023,504

--

4,977 $1,972

-5,928

--

12,25627,5426,252

81,731--

129,053 34,681 12,877 127,781

588,503192,355780,858

59,05459,054

•

-

$ 909,911 $ 93,735 $ 12,877 $ 127,781

15

Mallard Early TotalHome Intervention All Funds

81,501 $

9,35710,012

5907,716

53,826

220 $ - $ 423,518

36,488

105,869(69,076)

8,000

-40,294

---

11,086(11,538)

--

2,400

42,242 $

20,939221,20299,369190,31582,434604,116(423,593)43,1381,2345,375

1,268,047

15,592 $19,691494

6,465--

71,33682,4345,562

131,60288,22148,980

81,501 42,242 428,135

588,503251,409839,912

81,501 $ 42,242 $ 1,268,047

16


COMBINING SCHEDULE OF ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2005

WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2004SCHEDULE 2

Support and RevenueIntergovernmentalCharges For ServicesContributionsUnited Way AllocationMembership DuesContributions and Net Revenues from

Special EventsContributionsSpecial Event RevenueCosts of Direct Benefit to Donors

Other RevenuesTotal support and revenue

ExpensesDepreciation and AmortizationDues and SubscriptionsFoodInsuranceInterestLicenses and InspectionsMaintenanceMedicalMiscellaneousOffice Supplies and PostagePayroll TaxesPensionProfessional FeesPublic AwarenessRentSalariesSuppliesTelephoneTrainingTransportationTravelUtilities

Total Expenses

Excess (Deficiency) of RevenuesOver Expenses

GeneralFund

- 31,532

31,714286,76966,351

111,751187,048

(187,048)6,770

504,887

2,4201,3229,2069,600

(4)48

3,76442

8,75112,8446,4731,6165,857

10,40315,21790,3472,8432,959

401-

7982,418

187,325

AdultHabilitation

i 449,461 !53,6753,500

-~

.--

92506,728

22,4081,4655,534

51,266657670

5,8081,6702,9103,494

30,7326,591

10,1333,239

14,419405,381

2,67010,6432,075

42,70710,3426,559

641,373

VocationalRehabilitation

G 20,856 $----

.---

20,856

13650

1901,758

223

19947

120120

1,054226345111493

13,39792

36571

1,466355225

20,845

SupportiveWork

Contracts

; i" *152,594

11,400-"

.--

137164,131

1,215-

37613,769

-104365

-3,161

551661

--

7,18017,625

103,44915,806

954400

38-

135165,789


Living

B 1,903,12414,462

--"

.--

1,0071,918,593

7,5273,2682,542

139,1631,3413,332

13,1544,3325,2277,841

110,80219,46231,11515,51819,211

1,440,8953,6306,3897,6521,367

52,41011,476

1,907,654

317,562 (134,645) 11 (1,658) 10,939

17

MallardHome

288,71919,414

308,133

8,942625

8,33722,788

4,1551,0144,9114,251

32,5881,500

11,1152,5649,920

3612,158

143,6278,7262,044

55,2934,9131,0947,599

338,525

(30,392)

EarlyIntervention

320,05911,58412,000

Total June 30

7,139350,782

1,916773

1,42110,154

169413

7,623426

3,2433,4108,9502,380

238,7403,214

40,740115,870

1,6435,9667,594

3462,8355,591

463,417

(112,635)

2005

2,982,219253,26158,614

286,76966,351

111,751187,048

(187,048)15,145

3,774,110

44,5647,503

27,606248,498

6,3205,604

35,82410,76856,00029,760

169,78732,839

296,1 1040,026

109,8632,312,966

35,41029,32073,48650,83767,83434,003

3,724,928

49,182

2004

$ 2,961,693207,79733,223

195,81384,037

129,332116,629

(116,629)20,787

3,632,682

46,1096,203

22,135250,120

6,3595,319

38,42710,11929,34627,389

161,01433,125

327,57534,17059,965

2,140,64522,02320,88559,52646,48757,73329,835

3,434,509

198,173

(Continued)

18


COMBINING SCHEDULE OF ACTIVITIES (CONCLUDED)


WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2004

SCHEDULE 2

Other Financing Sources (Uses)Operating Transfers InOperating Transfers (Out)

Total Other FinancingSources (Uses)

Increase (Decrease) in NetAssets

Net Assets at Beginning of Year

Supportive Supported/General Adult Vocational Work Independent

Fund Habilitation Rehabilitation Contracts Living

(268,979)$ 135,802 $ 1,658 $

(268,979) 135,802

(11) (11,497)

( I I ) 1,658 (11,497)

48,583

732,275

1,157

57,897

(558)

558

NET ASSETS AT END OF YEAR S 780,858 $ 59,054 $

19

Mallard Early Total June 30Home Intervention 2005 2004

30,392 $ 112,635 $ 280,487 $ 132,520(280,487) (132,520)

30,392

.

-

112,635

49,182 198,173

790,730 592,557

$ 839,912 S 790,730

SUPPLEMENTARY INFORMATIONGRANT ACTIVITY

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ASSOCIATION FOR RETARDED CITIZENS/OUACHITASCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Federal Grantor/Pass-Through C.F.D.A.Grantor/Program Title Number

Flow-Through Programs

Department of Housing andUrban Development

City of MonroeCDBG Year 2004 Grant forOperational Independence

FederalAward

Amount

Department of TransportationOffice of Urban Mass Transit

Adult Habilitation 20.500

TOTAL FEDERAL AWARDS

12,260

Expenditures

14.218 $ 14,651 $

$ 26,911 $

14,651

12,260

26,911

See Notes to Schedule of Expenditures of Federal and State Awards

99

ASSOCIATION FOR RETARDED CITIZENS/OUACHITASCHEDULE OF EXPENDITURES OF STATE AWARDS

FOR THE YEAR ENDED JUNE 30,2005

Grantor Program/Program Title

GrantAssistance

I.D. Number(OCDDfl)

StateAward

Amount Expenditures

Louisiana Department of Healthand Hospitals

Office for Citizens WithDevelopmental Disabilities:

Adult Habilitation Program

Early Intervention Program

608642 $ 252,600 $

Supervised Independent Living 609521

621651

34,868

20,000

252,669

34,868

4,000

TOTAL STATE AWARDS $ 307,468 $ 291,537

See Notes to Schedule of Expenditures of Federal and State Awards

ASSOCIATION FOR RETARDED CITIZENS/OUACHITANOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AND STATE AWARDS


1. General

The Schedules of Expenditures of Federal and State Awards presents the activity of all Federaland state awards programs of The Association for Retarded Citizens/Ouachita (ARCO). AllFederal awards received directly from Federal agencies, as well as Federal awards passed throughother government agencies, are included in the Schedule of Federal Awards.

2. Basis of Accounting

The Schedules of Federal and State Awards are presented using the accrual basis of accountingwhich is more fully described in Note 2 to the Association's financial statements.

3. Relationship to Combining Schedules of Activities

Federal, state and local government awards revenue and fees for service are included inintergovernmental revenue on the Statement of Activities. This revenue is further detailed onSchedule 2. Intergovernmental revenue consists of the following:

FederalAwards

26,911 $

StateAwards

; 252,669

LocalGovernmentAssistance

t t* •»

Fees forServices

169,881 ;288,719

TotalInter-

governmentalRevenue

$ 449,461288,719

Adult HabilitationMallard HomeSupported/Independent

Living - 34,868 - 1,868,256 1,903,124Early Intervention - 4,000 - 316,059 320,059Vocational Rehabilitation -__ -__ -_ 20,856 20,856

TOTALS S 26,911 $ 291,537 $ - $ 2,663,771 $ 2,982,219

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Francis I. Huffman. CPAI I jfff^V L- Fred Monroe, CPA!_

The Board of DirectorsThe Association for Retarded Citizens / Ouachita

A material weakness is a condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk thatmisstatements in amounts that would be material in relation to the financial statementsbeing audited may occur and not be detected within a timely period by employees in thenormal course of performing their assigned functions. Our consideration of the internalcontrol over financial reporting would not necessarily disclose all matters in the internalcontrol over financial reporting that might be reportable conditions and accordingly, wouldnot necessarily disclose all reportable conditions that are also considered to be materialweaknesses. However, we consider reportable condition 05-01 described above to be amaterial weakness.

This report is intended for the information of management of the Association, awardingagencies and pass-through entities, other entities granting funds to the Association and theLegislative Auditor for the state of Louisiana and is not intended to be used and should notbe used by anyone other than these specified parties. Under Louisiana Revised Statute24:513, this report is distributed by the Legislative Auditor as a public document.

(A Professional Accounting Corporation)

December 15, 2005

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SCHEDULE OF FINDINGS


05-01 INVOICES WERE NOT SENT TO A STATE AGENCY FOR SERVICESPROVIDED BY THE ASSOCIATION

Finding: Services provided by the Association in the Supported Independent Living Programwere processed and recorded in the General Ledger. Invoices for some of those services werenot prepared timely or submitted to the Department of Health and Hospitals. Therefore, theAssociation is prohibited from billing for those services which total approximately $69,000.

Recommendation: A detailed review should be conducted of the internal controls over theAssociation's billing procedures. Additions should be made to the applicable policies andprocedures that will ensure invoices are timely prepared and submitted for all servicesprovided by the Association. Supervisory personnel should also compare receipts anddeposits to the billings to ensure that payments are received timely for all invoices.

Management's Corrective Action Plan: Management acknowledges and agrees with thisfinding. Services were not billed as stated. Management has reviewed billing procedures andimplemented additional internal policies and procedures to ensure all services are billed toappropriate funding sources in a timely manner.

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