EAST BATON ROUGE COUNCIL ON AGING, INC.

BATON ROUGE, LOUISIANA

JUNE 301 2017

L.A. CHAMPAGNE Bl Certified Dublic L\ccounlants

4911 BENNINGl'ONAVENUE. BATON ROUGE. LOUISIANA 70808·3153

(225) 925-1120- FAX: (225) 927-8124- EMAIL: lac@laccpa.com

TABLE OF CONTENTS

Independent a~1ditor's repmt

Required supp lementary informatjon: Management's discussion and analysis

Basic financia l statements:

Government-wide.financia/ slatellU!J?ts:

• Statement I - Statement of net position

• Statement 2 -Statement of activiries

Fwtdjinancial statements:

• Statement 3 - Balance sheet- governmental funds

• Statement 4- Reconciliation of the governmental funds balance sheel to the statement of net position

• Statement 5 - Statement of revenues. expenditures, and changes il1 fund ba.lances - governmental funds

• Starernent 6 - Reconciliation of the statement of revenues, expenditures, and chapges in fund balances of the governmental funds to the statement of activities

Notes to basic financial statements

Requj'red supplementary 'information Supplementary financial information required by the Governmental

Accounting Standards Board (GASB) Statement 34:

• Bupgetary comparison schedule- general fund

• Budgetary comparison schedule- title ni B supportive services fund

• Budgetary comparison schedul.e- title fii C-1 fund

• Budgetary comparison schedu le - title Ill C-2 fund

• Budgetary comparison schedule - senior center fund

• Budgetary comparison schedule- nutrition services incent1ve program

• Notes to required supplementary informatron

I - Ill

1 - 9

10

II

12

13

l4

15

16 - 31

32

33

34

35

36

37

38 - 39

Supplementary financial information required by the Ciovernor's Office of Elderly Affairs (GOEA):

• Combining schedule of revenues, expenditures. and changes in funrl balance~- nonmajor governmental funds

• Comparative schedule of capital assets and changes in capital assets

Supplementary financial information required by Title 2 CFR Part 200 of the Uniform Administrative Requirements. Cost Principles. and Audit Requirements fOr Federal Awards:

• Schedule of expenditures of federal awards

• Notes to the schedule of expenditures or federal awards

Supplementary infOrmation

Schedule of compensation. benefits and other payments to chief executive officer

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

Independent auditor's report on compliance for each maJor program and on internal control over compliance required by Un(/Orm Adminil'/rative Requirements, Cos/ Principles. and Audit Requirements for Federaf AH'ards

Schedule of findings and questioned costs

Management's corrective action plan

Schedule of corrective action taken on prior year findings

40

41

42

43

44

47-48

49- 55

56-60

61

Robert. L Stamey, CPA Kimberly G. Sanders. CPA, MBA

Alvin J. Callais. CPA Mic11ael A Tham, CPA, CGMA su~n s. Tham. CPA

Neal Fortenberry, CPA Wayne Dusse1, CPA. CFE' Jonathan Clark. CPA

L.A. CHAMPAGNE Ill Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To Management and Members of the Board of Directors of The East Baton Rouge Council on Aging, Inc.

Baton Rouge, Louisiana

Report on the Financial Statements

Member of the Pnvete Companies Praelice

Section of the American Institute of CPAs

Vle have audited the accompanying fmancial statements of the governmental activities, each major fund, and the aggregate remaining fund information of East Baton Rouge Council on Aging, 1nc. (the Council), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Council>s basic financial statements as listed in the table of contents.

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 financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility Our responsibility is to express opinions on these fmancial 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 fronl material misstatement.

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

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

49~ 1 Bennington Avenue • Baton Rouge, LouisiC~na 70808-3153 • Phone (225) 925-1120 • Fax (225) 927-8124 • lac@laccpa.com 1234 Del Este, Ste 503 • Denham Springs, LA 70726 • Phone (225) 664-3671

Opinions In our opinion. the financial statements referred to above present 1~1irly. in all nwtcnal respects, the respectiv(; llnancia! position of the governmental activities. each major fund. and the aggregate remaining fund information of the East Baton Rouge Council on Aging. as of June 30. 2017, anJ the respective changes 1n linancial position for the year then ended in accordance with w.:counting principles g:cnerally accepted in the Unitrd States of Amcnca.

Other Matters Rt:tjuired .-.. ·upelt:mc nhu:1· li?kll'nwt io11 Accounting pnncipks generally accepted in the Llnited Sta.tes of America require that the management's discussion and analysis and budgetary comparison iniOrmation on pages 1 - g and J2 - 39, respectively be presented to supplement the basic financial statements. Such infornw.tion. although not a part of the basic linam:ial st::J.tements. is required by the Governmental Accounting Standards Board. who considers il to be an essential pa11 of financial reporting !lor rlacing the basic Jinancial statements in an appropriate opcraticmal. economic. or historical context. \Ve hcn·c applied certain limited procedures to the required supplementary infOnnalton in accordance with auditing standards generally accepted in the United St<1tes of America. whtcb consisted of inquiries or managl:ment ab!mt the methods or preparing the inl!m11atinn and comparing the information tt-.,r consistency with management's responses to our inquiries. the basic financial statements, and other knowledge we obtained during our audit of the basic financinl statements. We do not express nn opinion or provide any assurance on the infOrmation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assur<1nce.

Other /nfurmutwn Our audit \Vas conducted for the purpose or f(_lnnmg opinions on the financial statements that co!!ectively comprise the Council's basic financial statements. The combining schedule of revenues. expenditures and changc>s in fund balance- non major governmental funds nn page 40. the comparative schedule of capital assets and changes in capital assets on page 41. and the schedule of compensation, benefits and other payments to chief executive olTicer un page 44 is presented for purposes of additional analysis and is not a required part of the basic !innnciul statements. Also. the accompanying schedule of expenditures of federal mvards on page 42 is presented for purposes of additional analysis as required by Title :2 U.S. Code or Federal Regulations (CFR l Part 200, [Jni(orm ,·Jdminislralil'c Requirements. Cost Fri11cip/es. and .-JuJil Requirements for Federal A\\ards. and is also not a required part of the basic fimncial statements.

The combining schedule or revenue and e\penditures and changes in fund balance - nonmajor government funds. the cPmparative schedule nf capita! assets and changes in capital assets, the schedule of expenditures of feckral awards. and the schedule of compensation. benefits and other payments to chief executive nrficer are the responsibility or management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures. including comparing and reconciling such intOnnation directly to the underly·ing accounting and other records used lo prepare the basic financial statements or to the basic linancial statements themselves. and other additim1al procedures in accordance with auditing standards generally accepted in the United States of America. in our opinion. the combining schedule of revenue and expenditures and changes in fund balance- nonmajor governmental funds, the comparative schedule or capital assets and changes in capital assets, the schedule of expenditures of federal <l\\o'ards, and the schedule of cnmpensation. benefits and other payments to chief executive oJTiccr are f3irly stated in all material respects in relation to the basic financial statements as a whole.

II

Other Reporting Required by Government Auditing Standards Tn accordance with Government Auditing Standards, we have also issued our report dated December 27, 2017, on our consideration of Lhe Council 's internal control over financia l reporting and on our tests of ils compl iance with certain provisions of laws. regulations, comracts. and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal 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 reporl is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Council 's internal contro l over financial reporting and compliance.

J2_ Q 0 *to . L.1-JJ Baton Rouge, Louisiana

December 27. 2017

iii

REQliiRED Slii'I'LEM~~NTARY INFORMATION

5790 Florida Blvd. Baron Rouge, LA 70806

p 225.923.8000 f 225.923.8030

www.ebrcoa.org

MANAGEMENT'S DISCUSSION AND ANALYSIS

The "Management' s Discussion and Analysis" of the East Baton Rouge Counci l on Aging, [nc.'s (the Council) financial perfonnance presents a narrative overview and analysis of the Council's fmancial activities for the year ended June 30, 201 7. This document focuses on the current year's activities, resulting changes, and currently known facts . Please read this report in conjunction with the basic financ ial statements, w hich follow this section.

FINANCIAL IDGHLIGHTS

• The Counci l's Government-Wide total liabilit ies exceeded its total assets at the close of fi scal year 20] 7 by $224,520.

Changes in Revenue 2017 vs 2016

Total revenues increased by approximately $108,000 or 3% from the prior fiscal year. In the current fiscal year, revenues from the Governor's Oftice of Elderly AffaiTs increased by approximately $21 ,000. The Council received approximately $59,000 in federal funding from FEMA for assistance, approximately $68,000 in rent income from the Office for Children/Family Services and approximately $76,000 of local contributions related to the August 2016 flood. Corporate contributions decreased approximately $106,000 as a result of August 2016 flood com:ributions. The Council also received its fLrst full year of auto rental sales tax which was an increase from the prior year of $52,000. The Council did not rece ive the $40,000 in additional funding from the City of Baton Rouge in the current year and in-kind contributions decreased approximately $22,000.

Changes in Expenses 2017 vs 2016

Total expenses increased by approximately $92,000 or 3% from the prior fisca l year mainly due to increase in expenses related to prov iding assistance related to the August 2016 flood.

The decrease in net position for the year ended June 30, 2017 is $2,760. The decrease in net position for the year ended June 30,2016 was $19,058.

The Council' s total deficit in net position for the year ended June 30, 2017 totaled $224,520 compared to the deficit in net position of $221,760 for the year ended June 30, 2016.

OVERVlEW OF THE FINANClAL STATEMENTS

The Council 's annual financial report consists of six parts:

(1) Management's discussion and analysis (this section) (2) The basic fLnancial statements (government-wide and fund statements) (3) Supplementary ihfonnation required by GASB 34 (4) Supplementary information required by GOEA (5) Supplementary information required by Un(lorm Administrative Requirements, Cos1 Principles.

and Audit Requirements .for Federal Awards (6) Auditors • reports.

The government-wide financial statements~ wWch consi.st of the Statement of Net Position (Statemelit 1) and the Statement of Activities (Statement 2), provide infonnation about the activities of the Council as a whole atld pt·esetit a long-term view of the Council ~s finances. In contrast, the fund financial statements, which consist of the Governmental Funds Balance Sheet (Statement 3) and the Sta.te.ment of Revenues, ExpendLtures, :and Changes in Fund Balances (Statement 5 ), tell how services wete 'financed in the short-term, as well as what remains for future spending for governmental funds. Fund financial statements al.so report the Council 's operations in more detail than the .government-wide financial statements by providing infonnation about the Council's most significant funds.

BASIC FlNANCIAL STATEMENTS

The basic financial statements consist of the government-wide financia l statements and fund financial statements, which present different views about the Council , along with notes to the financial statemems.

Govea·nment-Wide Financial Statements

The government-wide financial statements are prepared using the accrual basis of accounting and are designed to provide readers with a broad overview of the Council's finances, in a manner similar to a private sector business. When using these financial statements, the user shouJd consider whether tbe Council's finances, as a whole, have improved or deteriorated s ince last year. The govemment-wide financial statements found on pages 10 through ll report the Council's net assets and changes in them. However, to assess the overaU financial position oftbe Council, the user must also consider nonfinancial factors, such as1 the condition of the. Council's capital assets and facilities, the a,dditioo or tennination of grants and other revenue sources, and the expansion or contraction of programs and services.

The Statement of Net Position presents all assets and liabilities and the Council's financial position at year end. whereas the Statement of Activities presents infotmation showing how the Council 's net assets changed during this fiscal year as a result of the Council's activities. fn this statement, all changes in net position are reported as soon as the underlying event giving rise to the change occurs regardless of when cash .is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only affect cash flows in fu11tre 'fiscal periods. The governmental activities of the Council include an Administration function and a Health, Welfare, and Social Services function. The H.ealth, Welfare, and Social Services function is comprised of eight distinct programs that include supportive services, nutritional services, family caregiver Sllpport. senior community service employment, disease prevention and health promotion, senior citizen center operations, unmet needs, and Medicare outreach and enrollment. There is also a I ine item for "other services,'' which consists of a variety of services that individually do not represent very large expenditures. Subpwgram activities are also presented within a couple of the primary functions to facilitate additional analysis. AIJ activiti.es of the Counci l are considered to be governmental activities.

2

A govemmental activity is usually one where the Counci l uses money it receives from governmental grants and COJ1lracts. along with donations from the general pttblic, to provide services at no charge to the general public, or a segment of the general public. such as the elderly. fn other words, the people bene·ftting from the services are not required to pay for what they receive. If the Council charged fees to cover all or most of the cost of providing a service, that activity might be classified as a business-type activity. The Council does not have any business.type activities.

Fund Fiua.ucialStatements

A fLtnd is a grouping of related accounts that is used to mamtain control over resources that have been segregated for speci-fic activities or objectives. All of the funds ofthe Council are governmental funds.

Govenuneotal funds are used to account for essentia lly the same functio11s reported as governmental activities in the government·-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial staten'lents focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of tl1e fiscal year. Accordingly, the governmental funds use the modified accrual basis of accounting. Because the focus of governmental funds is Mnower than that of the government-wide ·financial statements, it is useful to cohlpare tbe infonnation presented for governmental funds with similar infonnation pre.sentecl for governmental activities in the govemment-wide financial statements. The Governmental Funds balance sheet presents a reconciliation of total govemmental funds balru1ce to net position of governmental activities on Statement3. The reconciliation of the statement of revenues, expenditures and changes in f1md balances of governmental funds to the statement of activ.ities is presented on Statement 5.

The Coullcil uses two types of govemmental funds: ( L) a general fund, a11d (2) special revenue funds.

The general fund is used to account for all financial resources except those that are required to be accounted for in another fund. The Cotmcil 's general fund receives general revenue primarily from a grant from the City­Parish of East Baton Rouge and public donations. General funds are often transferred to special revenue funds to hetp pay for expenditures that could not be co-vered by their primary revenues.

All other f11nds are special reveJ,lue funds that are used to account for the proceeds of specific revenue sources which are restricted or committed to expe11ditures for specified purposes odter than debt service or capital. projects. By using separate funds to track revem1es aod ~enditutes, management can cotttrol funds for particular purposes or show thal the fund is meeting legal responsibi lities for using cetiain grants and other revenues. Most special revenue funds have no fund balance at year.:end because all revenue received is exper1ded in the same year. The Utility Assistance fund is one special revenue fund that typically has a fund balance at year end because any unspent revenue at year end does not have to be returned to a grantor or donor.

The Council J1as presented the General Fu nd, Title IllB Fund, Title lU C-l Ftmd, TitJe III C-2 Fund. Senior Center Fund, and the NSIP fund as "major" governmental funds as required by the Governor' s Office of Elderly A ffa.irs.

3

Notes to tlae Financial Statements

The notes provide additional information that is essential to a full understanding of the data provjded in the government-wide and fund financial statements. The notes to the tinancial statements can be found beginning on page 16 of this report. The notes to the financial statements should be read before mak ing assumptions or conclusions about the Council's tinancial condition.

SUPPLEMENTARY INFORMATION REQUIRED BY GASB STATEMENT 34

In addition to the basic financial statements, tbis report also presents ceJtain required supplementary 1nformation (RSJ) that further explains and supports the infom1ation in the financial statements. The Governmental Accounting Standards Board (GASB) Statement No, 34 requires budgetary comparison schedules for the General Fund and each lnajor Special Revenue F'und that has a legally adopted budget (see pages 32 through 39).

Management's Discussion and Analysis (MD&A) is also required supplementary information by GASB Statement \lo. 34. However, GASB Statement 34 req11ires the MD&A be presented as the fLrst item in this reporting package and not with the otJier RSI, which is included later in this reporting package.

SUPPLEJ\IlENTARY INFORMATION REQUIRED BY GOEA

T he Governor's Oflice of Elderly Affairs (GOEA) has required the Council to present comhin]ng statements that provide details about non-major governmental funds and details about capital assets and the changes in capital assets. This information will be used by GOEA to verify the accuracy of information subn.1itted to them during the year and to help monitor ce1t ain compliance requirements set forth in the grants that it has with the Council. (see pages 40 through 4 1).

SUPPLEJ\'IENTARY JNFORMATION REQUlRED BY UNIFORA1 ADMINISTRATIVE REQUIREMENTS, COST PRI.NCJPLES, AND AUDIT REQUIREMENTS FOR FEDERAL A WARDS

Uniform Administrative Reqzdremenls. Cost Principles, and AucltJ Requirements for Federal Award\· requires. a Schedule of Expenditures of Federal Awards to be included as supplementaJ information. This schedule will present in formation about the Council's federal ly funded programs in a manner that can facilitate financial and compliance analysis by the ag-encies that have grmlted federa-l money to the Council. (see pages 42 throtlgb 43).

(continued)

4

GOVERNMENT-WIDE FlNANClAL ANALYSIS

As of June 30,2017. net position was a deficit of$224,520. A of June 30. 20 16, the net defic1t was $221,760 This was an increase 111 the net deficit of $2,760.

Table 1 Net Position (Deficit)

Increase (Decrease} 2017 2016 Amount Percent

Cash $ 34.106 $ 91.077 $ (56,971) (63)% Other CUITCnt assets 12,057 19,089 (7.032) (37) Capita I assets. net 414,642 484,875 (70,233) (14) NonctuTent assets 10,205 10,205

Total assets 471.010 605,246 ( 134.236) (2)

Line of credit 153.325 98,925 54.400 55 Accounts payable 367.595 321,959 45.636 14 Accrued payroll and related taxes 34.479 37.405 (2,926) (8) Unearned revenue 218.000 (218.000) ( 100) Accrued compensated absences 26.431 19,875 6.556 33 Long-tenn debt 113.700 130,842 (17.142} (13)

Total liabilities 695.530 827.006 (131.476) (16)

Net position: Net investment in capital assets 414.642 484.875 (70,233) ( 14) Restricrecl for: Utility assistance 96.185 96,185

Unrestricted deficit {735.347) (802,820~ 67,473 8 Total net position (deticit) $ {224,520) $ ~221,760~ $ (2, 7602 1%

5

Gqvernmental Activities

Governmental activities in fisca l year 20 17 led to an decrease in net deficit of $2,760 resulting in a net deficit of $224,520 for the year ended June 30, 2017. For the year ended June 30. 2016, governmental activities resulted in an increase in the net deficit position of $19.0.SR. Key elemeuts of these activities are detailed it, Table 2.

Table 2 Changes in Net Deficit

Increase (Decrease} 2017 2016 Amount Percent

Revenues Progtam revenues:

Operating grants and contributions $ 2,736,016 $ 2,631 ,600 $ 104,416 3% Charges for services 43,070 51 ,826 (8,756) ( 17)

General revenues: Grants and contributions not restricted 872,000 912,000 (40,000) (4) Aut<;> Rental Tax 59,097 6,650 52,447 789

Total revenues 3,710,183 3,602,076 108, 107 2

Expenses Total expenses 3,712,943 3,621 ' 134 91,809 2

l11crease in net deficit (2,760) (19,058) 16,298 86

Net deficit- beginning of year (221 ,760) (202,702) (19,058) (9)

Net deficit- end of year $ (224,520) $ (221 ,760) $ (2, 760) l%

When reviewing the government-wide Statement of Activities, there are relationships that are impmtru1t to the understanding of the- Council's operations. As you can see on Statement 2, the Council ' s major program activities include supportive services, nutriti.on serv ices. and senior centers. Accordingly, management allocates funds to these programs because that is where there is the greatest demand.

Another area of interest 011 the Statement of Activities relates to· the total coJumn wherein the Counc il illustrates that its govemmental activities have more expenses than program revenues. ln other words, they are not set f­supporting. As a resultl mru1agement prepares the annual budget based on tbis expectation, which means that general revenues will be used to cover the excess of expenses ovet- revenues in these activities. Without unrestricted grants and contributions, the CouncjJ wou ld be unable to provide services at current levels. Flllther, t11e general nature of these revenues allows mru1agement discretion as to how to apply them in paying for the Council's cun·ent services, as well as reallocating them to meet changing demands.

AN ANALYSIS OF THE COUNCIL'S FUNDS USING GOVERNMENTAL FUND FINANCIAL STATEMENTS

The focus of the Council~s governmental funds is to provide infonnation on near-term inflows, outflows, and balances of spendable resource.s. Such informatjoo is useful in assessing the Co unci l"s tlnancing requirements. In particular, the unassigned fund balance may serve. as a useful measure of a governmeilt •s net resouJces available for spending at the end of the fiscal year. As of the end of the current fiscal year, th.e Council's governmental funds rep01ted combined ending fund balance deficit for aJI fund types of $535,667, a decrease in the deficit of$50,331 when compared to last year. The Council's General Fund detlcit decreased by$50,33 1 during the current fiscal year. The unassigned fund balance deficit component of the General Fund was $631,852. The combined decrease in all Special Revenue Funds was $782,352. The decrease in the fi:tnd balance deficits in the cun:ent tiscaJ year was a result of the following:

Revenues

Total revenues (excluding in-kind services and facilities) increased by approximately $l22,000 in the current year. Revenues from the Governor' s Office of Elderly Aftairs increased by approximately $21 ,000 and the Counci I received its first full year of auto rental sales tax which was an increase from the prior year of$52,000. The Council received approximately $59.000 in feder'al funding from PEMA for assistance and approximately $68,000 in rent income from the Office for Children/Family Services related to the August 2016 flood. Nso·as a result of the August 2016 flood, contributions were given to the Council for flood relief efforts rather than provided for the Council 's activities. Public support from corporate contributions decreased approximately $106,000 while other income increased approximately $76,000. The Council did not receive the $40,000 in additional funding fi·om th.e City ofl3aton Rouge in the current year.

Expenditures

Total expenditllres (excluding in-kind Services and facilities) increased by approximately $140,000 this year, primarily clue to the expendih1res related to provided assistance related to the August 20 I 6 flood.

AN ANALYSIS OF THE GENERAL FUND BUDGET

The budge~ was amended one time during the year. The budgetary comparison schedule for the General Ftmd is on page 32. Revenues exceeded the final amended budget by approximately $934,000 attTibuted to the revenue re(;eived from the City ofBaton Rouge and federal and local sources for flood assistance. Expenditures exceeded the final amended budget by approximately $102,000 mainly due to the other cost incurred' for August 20 l6 flood assistance.

CAPITAL ASSET AND DEBT ADl\UNISTRATION

Debt Adm:inistt·ation

The Council has the general practice not to incur long-tenn debt. However, due to declining operating cash 'flows over several years, Management, with the consent 0f the Board of Directors, extended the line of credit during (he year to $200,,000, of which S46,675 was unused as of June 30, 2017.

7

Capital Assets

The Council's investment in capital assets for its governmental activities as or June 30, 201 7, amounts to $4 14.642 1. net accumulated depreciation). This investment in capita l assets includes leasehold improvements, furniture and equipment, vehicles and buildings (see table below):

Table3 Capital Assets at Year-end

2017 2016 Leasehold improvem ents $ 402, 107 $ 402, 107 r:urniture and equipment 447,779 429.263 Vehicles 149.903 157,603 Buildings 127,535 127,535

1. 127,324 1, 11 6,508

Less accumulated depreciation (712,682} ~63 1 ,633) Total!. $ -l14.642 $ 484.875

The Council had a decrease in capi tal assets net of accumulated depreciation of $70,233. T he decrease is attributable to the currem year depreciation expense. minimal asse1 additions and one disposal for the current year .

ECONOMIC FACTOR AND NEXT YEAR'S BUDGET AND RATES

T he Council receives most of its funding from l'ederal, state and local agencies. As ~~ result, the source or income for the Coum.:il is consistent. However, some of the Council's grants and contracts are contingent upon the level of serv ice provided by the Council, and therefore, those revenues arc not fi xed. There have been no significant changes to the fi.tncling levels or tenns of the grants and contracts. In November 201 6, the citizens of East Baton Rouge Parish voted to approve a millage tax for senior in our parish. The passage of this tax millage will enable the Council to implement several programs fo r the next fiscal year .

T he Executive Director and Board of Directors considered the fo llowing factors and indicators w hen set1ing next yeatJs budget. rates, amJ fees. These factors and indicators include:

Each year the East Blllon Rouge Council on Aging, Inc. experiences increases in fuel costs and other inOationat) ' items w ithout additional funding to offset the~e increases. Actual expenditures from the previous fisca l year in relation to expected needs in the current year. Consideration of funding to be received tram GOEA and City of Baton Rouge. Sa laries and benefits are based on the number of employees needed to per form necessary services. Services the Council will provide along w ith estimated service costs. E)t imate or operating supplies needed to perfonn necessary services. Detail plan o f equipment needed to be purchased.

CONTACTlNG T HE COUNCIL'S MANAGEMENT

This financial report is designed to provide a general overview of the Council's finances for those with an interest in the Councirs financial position and operations. Questions concerning any of the information provided in this report or rcque~t for additional financial in formation shou ld be addressed to Ms. Eva Prau. CFO. East Baton Rouge Counci l on Aging. Inc .. 5790 Florida Blvd., Baton Rouge, Louisiana, (225) 923-8031 .

ha Clnrk-Amar Ch icf Executive Officer

9

BASIC FINANCIAL STATEMENTS

EAST BATON ROUGE COUNCIL ON AGING, l i'IC.

ASSETS Curren! assets:

Cash - restrtcted

Account~ rd;eivable- net

Total CUITCill ilSSl'tS

Noncurrent usse~~~

Capital assets. net of depreciauon

DeposiL~

Total as~ets

I.. IABI LITIES

C.urrent liabilities·

Line of credit

i\ccoums payable

Accrued payroll and related ta,es

Total currcntl iitbliues

Non-current liabiJittes:

Accrued compe11sated a.bsences

Due within one ye:lr

Loans payable

Due. within one year

Dl.!e in tnore than one year

Totalliabilihes

NET J?OSJTION

Net investment in aapiwl a~sets

Restricted for:

LftjJity assistance

Unrestrict.:J net deficit

Tota111.et Pl'Sition

Total Ifabilttics and net posiliUII

STATEMENT OF NET POSIT ION Jane 30. 10 J 7

SM occonlpanylng 1/t:Jtes ta the bas;c flnnrtl:ml slalemem.v.

IO

Statement 1

Governmental AcUvities

$

$

$

$

]~, 106

11,057

46, l63

-4'14,642

10,?()5

47LOIO

I 53,325

367.595

H,479

555,3.!)9

26,431

13.61·~

100,086

695.530

414,642

96,185

(735,347)

(224,520)

471,010

EAST .BATON ROUGE COUNCJL ON AGING, INC.

.FunrJions/Progmms Governmental activities :

lk:•Hh, Welfare, :1nd Social Sen rices: Supportive SerYices:

Perstmal Care Nutrition Servi.:t::

Congregate Meals Home De.Jivercd Meals

Disease Preventing and Health PrOn\~)lion

Nanonal Familr Caregiver Support Multipurpose Senior Centers

Adminisl ralion; Area Agenc.y Administration C.i.:neraJ Adm in.i strati on

Total gowmmcntal activities

STATEMENT OF ACTIVJTJES For the Jlear ended June 30. 2017

Pmgnun Revenues

Direct Expenses

377,16.6

499,508 567,841

12.000 91,527

569,455

103,303 1,492)43

s;

liJdirect Expens~-s

134.310

187.825 186,415

32. 171 136,67 1

(677.392)

$

Charges for

Services

24,687 18.383

$

Operaring Gr;mts >llld

Contributions

3J6.529

526.354 356,920

11.4:54 101,11 9

653_149

103 . .303 667, 188

s 3,712~943 $ $ 2.7'36,0 l6 43.070 =$====::=:;~~

General R,evenues: GraniS and cMrributions not resrrictcd to spcc11ic programs Taxes:

Sale.~- Auto R~mal Decrease in net position

Net deficit· begLililill& of the year

Net deficit - end of the year

See ac:C'ompanying nutes til the basic.finam:ia( statemenrs

II

$

$

Stntement 2

Net (l~xp~nse)

R CVf'[lllC \!Ild

C:hang~s m Net Pt>sitio11

Total Govcmrnental

Acrivi~tes

(194,947)

(136,292)

(378,953)

\546) (12.579)

t51 ,977)

( L47,563l (933,857)

872.000

59.097 (2.760)

(121,760)

(224, 520)

Statement 3 EAST !lATON RO l lCE COUNCIL ON AGING, INC.

BALANCE: SJJ EET GOVERNMENTAL FUNDS

June 30. 2017

Non· 'lota l General Sen1or Ma;or Governmental

Ft111d Tille Ill B T1Lie Ill C-1 Tilk Ill C-2 Center NSIP l·unds f unds ASSETS ca~J) $ 33,700 s $ $ $ $ s 4()0 $ 34, 106 Other recc1 voblcs • net 12,057 12.057 Due from other t'unds 92~7 2.72<1 19J.509 15,235 103.599 324,3 14

Total Assets $ 45,763 s 9.247 $ 2.724 $ 193,509 s 15,135 $ $ 103,999 s 370An

LIABl LlTfES

Line ofCredll $ 153.325 s $ $ $ $ $ $ 153.325 A CC()lllltS payable 158,880 3.57(1 I 88.747 10.398 o.OOO ]67.595 Accrued payroll and related ta:;es J:J,665 5,677 2.724 ~.762 4,837 1,814 34,479 Accrued compensated absence~ 26,43 I 26.431 l)ue to other fund~ ::>24.3 14 324,314

Tollll Lmbilities 677.6 15 9,247 2,724 1'13509 15.235 7,814 906, 144

Fl' D BALANCES Restricted 96,185 96,1S5

Unassigned (631.852) !63 1,852)

Tot;~l ti.md bolanc.es (631 ,852) 96. 185 (535;667 )

rotal ltabil i11eS1lnd fu11d balance.s $ 45.763 $ 9,247 :s 2.724 I. 193.50)1 $ 15,235 $ $ 103.99() $ 370,477

See accompanying notes to the basic financial stotemcms.

12

EAST BATON ROUGE COUNCIL ON AGING, INC. RECONClLIATION OF THE GOVERNMENTAL FUNOS

BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30. 201 7

Fund balance- governmental funds

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the fund.

Governmental capital assets Less accumulated depreciation

Assets used in governmental activities that are not financial resources and, therefore. are not reported in the governmental funds.

Deposits

Long-term liabilities are not due and payable in the current period and, therefore. are not reported in t-he governmental funds.

Loans payable

Net deficit of governmental activities

See accompa11ying no1cs 10 the basic financial statements

$ 1,127,324

(712,682)

Statement 4

$ (535,667)

4 14,642

l 0,205

(J 13,700)

$ (224,520)

Statement 6 EAST BATON ROUGE COUNCIL ON AGING, INC.

RECONCILI ATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CRANGES INFUNDBALANCES OFTHEGOVERNMENTALFUNDSTO

THE STATEMENT OF ACTlVfTIES Year ended June 30. 2017

Excess (deficiency) of revenues and other financing sources over expenditures and otl1er uses- total governmental funds

Amounts reported for governmental activities in the statement of acti\·ities are different because:

Governmental l ~mds report capital outlays as expenditures, however. in the statement of activities, the cost of those assets is allocated over their estimated usefu l lives as depreciation expense.

Capital outlay Depreciation expense

Some expense reported by lhe governmental funds require the use of current financial resources and therefore are not reported as expenditures in the statement of activities

Principal payments

Change in net position of governmental activities

See accompunying notes to the basic financial statements

15

$ 50.33 I

$ L8.5l6 (88.749)

(70.233)

17.142

17,142

$ (2,760)

EAST BATON ROUGE COUNCIL ON A,GING, INC. NOTES TO FINANCIAL STATEMENTS

June 30. 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of the East Baton Rouge Council on Aging, fnc. (the Council) conform to the accounting principles generally accepted in the United States of America (GAAP) as applicable to govemmen;tal units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental and tinancial reporting principles.

The purpose of the Council is to collect facts and statistics and make special studies of conditions pertaining to the employment, financial status, recreation, social adjustment, mental and physical health or other conditions affecting the welfare of the aging people in East Baton Rouge Parish, Louisiana (the Parish)~ to keep abreast of the latest developments in these fields of activity throughout Louisiana and the United States; to interpret its findings to the citizens of the Parish and state; to provide for the mutual exchange of ideas and iJlformation on the parish and state level; to conduct public meetings; to make recommendations for needed improvements and additional resources; to promote the welfare of aging people; to coordinate and monitor services with other local agencies serving the aging people of the parish; and to assist and cooperate with the Governor,s Office of Elderly At1airs (GOEA), and other departments of state and local government serving the elderly. and: to make rec-ommendations relevant to the p lanning and delivery of services to the elderly of the parish.

The primary servkes provided by the Council to the elderly residents ofthe Parish include congregate and home delivered meals, health care services, nutritional education, information and referral, legal assistance, homemake1· services, operation of senior centers, and outreach.

Reporting entity Jn 1964, the State of Louisiana passed Act 456, which authorized the cha.rtet of voluntary counci ls on agjng for the welfare ofthe aging people in theiJ respectjve parishes. ln 1979, the Louisiana Legislature created the Governor's Office of Elderly Affairs (La R.S. 46:93l)with the specific intention to administer and coordinate soc iaJ services and programs for the elderly population of Louisiana tJ1rough si.xty-fotn· parish voluntary co unci Is on aging.

Charters are issued by the Louisiana Secretary of State upon approval by the Governor's Office of Elderly Affairs. The East Baton Rouge Council on Ag'ing. Inc. is a non-profit, quasi-public corporation which must comply with the policies and regulations established by the Governor's Offtce of Elderly Affairs, the state agency which provides the Council with most of its revenues. Other entities that provide the Council with federal, state, or local funds may impose some additi.onal requirement.'>.

Before January 1 ~ 1982, the Council operated as pa1t of the City of Baton Rouge. Eftective January 1, 1982, the Council began operating as a stand-alone entity, responsible for managing all of its affairs. Based on the criteria set forth in GASB Statement No. 6 I , The Financial Reporting Entity (an amendment of GASB Statement 14), the Council is not a component unit of another rrimary govemment nor does it have any component units related to it. In addition, based on the criteria set forth in this statement, the Council has presented its financial statements as a stand-alone, special purpose government· accordingly, it is applying the provisions of Statement 61 as if it were a primary government.

A Board of Directors, consisting of eleven voluntary m·embers who serve three-year terms, governs the CounciL

16

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTF:S TO FINANCIAL STATEMENTS

Juue 30. J()J7

A: SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (Continued)

Bmi.1· nj f!I'I?SI.:IIf(lfion

The Council's basic tinancwl statements COI1S!SI or ··governmenl-wide" financwl statements on all aCIIVIiK'S

of the Council. which are des1gned to report the Council as a whnk entity, and ''Jl.md'' tinancial statements. which repmt mdividual major governmental funds and combined non-major governmental funds.

Bolh The government-wide and fund Jinallcial statements categori1e primary nctivitics a~ either "governmental" or "business" type. The Council's functions and programs have all be..::n categorized as "gmernm~.;ntal" activities. The Council does not have any busincss-t~pc activities, fiduciary funds. or any compt1llt'111 units that are fiduciary m n:::tture. Accordingly. the go\·ernmcnt-wid!.! financial statemenb do not include any of these activities or funds

Ciol'el"/11111.!11/-ll'ide financial .\'{U/1!11/CI//S - The Statement or Net Position and the Statement of Ac.:tivitie~ accounts for all activities of the Council. As a general ruk. the effect ofinter-funJ activity has been eliminated from thes~.C statements. The government-wide presentation focuses primarily on the sustainability of the Council as an entity and the change l!1 its net position resulting ti·omthe activities of the current fiscal year. Generally. interg:overnm.:-ntal revenues support governmental activities.

In the go\·ernment -wide Statement nf Net Position only one column of numbers has been presented lOr total governmental activities. The amounts arc presented on a consolidated basis and represent only governmental type activities.

Tht.' Statement of Net Position has been prepared on a full accrual. economic resource basts, wlm.:h recognizes a!llong-term assets and receivables as well as !ong-tenn debt and obltgations. The Council's net positiL11l is r.:pc)l1ed in three parts- inve::;ted in capital assets, net of related debt restricted net position: find unrestricted net position.

Th,· government-wide Statement of Activities reports both the gross '1nd net cost of each ol the Counc.irs rum:tions and signil~cant programs. Many functions and programs are supported by general government revenues s·.1ch as intergovernmental revenues and unrestricted public support, p:::trticularly if the function or pwgram has a net cost. The Statement of Activities begins by pres~:·nting gro5S direct and indirect e.\pcnses that include depreci[ltion and amortization. and then reduces the e-.:penses by related program 1·evt:nucs. such as charge<; for services. upernting and capital grants. and restricted contributions, to derive the 11et cost of each function 01 program. Program revenue" must be directly nssociateJ with the function or program to be used to dtrectl~· offset its cost. Oper:tting grants include operating specific and discretionary (either operating or capita!) grants. while the capital grants column reflects capital-spectfic gwnts.

Direct expenses reported in the Stateme.nt of Activities are those that are clearly identifiable with a specific function or program. whereas the Council allocates its indirect e.-..pcnses among various functions and programs in accordance \vith OMB Circular A-122. Cost Principles for Non-Profit Organizations. The Statement of Activities shows thi.,; allocation in a separate column labeled "indirect expen~es." CJOEA provides admtnistrative grant funds to help the Council pay for a potiion of its indirect costs.

In the Statement of Activities. charges tOr ~en, ices represent program revenues obtained by the Council when it renders services provided hy a ~pecific function or program to people ur other entities. Unrestricted contributions, unrestricted gmnts, interest income. and nusce!laneous revenues that are not included among progmm revenues are reportet.l as general revenues in this stateme111.

17

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL ST ATE!VlENTS

June 30. 20 77

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLIC1ES (Continued)

Fzmdfinandcrf stalements- The present financial information that is very similar to that which was included in the general-purpose financial statemel1ts issued by governmental entities before Statement No. 34 required the fonnat change.

The daily accounts and operations of1he Counci l continue to be organized using fu.nds, Fund accounting is designed to demonstrate legal compl iance and to aid financial management by segregating transactions relating to certain governmental functions or activities. The opera1 ions of each ftmd are accounted for with a separate set of self-baJanciog accounts that comprise its assets, li?bilities, equity, revenues. and expenditures. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.

The Council uses governmental fund types. The focus of the governmental funds' measurement (in the fund statements) is on determination of financial position and changes in financial position sources, uses. and balances of financial resources rather tl1an on net income. An additional emphasis is placed on major funds within the governmental fund types. A fund is generally considered major if it is tT1e prinuuy operating fund of the Council or if its total assets, liabilities, revenues, or expenditLtres are at least I 0% of the corresponding total for all funds of that category or type. The non-major funds are summarized by category or fund type into a single column in the fund financial statements.

Governmental fund equity is called the fund balance. Fun.d balance is fmiher classified on a hierarchy that shows5 from the highest to the lowest, the level or fonn of constraints on fund balance and accordingly, the extent to which the Council is bound to honor them: non-spendable. restticted, committed, assigned and unassigned.

The following is a description of the governmental funds of the Co\mcil:

General Fund- The General Fund is the general operating fund of the Council. [t js used to account for all financial resources except those require·d to be accounted for in another ft1nd. These discretionary funds aJe accounted for and reported according to the somce (federal, state, or local.) from wbich they are derived. [n

addition, the servicing of general long-term debt is accounted for in the General f und because unrestricted resoLLrces ate used to pay for the liabili ties incurred by this fund. The General Fund is considered a Major Fund of the Council.

The following are brief descriptions ofthe programs and funding sources that comprise the Council's General Fund:

Local Revenues sucb as donations from the general pltblic, funding fro tn the loca l City-Parish government, income from various fund raising activities, and interest earned on invested idle funds have been recorded in the local program ofthe general fund . Expenses related to these activities as well as expenses not chargeable to specific programs are recorded in the local program. Local program funds are also transferred to other funds and programs to supplement their funding when needed. Most of the COLmcil's fixed assets are acquired witf1 local program funds.

18

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTlNG POLlCIES (Continued)

PCOA PCOA funds are appropriated for the Counc il by the Louisiana Legislature and remitted to the Council. via the Governor's Offia.e of E lderly Affaits (GOEA). The Council may use -rhese "Act 735'1 funds at its discretion prov ided the program benefits peopte who are at !.east 60 years old.

NSIP (Nutritional Services Incentive Program) NSIP funds are provided to the Couocil through the GOEA. These funds are used to defray the cost of providing meals lmder the co ngregate and home delivered meal. programs.

Senior Activities Tl1e Senior Activities fund is used to account for revenues and costs associated with senior activities. These activities include, but are not limited to craft classes held at sen ior centers, a cons ignment store that enab les sen ior citizens to market their crafts, and sponsorship oftl1e ann ual Sen ior Olympics.

Major Special Revenue Funds - Spec$! Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt serv.ice or capital projects. The term ' 'proceeds of specific revenue sources" establishes rhat one or more specific restricted or committed reven ues should be the foundation for a special revenue fund. The Council has established severa l specia l revenoe funds.

T he fo llowing are brief descriptions of the purpose of each special revenue fund and their classification as eitJ1er a major or non-major govemmental fund :

Major Governmental .Funds

Title ll!~B Sllpportive Services Fund The Title lli-B Supportive Services fund is used to account for funds wh ich are to provide a va1iety of social services; such as, info rmation and assistance~ access services, in-home senf1ce.s, community services, legal assistance, and outreach for people age 60 and older.

Title J II C-1 Fund The Title rn C-1 Fund is used to account for funds that are osed to provide nutritional, congregate meals to the elderly at strategically focated mea.l sites in East Baton Rm,1ge Parish.

Title III C-2 Fund Title lll C-2 Fund is used to account for funds that are used to provide nutritional, home-delivered meals to home bound older persons.

Senior Center Fund The Senior Center Fund is used to account for the administration of Senior Center program funds appropriated by the LotJisiana legislature to the Governor's Office ofElderly Affairs, which in tum "passes through" the funds to the Council. This program provides funding for community service centers wbere older persons can receive supportive services and pa11ic ipate in activities 'vVhich toster their independence, enhance their digni ty, and encourage their involvement in and with the community. The CouJ1c il operates eleven senior centers and four nutritiona l food sites in East Baton Rouge Parish, Louisiana.

19

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 20/7

A: SUMMARY OF SJGNrFICANT ACCOUNTING POLICiES (Continued)

Nonmajor Govenunental Funds

Title !!I C Area Agency Administration (AAA) Fund The T itle 111 C Area Agency Administration (AAA) Fund is used to account for some of the administ1·ative costs associated with operating the Special Programs for the Aging.

Title ill D Fund T he Title llT D FUJ1d is used ro account for fnnds .that provide disease prevention and health promotion services. During the year, the Council provided we llness activities designed to support and/or improve the older person 's mental and/or physical well-bei ng inc luding exercise/physical fitness classes and hea.lth screen ing sessions. The Council also provided medication management services, which included screening and educating o lder persons to prevent incorrect medications usage and adverse drug reactions.

Title Ill E Fund The Title fl [ E Fund is used to aceount for fundS; which provide various caregiver suppo1t services. This includes ptlblic education, infonnation and assistance, support groups . in-hotne respite care, and personal care services.

Supplemental Senior Cemer Fund The Supplemental Senior Center fund is used to account forthe addit ional money appropriated by the Louisiana Legislature to supplement the pr·imary state grant for senior centers . These funds are ''passed through'' the Govemor's Office of Elderly Affairs.

Utility Assistance Fwzd The Utility Assistance Fund is used to accot1nt fo[ Project Care, whi.ch is sponsored by Entergy, a local tltility company. Eotetgy collects contributions fi-om service customers and employees and remits the funds directly to the Salvation Army. These funds are used to provide financial assistance to tile elderly for the payment of their utili ty bills.

Jllleasurement Focus and &1sis ofAccmmting Measurement focus is a term used to describe "which' ' transactions are recorded wirhin the various financial statements. Basis of accounting refers to "when'' transactions .are recorded regardless of the measurement focus applied.

Measurement focus- The government-wide financial statements are presented using the eco11omic resources measurement focus. The acco·unting objectives of this measurement focus are the determination of operating incom.e. changes in net assets. and financial position. All assets and liabilities (whether current or non-current) associated with their activities are reported . All governmental funds utilize a current financia l resources measurement focus in the fund fi nancial statements. Only current financial assets and liabi lities are generally included on the balance sheet. Operating statements present sou.rces and uses of available spendable financial resources during a given period. The fund balance is the measure of available spendable fi nancial resources at tbe end of the period.

~0

EAST BATON ROUGE COUNCIL ON AGING, lNC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of accounting - The government-wide tinancial statements are presented using the accma l basis of accounting. Reven ues are recognized when earned and expenses are recognized when incurred or economic assets are used. Revenues, expenses. gains, losses, assets. and liab ilities tesulting from exchange and exchange-like transactions are recognized when the exchange takes place.ln the fund fipancial statements, governmental funds are presented on the modified accrual basis of accounting. Revenues are recognized when " measurable and available." Measurable means the amounl ofthe transaction can be determined. and available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures ( including capital outlay) are recorded when the related fund liability is incurred.

fnleJfund A clivi()' In the fund financial statements, interfund activity is reported as either loans or transfers. Loans between funds are reported as interfund receivables (due from) and payables (due to) as appropriate. Transfers represent a permanent reallocation of resources between funds_ In other words. they are not expected to be repaid.

l n the government-wide financia I statements, a II types of interfund transacrions are el im1nated When presenting the governmental activity infonnation.

Cash and Cash Equivalenls Cash includes not only currency on band, but also demand deposits with banks or other linancial institutions. For the purposes of the Statement of Net Position_ restricted cash amounts are tbose received or earned by the Council with an explicit understanding between the Council and the resource provider that the resource would be used for a specific purpose.

Receivables The Council has established an allowance for doubtful accounts relating to its home delivered meal pmgram based on management's assessment of collectabilily and prior experience. The Counci l does not charge interest on past due accounts. Customer accounts are chru-ged off if management determines the outstanding balance is doubtful. At June 30, 2017, the al lowance for doubtful accounts totaled $41,024

Prepaid Expenses The Council has elected not to expense amounts paid for future services until those services are consumed to comply with the cost reimbursement temlS of its grant agreements. The fund balances in the governmental fund types have been reserved for any prepaid expenses recorded in these funds to reflect the amount of fund balance not cuJTently available for expenditure.

Capital Assets The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. Capital assets are long-lived assets that have been purchased or acqu ired with a11

original cost of at least $1,000 and that have an estimated useful life of greater than one year. When purchased or acquired, these assets are recorded as capital assets in tbe Government- W.ide Statement of Net Position. fn contrast, in the Fund Financial Statements, capita l assets are recorded as e.xpenditures of the fund that provided the resources to acquire the asset rfthe asset was purchased, it is recorded in the books at its cost. lfthe asset was donated, then it is recorded at its estimated fair market -value at the date of donation.

21

EAST BATON ROUGE COUNCIL ON AG ING, rNC. NOTES TO FINANCIAL STATEMENTS

June 30. 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Capital Assets (continued) For capital assets recorded in the Government-Wide Financtal Statements. deprectat10n is computed and recorded using the straight-line method for the assets estimated useful life. The estimated useful lives of the various classes of depreciable capital assets are as follows:

Buildings Building Improvements Equipment Veh icles Computers

30 years 20 years 5-7 years 5 years 3 years

Salvage values have not been estimated by management when calculating how much of an asset's cost needs to be depreciated except for vehicles. For tbat category of capital assets, management has used 10% of the vehicle's initial cost as a salvage value estimate.

Depreciation is not computed or recorded on capital assets for purposes of the Fund Financial Statements.

Compensated Absences Full time employees earn vacation leave, beginning with the first full month of employment, at the rate of one day pay per month. The earning rate for vacation leave increases with each year of employment up to I. 75 days per month for employees with ten or more years of service.

No more than 5 days of vacation leave may be carried over after May I Sth of each year. Payment of any vested vacation leave is made by the Council upon termination of an employee for any reason.

Generally accepted accounting principles require the accrual for vacation leave to the extent it is probable that the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termi nation or retirement. The Council recorded a liability as of June 30, 2017, for the accrued vacation for each employee at the employee's current rate of pay.

Generally accepted accounting principles require the accrual for sick leave if it is probable thatthe employer will compensate the employees for the benefits through cash payments conditioned Oil the employee's termination or retirement. Since the accumulated sick leave lapses upon termination, no amount has been accrued.

Management has estimated that the liability for accrued compensated absences will be paid from general f1md expendable, available financial resources. Consequently, the total amount of accrued compensation is reported as a current accrued liability at the fund level.

Revenue ReCOf!Tiilion Revenues are recorded in the Government-Wide Statements when they are earned under the accrual basis of accounting. Revenues are recorded in the Fund Financial Statements using the modified accrual basis of accounting. In applying the susceptible to accrual concept using this basis of accounting, intergovernmental grant revenues. program service fees, and i11terest income usually are both measurable and available. However, the timing and amounts of the receipts of public support and miscellaneous revenue are often difficult to measure; therefore, they are recorded as revenue in the period received.

22

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCL<\L STATEMENTS

.June 30, 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

income Tax Status The Council , a quasj-governrnental entity, is exempt fi·om federal income taxes under Section 501 (C) (3) of the Internal ReventJe Code (the Code), and is an organization that is not a private foundation as defined in section 509(a) of the Code. The Council is also exempt (Tom Louisiana income tax.

The Cot111cil does not file a form 990 because it has been detennined to be an "affiliate of a governmental unit" within the meaning of Section 4 of Revenue Procedure 95-48, 1995-2 C. B. 418.

Net Position in the Government-wide Financial Statements In the Government-wide Statement of Net Position, the net pos.ition is classified and displayed in three component~:

• Net investment in capital asser,s- This component consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any b011ds, mortgages, notes, or other borrowings that are attTibutable to the acquisition, construction, or improvement of those capital assets. At year-end. the Council did not have any borrowings that were related to capital assets.

• Restricted net position - This component consists of net assets with constraints placed on the use either by (l) external groups such as creditors, grantors, contTibutors, or laws or regLllations of other governments; or (2) Jaw through constitutional provisions or enabling legislation.

• Unrestricted net position - This component consists of ala other net assets that do not meet the definition of "restricted" or "net investment in capita l assets." When both restricted and unrestricted resources are available for use in a specific progmm or for a specific purpose, the Counci l's usual po licy is to use restricted resources first to finance its activities.

Fund Balance - Fund Financial Statements Accounting standards requi re governmental fund balances to be reported in five catego1ies to make the nature and extent of the constraints placed on a government's fund balance more transparent. The following classifications describe the relatjve strength of the spending constraints placed on the purpose for which resources can be used:

• Nonspendable- amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

The Council did not have any noospendable funds as of year-end.

• Restricted- amounts for which constraints have been placed on the use of resources are either: o Extemally imposed by creditors (such as through debt covenants), grantors. contributors, or

laws or regulations of other governments; or o Imposed by law througl1 constjtutional provisions or enabling legislatjon.

The Council had restricted funds of$96, 185 at year-end.

?" __ ,

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FJNANCIAL STATEMENTS

June 30. 2017

A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

• Commit/eel: This classification includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action (resolution) ofthe Council' s board of directors, which is the Council's highest level of decision-making authority. These amounts cannot be used for any other purpose unless the board of directors removes or changes the speci fi.ed use by taking the same type of action that was emp.loyed when the nmds were initially committed. This classification also includes contractual obligations to tbe extent that existing resources have been specificaHy committed for use in satiBfying those contractual requirements.

The Council did not have any committed funds as of year-end.

• Assigned: This classification includes spendable amounts that arc reponed in governmental funds Other than lhe General Fund, that are neilher restricted nor ~ommitted, and amounts in the General Fund thatare intended to be used for a specific purpose in accordance with the provisions ofGASB Statement 54. The .intent of an assigned fl!nd balance should be expressed by either the Council 's board of directors, or a subordinate high-level body, such as a finance committee, or an official, such as the executive director, that has the authority to assign amounts to be used for specific purposes.

The Council did not have any funds available to assign at year-end.

• Unassigned: This classification is the residual fund balance for the General Fund. It also represents fund balance that has not been assigned to other funds and that bas not been restricted, committed, or assigned to specific purposes within the General Fund.

The Council had an unassigned deficit fund balance of $631,852 at year-end. Management believes that its contimJing plan to increase revenue from fund raising and control costs through careful budgetary monitoring will reduce and eliminate Che deficit in a future period.

When fund balance resources are available tor a specific purpose in multiple classifications. the COLU1cil would use the most restrictive funds first in the following order: restricted. committed. assigned. and unassigned as they are needed. Howevel', it reserves the right to selectively spend unassigned resources first and to defer the use of the other classified funds.

Allocation of Indirect Expenses The Council reports all direct expenses by functioJ1 and programs. offtmctions in the Statement of Activities. Direct expenses are those that are clearly identif~able \vith a function or program, Indirect expenses are recorded as direct costs o.f the Administration fuoction. GOEA provides funds to partially subsidize the Council's Administration function. These indirect costs, including trave l, operating services, operating supplies, and other administrative costs are allocated using a budget tool provided by the GOEA which is based primarily on the rdationship of direct costs a program bent'S to the total direct costs of all progr11ms.

lY!anagemenr's Use of Estimates The preparation of financral statements in conformity with accounting pdnciples generally accepted in the United States of America requ ires 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 expenditures during the reporting period. Actual results could differ from those estiniat.es.

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

A: SUMMARY OF SIGNJFICANT ACCOUNTING POLICIES (Continued)

New Accountinf; Standards Adopted No new accounting standards were adopted duri.ng tJ1e year ended June 30, 20 L 7.

8: CASH

The Council maintains a consolidated bank account that is available for use by all funds.

The purpose of the consolidated account is to reduce administration costs and facilitate cash management. The consolidated account also allows those funds with available cash resources to temporarily cover any 11egative casl1 balances in other funds.

The Council maintains another demand deposit accoLmt for maJ(ing payroll disbmsements. The Council has additional bank accounts, for investment of idJe funds to reduce credit risks and for other administrative purposes

As described in Louisiana law, the Council is classified as a quasi-public entity. Accordingly, the Council is not required to comply with Louisiana laws relating to the collateralization of bank deposits. However, the Council's policy is to follow state law in an effort to minimize risks associated with bank deposits that exceed those currently covered by FDIC insUJance. Accordingly, tl1e Council's management obtained co.llateralization for deposits at frnancial institutions that exceed FDIC insurance.

Cash is repmted at its carrying value, which equals its fair value. At June 30, 2017, 110 cash balances were restricted. The bank balances associated with these carrying values were $48,049. None ofthe bank balat1ces were exposed to credit risks.

C: RECEIVABLES ON FUNDING CONTRACTS

No amounts were due on funding contracts from the Govemor's Office of Elderly Affairs at June 30, 20 17.

D: CONTINGENCIES

East Baton Rouge Council on Aging is named as a defendant in several lawsuits seeking unspecified damages. The Council intends to vigorously defend these lawsuits and claims but Council management is unable to evaluate the outcome of these matters or estimate tbe amounts of any liabilities that may result from an unfavorable resolution.

E: DEFERRED COMPENSATION

The Council offers its employees a deferred compensation plan created in accordanc~ with lntemal Revenue Code Section 457. The plan is available to all Council employees and permits them to defer a portion of their salary until future years. Participation in the plan is at the employee's option.

The deferred compensation cannot be withdrawn by participating employees until tennination, retirement, death or unforeseeable emel'gency. All assets and income of the plan are held in trust for the exclusive benefit oftbe participants and their beneficiaries. In accordance with GASB Statement No. 32, the Council does not carry the Jiabil ity for deferred 6ompensation or any re lated deposit or investment asset') on its combined balance sheet. At June 30, 2017, the plan assets totaled $40.091.

25

EAST BATON ROUGE COUNCIL ON AGING, INC.

F: CAPITAL ASSETS

NOTES TO FIN ANClAL STATEMENTS Ju11r: 30, 2017

A summaJy of changes to fixed assets for the year ended June 30. 20 17, is as follows:

Balance 06/30/16 Additions Deletions

Capital assets: Vehicles $ 157,603 $ - $ (7, 700) Furniture and equipment 429,263 18,516 Leasehold itnprovements 402, 107 Buildings 127,535

Total capital assets 1.116,508 18,516 (7, 700)

Less accumulated depreciation: Vehicles 11 3,587 13,570 (7,700) Furniture and equipment 308,025 22,339 Leasehold jmprovements 180,446 48 ,170 Buildings 29,575 4,670

Tot<1l accumulated depreciation 631 ,633 88,749 (7, 700)

Capital assets, net of depreciation $ 484,875 $ (70,233) $ -

Balance 06/30/17

$ 149,903 447,779 402, I 07 127,535

1, 127,324

119,457 330,364 228,61 6

34,245 7 12,682

$ 414,642

Depreciat ion expense was charged to functions/programs of the primary government as follows:

Govermnental activities: Personal Cm:e Congregate Meals Home Delivered Mea ls Multipurpose Senior Centers General Administration

Total depreciation expense- govemmenral activities

G: LINE OF CREDIT

$

$

),7 19 4,668

15,727 344

66,291

88,749

On September 28, 2016, the Council opened a $200,000 line of credit with Whitney Bank. The intetest rate is variable at Prime plus 2.750%, which was 6. 75% at June 30, 2017. The outstanding balance on the Jine of credit was $153,325 atJune 30.201 7 and it Is due September 28, 2017.

Lirte of Credit $

Balance 06/30/16

98,925 Add itions

$ 537,400 $

26

Reductions 483,000 $

Balance 06/30/ 17

153,325

H: DEBT

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30. 2017

The following is a summary oftransactions relating to the Council's l.ong-term debt during the year.

Balance Balance 06/30/ 16 Additions Reductions 06/30/17 Short-term

Accrued cornpensated absences $ 19,875 $ 10,505 $ 3,949 $ 26,431 $ 26,431

Loans Note payable - Amer[can

Gateway Bank 127,855 14,155 I 13,700 13,614 Note payable - Whitney

Bank 2 ,987 2,987 $ 130,842 $ - $ 17,142. $ 113,700 $ 13,6 14

On October 3, 2012, the Cotmcil entered into a loan agreement with Whitney National Bank. The loan amount was $20,100, with a variable interest rate of the Wall Street Journal pdme rate plus 3.0%. Interest payments were due monthly on the loan with the principal balance due on October, 3, 20 l3 . Effective November 27, 20 13, the Council converted its outstanding line of credit into a term loan. The principal is schedt!led to be repa id in 35 monthly installments of$605 each with the final payment due on November27, 2016.

On July l 0, 2014, the Council entered into a loan agreement with American Gateway Bank. The loan amount was $150,000, with an interest rate of6.0%. The Council will pay this loan in 59 regular payments of$1 ,672 each and one itregular last payment of $85,633 due on July 101 2019.

Debt Service Requirements to Maturity

The annual requil'ements to amortize debt outstanding at June 30, 2017, are .as follows:

Note Payable Total Govemmental Year American Gatewal Bank Long-term Debt

Princieal Interest Princieal Tnterest 2018 $ 13.614 $ 6,452 $ 13,614 $ 6,452 2019 14,453 5,612 14,453 5,612 2020 85_.633 428 85,633 428.

$ 113.700 $ 12,492 $ 113,700 $ 12,492

Interest paid on debt obligations amounted to $1 S.O 12 for the year ended June 30. 2017.

I: LEASE COMMITMENTS

Operating Leases On January I, 20 I 0, the Council entered into a lease with the City of Baton Rouge for the building that houses the Council's main office at 5790 FJol'ida Boulevard, Baton Rouge, Louisiru1a. The lease is for a: term of twenty­five years at no cost. The Council is responsible for utilities, normal repairs and maintenance, and ptoviding liability, fire and casualty insurance in the amount of$5 million.

27

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

1: LEASE COM1VDTMENTS (Continued)

On May 5, 2014, the Council entered into a lease for the bui lding that houses its bingo hall at 6955 Florida Boulevard. Baton Rouge, Louisiana, The lease is for a term of sixty months at $8,300 per month. However, rentals for the first four months have been abated under an act of donation . 1l1e Council is responsible for uti lities, normal repairs and maintenance, and providing generaJ liability insurance in tbe amount of$J million.

The Council leases equipment u11dervarious leasing anangements which qualify as operating leases. The lease payments are made on a monthly basis under scheduled terms that vary.

Management has estimated the future minimum lease payments lJndel' all of the. non-canceUable lease agreements in effect at June 30, 2017 as follows:

Year endjng June 30, Amount

2018 $ 106,939 2019 86,774 2020 3,450 2021 2,300

$ 199,463

Rent expense related to these operating leases totaled$ 107,680 for the year ended June 30, 2017.

J: IN-KIND DONATIONS

The Council received $342,723 in various in-kind contl·ibutions during the year which have been valoed at their estimated fair market value and presented in this report as revenue". Related expeoditures, equal to the in­kiJ1d revenues. have also been presented, thereby producing no effect on net revenue.

A summary of the jn-kind contributions and their respective assigned values is as follows:

The Council' s main office facility was fumished by the City of Baton Rouge at no charge

Other Senior Center site facilities and health screening sites are fumished to the Council without charge

Other miscellaneous items furnished to the Council without charge

Total in-kind con.tribLllions

$ 225,504

97,761

19,458

$ 342,723

The Council receives additional supp011 through services contributed by volunteers that does not meet the criteria for recognition under generally accepted accounting principles because the Council would not hire additional paid employees to perform tJ1ese services if volunteers were not availabJe.

28

EAST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

K: BOARD OF DIRECTOR'S COMPENSATION

Service ou the Board of Directors Is voluntary and, therefore, members are not compensated in rhe form of per diem. Members of the Board are reimbursed for travel expenses.

L~ EMPLOYEE BENEFITS

The Council maintains a cafeteria plan allowable under JRC Section 125 for its eligible full-time employees. Employees may eJect to reduce compensation to pay for personal health and dental insurance.

M: ECONOMIC DEPENDENCY

The Council receives .the majority of its revenue from grants administered by the Louis~iana Governor's Office of Elderly Affairs and quarterly allocations from the City of Baton Rouge, Louisiana. The grant amounts are appropriated each year by the federal, state, and local governments. lf significant budget cuts are made at the federal , state and/or local level the Council funding cou ld be reduced significantly and have an adverse impact on its operations. However, management is not aware of any actions by Council funding soutces that will adversely affect operations in the nexi fiscal year.

The CouncjJ receives support from a number of sources. Significa11t among those are the following, reflecting their percent of total revenues provided in fiscal yeru· 2017:

Governor' s Office of Elderly Affairs 55% City of Baton Rouge 24%

N: FEDERALLY ASSISTED AND OTHER GOVERNMENT PROGRAMS

Federal and state assistance programs represent an importru1t source of funding tbr the Council. The federal programs are audited am1ually in accordance with the ('Single AudLt Act". Other programmatic audits ITiay be conducted by .grantor agencies. Prior audits have not resulted in ru1y significant disallowed costs_ However, grantor agencies may conduct ot require additional examinations which could result in the cancellation of grants or contracts, the disallowance of costs charged to the grru1t or require t.be repayment of any questioned costs iden.ti tied, and such repayments may be material to the tinancial statements.

0: lNTERFUND TRANSFERS

The COtmcil provides support to its various progrruns in the fonn of transfers. Transfers in and out are listed by fund type for the year ended June 30. 2017:

Transfers In For: Title Ul B $ Title Ill C-1 Title Ill C-2 Senior Center Nonmajor Funds in tbe

Aggregate Tota l Transfers Out $

General Fund 193,228 $ 209,220 239,303 117,476

23, 125

782,352 -..0....."""===

$

29

Transfers Out From Nonmajor Funds Total

NSlP in the Aggregate Transfers In

- $ - $ 193,228 100,643 309,863 69,938 59,307 368,548

117,476

23,125

170,581 $ 59,307 $ 1,012,240

I':AST BATON ROUGE COUNCIL ON AGING, INC. NOTES TO FINANCIAL STATEMENTS

June 30, 2017

0: INTERFUND T RANSFERS (continued)

Transfers are used to (a) move revenues from the fw1d that collects the funds as required under applicable statute or budget to the fund that expellds the funds as required under applicable statute or budget, and (b) shift unrestricted revenues from the Geneial Fund to finance program costs not covered by dedicated special revenues.

These transfers are eliminated as a part of the consolidation process in preparing the Government-Wide Financial Statements.

P: lNTERFUND RECEJV ABLES AND PAY ABLES

The following is a summary of amounts due from and due to other funds at June 30,2017:

Due From Due To

Senior Center Fund General Fund $ 15,235 $

Title Ill B Fund General Fund 9,247

Ti tle Ill C-1 Fund General Fund 2,724

Title JJI C-2 fund General Fund 193.509

Nonmajor Fund in lhe aggregate General Fund I 03,599

General Fund Title Ill B Ftmd 9,247 Title Ill C-1 Fund 2. 724 Title lll C-2 Fund 193.509 Senior Center Fund 15,235 Non major Fund in the aggregate 103,599

Total General Fund 324,3 14

$ 324,314 $ 324.314

Outstanding balances between funds reported as "due to/due from other funds'· include charges by one fund to another for services and/or goods oulStartding at year end and are expected to be settled wilhin the next year.

lJ1terfund receivables and payables are eliminated in the Government-Wide Financial Statements as a part of the consolidation process

30

EAST BATON ROlJGE COlJNCll. ON AGING, INC.

Q: SUBSEQUENT EVENTS

NOTES TO FINANCIAL STATEMENTS June 30, 2017

Management has eval uated events through the date that the financial statements were available to be issued. December 27, 20 l7, and determrned that no events have occun·ed tbat require additional disclosure. No events occurring after this date have been evaluated for inclusion in these financial statements.

R: GOING CONCERN

As shown in the accompanyin,g financiaJ statel11ents, the CounciJ at June 30, 2017, is reporting a total fund deficit of$535.667 and a net position deficit of $224,520. These deficits have been ongoing for several periods. These conditions create uncertainty about the Council's ability to contiJ1ue as a going concern .

Council Management and the Board has formulated a plan to reduce the defici'ts through management of the Council ' s cash flows by:

• Developing budgets to better control expenditures. • Adherence to the budget in order to reduce expenditures. • Providing a stab le source of funding through a dedicated property tax. On November 8, 20 16, voters

approved a 2 ~ mi II property tax dedicated to the Council that will provide $7.9 million annually for ten years beginning January 20 IS.. The Cotmcil may consider issuance of revemte a11ticipation bonds to provide funding for the period prior to commencement oftax col lections in 2018, should the need arise.

• Raising additional revenue from private grants and funding. • Utilizing the Event Center to generate additional revenue and to reduce costs related to senior activities

held in the facility. • Discontinue unprofitable fundraising programs, specifically the Charitable Gaming Project, the

operation of which contributed significantly to the current year deficit.

31

REQUIRED SIJPPLI<:MENTARY INFORMATION

EAST BATON RO ltGE COliNCIL ON AG ING. IN\.

Bl 'OG£TAIW CO,\IP.\RISON SCII EOlll E •

GE~£RAL FUND

Fo1 I hi! l'l!ar l!nd.td Jum· 30. 10/7

1\~tual Vanance wun BudgctC\1 Amoums Amounts Fmal Budget

M()(Jukd Favor.tblc Ongmnl Final 1\cctual l!asts <Untavornblc)

REVf.~lt f.S

lnt.:rgovcmmcmnl Cny ol Batoh Rllllg<' ~ 2i17.243 $ 159.070 $ 87:!.000 $ 712.930 (invcmor's Ollie.: of Elderly AITmrs· 10.000 110.500 ll0,500 nmcc llorncland s~cunty

and 1-.mcrg~ncy Pr~poredn()SS 5'1,06'l 59,069 Tax~:s ·

Snles • Auto Rentnl SO.OOti 59.097 9,\)97 Publtc St1pptm • NSlrtcicd:

Contnb11 11ons Scnu11· Olympic Sponsorship

Public Suppon- unrestricted· Comnbullons 123.~75 113,475

Progrntn Scrvtec Fcc~ l'atd m.:als

Interest Income Utthtv Asststancc- t:nu~r~y

Other -137.29-1 24393~ (193.360) ln-kmd Comnl>uttons 132.210 13~210

Totol rownucs 317_243 616,36 I l.ll00.285 953,921

EXI'ENOITllllES llcullh , Wclr:m.!, & Soci111 Services: Currem

Snlnries a11d wages 118,557 171),395 17l),l62 (1!.71\7) l'rmgc 27,91 1 47.758 10,979 36,779 Travel 50 35 28 7 Operating $Crviccs 126,320 153,710 2~ 1 ,'N2 {128.182)

Op~raung St1pphes 6.256 9.776 9,776 Othll(COSl 38, 149 264,690 263 287 1.-103 K 1tchen opcrnuons

Cup1tul ou1loy Debt scrvtcc.

l'ri iiCifl<l( l'lllii CITJt:lll 17,142 (1 7, 1-12)

Interest 15.012 (15,(112)

Ullht)' 1\~SISlllni'C Total C'lpcmhlurL'S 317,243 646.364 767.602 (111,138)

E'(c.:~s ol revenues over cxpcndilur~ 832,683 831.61!3

OTII F.R FJ'I,\NCING SOURCES (USES) Opcraung trdnsl.:rs tn

Operalln&: 11-:tn,fers out (782,352) (782,352!

Total other linan~mg sources (uses) (782,352) (782,352)

'let change in runll balance s 50,331 s 50.331

Fund hulnnces 13~gtnning 1lf )'CUI (6!!2.1 83) L:nd oryeilr $ (63 1,851)

Sue occomptiiii'IIJg not as w budgemry comp<~rl.um schetlu/it.l.

]2

eMIT BATON ROUGE COI.fNCIL ON AGING, INC. Bl iOGCTA RY COMPARISON SCIIEDHLE ·

TLTLE Ill 13 · SUPPORTLVE SERVICES H Nl>

For lheyuar endedJ11ne 30. 1017

A\t·Jmd Vnnannr w11h

Budgtlted AlnouJJIS Amounls Ftnat Bud,get Modi lied Favorable

OrigmaJ Ftnal Accrual Bosis (~ln tllvorl\ble)

REV~;NtiES

lmergovernrnental: Governor's Office of Elderly Alliltrs: s 316.529 :li ~16,520 $ 316.529 $ City or Balon Rouge 165.865 192,600 (192,61l(l)

l'ubhc Support· restricted; Comnbuuons Semor Olympic Sponsorship

l·'ublic Support • •utmmricuffi: l'ontnbuttons Ful1tJ riiiSing

l'rogr:un Sen: ice fees Pnid me~ls

lnterust !ncQmc t ltility AssistMCc · Ent.:rgy 0ther 6~,487 6tJ.487 169,487) In-kind Contribmions

Total rewnues 55 1,881 578,6 1() 316.:i29 (262,0S7)

EXPENDrrURES

ll~nlt·h, Wcllitre, & Sochtl Services'

Current

Satnnes t!!ui wn!les 368,036 387,331' 324.5 I 0 62,ll21

Fringe 86.644 109.]&1 106.070 3.31 J

Travel I 1.007 5,469 5.461 s Operating survices 46,864 44.l5i 41.936 2,21.5 Operarmg suppli~ 10,972 10.982 7.766 3)16

Other cost 28)5.8 21 ,3()2 14.,(114 (2 ,712) Kitc!len operations

C>ipi tnl llOtl3y Debt serv1~c:

l'rincJpulrut.iremonl lnt·erest

Uulity Assis tance T a tal expenditures 551 .881 578.616 509,757 68,859

Dellctency of revenues over C..l(penditures {193,228) ( 193.228)

OTIIEf{ f' l i'i'ANCING SOllllCES (USES) Operating tr:msfers in 193,::!28 193.2:!8

Operatmg tr:l.llslers out

Tow I other f.lnancing sources (uses\ ,193,128 193.22$

Net chaugc in fund balauce $ !

f'und balauces Begmnmg of year End ofy.:a[ $

Sel! accvmpall)llll,.,i! nmes to budgetUIJI t'ompanson .<r!tedules.

33

EAST IM TON nOt iGF. CO UNCIL ON AG ING, INC. Bl iOC€1'1\R\' CbM I'ARISON SCm : ouu: -

TITLE Ill C'- t Fl'Nil

For 1he year endr!d Jun£> 30, ]0 I 7

A.:tual Vari<mce 1\ llh Budgeted Amounts Amoun lS Final Budget

Modified Fnvorable

Ongmal Final Accrual 8U$1S (Untt\vorable) RlWENl iES

Intergovernmental. Govcmor's Ollice ofE1derly Affairs: $ 355,773 $ 355,773 s 3.55,773 $ City of Baton Rouge 118.922 12<i,30~ (IJ6,30S.)

l'ubl ic Suppon - resuicced. Contributions Sanior Olympic Sponsorshtp

Public Support- unrcsrrict~d:

Contr:lbutions l'und mismg

Progr~m Service Fees: l'aid meals 35,000 J(t.O(IO 24.687 (5.313)

Tnteri!st I nco me l ltility Assistance- £mergy Other 50,000 55,000 (55,000) ln·kind CClntributions

Total revenues 559,695 567.081 380.460 ( I 86,6-:! I)

EXl'ENDITliRES

llealth. Wclf.1r·e, & Social Sc.rvices;

Current:

Salaries and wage~ 295,895 284,30·1 268.763 15.541

Fnnge 69,661 80,286 94.9(>3 (14,('n)

Travel 107 47 47 Operating services 57,429 51.707 58,646 (6.')39)

Operaling supplies 218.445 236.353 10,860 225,493· Other cQst I 8.802 15,028 15.3SI (353)

Klcchen operations 236.341 (431.1,.141)

Capita l outlay 5,322 (5,322)

Debt servkc:

Principii! retirement lnlercst

tlt\Hty Asststance Total expenditures 660,339 667,725 690.323 (22,59!1)

Uclicicney \lf revenues over expenditLJies ( 100.644) (100.644) (309.863) (209.11>!1)

OTHER FINANCING SOUHC'ES (llSES) ()perntmg tmnslers in 100.644 IOO.t-1'14 309,863 (209,219)

Opernting ll'l!l1sfers out

Tgtnl olherfinancing source$ (uses) 100,644 100,644 309.86'3 (209,219)

Net th:mgr in fu111l balance s $ $

l?und b:tl!IIICCS

Beginning o.f yenr End of year $

Sell occompanyfng nor.:s. to budgcfury ''OIIIf'lifWJil sr:/ledules.

34

EAST BATON ROUGE C'Oti~CII . ON AGING, INC. B'UDG£TARY COMP,\HISON SCHEDULE-

T ITLE Jll C-2 FllNI)

For the yem·endt>tl J1111e JO. 2017

Actual Voriancc·With Budll_Cied Amounts Amounts Firwl Budgt:t

Modified ravorahlc

Original Final Accrual Basis (Unfavorable) ~tWENTIES

lntcrgoverhmenro.l Govurnor's Orticeof Eidcrly A (fairs 'S 356,920 s 356,920 s 356,920 s City of Baton Rouge 225, ISS 117,493 (1 17,<193!

Public Suppori - r-estricted. Crmtrr butrons ScJrior Olympic Sponsorslull

Public Suppori- unrestricted; Contributions Fund rarsrn!,\

Progranr Service Fees: !'>aid rneafs 15.001.) 10,000 lX,JllJ {1,617)

lmercstlncomc Utility Assisranc.c -Eoterg_v Oth.er 1,626 (1 ,626)

Tp.tal revenu~~ 597, 1U5 S9M39 375.303 (220,736)

EXPKl'IDITUHES

llcnlth, Wclfnrc, & Social Services: Current:

Salaries and w~ge' 227.735 207.949 198,9 19 9,0.30 Fring~· 53,614 58,724 79,522 (20,7q8)

Trovd 108 46 46 Ope1~11ng servoces 58.01! 5.1.3~9 67,777 (16,388) Opcn11ing supphes 308,jS2 330566 18.151 312,415 0 1hercost 18.993 17.304 31.568 (20.264) Kilch~n operauons 334,210 (334,210)

Ca-p11ol oUtlay 7.658 (7,658) Deb! servrcc:

Princrpol rcmcnlcm lnter.:st

Utility Assistance In-kind services and facilities

Total e:>ipenditures 667,044 665,978 743,851 (77, 873}

Dci'idc.ncy of r~vcnucs o~r ¢;xp~nditures 169.939) (69,939) {368,548) (298,609)

OTOER FINANCING SOURCES (USES) Operating tr.msfers 111 69.939 69,939 ..)68,5.4$ 298,601')

01}eratlng tmnsfer~ out

Totnl other i'innncing sources (uses) 69,939 69,939 368,548 298_609

Net ~lmnge in funr.l balance $ s s

.Fund balances Beginning-of year

End of year s

Sec <it;t:filllfl(l/ljllllf!. now.r to btu/germy t·vmpanwn .•···fr~Jul<'.<.

35

EAST BATON ROUGE COUNCIL ON AGING, INC. IWDGETAR\' COM PARISON SCI-IEOlfLF. .

SENIOR CENT £n

For the year rmtled June 31/, 1017

Actual Varmnce wit~ Budgeted Amounts Amounts Final Budget

Moditicil Favorable.

Ongmal Finul t\ccrunl Basts (Unfnvor.sbl~)

REVENLTES

lntergowrnmcntnl: Gov!!(nor's Oflice of Elderly Affairs: s ]8:!.85 1 s J8:2S51 s 382.852 $ I City ori30ton Rouge 1 3~.~09 lD6.409l

Pobhc Stopp011 - restrict•'<~:

Contri butions Senior OlympiC S]Jonsorslup

Public Support- unrestricted· Conttibuttons 250 250 ~und raismg

Pmgr~m Service Fees~ Ptnd meals

Interest Jncom~ Uti11ty Asststoncc- Entergy Other 217 227 In-kind Conlrlbutions 210,513 210,5 13

To,nl revenues 382,85 1 5 19.260 593,842 74,5ll2

I'.XJ'ENDITURES

Ilea It h. Welfare . . & Soci:\1 cn~ic~.s:

Current:

Salancs and wages 258,780 279,0 16 250,916 2-S, trlO Fnnge 60,923 78.7'>3 75,982 2,811

Tmvel 1,568 :SQ 645 (.556) Opcrnttug s<!-tviccs 36,759 74,735 t S5.'127 (S0,692)

Operating supplies 26,606 3Q,7QCJ 127.814 (97,105)

Othcr.::ost 37.035 95.738 94.998 740 Kitchen opt!ration~

Capital ot.tlny 5 ,536 (S,5361 Debt serv1~t:<

Princtpal retirement Interest

Utility Ass1stance Totnl expenditures 4:22,671 559,(lll0 7 11 .118 (15::!,238)

Dc!ici<!ncy of revenu.es over expenditures (39,8::!0) (39,820) (1 17.476) t77.656j

OTEIER FI Ni\NCLNG SOURCI~S (liSES)

Opemting mmsfers "' 39,820 39,820 117.476 77,65.6

Operating transfers-out

Total other financing sourc-es (uses) 39,820 39,1120 117,476 77,656

Ncrineroosc in funil b~lnnce s s s

Funtl b_al~ni.'cs

Beguming of year End pfyear s

Sert <IIN<>Iilfl{lft\rillfi 11ntes 10 bmlgerm:v t:t/tllfltll'"'l" .vdtedul~·~

36

F.i\ST BATON R()ll(; l..: COUNCIL ON AGJN(;, INC. ll tiDGETARY COJ\IPAIUSON SCI-lf.OlH~E-

NSrP

For 1he year ended .June 30. 2017

Actual Vanancewnh Bud!?(!tetl Amounts An\voJIIS Ftnnl Budgtl

Moditkd F;tvornble

Original l;inal Accrual E!:1sis (Unfavorable)

REVENUES

lntcrgovemmentaf· Govtme)l's Ofllce of Elderly Aflbirs: $ 170.581 s 170,58 1 s 170,58 L $

City of Baton Roug,e Public Suppon.- restricted:

Conuibutions Sen tor OlympiC :>ponsorshi p

Ptiblrc Support- unre.~lrlcted:

Comrihut ions l'und rnismg.

Progrnm ScrviC(: Fees Paid meals

lmcrcst lncoJilc Uttlily t\ssislance- Entetgy Other ln-kiod COntributions

Total revenues 170,581 170.581 170,58 1

£Xl'£NDJTULU:S

llcnlih, Wclf:~rc. & Sncinl Services:

Current

Salane.s and wages Fringe l"rnv~l

OperaLinJ> Sti'Vices Operatmg supplies Other cost Kttchcn operattons

Capunl outlay Debr ~ervtc:c·

Principal rdirement ln••~·~t

Utflity Assistance T01al ~~penditurcs

~~cess or revenues over ~xpenditures 170,581 170,51f t 170.581

OTirEH HNANCING SOURCtS (USES)

Oreraring transfers in Opcn11ing transfers out (170,581) ( 170.5SIJ (170,5SJ)

Toral otht r financing sources (us~s) (t70,581) (170,581) 1 170,58 1)

Ner inc.rcasc in fund balance s s s

fund balances Bcginnfng ofycnr

Ehd ofyenr s

Set• at'I.'CJmpcmying no/~~ (t) luulge/Ciry L'lllllf"m srm <<'hed,du.l'-

37

EAST BATON ROUG.E COUNCIL ON AGING, INC. NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

BUDGETARY REPORTING June 30. 2017

The budgetary infonnation presented in this section of required s upplementary information applies to "major'' govemtnental funds for which annual budgets were adopted. Budgetary information for "non-major" funds has not been included anywhere in these financial stateme11ts.

The Council used the following procedures to derive the budgetary data whjch has been presented in these financial statements:

The Govemor's Office of Elderly Affairs (GOEA) notifies the Cottncil each year as to the funding Jevels for each program's grant award. GOEA awards funds fm- fiscal periods ending June 30th.

Tlw City of Baton Rouge notities the Council each year as to the amount included in the C ity-Parish budget for the Council. Because the City of Baton Rouge operates on a calendar year, its -tiscal year will overlap the Council's fiscal year. Accordingly, the Councjl's management can predict with reasonable accut'acy how much money the Council will have available for the first six months of its tiscal year. Management estimates the City's allocation for the last six months of the Council's fiscal year until the City notifies the COtmcil of the exact allocation. Management will then incorporate the actual allocation amount into the Council's amended budget. Funds received from the City of Baton Rouge are un.restdpted as to use by the Council on Aging.

• The Counci'l may also obtain grants from agencies other than GOEA and the City of Baton Rouge, and the Council considers the potential revenues to be earned w1der those grants.

• Projections are made of revenues from other sources based on past treJ1ds and data available to form expectations of f11ture revenues.

• The Council's management prepares a proposed budget based on the expected fundir1g levels and then submits the budget to the Board of Directors for approval.

• The Board of Directors reviews and adopts the budget before May 31 of the Clul'ent year for the next year.

• The adopted budget is forwarded to the Governor's Office of Elderly Affairs for the final approval.

All bqdgeta1y appropriations for grants awarded the Council by GOEA lapse at the end of each fiscal year (June 30), except for N.SJ .P. cash in lieu of Commodities funding which lapse at December 31st. Occasionally, the Counci I wi l I receive a special project grant that may operate on a p~riod different from the Council's nmmal fiscal year and, therefore, have a specified date where the budgetary appropriation will lapse.

The budget is prepared oil a modified accrual basis, consistent with the bas·is of accounting, for comparability of budgeted and actual revenues and expenditures.

Budgeted amounts included in the accompanying tinanciaJ statements include the original adopted budget amount and all subsequent amendments, which must also be adopted by the Board of Directors and approved byGOEA.

38

• Actual amounts are compared to budgeted amounts periodically during the fiscal year as a management control device

• The Council may transfer funds between I ine items as often as required but must obta~n prior approval from the Governor's Office of Elderly Affairs. for funds received under gnmts from this state agency. As part ofits grants awards, GOEA requires tbe Counci l to amend its budget .in cases where actual costs fo r a particular cost category exceed tl1e budgeted line item by more than 10%, unless unrestricted funds are available to "coVer" the ave.JTun.

• Expendit1.1res cannot legally exceed appropriations on an individual fund leve l.

• 1'he Council is not required by state or loc.al law to prepare a budget far every program or activity it conducts. Accordingly, same General Ftmd activities are not budgeted, particularly if they are deemed to be immareriaJ by management.

39

SUPPLEMENTARY FINANCIAL INFORMATION REQlllRED BY THE GOEA

EAST BATON ROliGE COliNCLL ON AGING, INC. COMBI NING SCI:l ~Dlll.E OF R£VENLIES, EXPE DITUR'ES AND CHANGES l N FUND BALANCES

ONMA.JOR GOVERNMENTAL FllNDS Year cmded June 30, 2017

AM Supplcmemal Trtle llll) Title lliE Uuhty Admi111Silotron Senror Center Wellne>s C<trcg)vcr Support Assistance Total

REVENUES l ntergo,• crnment~l:

Crty ol' Baton Rouge 'S $ $ $ $ $ Ofllcc ot' Eld~rly Affairs 103.303 59,307 11,454 101.119 275,183

Public Suppon (restri¢ced). Cor1tnbu11on~

Pubhc Support (unrestricted)· C'ontrihutrons Ftrnd mrsrng

Program Se.rvrcc Fees· Paid meuls

J.ntcrost Income Uuhty Assisu111cc • Emcrgy Otha In-kind Contributions

Tot~l revenues 103.303 59,307 11 .454 101,119 175.183

li:~1>£NDITURES

U~;IIHI, WeJfnr·c •• ~Socia l Sen·ices: Cltrrent

Sruarics and wages 33,6M 78..110 111,074 fringe 10,-IS'I 18.691 39J72

Travel 28 2,058 2.086

OperatUlg service~ 43.43•1 10,045 53,479 Opemting supplies 6,853 1,860 8,713 Other cost 8.843 12.00<1 2,63<1 JJ,477

K1tchcn operations Capllaloullay Debt serv1cc·

Pnnc1pal rctilcment Interest

Uiilfty Assislnnce 1'otul expenditures 103,303 12,000 123,698 '2.39.00)

Bl\ccs~ (detlcicncy) orr~venues over expcnd.rturcs 59.307 (546) (22,579) 36. 182

OTII I!R F'INANC!NGSOURCES (liSES) Opcraung transters 111 546 22.579 13.125

Opcraung transfers out (59,307) (59,307)

Toltll other linuocing sources (uses) (59,307) .546 2.2,579 (36.1 1!2)

N~t chungc m fund btilimce

Fund bnlances Begu1nmg ol'yc<~r 96.185 ')6 185

End or year $ $ .$ $ $ 96.185 s 96. 185

40

EAST BATON ROUGE COUNCIL ON AGING, INC. COMPARATIVE SCHEDULE OF CAPITAL ASSETS

AND CHANGES TN CAPITAL ASSETS YeaF ended June 3 0, 20 I 7

Balance Additions/

June 30, 20 16 Adjustments Deletions

CAPITAL ASSETS Vehicles $ 157,603 $ $ (7,700) Oftice furn_iture and eq uipment 429,263 18,5 16

Leaseho ld improvements 402,107

Buildings 127,535

TOTAL CAPITAL ASSETS $ I , 11 6, 508 $ 18,516 (7,,700)

INVESTMENT IN CAPITAL ASSETS Property acquired with fu nds from:

General fund $ 952,29l $ 5,536 $ (7,700)

RSVP 1,060

PCOA 3,558

Ti tle liT C-1 7,658

T ille lii C-2 42,599 5.322

Donations from the genera l public 117,000

TOTAL INVESTMENT IN CAP1T AL ASSETS $ 1,116,508 $ 18,516· $ (7,700)

4 1

Balance

June 30. 20 17

$ 149,903

447,779

402. 107

127,535

$ I, 127,324

$ 950, 127

1,060 3,558

7.658

47,92 1

11 7,000

$ 1,127,324

Sl!PPLF::VlENTARY FI:\IANCIAL INFORMATION I{F:QUIRED BY THE t'NIFORJH A.DMINISTR..I TJVE REQU/REiliENTS. COST PRINCIPLES, Af\'D

AUDIT REQl'/REMENTS FOR FEDERAL .I W4RlJS

EAST 11ATO ROUGE COliNCtL ON AGlNG. INC. SCil tDllLE OF EXPENDlTJJllES OF FEDERAL 1\ WARDS

Yi!ar endl!d Junl! 30, }Ill 7

PASS-IHROU<.lll FEDF.RAL. fiNTJTY PROORAM

FEDERAl. GRANTOR!!' ASS 'DlROUGH GRANTOR/PlWGRAM CFD1\ IDE.NTIFYJNG OR;\WARD TilLE OR CLUS1'ER TITLE NUM!3ER NlJMUER AMOUNT

United Stat<ls Oepnctmem oi'Heal ~• and Human Services

Pas,'Cd through the Louisinnu Gov~mor's

Ollioe nl' t:lderly Affairs: Sp~CJal Progr:ams for the Agio~:

Tille Ill , !"art 13 • Supponive Servioc.~ and Se111~rCentcrs 93.0114 710224 s :!30, 162

fitle Ill, Pan C- Arl!lt Agency Adu11111~trnnon 93,04) 720224 77,177 Ttlle Ill , Pru1 C-1 Nulrilion Services Congrog<Jid Meols lJ.l,\t45 71U'l1A M1.074 Tille I II , Pnrt C-2 Nurrition Services !lome Oelfvured Meal~ 93.045 7:20124 155,70~

Total Title ill, Pnrt C 47 1,153

~ttlrllloft Services Incentive Prob'Tnm 93.053 72(J106 170.581

Total A):~ng Cluster Sli4,9')1i

Titlo Ill, Part D • Dise~se Prevention ~nd Health l'romotion Services 93.043 non~ 11 ,454

Title Ill , J>ari E · National Fnmily Caregiver Pro~nun 93.052 7!02l~ nS39

Medicare Improvements for Pari·CJll.i ~nd Prov1d~r'll ?3.518 200()1 43551 10,500

Total Uniled States Department ofHeallh ~nd l-h11nun Services 9&1,189

United Stales Department of llome.land Sec111ity and Emergunc_v Prepnrednc;ss

J'osscrlthr<rugh LoUJ01nna Depilr1nicnt ofHornelnnd Secunly and Emerj!enev Preparedness:

Disaster Grnnl -Public Assistance 97.036 031-0l4C7-0<: :5!),()69

Toml United States-Depilr1menl l'f Homeland Seq rity and t.mel'l!~liCY Prepan~dne~s 5'1.069

s t.021,858

42

TOTAl. REVENUE F6'0RRAL

RECOGNIZED EXPENtllTURES

s :EO.I62 $ 120.1(.:!

77.477 77,477 l •JI,U'/4 141,074 155,702 155,701 474,253 ·174,253

170,581 170,58 1

86<1,996 8<>4,996

liAS~ II ,J5•1

75,839 75,8.3()

tO,SOO 10500

962.7&9 ?62.189

59,069 59,069

59,069 59.069

s 1,021,858 s 1.02 1,858

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30,2017

(I) BASIS OF PRESENTATION The schedule of ex.penditures of federal awards (the Schedule) includes the federal award activity of the East Baton Rouge Council on Aging under programs ofthe federal government for the year ended June 30, 2017. The information in this schedu le is presented in accordance with the t'equlrements ofTitle 2 U.S. Code of Federal Regulation& (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Un iform Guidance). Because tbe Schedule presents only a selected portion of the operations of the East Baton Rouge Council on Aging, it is not intended to and does not present the financial position or changes in fund balances used in the preparation of the basic financial statements.

(2) SUMJ'VIARY OF SIGNIFICANT ACCOUNTJNG POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditutes are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited to t'eimbursement. Pass-through entity identifying numbers are presented.

(3) SUB-RECfi>IENTS The Council did not pass-through any 6f its federal awards to a sub-recipient during the year ended June 30. 2017.

(4) NON-CASH ASSISTANCE No federal non-cash assistance was received or expehded during the year ended June 30. 2017.

(5) RECONCJLIATION TO THE BASIC FINANCIAL STATEMENTS The expenditures listed in the accompanying schedu le are reported in the following funds in the Counci l's basic financial statements. The Counci l receives both federal and state ftll1ding to suppo1t expenditures of its programs. Since program expenditures exceed federal revenues, the fedetal portion of program expenditures relate directly to the federa l revenue received. These revenues are included with in the intergovernmental revenues reported ip the Statement of Revenue, Expenditures, and Changes in Fund Balances as follows:

fund Amount General $ 69,569 Title 1fl B 220,162 Title 111 C- t 241,074 Title 111 C-2 155,702 NSIP 170,581 Non-Major 164,770

$ !,021,858

43

Slii)PLEMENTAH.Y INFOR;\'IATION

EAST BATON ROUGE COUNCIL ON AGING, INC. CI:IEDULE OF COMPENSATION, BENEFIT & OTHER PAYMENTS

TO CIDEF EXECUTIVE OFFICER Year Ended June 30. 2017

Chief Executive Officerffitle: Tasha Clark·Amar. Executive Director

Purpose Amount

Solary s 112,197

Benefits • insurance 5.4 17

Rei mburscmcnts 108

Travel 275

$ 117,997

44

Rob.cr! L Slamej. CPA K>rnberly G Sand.ors. CPA. MBJI

Alv>n J Calla•s CPA Mtcha"-'1 A_ Tham, CPA. CGMA Sus~n S. Thi!m, CPA

NeJ' fmt,onOelt)'_ CPA

W~yne Oussel. CPA. CFE Jonolllan Clar,, CPA

L.A.CtiAMPAGNE w

Certified Public 1\ccouotants

INDEPENDENT AUDITOR'S REPORT

Member of /lie Private Compames Prec/1ce

Sec/ron of the Amencan lnslrlu/e ofCPAs

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 East Baton Rouge Council on Aging, Inc.

Baton Rouge, Louisiana

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to tinancial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the East Baton Rouge Council on Aging. Inc. (the Council), as of and for the year ended June 30. 2017, and the related notes to the financ1al statements, which collectively comprise East Baton Rouge Council on Aging, Inc.'s basic financial statements and have issued our report thereon dated December 27, 2017.

Internal Control over Financial Reporting

In planning and performing our audit of the tinancial statements, we considered the Council's intemal control over tinancial reporting (intemal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressmg our opinions on the tinancial statements, but not for the purpose of expressing an opinion on the effectiveness of the Council's internal control. Accordingly, we do not express an opinion on the effectiveness of the Council's internal control.

A ~le.ficien(l' in internal control exists when the des1gn 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 sig11i/icant deficiency is a deficiency. or a combination of deficiencies, Ill mtemal control that is les::; 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 \veaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identifY any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as item 20 17-"2 that we consider to be a significant deticiency

491i Bennington Avenue • Baton Rouge, Louisiana 70808-3153 • Phone (225) 925-1120 · Fax !225} 927-8124 • lac(cf)laccpa_com

1234 Del Este, Ste 503 • Denham Spnngs, lA 70726 • Phone (225) 664-3671

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Council ' s fiJ1ancial statements are free from material misstatement. we performed tests of its compliance v,ritb certain provisions of laws, r·egulations. conn·acts. and grant agreements. noncompliance with which could have a direct and mater·iaJ effect on the determination of financiaJ 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 matter that is required to be repmied under Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs as item 2017-1.

East Baton Rouge Council on Aging, Inc.'s Response to Findings

The Council ' s response to the linclings identified in our audit is described in the accompanying schedule of findings and questioned costs. The Council' 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 entity' s internal contTOI or on compliance. Tllis report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

J(_ Q. Q0Q~OCey-N -+ Lo l- l · Q

Baton Rouge, Louisiana

December 27, 2017

46

Robert L Stamey, CPA Kimberly G Sanders, CPA, MBA

AlvJn J Callais, CPA MIChael A Tham, CPA. COMA Susan $ _ Tham. CPA

Neal FOI"Ienbetry, CPA Wayne Dussel, CPA, CFE Jonathan Clark. CPA

LA CHAMPAGNE HI Certified Public. Accountants

INDEPENDENT AUDITOR'S REPORT

Member of the Private Companies Practice

Section of the American Institute of CPAs

ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

To the Board of Directors of the East Baton Rouge Council on Aging, Inc.

Baton Rouge, Louisiana

Report on Compliance for Each Major Federal Program

We have audited East Baton Rouge Council on Aging, Inc.'s (the Council) compliance with the types of compliance requirements described in the OlvfB Compliance Supplement that could have a direct and material effect on each of East Baton Rouge Council on Aging, Inc.'s major federal programs for the year ended June 30, 2017. The Council's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

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

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the Council's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, Issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about The Council's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Council's compliance.

4911 Bennington Avenue • Baton Rouge. Louisiana 70808-3153 • Phone (225) 925-1120 • Fax (225) 927-8124 • lac@laccpa.com 1234 Del Este, Ste 503 • Denham Springs, LA 70726 • Phone (225) 664-3671

Opinion on Each Major Program

In our opinion, the Council complied, in all material respects, with the types of compliance reqt.1irements refenecl to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017.

Report on Internal Control over Compliance

Management of the Council, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of con1pliance, we considered the COLmcil ' s internal control ovef compliance with the types of requirements that could have a direct and material effect on each majOJ federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose nf expressing an opinion on the effectiveness of internal control over compliance. Accordingly. we do not express an opinion on the effectiveness of the CounciPs internal control over compliance.

A deficiency in internal control over compliance exists when the design or operatiou of a control ove1' compliance does not allow management or employees, in the normal course of petforming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency. or combination of deficiencies. in internal control over compliance, Stlch that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corTected, on a timely basis. A sign{ficant deficiency in internal conlrol over complic;nce is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance. yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any de·ficiencies in internal control over compliance that we consider to be material weaknesses. However, matetial wealmesses may exist that have not been identified.

The purpose of this repo1i on intemal control over compliance is solely to describe the scope of our testing of intemal control over compliance and the results of that testing based on the require1nents of The Unifon:n Guidance. Accordingly, this report is not suitable for any other purpose.

Baton Rouge, Louisiana

December 27, 2017

48

EAST BATON ROUGE COUNCIL ON AGING, INC. SUMMARY OF AUDIT RESULTS AND

SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ended June 30, 2017

A: SUMMARY OF AUDIT RESULTS

1. The aud.itor's report expresses an unmodified opinion on the financial statements of East Baton Rouge Council on Aging.

2 . One significant deficiency in internal controls, 2017-2 related to the audit of the financial statements is reported in the "Independent Auditor1s Report on Internal Contml Over Financial Reporting and on Compliance and Other Matters Based on an Au<lit of Financial Statements Perfom1ed in Accordance with Governmental Auditing Standards." No items are reported as material weaknesses.

3. One instance of noncompliance, 2017-1 material to the fmancial statements of East Baton Rouge Council on Aging was disclosed during the audit.

4 . There are no significant deficiencies in internal controls relating to the audit of the m~jor federal award programs included in the "Independent Auditor's Report on Compliance for Each Major Program and on lntemal Control Over Compliance Required by the Uniform Guidance''.

5. The auditor's report on compliance for the major federal award programs for East Baton Rouge Council on Aging expresses an unmodified opinion.

6. There are no audit findings relating to the major federal award programs for East Baton Rouge Counc1l on Aging reported in Pmt C of this Schedule.

7. A management Jetter was not issued.

8. The program cluster tested as a major program is as follows:

U. S. Department of Health and Human Services Aging Cluster - Special Programs for the Aging:

Title TII-B- Supportive Services; CFDA 93.044 Title Ill-C- Nutrition Services; CFDA 93.045 N.S.tP - Nutrition Services Incentive Program; CFDA 93.053

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

1 0. East Baton Rouge Council on Aging was detem1ined to be a high-risk auditee.

49

8: FINDINGS - FINANCIAL STATEMENTS AUDIT

COMPLIANCE

2017-1 Compliance with Operating Lease Terms

Condition: The CounciL's cmTent fi.re and casualty insurance policy coverage is $2.5 million. This is a repeatfindingfrom tile prior year.

Criteria: Under the terms of the Council"s lease agreement with the City of Baton Rouge for the building that houses the Counci l' s main office, the Council is responsible to mai.ntain fire and casualty insurance coverage in the amount of$5 million.

Effect: The Council bas not complied with ihe terms of tbe lease agreement. Non-compliance with the lease tem1s may result in monetary penalties and potential termination of the agreement.

Cause: The Council was unable to obtain insurance coverage in the specified amount because coverage is limited by insurance Lmderwriters to the value of the facility.

Auditor's Recommendation: The Council should try to renegotiate the terms of its lease agreement with tbe City of Baton Rouge to modify the insurance coverage requirement.

Management Respo·nse: The Council anticipates moving to another City-Parish facib~y under a new lease agreement. The Cow1cil has a signed Cooperative Endeavor Agreement with the City of Baton Rouge.

INTERNAL CONTROL

2017-2 Legislative Auditor Investigative Audit

Observation: In May 2017. the Louisiana Legislative Auditor isst1ed an investjgative audit report relating to complaints received. The report outlined deficiencies in operations, opport:tmities to enhance procedures and recommendat~ons for corrective action. The matters outli11ed in the report relate to the following:

• Management and staff performed political activities during, work hours ·• Council donated funds to a political organization • Council used public funds to pay political organization's expenses • Council a1lowed political organization to use its postage permit • Disaster overtime reimbursements • Inadequate documentation of credit card charges

50

Management and staffperformed political activities during work hours

Condition: From Februaty 2016 to December 2016, Council management and staff used public resources to operate Support Om Seniors (SOS): a political action committee formed to support a ta'< proposition to increase the Cmmcil 's funditlg, during_ work hours.

Criteria: The Louisiana. Constitution and state law prohibit the use of public funds to urge any elector to vote for or against any candidate or proposition, or be appropriated to a candidate or political organization.

E.ffect: By using public funds and resources to operate SOS during work hours, Cotu1cil management and staff may have violated the Louisiana Constitution and state and federal laws.

Cause: The Council did not have adequate policies and procedures.

Auditor's Recommendation: The Council should consider implementing the recommendations made by the Legislative Auditor.

lvfanagement Re::.ponse: Over the course of the last six years Council 's On Aging statewide have been facing state budget cuts. which includes the EBRCOA. We have been particularly vocal on advocating about the importance of programs such as COA's. On Febnlary 23rd 20 l6, our management along with some staff participated in Senior Day at the Capitol which is not a political activity, but an opportunity to advocate to legislators and the Govemor about the significance of our programmatic impact and how we are cost effective entities. We created the slogan Support Our Seniors as a call tag due to the constant slashing of the Aging Program's budget and programs at the State Legislature. Furthennore, the agencies faced threats and budget cuts nearly every session. That call tag Suppmt Our Seniors became synonymous with EBRCOA. Hence when the time came to create the political action committee, the slogan was an identifiable tag. We have adhered and implemented all recommendations made by the Louisiana Legislative Auditor, the Governor's Office of Elderly Affairs and the City of Baton Rouge.

Council do.nated funds to a political oa·gan.iz:ation

Condition: From August 30.2016 to November 15, 2016, the Council donated ,$24 ,8:10 to SOS.

Crilerh· The Louisiana Constitution and state law prohibit the donation of public funds.

Ejfect: By donating funds to SOS, Council management may have violated the Louisiana Constitution and state and federal laws.

51

Cause: The Council did not have adequate policies and procedures.

Auditor 's R ecommendation: The Council should consider implementing the recommendations made by the Legislative Auditor.

Management Response: Annually the East Baton Rouge Counci l on Aging publishes a Campaign Edition of its Polished Magazine, which is separate and apart from our quarterly required publication. The Campaign Edition is only sold dming election season to perspective candidates numing for perspective office to ail ow them an opportunity to inform the seniors of their platforms, to disseminate information to seniors and to raise funds to further support programs and services. Througl1 this process we have come to the realization that our mindset of the millage proposition being solely for supporting programs and services of the seniors was not entir ely correct. The funds generated from the sale of ads hence fOLth, with our new _policies will be retained solely for progranu11atic activities and a policy will be created that defines the procedures for such activities. We have adhered and implemented all recommendations made by the Louisiana Legislative Auditor, the Governor' s Office of Elderly Affairs and the City of Baron Rouge.

Council used public funds to pay political organization's expenses

Condition: From April 2016 to November 2016, the Cow1cil used $15,655 in public funds to pay SOS' s expenses.

Criterfa: The Louisiana Constitution and state law prohibit the donation of public funds.

Effect: By using public funds to pay SOS's expenses, Council management rnay have violated the constjtutionaJ prohibition against the donation of public 'fimds.

Cause: The Cow1cil did not have adequate policies and procedures.

Auditor 's Recommendation: The Cotmcil should consider implementing the recommendations m.ade by the Legis]ative Auditor.

Management Response:: On May 20, 2016, the SOS PAC checking accotmt was opened by Michael Beychok who decided that we would not have a debit or credit card for the account. Also, around the same time a PayPaJ account was established for a text campaign. The Council credit card was not used for convenience. Most of our purchases for the campaign were done online which required a credit card. On November 15, 2016, a deposit in the amount of $4,174.56 was deposited into the PAC account from Pay Pal payments made in error to the Council On Aging Pay Pal accmmt. ln essence the Council was given money that was meant for the SOS PAC and the accounting department transferred the funds collectively, but should have transferred it by each transaction. On

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the same day, credit card purchase reimbursements were made to the ColUlcil. Transfers were not made i:n a timely manner. Tim newly hired internaJ CPA Auditing firm is in the process of creating and revising the accounting policy and procedure manual to include additional credit card policies. The Hometown Production documentary was meant to be informational only. The production company inadvertently filmed sig11age saying "Vote Yes'·. The SOS t-shirt was already an identifiable tag for the CounciL These additional shirts were ordered for the rally. We have adhered and implemented all recommendations made by d1e Louisiana Legislative Auditor, the Governor' s Office of Eldet'ly Affairs and the City of Baton Rouge.

CounciJ allowed political organization to use its postage permit

Condition: From July 12. 2016 to October 24, 2016, Council management used its United States Postal Service (USPS) nonprofit pennit (permit) to mail 34,369 pieces of SOS's mail.

Criteria: Section 703 of the USPS Domestic Mai I Manual (incorporated into Federal Code of Regulations pm-suant to 39 CFR 111.1) states that political organizations "do not qualify for the nonprofit standard mail prices, even if organized on a nonprofit basis~"

E.flect: By using the Councit•s permit to mail political mailers for SOS, Council management may have violated Section 703 ofthe USPS Domestic Mail Manual.

Cause: The Council did not have adequate policies and procedures.

Auditor's Recommendation: The Coun.ciJ should consider implementing the recommendations made by the Legislative Auditor.

Management Response: EBRCOA made numerous attempts to rectify the enor between the Printing Company~ PAC and U.S. Postal Service related to the bulk mail. EBRCOA had been led to believe through conversations with the Postal Representative with whom EBRCOA representatives met, that the EBRCOA check for $1,452 resolved any discrepancies. If there were any additional amounts owed, the EBRCOA was never notified or contacted regarding said discrepancies. We have adhel'ed and implemented all recommendations made by the Louisiana Legislative Auditor, the Governor's Office of Elderly Affairs and t.he City of Baton Rouge.

Disaster overtime reimbursements

Condition: In October 2016, the ColUlcil requested and received $12.585 in reimbursements froro the Federal Emergency Management Agency (FEMA) for disaster-related ove1time for employees who may have been ineligible.

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Criteria: FEMA's Public Assistance Program and Policy Guide (FP I 04-009-02 January 20 16), states that FEMA determines the eligibility of overtime, premium pay, and compensatory time costs based on an applicant' s pre­disaster labor policy.

Effect: Should FEMA determine that the Catmcil was not entitled to receive reimbursement for these employees, the Council may be required to reimburse FEMA for amounts improperly received.

Cause: The Council did not have adequate policies and procedures.

Auditor 's Recommendation: The Council should consider implementing the recommendations made by the Legislative Auditor.

lvfanagement Response: The FEMA overtime claim in question was initiated and completed by FElVlA personnel, not the EBRCOA. EBRCOA is the disaster agency designated for disaster relief for the seniors in East Baton Rouge Parish. The Great Flood of 2016 was tl1is EBRCOA administration' s first experience with a federal disaster of similar magnitude. The staff and the Board worker directly with FEMA, drawing iJlput, direction, and assistance from FEMA public assistant project specialist Shelby Zimmer, emergency management specialist Carrie Gay. and Anitra Adams from the Govemor's Office of Homeland Security & Emergency Preparedness ("GOHSEP"). After several discussions between FEMA representatives and members of the EBRCOA management, FEMA agreed to assist in the preparation of the majority of the paperwork for the reimbursement. Specifically. Ms. Zimmer prepared the Force Account Labor Account documents on behalf of the EBRCOA and submitted the records electronically through its system. Although the FEMA cutoff date was Augusts 21.. 201 6, GOEA required that the EBRCOA continue to work flood recovery until September 19, 2016. Ms. Zimmer advised and encouraged that all staff were entitled to and shoul,d seek reimbursement for ove11ime. Ms. Zimmer spoke with EBRCOA CEO and Board Chairman and gave specific directives on how to go about accomplishing just that Ms. Zimmer instructed Chainnan Dumas to write a letter to allow for the CEO as well as all employees to receive overtime. Shelby Zimmer is no Jonger with FEMA. After a meeting with a Louisiana Legislative Auditors team on April 5. EBRCOA contacted Canie Gay on April 12. Ms. Gay informed the EBRCOA that FEMA and the state has possibly made a mistake on this particular project and that she informed Brent McDougall of the Louisiana Legislative Auditor's Office of this fact on March 24 by e-mail. Sl1e also confirmed that FEMA was in large part responsible for submitting the paperwork and guided the EBRCOA, step-by­step" through the reimbursement process, including dealing with overtime claims and payment. Since this issue has been brought to light. the Board of Directors h~s cre~ted a new disaster overtime policy that will coincide with the Fair Labor Standards act in the event of future disasters as well as with FEMA policy. In sum, the EBRCOA requested and received reimbmsements for disaster related overtime in accordance witb directions and assistance by FEMA and GOHSEP personnel. EBRCOA was advised that all those people identified as being entitles to receive overtime payments were approved and

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authorized through the direction of FEMA and GOHSEP personnel. We adhered and implemented all recommendations made by the Louisiana Legislative Auditor, the Governor's Office of Elderly Affairs and the City of Baton Rouge.

Inadequate documentation of credH card charges

Condition: The Council failed to maintain adequate documentatjon for credjt card purchases,

Criteria: The Louisiana Constitution and state law prohibit the donation of public funds.

Effect: Since the Council failed to maintain adequate documentation for credit card purchases incurred between Decembet 2015 and November 2016, there were instances in which the Legislative Auditor could not determine the business purpose, necessity. or reasonableness of the purchases, or if all the purchases benefitted the Cow1cil.

Cause:· The Council did not have adequate policies and procedures.

Auditor's Reconrntendalion: The Council should consider implementing the recommendations made by the Legi!:;lative Auditor.

Management Response: All EBRCOA credit card purchases weTe identified and charged to the proper expense category. The practice of collecting and bundling purchases by code, as opposed to by individual receipt, was at the ti1ne presumed to be appropriate and, upon prior information and belief, common practice. This was never made an issued in any of the annual audits conducted by the CPA finn that revjewed the books of the agency. Nevertheless. the EBRCOA agrees to comply with the procedures now enumerated by the Louisjana Legislative Auditor. We adhered and implemented aU recommendations made by the Louisiana Legislative Auditor. the Governor's Office of Elderly Affairs and the City of Baton Rouge.

C: FINDINGS AND QUESTIONED COSTS- MAJOR FEDERAL AWARD PROGRAM AUDIT

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Special Programs for the Aging- Title IIIB- Supportive Services; CFDA 93.044, Title IDC- Nutrition Services; CFDA 93.045, and N.S.I.P. - Nutrition Services Incentive Program; CFDA 93.053, year ended J une 30,2017

COMPLIANCE

No fmdings or deficiencies noted

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EBR 5790 Florida BJvd. Baton Rouge, LA 70806

p 225.923.8000 Council on Aging

Sflppm1 -/Mild-• - Strrlof SHion

f 225.923.8030

www.ebrcoa.org

December 27, 2017

East Baton Rouge Council on Aging respectfully submits the following corTective action plan for the year ended June 30 2017.

Name and Address of independent public accounting tirm:

L.A. Champagne & Co., L.L.P. 4911 Bennington Avenue Baton Rouge, LA 70808

Review period: fiscal year ended June 30. 2017

The findings from the fLscal year ended June 30, 2017 schedule of findings are discussed below. The findings are numbered consistently with the number assigned to the schedule.

FINANCIAL STATEMENT FINDINGS

COMPLIANCE

2017- 1 Compliance with Operati11g Lease Terms

Condition: The Council ' s current fire and casualty insurance policy coverage is $2.5 million. This is a repeat finding from the prior year.

Management Response: The Counci l anticipates moving to another City-Parish faci lity under anew lease agreement. The Council bas a signed Cooperative Endeavor Agreement with the City of Baton Rouge.

INTERNAL CONTROL

20 l 7-2 Legislative Auditor Investigative Audit

Observation: In May 2017, the Louisiana Legislative Auditor issued an investigative audit report relating to complaints received. The report outlined deftciencies in operatio opportunities to enhance procedures and recommcndarions for corrective action. The mat outlined in the report relate to the following:

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• Management and staff performed political activities during work hours • Council donated funds to a political otganization • Council used public funds to pay political organization ' s expenses • Council allowed politicaJ organjzation to use its postage pcnuit • Disaster overtime reimbursements • Inadequate documentation of credit card charges

Management and staff performed political activities during work hours

Condition: From February 2016 to December 2016, Cow1cil management and staff used public t'esources to opetate Support Our Seniors (SOS), a political action committee fortned to support a tax proposition to increase the Council's funding, during work hours.

Management Re.sponse: Over the cottt'se of the last six years Council's On Aging' s Statewide have been facing state budget cuts which includes the EBRCOA. We have been particularly vocal ·on advocating about tbe importance of programs such as COA's. On february 23rd 2016 ... our managemenl along with some staff participated in Senior Day at tbe Capitol which is not a political acti~ities; but an opportunity to advocate to legislators and the Governor about t.he significance of oux programmatic impact and how we are cost effective entities. We created the slogan Support Our Senfms as a <.:all lag tlue Lu lhe <.:onslanL sla~l.ting of the Aging Program budget aFid programs at the State Legis!atw·e. Fwihermore, the agencies faced tlu·eats and budget cuts nearly eve1y session. That call tag Support OuT Seniors became synonymous with EBRCOA. Hence. when the time came to create the political action committee, the slogan was an identifiable tag. We have adhered and iT;l1plemented al1 recorn.mendations made by the Louisjana Legislative Auditor, the Governor's Office of Elderly Affairs and the City of Baton Rouge.

Council donated funds to a politicaJ organization

Condition: From An gust 30, 20 l6 to November 15, 2016, the Council donated $24,830 to SOS.

Management Response: Annually the East Baton Rouge Council on Aging publishes a Campaign Edition of its Polished Magazine, which is separate and apart from our quarterly required publication. The Campaign Edition is only sold during election season to perspective candidates nmning for perspective office to allow them at1 oppmtunity to inform the seniors ofthe1r platforms, to disseminate information to seniors and to raise funds to further supp01t programs and services. Through this process we have come to the realization that our mjndset oftl1e mi llage proposition being -solely for suppor{ing programs and services of the seniors was not entire! y correct. The funds generated fl'om the sale of ads hence forth, with our new policies will be retained solely forprogramm,atic activities and a policy will be created that defmes the procedures for such activities. We have adhered and implemented all

57

recommendations made by the Louisiana Legislative Auditor, the Governor's Office of Elderly Affairs and the City ofBaton Rouge.

Council used public funds to pay political organization ,s expenses

Condition: From April 2016 to November 2016, the Council used $15,655 in public funds to pay SOS's expenses.

Mcmagentent Response: On May 20,2016, the SOS PAC checking account vvas opened by Michael Beychok who decided that we would not have a debit or credit card for the account. Also, around the same time a Pay Pal account was established for a text campaign. The Co unci I credit card was not used for convenience. Mosl of our purchases for the campaign were done online which required a credit card. On November 15, 2016, a deposit in the amount of $4,174.56 was deposited into the PAC account :fi:om Pay Pal payments made in elTOr to the Council On Aging Pay Pal account. fu essence the Council was given money that was meant for the SOS PAC and the accounting department transfened the funds coUectively, but should have trausferred it by each transaction. On the same day, credit card purchase reimbursements were made to the Council. Transfers were not made in a timely manner. The newly hired intemal CPA Auditing fitm is in the process of creating and revising the accounting policy and procedure manual to include additional credit card policies. Tbe Hometown Production documentruy was meant to be infonuational only. The production company inadvertently .filmed signage sayiJlg "Vote Yes". The SOS t-shirt was already an identifiable tag for the Council. These additional shirts were ordered for the rally. We have adhered and implemented alJ recommendations made by the Louisiana Legislative Auditor, the Governor's Office of ElderJy Affairs and the City of Baton Rouge.

Council allowed political organization to use its postage permit

Condition: From July 12, 2016 to October 24, 2016. Council management used its United States Postal Service (USPS) nonprofit permit (permit) to mail 34,369 pieces ofSOS's mail.

Managemem Response: EBRCOA made numetous attempts to rectify the error between the Printing Company, PAC and U.S. Postal Service related to the bulk mail. EBRCOA had bee.n Led lo believe through conversations with the Postal Representative with whom EBRCOA representatives met, that the EBRCOA check for $1,452 resolved any discrepancies.lfthere were any additional amounts owed, the EBRCOA was never notified or contacted regarding said discrepancies. We have adhered and implemented all recomrnendatio.ns made by the Louisiana Legislative Auditor, tlJe Goven1or's Office of Elderly Affairs and the City ofBaton Rouge.

-

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Disaster ovea·tirne reimbursements

CondiNon: fn October 2016. the Council requested and received $12,585 in reimbursewt!nls from the Federal Emergency Management Agency (FEMA) for disaster-related overtime for employees who may have been ineligible.

Management Response: The FEMA overtime claim in question was initiated and completed by FEMA personnel, not the EBRCOA. EBRCOA is the disaster agency designated for disaster relief for the seniors in East Baton Rouge Parish. The Great Flood of2016 was this EBRCOA administration~s first experience with a federal disaster of similar rnagnitude. The staff and the Board worker directly with FEMA, drawing input, direction, and assistance from PEMA public assistant project specialist Shelby Zimmer, emergency management specialist Carrie Gay, and Anitra Adams n·om the Governor's Office of Homeland Security & Emergency Preparedness ("GOHSEP,). Aller several discussions between FEMA representatives and members of the EBRCOA management, FEMA agreed to assist in the preparation of the majority ofthe paperwork for the reimbursement. Specifically. Ms. Zimmer prepared the Force Account Labor Account documents on behalf of the EBRCOA and submitted lhe records electronically through its system (see attached e-mails by and between FEMA and the EBRCOA labeled as Exhibit A). Although the FEMA cutoff date was Augusts 21, 2016, GOEA required that the EBRCOA coutinue to work Hood recoveJy until September 19, 2016. Ms. Zimmer advised and encom·aged that all staff were entitled to and should seek reimbursement for overtime. Ms. Zitmner spoke with EBRCOA CEO and Board Chairman and gave specific directives on how to go about accomplishing just that Ms. Zimmer instmcted Chairman Dumas to write a letter to allow for the CEO as weJI as all employees to receive overtime. Shelby Zimmer is no longer witl1 FEMA however, Ms. Canie Gay addressed this issued recently in the attached e-mails (See Exhibit B). After a meeting with a Louisiana Legislative Auditors team on April 5, EBRCOA contacted Carrie Gay on April 12. Ms. Gay informed the EBRCOA that FEMA and the state has possibly made a mistake on this particular project and that she informed Brent McDougall of the Louisiana Legislative Auditor's Office of this fact on March 24 bye­mail. She also confirmed that FEMA was in large patt responsible for submitting the paperwork and guided the EBRCOA, step~ by-step, through the reimbursement process= including dealing with overtime claims and payment. Since tlus issue has been brought to light, the Board of Directors has created a new disaste1· overtime policy that will coincide with the Fair Labor StandaJ"ds act in the event of future disasters as well as with FEMA policy. Tn su.rn, the BBRCOA requested and received reimbursements for disaster related overtime jn accordance with directions and assistance by FEMA and GOHSBP personnel. EBRCOA was advised that all those person identified as being entLtles to receive overtime payments were approved and authmized tlu·ough the direction of FEMA and GOHSEP personnel. We adhered and implemented all recommendations made by the Louisiana Legislative Auditor, the Govemor's Office of Elderly Affairs and the City of Baton Rouge.

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Inadequate documentation of credit card charges

CondiNon: The Council failed to maintain adequate documentation for credit card purchases.

Mcmttgement Response.· AU EBRCOA credit card purchases were identified and ch<:trged to the proper expense category. The practice of collecting and bundling purchases by code as opposed to by individual receipt, was at the time presumed to be appropriate and, upon prior information and belief, common practice. This was never made an issued in any of the annual audits conducted by the CPA firm that reviewed the books of the agency. Nevertheless, the EBRCOA agrees to comp]y with the procedmes no~·

enumerated by the Louisiana Legislative Auditor. We adhered and implemented all recommendations made by the Louisiana Legislative Auditor, the Governor's Office of Elderly Affairs and the City ofBaton Rouge.

If there are any questions regarding this plan, please call me at 225-923-8000.

Respectively submitted,

Clark-Amar, ChiefExecutive fi'icer East Baton Rouge Council on Aging, Inc.

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EAST BATON ROUGE COUNCIL ON AGING, INC. SCHEDULE OF CORRECTIVE ACTION TAKEN

ON PRIOR YEAR FINDINGS Year Ended June 30, 2017

FINANCIAL STATEMENT FINDINGS

2016-1 Compliance with Operating Lease Terms

Repeated in current year findings as item 20 I 7 -I .

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

2016-2 Special Test and Provision

Resolved in current period. Controls have been implemented lo assure that receipt of meals at congregate meaJ sites is properly documented by signature of the recipient.

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EAST BATON ROUGE COUNCIL ON AGING, INC.

BATON ROUGE, LOUISIANA

JUNE 30, 2017

STATEWIDE AGREED UPON PROCEDURES

L.A.CHAMPAGNE I Certified Public Accountants

4911 BENNINGTON AVENUE. BATON ROUGE. LOUISIANA 70808-3153

(225) 925-1120- FAX: (225) 927-8124- EMAIL: lac@laccpa.com

Robert L. Stamey, CPA Kimberly G. Sanders, CPA, MBA

Alvin J. Callais, CPA Michael A. Tham, CPA, CGMA Susan S. Tham, CPA

Neal Fortenberry, CPA Wayne Dussel, CPA, CFE Jonathan Clark, CPA

L.A.CHAMPAGNE i Certified Public Accountants

Member of the Private Companies Practice

Section of the American Institute of CPAs

Independent Accountant's Report on Applying Agreed upon Procedures

To Management and Members of the Board of Directors of The East Baton Rouge Council on Aging, Inc.

Baton Rouge, Louisiana

We have performed the statewide procedures prescribed by the Louisiana Legislative Auditor (LLA) and enumerated below, which were agreed to by the management of East Baton Rouge Council on Aging, Inc. (the Council) and the LLA during the period from July 1, 2016 through June 30, 2017. Management of the Council is responsible for its compliance with the statewide procedures. The sufficiency of these procedures is solely the responsibility of the Council and the LLA. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

Written Policies and Procedures

1. Obtain the entity's written policies and procedures and report whether those written policies and procedures address each of the following financial/business functions (or report that the entity does not have any written policies and procedures), as applicable:

a) Budgeting, including preparing, adopting, monitoring, and amending the budget.

Written policies and procedures were obtained and do address the functions noted above.

b) Purchasing, including (1) how purchases are initiated; (2) how vendors are added to the vendor list; (3) the preparation and approval process of purchase requisitions and purchase orders; (4) controls to ensure compliance with the public bid law; and (5) documentation required to be maintained for all bids and price quotes.

Written policies and procedures were obtained and do address the functions noted above.

c) Disbursements, including processing, reviewing, and approving.

Written polices and procedures were obtained and do address the functions noted above.

d) Receipts, including receiving, recording, and preparing deposits.

Written policies and procedures were obtained and do address the functions noted above.

e) Payroll/Personnel, including (1) payroll processing, and (2) reviewing and approving time and attendance records, including leave and overtime worked.

Written policies and procedures were obtained and do address the functions noted above.

4911 Bennington Avenue • Baton Rouge, Louisiana 70808-3153 • Phone (225) 925-1120 • Fax (225) 927-8124 • lac@laccpa.com

1234 Del Este, Ste 503 • Denham Springs, LA 70726 • Phone (225) 664-3671

f) Contracting, including (1) types of services requiring written contracts, (2) standard terms and conditions, (3) legal review, (4) approval process, and (5) monitoring process.

Written policies and procedures were obtained and do address the functions noted above.

g) Credit Cards (and debit cards, fuel cards, P-Cards, if applicable), including (1) how cards are to be controlled, (2) allowable business uses, (3) documentation requirements, (4) required approvers, and (5) monitoring card usage.

Written policies and procedures were obtained and do address the functions noted above.

h) Travel and expense reimbursement, including (1) allowable expenses, (2) dollar thresholds by category of expense, (3) documentation requirements, and ( 4) required approvers.

Written policies and procedures were obtained and do address the functtons noted above.

i) Ethics, including (1) the prohibitions as defined in Louisiana Revised Statute 42:1111-1121, (2) actions to be taken if an ethics violation takes place, (3) system to monitor possible ethics violations, and (4) requirement that all employees, including elected officials, annually attest through signature verification that they have read the entity's ethics policy. Note: Ethics requirements are not applicable to nonprofits.

Although the entity is a nonprofit and ethics is not applicable, client requires its employees to attend ethics training.

j) Debt Service, including (I) debt issuance approval, (2) EMMA reporting requirements, (3) debt reserve requirements, and (4) debt service requirements.

Written policies and procedures were obtained and do address the functions noted above.

Board (or Finance Committee, if applicable)

2. Obtain and review the board/committee minutes for the fiscal period, and:

a) Report whether the managing board met (with a quorum) at least monthly, or on a frequency in accordance with the board's enabling legislation, charter, or other equivalent document.

Obtained and reviewed minutes of the managing board for the fiscal period noting that the foil board met September, November, December, February, April, May, and June during the fiscal year.

b) Report whether the minutes referenced or included monthly budget-to-actual comparisons on the General Fund and any additional funds identified as major funds in the entity's prior audit (GAAP-basis).

Minutes include monthly budget-to-actual comparisons for the fonds required to be reported to the Governors Office of Elderly Affairs quarterly.

~ If the budget-to-actual comparisons show that management was deficit spending during the fiscal period, report whether there is a formal/written plan to eliminate the deficit spending for those entities with a fund balance deficit. If there is a formal/written plan, report whether the meeting minutes for at least one board meeting during the fiscal period reflect that the board is monitoring the plan.

Deficit spending was not noted during the fiscal period.

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c) Report whether the minutes referenced or included non-budgetary financial information (e.g. approval of contracts and disbursements) for at least one meeting during the fiscal period.

The minutes do reference non-budgetary financial information for at least one meeting during the fiscal period.

Bank Reconciliations

3. Obtain a listing of client bank accounts from management and management's representation that the listing is complete.

Obtained a listing of client bank accounts from management and management provided representation that the listing is complete.

4. Using the listing provided by management, select all of the entity's bank accounts (if five accounts or less) or one-third of the bank accounts on a three year rotating basis (if more than 5 accounts). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fond accounts may be excluded from selection if they are otherwise addressed in a separate audit or AUP engagement. For each of the bank accounts selected, obtain bank statements and reconciliations for all months in the fiscal period and report whether:

a) Bank reconciliations have been prepared;

Bank reconciliations have been prepared for all months.

b) Bank reconciliations include evidence that a member of management or a board member (with no involvement in the transactions associated with the bank account) has reviewed each bank reconciliation; and

Evidence of management's review of the bank reconciliations for each month were noted.

c) If applicable, management has documentation reflecting that it has researched reconciling items that have been outstanding for more than 6 months as of the end of the fiscal period.

No reconciling items noted.

Collections

5. Obtain a listing of cash/check/money order (cash) collection locations and management's representation that the listing is complete.

Obtained listing of cash collection locations and management provided representation that the listing is complete.

6. Using the listing provided by management, select all of the entity's cash collection locations (if five locations or less) or one-third of the collection locations on a three year rotating basis (if more than 5 locations). If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner. Note: School student activity fonds may be excluded from selection if they are otherwise addressed in a separate audit or AUP engagement. For each cash collection location selected:

a) Obtain existing written documentation (e.g. insurance policy, policy manual, job description) and report whether each person responsible for collecting cash is (I) bonded, (2) not

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responsible for depositing the cash in the bank, recording the related transaction, or reconciling the related bank account (report if there are compensating controls performed by an outside party), and (3) not required to share the same cash register or drawer with another employee.

Written documentation was obtained and it was noted that the functions addressed above were implemented in accordance with policy.

b) Obtain existing written documentation (e.g. sequentially numbered receipts, system report, reconciliation worksheets, policy manual) and report whether the entity has a formal process to reconcile cash collections to the general ledger and/or subsidiary ledgers, by revenue source and/or agency fund additions, by a person who is not responsible for cash collections in the cash collection location selected.

Written documentation was obtained and it was noted that the entity has a formal process to reconcile cash collections to the general ledger by a person who is not responsible for cash collections in the cash collection location selected.

c) Select the highest (dollar) week of cash collections from the general ledger or other accounting records during the fiscal period and:

> Using entity collection documentation, deposit slips, and bank statements, trace daily collections to the deposit date on the corresponding bank statement and report whether the deposits were made within one day of collection. If deposits were not made within one day of collection, report the number of days from receipt to deposit for each day at each collection location.

Collection documentation was obtained for the selected cash collections and it was noted that deposits were made within two to thirty-nine days of collection.

> Using sequentially numbered receipts, system reports, or other related collection documentation, verify that daily cash collections are completely supported by documentation and report any exceptions.

Daily cash collections selected were completely supported by documentation.

7. Obtain existing written documentation (e.g. policy manual, written procedure) and report whether the entity has a process specifically defined (identified as such by the entity) to determine completeness of all collections, including electronic transfers, for each revenue source and agency fund additions (e.g. periodic confirmation with outside parties, reconciliation to utility billing after cutoff procedures, reconciliation of traffic ticket number sequences, agency fund forfeiture monies confirmation) by a person who is not responsible for collections.

Written documentation was obtained and it was noted that the functions addressed above were implemented in accordance with policy.

Disbursements -General (excluding credit card/debit card/foe! card!P-Card purchases or payments)

8. Obtain a listing of entity disbursements from management or, alternately, obtain the general ledger and sort/filter for entity disbursements. Obtain management's representation that the listing or general ledger population is complete.

Obtained listing of disbursements and management provided representation that the listing is complete.

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9. Using the disbursement population from #8 above, randomly select 25 disbursements (or randomly select disbursements constituting at least one-third of the dollar disbursement population if the entity had less than 25 transactions during the fiscal period), excluding credit card/debit card/fuel card/P-card purchases or payments. Obtain supporting documentation (e.g. purchase requisitions, system screens/logs) for each transaction and report whether the supporting documentation for each transaction demonstrated that:

a) Purchases were initiated using a requisition/purchase order system or an equivalent electronic system that separates initiation from approval functions in the same manner as a requisition/purchase order system.

Examined supporting documentation for each of the disbursements selected and noted that 7 purchases were initiated without a purchase order.

b) Purchase orders, or an electronic equivalent, were approved by a person who did not initiate the purchase.

Examined supporting documentation for each of the disbursements selected and noted that 7 purchases were not approved by a person who did not initiate the purchase.

c) Payments for purchases were not processed without (1) an approved requisition and/or purchase order, or electronic equivalent; a receiving report showing receipt of goods purchased, or electronic equivalent; and an approved invoice.

Examined supporting documentation for each of the disbursements selected and noted that 7 purchases had no purchase order.

10. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the person responsible for processing payments is prohibited from adding vendors to the entity's purchasing/disbursement system.

Written policies and procedures provided do address the function of adding vendors to the entity's purchasing/disbursement system.

11. Using entity documentation (e.g. electronic system control documentation, policy manual, written procedure), report whether the persons with signatory authority or who make the final authorization for disbursements have no responsibility for initiating or recording purchases.

Written policies and procedures provided do address the separation of signatory authority from initiating or recording of purchase.

12. Inquire of management and observe whether the supply of unused checks is maintained in a locked location, with access restricted to those persons that do not have signatory authority, and report any exceptions. Alternately, if the checks are electronically printed on blank check stock, review entity documentation (electronic system control documentation) and report whether the persons with signatory authority have system access to print checks.

Supply of unused checks are maintained in a locked location, with restricted access from those persons with signatory authority.

13. If a signature stamp or signature machine is used, inquire of the signer whether his or her signature is maintained under his or her control or is used only with the knowledge and consent of the signer. Inquire of the signer whether signed checks are likewise maintained under the control of the signer or authorized user until mailed. Report any exceptions.

The entity does not utilize a signature stamp or signature machine.

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Credit Cards/Debit Cards/Fuel Cards/P-Cards

14. Obtain from management a listing of all active credit cards, bank debit cards, fuel cards, and P­cards (cards), including the card numbers and the names of the persons who maintained possession of the cards. Obtain management's representation that the listing is complete.

Obtained a listing of all active credit cards and management provided representation that the listing is complete.

15. Using the listing prepared by management, randomly select 10 cards (or at least one-third of the cards if the entity has less than 10 cards) that were used during the fiscal period, rotating cards each year. If there is a change in practitioners, the new practitioner is not bound to follow the rotation established by the previous practitioner.

Obtain the monthly statements, or combined statements if multiple cards are on one statement, for the selected cards. Select the monthly statement or combined statement with the largest dollar activity for each card (for a debit card, select the monthly bank statement with the largest dollar amount of debit card purchases) and:

a) Report whether there is evidence that the monthly statement or combined statement and supporting documentation was reviewed and approved, in writing, by someone other than the authorized card holder. [Note: Requiring such approval may constrain the legal authority of certain public officials (e.g., mayor of a Lawrason Act municipality); these instances should not be reported.)]

Documentation of review noted for each monthly statement selected.

b) Report whether finance charges and/or late fees were assessed on the selected statements.

No finance charges and/or late fees were assessed on the selected statements.

16. Using the monthly statements or combined statements selected under #15 above, obtain supporting documentation for all transactions for each of the 10 cards selected (i.e. each of the 10 cards should have one month of transactions subject to testing).

a) For each transaction, report whether the transaction is supported by:

~ An original itemized receipt (i.e., identifies precisely what was purchased)

One credit card tested had 34 transactions not supported with an original itemized receipt. Thirty two of the thirty-four transactions were for the purchase of gas for entity fleet vehicles. Although original receipts were not retained the entity has a policy that all fuel purchases are recorded on a daily route sheet indicating the amount of fuel and the cost for each van.

~ Documentation of the business/public purpose. For meal charges, there should also be documentation of the individuals participating.

One credit card tested had 2 transactions with no documentation of the business/public purpose.

~ Other documentation that may be required by written policy (e.g., purchase order, written authorization.

One credit card tested had 34 transactions not supported with an original itemized receipt.

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b) For each transaction, compare the transaction's detail (nature of purchase, dollar amount of purchase, supporting documentation) to the entity's written purchasing/disbursement policies and the Louisiana Public Bid Law (i.e. transaction is a large or recurring purchase requiring the solicitation of bids or quotes) and report any exceptions.

One credit card tested had 34 transactions not supported with an original itemized receipt.

c) For each transaction, compare the entity's documentation of the business/public purpose to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. cash advances or non-business purchases, regardless whether they are reimbursed). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception.

One credit card tested had 2 transactions not supported with an original itemized receipt.

Travel and Expense Reimbursement

17. Obtain from management a listing of all travel and related expense reimbursements, by person, during the fiscal period or, alternately, obtain the general ledger and sort/filter for travel reimbursements. Obtain management's representation that the listing or general ledger is complete.

Obtained listing of travel and expense reimbursements by person and management provided representation that the listing is complete.

18. Obtain the entity's written policies related to travel and expense reimbursements. Compare the amounts in the policies to the per diem and mileage rates established by the U.S. General Services Administration (www.gsa.gov) and report any amounts that exceed GSA rates.

Written policies and procedures were obtained and no amounts listed in the policies regarding travel and expense reimbursements exceed GSA rates.

19. Using the listing or general ledger from # 17 above, select the three persons who incurred the most travel costs during the fiscal period. Obtain the expense reimbursement reports or prepaid expense documentation of each selected person, including the supporting documentation, and choose the largest travel expense for each person to review in detail. For each of the three travel expenses selected:

a) Compare expense documentation to written policies and report whether each expense was reimbursed or prepaid in accordance with written policy (e.g., rates established for meals, mileage, lodging). If the entity does not have written policies, compare to the GSA rates (#18 above) and report each reimbursement that exceeded those rates.

Expenses selected were reimbursed and prepaid in accordance with written policies.

b) Report whether each expense is supported by:

~ An original itemized receipt that identifies precisely what was purchased. [Note: An expense that is reimbursed based on an established per diem amount (e.g., meals) does not require a receipt.]

Expenses selected were supported in accordance with written policies.

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~ Documentation of the business/public purpose (Note: For meal charges, there should also be documentation of the individuals participating).

Documentation of business purpose noted for each expense reimbursement selected.

~ Other documentation as may be required by written policy (e.g., authorization for travel, conference brochure, certificate of attendance)

Documentation required by written policy noted for each expense reimbursement selected.

c) Compare the entity's documentation of the business/public purpose to the requirements of Article 7, Section 14 of the Louisiana Constitution, which prohibits the loan, pledge, or donation of funds, credit, property, or things of value, and report any exceptions (e.g. hotel stays that extend beyond conference periods or payment for the travel expenses of a spouse). If the nature of the transaction precludes or obscures a comparison to the requirements of Article 7, Section 14, the practitioner should report the transaction as an exception.

No exceptions noted.

d) Report whether each expense and related documentation was reviewed and approved, m writing, by someone other than the person receiving reimbursement.

Each expense reimbursement selected was reviewed and approved, in writing, by someone other than the person receiving reimbursement.

Contracts

20. Obtain a listing of all contracts in effect during the fiscal period or, alternately, obtain the general ledger and sort/filter for contract payments. Obtain management's representation that the listing or general ledger is complete.

Obtained listing of all contracts in effect and management provided representation that the listing is complete.

21. Using the listing above, select the five contract "vendors" that were paid the most money during the fiscal period (excluding purchases on state contract and excluding payments to the practitioner). Obtain the related contracts and paid invoices and:

a) Report whether there is a formal/written contract that supports the services arrangement and the amount paid.

A formal/written contract supporting the service arrangements and the amount paid was noted for the vendors selected.

b) Compare each contract's detail to the Louisiana Public Bid Law or Procurement Code. Report whether each contract is subject to the Louisiana Public Bid Law or Procurement Code and:

~ If yes, obtain/compare supporting contract documentation to legal requirements and report whether the entity complied with all legal requirements (e.g., solicited quotes or bids, advertisement, selected lowest bidder)

Not applicable.

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)> If no, obtain supporting contract documentation and report whether the entity solicited quotes as a best practice.

Entity has a policy to solicited quotes but no documentation was supplied for the contracts selected.

c) Report whether the contract was amended. If so, report the scope and dollar amount of the amendment and whether the original contract terms contemplated or provided for such an amendment.

Contracts selected were not amended.

d) Select the largest payment from each of the five contracts, obtain the supporting invoice, compare the invoice to the contract terms, and report whether the invoice and related payment complied with the terms and conditions of the contract.

The invoices and related payments selected complied with the terms and conditions of the contract.

e) Obtain/review contract documentation and board minutes and report whether there is documentation of board approval, if required by policy or law (e.g. Lawrason Act or Home Rule Charter).

Board approval is not required.

Payroll and Personnel

22. Obtain a listing of employees (and elected officials, if applicable) with their related salaries, and obtain management's representation that the listing is complete. Randomly select five employees/officials, obtain their personnel files, and:

a) Review compensation paid to each employee during the fiscal period and report whether payments were made in strict accordance with the terms and conditions of the employment contract or pay rate structure.

Each employee selected was paid in accordance with the terms and conditions of the employment contract or pay rate structure.

b) Review changes made to hourly pay rates/salaries during the fiscal period and report whether those changes were approved in writing and in accordance with written policy.

Changes to pay rates during the fiscal period for selected employees were approved in writing.

23. Obtain attendance and leave records and randomly select one pay period in which leave has been taken by at least one employee. Within that pay period, randomly select 25 employees/officials (or randomly select one-third of employees/officials if the entity had less than 25 employees during the fiscal period), and:

a) Report whether all selected employees/officials documented their daily attendance and leave (e.g., vacation, sick, compensatory). (Note: Generally, an elected official is not eligible to earn leave and does not document his/her attendance and leave. However, if the elected official is earning leave according to policy and/or contract, the official should document his/her daily attendance and leave.)

Documentation of daily attendance and leave was noted for each selected employee.

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b) Report whether there is written documentation that supervisors approved, electronically or in writing, the attendance and leave of the selected employees/officials.

Documentation of supervisor approval for attendance and leave was noted for each selected employee.

c) Report whether there is written documentation that the entity maintained written leave records (e.g., hours earned, hours used, and balance available) on those selected employees/officials that earn leave.

Documentation of written leave records were maintained for employees selected.

24. Obtain from management a list of those employees/officials that terminated during the fiscal period and management's representation that the list is complete. If applicable, select the two largest termination payments (e.g., vacation, sick, compensatory time) made during the fiscal period and obtain the personnel files for the two employees/officials. Report whether the termination payments were made in strict accordance with policy and/or contract and approved by management.

Obtained listing of employees terminated during the fiscal period and management provided representation that the listing is complete.

25. Obtain supporting documentation (e.g. cancelled checks, EFT documentation) relating to payroll taxes and retirement contributions during the fiscal period. Report whether the employee and employer portions of payroll taxes and retirement contributions, as well as the required reporting forms, were submitted to the applicable agencies by the required deadlines.

Obtained supporting documentation relating to payroll taxes during the fiscal period noting that related payments and required reporting forms were submitted to the applicable agencies by the . required deadlines.

Ethics (excluding nonprofits)

26. Using the five randomly selected employees/officials from procedure #22 under "Payroll and Personnel" above, obtain ethics compliance documentation from management and report whether the entity maintained documentation to demonstrate that required ethics training was completed.

Ethics compliance documentation was filed in the five randomly selected employees' employee file.

27. Inquire of management whether any alleged ethics violations were reported to the entity during the fiscal period. If applicable, review documentation that demonstrates whether management investigated alleged ethics violations, the corrective actions taken, and whether management's actions complied with the entity's ethics policy. Report whether management received allegations, whether management investigated allegations received, and whether the allegations were addressed in accordance with policy.

Other than the Louisiana Legislative Auditor's investigative audit issued May 3, 2017, there were no alleged ethics violations reported to the entity during the fiscal period.

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Debt Service (excluding nonprofits)

28. If debt was issued during the fiscal period, obtain supporting documentation from the entity, and report whether State Bond Commission approval was obtained.

The entity is a nonprofit; therefore, this item is not applicable.

29. If the entity had outstanding debt during the fiscal period, obtain supporting documentation from the entity and report whether the entity made scheduled debt service payments and maintained debt reserves, as required by debt covenants.

The entity is a nonprofit; therefore, this item is not applicable.

30. If the entity had tax millages relating to debt service, obtain supporting documentation and report whether millage collections exceed debt service payments by more than 1 0% during the fiscal period. Also, report any millages that continue to be received for debt that has been paid off.

The entity is a nonprofit; therefore, this item is not applicable.

Other

31. Inquire of management whether the entity had any misappropriations of public funds or assets. If so, obtain/review supporting documentation and report whether the entity reported the misappropriation to the legislative auditor and the district attorney of the parish in which the entity is domiciled.

Management has asserted that the entity did not have any misappropriations of public funds or assets during the reporting period

32. Observe and report whether the entity has posted on its premises and website, the notice required by R.S. 24:523.1. This notice (available for download or print at www.lla.la.gov/hotline) concerns the reporting of misappropriation, fraud, waste, or abuse of public funds.

Required notices are posted on the entity's premises and website.

33. If the practitioner observes or otherwise identifies any exceptions regarding management's representations in the procedures above, report the nature of each exception.

No exceptions noted

This agreed-upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards. We were not engaged to and did not conduct an audit or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the statewide procedures. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

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This report is intended solely for the use of management of the Council. and the LLA and is not intended to be and should not be used by anyone other than those specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

J( Jl, Ch~oqru ~ to . l.l. \? Baton Rouge, Louisiana December 27, 2017

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