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III Harrington Group Certified Public Accountants LLP

COMMUNITY DEVELOPMENT INSTITUTE HEAD START

FINANCIAL STATEMENTS, SUPPLEMENTAL SCHEDULE,

and ADDITIONAL INFORMATION

JUNE 30, 2013

Under provisions of state law this report is a public document Acopy of the report has been submitted to the entity and other appropnate pubitc officials The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and where appropnate. at the office of the parish clerk of court

Release Date JAM 2 9 2QH

PASADENA ATrusted Nonprofit Partner SAN FRANCISCO 234 E Colorado Blvd SO Francisco St

Suite MI50 Experience Service Respect Suite 160 Pasadena C A 9 I I 0 I San Francisco CA 94133 T.I (.-it. ^ 7 Aen I WWW npocpas com ^ , ' - " ' - " " ' ^^ Tel 6264036801 ^ ^ Tel 415391 3131 Fax 626 403 6866 Fax 415 391 3233

C O N T E N T S

Independent Auditors' Report 1- 2

Statement of Financial Position 3

Statement of Activiues 4

Statement of Functional L'lxpcnscs 5

Statement of Cash Flows 6

Notes to Financial Statements 7-12

Supplemental Schedule

Schedule of Expenditures of Federal and Non-federal Awards 13-15

Additional Informauon

Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Govemment AudtUng Standards 16

Independent Auditors* Report on Compliance for Each Major Program and on Internal Control Over Comphance Required by OMB Circular A-133 17-18

Schedule of Findings and Questioned Costs 19

Ill Harrington Group Certified Pubtic Accountants, LLP

I N D E P E N D E N T A U D I T O R S ' R E P O R T

To the Board of Directors Commumty Development Institute Head Start

Report on the Fmancia l Statements

We have audited the accompanving financial statements of Communit\' Development Institute Head Start (a nonprofit organizauon), which comprise the Statement of Fmancial Position as of June 30, 2013, and the related Statements of Activities, Functional Expenses, and Cash Flows for the vcar then ended, and the related notes to the financial statements

Managemen t ' s Responsibility for the Financial Statements

Management is responsible for the preparauon and fair presentation of these financial statements in accordance with accountmg prmciples generally accepted in the United States of America, this mcludes the design, implementation, and maintenance of mternal control relevant to the preparation and fair presentauon of financial statements that are free from material misstatement, whether due to fraud or error

Auditors ' Responsibility

Our rcsponsibilit)- is to express an opinion on these financial statements based on our audit We conducted our audit m accordance with audiung standards generally accepted in the Umtcd States of America and the standards apphcable to financial audits contamed in Govemment Auditing Standanis, issued by the Comptroller General of the Umted States Those standards require that wc plan and perform the audit to obtam reasonable assurance about whether the fmancial statements are free of 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 auditors' judgment, including the assessment of the risks of matenal misstatement of the financial statements, whether due to fraud or error In makmg those risk assessments, the auditors' consider mternal control relevant to the entity's preparation and fair presentation of the fmancial statements in order to design audit procedures that are appropriate m the circumstances, but not for the purpose of expressing an opimon on the effectiveness of the entit\-'s intemal control Accordmgly, we express no such opinion An audit also mcludes evaluatmg the appropriateness of accounting policies used and the reasonableness of sigmficant accountmg estimates made b\ management, as well as evaluating the overall presentation of the fmancial statements

We beheve that the audit e\idence we have obtained is sufficient and appropriate to provide a basis for our audit opimon

o p i n i o n

In our opimon, the financial statements referred to above present fairlv, m all matenal respects, the fmancial position of Communm Development Insutute Head Start as of June 30, 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting pnnciples generallv accepted in the Umted States of America

PASADENA ATrusted Nonprofit Partner SAN FRANCISCO 234 E Colorado Blvd 50 Francisco St Suite MI50 Expe r i ence Serv ice Respect Suite 160 Pasadena CA 91101 San Francisco CA 94133 Tel6264036801 WWW npocpas com ^^^ 4,53913(31

Fax 626 403 6866 Fax 415 391 3233

I N D E P E N D E N T A U D I T O R S ' R E P O R T conanued

Other Matters

Other Information

Our audit was conducted for the purpose of forming an opimon on the financial statements of Commumt)-Development Institute Head Start as a whole The accompanymg Schedule of Expenditures of Federal and Non-federal Awards, as required by Office of Management and Budget Circular A-133, Audits of States, hotai Govemments, and Non-Profit Or^anit;ations is presented for purposes of addmonal analysis and is not a required part of the fmancial statements Such information is the rcsponsibihty of management and was denved from and relates directly to the underlymg accounung and other records used to prepare the financial statements The mformation has been subjected to the auditmg procedures applied in the audit of the financial statements and certam additional procedures, including comparmg and reconciling such information directly to the underlymg accountmg and other records used to prepare the financial statements or to the fmancial statements themselves, and other addmonal procedures in accordance u-ith auditmg standards generally accepted in the Umted States of Amenca In our opimon, the mformauon is fairly stated, in all material respects, in relation to the financial statements as a whole

Summant^d Comparative Information

We have previouslv audited Community Development Institute Head Start's 2012 financial statements, and our report dated March 11, 2013 expressed an unmodified opimon on those financial statements In our opimon the summarized comparative information presented herein as of and for the year ended June 30, 2012, IS consistent, m all matenal respects, with the audited financial statements from which it has been denved

Other Repor tmg Required by G o v e m m e n t A u d i o n g Standards

In accordance with Govemment Auditing Standards, we have also issued our report dated December 20, 2013 on our consideration of Communm' Development Institute Head Start's internal control over financial reportmg and on our tests of its comphance with certain provisions of laws, regulations, contracts, and grant agreements and other matters The purpose of that report is to describe the scope of our testmg of internal control over financial rcporung and compliance and the results of that tesung, and not to provide an opimon on internal control over fmancial reportmg or on comphance That report is an integral part of an audit performed m accordance with Govemment Auditing Standards in considering Commumt)- Development Instimtc Head Start's internal control over financial reporting and compliance

San Francisco, Cabfornia December 20, 2013

C O M M U N I T Y D E V E L O P M E N T I N S T I T U T E H E A D START

S'lA'lEMENT OF FINANCIAL POSITION June 30, 2013

With comparauve totals at June 30, 2012

Assets Cash Accounts receivable Prepaid expenses

2013

2,008,881 8,796,493

194,234

2012

740,526

3,826,106

121,837

Total assets $ 10,999,608 $ 4,688,469

Liabilities and net assets Liabilities

Accounts payable Accrued liabilities (Note 3) Lmc of credit (Note 4)

52,138 $ 8,121,330

45,891 2,581,768

Total liabilities 8,173,468 2,627.659

Net assets Unrestricted 2,826,140 2,060,810

Total net assets 2,826,140 2,060,810

Total liabilities and net assets $ 10,999,608 S 4,688,469

The accompan\ing notes are an integral part of these financial statements 3


STATEMENT OF ACIIVITIES For the vcar ended June 30, 2013

With comparaQve totals for the vear ended |une 30, 2012

2013 2012

Revenue Fees from government agencies (Note 6) In-kind income (Note 8) Other mcome Parent fees

Total revenue

Expenses Program ser\-ices Management and general

Total expenses

Other changes Contract settlements

Change in net assets

Net assets, beginning of year

Net assets, end of year

$ 173,385,223 $ 155,974,199 21,608,520 13,712,395

113,407 151,471 70,212 147,246

195,177,362

177,355,184 16,655,840

194,011,024

(401,008)

765,330

2,060,810

169,985,311

154,554,568 14.436.512

168,991,080

(643,619)

350,612

1.710,198

$ 2,826,140 S 2,060,810

The accompanying notes are an integral part of these financial statements

4

C O M M U N I T Y D E V E L O P M E N T

I N S T I T U T E H E A D S T A R T

STATEMENT OF FUNCTION.-VL EXPENSES

For the year ended June 30, 2013

With comparative totals for the }car ended June 30, 2012

Salanes

Employee benefits

Pa\ roll taxes

Total personnel costs

In-kind expenses (Note 8)

Occupancy

Other

Food

Supplies

Repairs and maintenance

Delegate agreements

Child services

Trims porta Don

Utibnes

Eqiupment

Traimng

Insurance

Consultants

Contractual services

Telephone

Travel

Pubhcations

Pnnting

Total 2013 functional expenses

Total 2012 hmcnonal expenses

Program

Services

S 79,022,716

14,121,714

8,548,471

101,692,901

19,754,509

9,537,424

6,910,604

6,277,802

6,023,142

5,017,357

4,979,291

2,884,116

2,438,595

2,270,847

1,869,969

1,799,807

1,566,099

1,265,724

1,227,730

1,218,940

236,602

226,056

157,669

$ 177355,184

5 154,554,568

Management

and General

S 7,416,482

1,325,358

802,296

9,544,136

1,854,011

895,110

659,189

589,187

565,286

470,892

467,319

270,681

228,868

213,124

175,501

168,917

146,982

118,791

115,226

114,400

22,206

21,216

14,798

$ 16,655,840

$ 14,436,512

Total Expenses

2013

$ 86,439,198 5

15,447,072

9,350,767

111,237,037

21,608,520

10,432,534

7,569.793

6,866,989

6,588,428

5,488,249

5,446,610

3,154,797

2,667,463

2,483,971

2,045,470

1,968,724

1,713,081

1,384.515

1,342,956

1,333,340

258.808

247,272

172,467

$ 194,011,024

2012

77,625,674

14,533,858

7,948,015

100,107,547

13,712,395

8,911,044

7,056,129

7,386,480

4,481,583

3,876,041

6,004,118

2,862,686

2,788,688

2,786,142

1,176,843

2,163,048

1,173,054

1,491,850

1,259,478

1,359,716

17,006

193,756

183,476

168,991,080

'llic accompanying notes are an integral part of these financial statements

5


STATEMENT OF CASH I'l.OWS For the \ear ended June 30, 2013

With comparauve totals for the \ear ended June 30, 201:

2013 2012 Cash flows from operating activities:

Change m net assets Ad)ustments to reconcile changes m net assets to net cash provided (used) by opcraung acuvities Changes in operatmg assets and babihties

(Increase) decrease in accounts receivable (Increase) m prepaid expenses Increase (decrease) in accounts pa\ablc Increase in accrued babibties

(Decrease) in deferred revenue

Net cash provided (used) by operating activities

Net increase (decrease) in cash

Cash, beginmng of year

Cash, end of year

765,330 350,612

(4,970,387) (72,397)

6,247 5,539.562

1,268355

1,268355

740.526

$ 2,008,881 S

484,874 (108,026)

(1,979,181) 1,046,801

(40,016)

(244,936)

(244,936)

985,462

740,526

The accompanving notes are an integral part of these financml statements 6



NOTES l O FINANCIAL STATEMENTS

Organizat ion

Commumt}' Development Instimte Head Start ("CDI-HS") is a pnvate, nonprofit corporauon with headquarters m Denver, Colorado CDI-HS works m partnership with an affibated nonprofit corporauon, Commumty Development Institute ("CDI") with headquarters m Denver, Colorado, as the recipient of grants for operauon of the local Head Start and Early Head Start programs under the National Intenm Management Contract funded by the Office of Head Start CDI-HS assumes operational responsibility for Head Start and Early Head Start programs when the exisung grantee is no longer able to administer the program CDI-HS works with the commumt\' to ensure that Head Start ser\*ices conunue uninterrupted for children and families Dunng the mtenm period, CDI-HS provides a strong infrastrucaire for fiscal mtegnty, staff development, and improved program ser\'ices

Summary of Sigmficant Accounung Pohcies

A summan' of the significant accounting pobcies appbcd in the preparation of the accompanying financial statements is as follows

Basis of Presentat ion

The accompanving financial statements have been prepared on the accrual basis of accounung

Account ing

To ensure obscr\'ance of certain constraints and restncuons placed on the use of resources, the accounts of CDI-HS are maintamed in accordance with the pnnciples of net asset accountmg This is the procedure by whicli resources for various purposes are classified for accounting and reporting purposes into net asset classes that are in accordance with specified activities or objecUves Accordmgly, all fmancial transactions have been recorded and reported bv net asset class as follows

Unres tnc ted These generalh result from revenues generated by receiving unrestricted contribuuons, providing ser\'ices, and performing admimstrative funcuons

Temporari ly Res tnc ted CDI-IIS reports gifts of cash and other assets as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets Wlicn a donor restricuon expires, that is, when a stipulated time restriction ends or the purpose of the restriction is accompbshed, temporarilv restncted net assets are reclassified to unrestricted net assets and reported in the Statement of Acmiues as net assets released from program or capital restncuons CDI-HS has no temporanh restricted net assets at June 30, 2013

Permanent ly Restricted These net assets are restncted b\ donors who supulate that resources are to be mamtained permanentlv, but permit CDI-HS to expend all of the income (or other econormc benefits) derived from the donated assets CDI-HS has no permanentlv restricted net assets at June 30, 2013

continued 7



NOTES T O FINANCIAL S I A T E M E N I S

2. Summary of Significant Account ing Pohcies, continued

Accounts Receivable

The accounts receivable balance outstanding at June 30, 2013 consists of governmental contract receivables due from state and local granting agencies Therefore, no allowance for doubtful accounts has been provided

Concentrat ion of Credit Risks

CDI-MS places its cash and temporary* cash mvestments with liigh-credit, quabr\' financial institutions At times, such investments may be m excess of the Federal Deposit Insurance Corporauon insurance limit CDI-HS has not incurred losses related to these investments

The receivable balance outstanding at June 30, 2013 consists of govemment contract receivables due from state and local granting agencies ConcentraUon of credit risks with respect to trade receivables IS limited, as the majorit)- of CDI-HS' receivables consist of earned fees from contracts aw-arded by

governmental agencies

Approximatelv 89% of CDI-HS' total revenue is derived from governmental agencies

Donated Matenals , Facilities, and Services

Contribuuons of donated non-cash assets are measured on a non-recurnng basis and recorded at fair value m the penod received Contributions of donated ser\-ices that create or enhance non-fmancial assets or that require specialized skills, are provided by mdividuals possessmg those skills, and w^ould t^-pically need to be purchased if not provided by donation, are recorded at fair value in the period received For the vear ended June 30, 2013, CDI-HS received 521,608,520 in donated materials, faculties, and ser\'ices (see Note 8)

Fair Value Measurements

Generallv accepted accounting principles provide guidance on how fair value should be detennined when fmancial statement elements are required to be measured at fair value Valuation techniques are ranked in tliree levels depcndmg on the degree of objectiviiv of the mputs used with each level

Level 1 inputs - quoted pnces in active markers for identical assets 1 ,evel 2 inputs - quoted prices in active or inactive markers for the same or similar assets Level 3 inputs - estimates using the best information available uhen there is little or no market

CDI-HS IS required to measure donated materials and ser\Mces at fair value (See Note 9)

conunued 8



NOTES T O FINANCIAL S TA TFMEN TS

Summary of Significant Account ing Pohcies, contmued

Income Taxes

CDI-HS IS exempt from taxauon under Internal Revenue Code SecUon 501(c)(3)

GeneralU accepted accounting prmciples provide accounting and disclosure guidance about positions taken by an organization in its tax returns that might be unccrtam Management has considered its tax posiuons and bebeves that all of the posiuons taken b\ CDI-HS in its federal exempt organizauon tax return are more bkely than not to be sustained upon exammation CDI-HS' remrns respectfully are subject to exarmnauon by federal authoriues, generallv for three \ears after they are filed

Funct ional Allocation of Expenses

Costs of providmg CDI-HS' programs and other activiues have been presented in the Statement of Funcuonal Expenses Shared costs are allocated among program and support serMces by a method that best measures the relative degree of benefit

Use of Es t imates

The preparation of financial statements in conformity with accountmg principles generally accepted in the United States of America requires management to make estimates and assumpuons that affect reported amounts of assets, liabibues, revenues, and expenses as of the date and for the penod presented Actual results could differ from those esumates

Comparat ive Tota ls

The financial statements mclude certain prior-year summarized comparative informauon m total but not by net asset class Such information does not include sufficient detail to constitute a presentation in conformit}- with accountmg pnnciples generally accepted in the United States of America, even though the accounts of CDI-HS are maintained m accordance with prmciples of net asset accounting Accordingly, such information should be read m conjuncuon with CDI-HS' fmancial statements for the year ended June 30, 2012, from which the summarized infonnation uas denved

Subsequent Events

Management has evaluated subsequent events through December 20, 2013, the date which the financial statements uere available

continued 9

COMMUNITY DEVELOPMENT INSTITUTE HEAD START

NOTES T O FINANCIAL STATEMENIS

3. Accrued Liabilities

Accrued babibties at June 30, 2013 consist of the following

Accrued expenses and pa\roll babibties — programs and delegates 56,571,142

Program transition bablbt^ 630,012 Accrued vacation 370,734 Accrued pavroll taxes and workers' compensauon msurance 353,752 Accrvied salaries 195.690

58.121.330

Line of Credit

CDI-HS has a line of credit with a bank, in the amount of $250,000, beanng interest at a vanable rate wluch is due May 27, 2014 The interest rate at June 30, 2013 was 5 25% The bank has a first pnont}' sccunt\^ mterest in all of CDI-HS' assets There was no outstandmg balance at June 30, 2013

Commi tmen t s and Cont ingencies

Obligat ions Under Opera t ing Leases

CDI-HS leases office space and equipment under operatmg leases with vanous terms Future rmmmum pavments, bv vear and m the aggregate, under these leases with initial or remaining terms of one year or more, consist of the following

Year ended June 30. 2014 5423,120 2015 289.296

5712.416

Rent expense for the vear ended June 30, 2013 was 510,432,534, which includes programs under operauonal responsibibt\

Contracts

CDI-HS' grants and contracts are subject to mspecuon and audit bv the appropriate goverrunental fundmg agencv The purpose is to determme whether program funds were used in accordance with their respective guidebnes and regulations The potential exists for disallowance of previoush-funded program costs The ultimate babdit\, if am, w-hich ma\ result from these governmental audits cannot be rcasonabh estimated and, accordinglv, CDI-MS has no provisions for the possible disallowance of program costs on its financml statements

continued 10


NOTIiS r o FINANCIAL ST ATEMEN TS

5. Commitments and Contingencies, contmued

Litigation

CDI-HS IS a defendant m various claims and lawsuits ansmg from the normal course of business Management intends to defend the agency vigorously in these matters It is not possible at this time to predict the probable ovitcome or the extent of CDI-HS' babibty, if am

6. Fees from Govemment Agencies

Fees from government agencies for the \ear ended June 30, 2013 consist of the following

Head Start programs 5164,279,653 Food program 7,629,813 State/local fundmg - Non-federal revenue 1.475.757

5173.385.223

7. Related Party Transactions

CDI-HS is affiliated with CDI rhe\ share a common Board of Directors and common upper management, but CDI does not possess the abibt}' to require that the majonty of the members of CDI-HS be appointed b\ CDI

Dunng the \ear ended June 30, 2013 CDI-HS paid CDI the following

I'Mscal administrauve scr\-ices for Head Stan grantees 55,338,141

8. In-kind Revenue and Expense

Head Start programs are required to provide matching non-federal funds for the operauon of programs This match appbes to regular Head Start and Earlv Head Start funds, as well as those received under the American Recover) and Reinvestment Act of 2009 Non-federal shares mclude donated cash and m-kind contnbuuons r\-pes of m-kind contnbutions mav include donated parent and commumt)' volunteer ume, discounted ser\'ices, discounted equipment, space, or transportaUon In-kmd contributions benefit the program directlv and are reflected in the Statement of Funcuonal Expenses (sec Note 9 for informauon on the recognized value ofthe in-kind contributions)

continued 11


NOTES TO FINANCIAL ST ATEMEN IS

Fair Value Measurements

The table below presents transacuons measured at fair \alue on a non-recurnng basis dunng the vear ended |une30, 2013

Contnbuted facilmes Contnbuted matenals Contnbuted ser\'ices

Fair value at June 30, 2013

The fair value of contnbuted ser\-ices, facibties, and matenals has been measured on a non-recurnng basis usmg quoted pnces for similar assets in inacuve markets (Level 2 mputs)

10. Subsequent Events

Subsequent to \ ear-end, CDI-HS amended its office lease to expand and mclude additional rentable space in its head quarters buildmg, and to extend the term of the lease with an ongmal end date of Fcbruaf)' 2015 to August 2017 The financial statements as of June 30, 2013 do not include any provision for the gam or loss ansmg from this transaction

I^vel I

s

5

Level 2

5 5,670,604 3,400,206

12.537.710

5-^1.608.520

S

1

l^vel3.

-

.

Total

$ 5,670,604 3,400,206

12.537.710

$21,608,520

12

SUPPLEMENTAL SCHEDULE


SCHEDULE OF EXFENDITUKES OF FEDERAL AND NON-FEDEXAL AWAKDS For the 7»u ended June 30,2013

Program Name Contract N o m b a

Federd CFDA

NumlKC Contiact

Te im Frogfam

Avaid Subrecipwilt Prognun

Fedcfal Award U S Dq»itnieiitofHeilthaiidHiiiiunSetncesfI>HHS'^

I>iecdy £tom DHHS> Head Suit Ouster Head Start (Abilene # ^ (a) Head Start (Atlaatic and Q ^ May Counties # 1) (ft) Euly Head Stait (Bainbeig Countr # 1) (f)

, Euly Head Stut(Daii]beig Countr # ^ (a) Head Start (BeaTcr CounQr, PA # 1) (lO Head Start (Beaver Coun^, PA # ^ (lO

Ibad Start (Brevard Coun^ # 2) (lO Head Start ^revard County # 3) (lO Head S u a CCential North East Puerto Rico # 1) (a) Head Start pdawaie Coun^ # ^ (•>) Head Start (Detroit - Wayne County # 1) (a) Head Start (DuPige County # 2) ( ^ Head Start (Eastern Riven # 7) (a) Head Start (Eastern Rivers # 8) (a) Head Start (E^cmatas & Solana Beach # 1} (a) Head Start (Eônatas & Solana Beach # 2} (a) Head Start (Central Virpma # 1} (a) Head Start (Cental Waahmgton EHS/HS # 1) (i^ Head Start (Central Waihmglon Migiant & SeaicMul # 1) ( ^ Head Start (Fbrt Green. BmoUyn # 2} (a) Head Start (Poedenck Qaunty # ^ (i^ Head Start êtmantown & Lebgh Aiea ofFhladelphia # ^ (a) Head Start (Hampton Roads # 2) (lO Head Start (Hampton Roads # 3) (lO Head Start (Hdlandale # 2) (a) Head Start (New Planover Co N C # l } ( a ) Plead Start (tbemlle I^nah # 1) (a) Head Start (Ibemlle Puish # ^ (a) Head Start (Duval County, FL # 1) (a) Head Start ([efierscm Dans Pansh # 7) (a) Head Start îbd Eastern Cttlaboma # ^ (a) Head Start ^(adtson County # 2) (i^ Head Start îfoca San Sd»stian # 3} (lO Head Start (San Sebastian & Moca # 1) (lO Head Start (NbxuDe County, NQ # 1} ( ^ Head Start (Monroe Coun^, MI # ^ ( ^ Head Start (Mcmtgpmery Coun^, PA # 1} (a) Head Start (Nordieast Arkansas # fi) (a) Head Start (Nonheast Adansas # 7) (a) Head Start ^ôriheast Oklahoma # 1) (a) Head Start (Nordieast Oldahoma # 2) (a) Head Start (Nodheast Puerto Rico # 5) (a) Head Start (Nordieut Puerto Rico # ^ (lO Ibad Start (Nordiem San Eh^p Co # ^ ( a ) Head Stut piadie Grand Junctum # ^ (i^ Head Start pt terTail & Wadena Counties, # 1) (i^ PieadStartPuachitaPuish.LA# 1) (a) Piead Start (Pme BhifF# 2) (a) Head Start (Pine Bhiff # 3) (a) Head Start (Ihndlas County # 1) (sO Piead Start (Rndlas County # 2$ (i^ Plead Start (San Gabnd Valley # 1) (a) Plead Start (San Gabnd Valley # 2) (a) Piead Start (San Pnmciaco # 1) ( i ) Piead Start (San Juan, Vuem Rico # 1) (i^ Plead Start (San Juan, Puerto Rico # 2 (a) Piead Start (Soudi Los Angdes Co # ^ (a) Piead Start ôutfa St Louts # ^ (a) Piead Start QSoudi St Louis # ^ (a) Piead Start ôutfa Central Kansas # 2} (a) Plead Start ^ d i Central Kansas # 3) (a) Plead Start (Soudieast Texas # 2) (lO Piead Stan (Soudi Veniioot& Green Meadows # 1) (a)

' Piead Start (Soudi VermontAc Green Meadows # 2) ( ^ Piead Start ôudi Vermont & Green Meadows # 3) (a) Piead Start (Southwest Arkansas # 1) (a) Plead Start ôudiem Alameda County # 1) (i^ Head Start (Tecumseh, OK # 1) (a) Head Start (Teâs Winte^giuden # ^ (lO Head Start ( Tn R ^ o n of Adkansas # 1) (lO Head Start ( Tn Regfcn of AAansu # ^ (lO Plead Stan (Waukegan, IL # 1) (a) Ibad Start (Webster Ave, Bioiix, NY # 1 (a) Head Start (Weld Co Migrant & Seasonal #3} (a) Head Start (Wdhams County # 1) (lO Head Start (Wilhams County # 2) (a)

Sob-total d u e c ^ fiom DHHS - Head Start Qui ter

Pass-thmu^ Office of Human AfGuo, Viipma Head Start (OPIA, Vii^ni^ (a^

90CH0059/a2 90CH0096/01 90CH0067/01 90CH0067/02 90CH0076/01 90CH0076/02 90CHD062/02 90CH0062/03 90CH0093/O1 90CHD065/a2 90CH0084/01 <)0CH0060/02 90CH0008/06 9OCH00O8/07 90CHD081/01 90CH0081/02 90CH0094/01 90CH0099/01 90CH0101/01 9OCH0O72/02 90CH0069/02 90CH0aS5/03 90Cm070/02 90CH0070/03 90CHD061/02 90CH0091/01 90CH0080/01 90CHn080/a2 90CH0097/01 90CH0035/05 90CH0066/02 90CH0068/Q2 90CH0054/03 90CH0092/01 90CH0O78/01 90CH0078/02 90CH0102/01 90CHa029/06 9OCH0O29/O7 90CHa086/01 90CHIX»6/02 90CH0Q38/05 90CEI0038/06 90CH0046/04 90CH0048M 90CH008g/01 90CH0090/01 90CH0073/02 90CH0073/03 90CH0082/01 90CH0082/02 90CH0077/01 90CH0077/0!! 90CH0100/01 90CHDO75/01 90CH0O75/02 90aK)049/04 90CH00«!/M 90CH0042/QS 90CH007V02 90CH007V03 90CH0063/Q2 90CH0O74/01 90CHDO74/02 90CH0074/03 90CH0095/01 90CH0098/01 90CH0087/01 90CHD043/04 90CH0079/01 90CH0079/02 90CH0085/01 90CH0089/01 90a«)05«/03 90CH0a83/01 90CH0083/02

93600 93600 93600 93600 93600 93600 93600 93600 9360O 93600 93709 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600 93600

05/01/11 -04/30/12 04/01/13-03/31/14 02/01/11 -01/31/12 02/01/12-01/31/13 09/01/11-08/31/12 09/01/12-08/31/13 08/01/11-07/31/12 08/01/12-07/31/13 11/1/12-10/31/13

01/01/12-12/31/12 07/01/12-06/30/13 07/01/11-06/30/12 12/01/11-11/30/12 12/01/12-11/30/13 06/01/12-05/31/13 06/01/13-05/31/14 12/01/12-11/30/13 06/01/13 -10/31/13 06/01/13-12/31/13 04/01/12-03/31/13 02/29/12-02/28/13 12/07/11 -12/06/12 03/07/12-03/06/13 03/07/13-03/06/14 07/01/11-06/30/12 09/28/12-09/27/13 05/01/12-04/30/13 05/01/13-04/30/14 04/01/13-03/31/14 12/01/11-11/30/12 01/01/12-12/31/12 03/01/12-02/28/13 09/01/11 -08/31/12 10/01/12-09/30/13 01/01/12-12/31/12 01/01/13-12/31/13 06/01/13-01/31/14 06/01/12-05/31/13 06/01/13-05/31/14 06/01/12-05/31/13 06/01/13-05/31/14 05/01/12-04/30/13 05/01/13-04/30/14 09/11/11-09/10/12 11/07/11-11/06/12 08/01/12-07/31/13 09/30/12-09/29/13 04/01/12-03/31/13 04/01/13-03/31/14 06/01/12-05/31/13 06/01/13-05/31/14 10/01/11-09/30/12 10/01/12-09/30/13 06/01/13-05/31/14 09/01/11-08/31/12 09/01/12-08/31/13 03/01/12-02/28/13 08/31/11-08/30/12 08/31/12-08/30/13 02/29/12-02/28/13 03/01/13-02/28/14 08/12/11-08/11/12 05/01/11-04/30/12 05/01/12-04/30/13 05/01/13-07/31/13 12/15/12 -12/14/13 05/01/13-08/30/13 09/01/12-08/31/13 07/21/11-07/20/12 02/01/12-01/31/13 02/01/13-01/31/14 08/01/12-07/31/13 09/30/12-09/29/13 01/01/12 -12/31/12 06/01/12-05/31/13 06/01/13-05/31/14

t 4,497,554 5,380318

526,298 310,420

5,103,935 4,421,593

6,130,054 1,079,319 7,807,687 1,161,652 50,495,648 5,050;5Z7

615,970 583,991

3,091333 2,338,613 2,486,907 2,782,576 2,989,077

1,341,941 1,138,185 4i842,538 7,869,120 2,395,475 843,686

1,899377 2379,426 2330,419

14,444369 1,1101448 2,054,751

852,673 594,755 658,136

2,409304 1,168365 2,166359 7364,695 1,069,497 3304342 3,021,020

10,449330 9314321

4,179300 477,719

1311,101 1,008320

2,783,057 879387

14367,764 1,127379

14,748,487 I I 3 6 I 3 4 4 12,942,411 3381,023 2,664,165

8383397 820489 731,195

1378394 455321

4,479,651 9378,856 6,165650 2,911360 2,677334 3,674,486

!tS5313 5,127,422 9,101,976 4312,076

975,790 1366317 784,992

1,442330 1.713.493

329347303

329347303

i 3 « 1388,011

159

728,947 4312,079

220;002 1337,723 4309,717

95,730 46,622373

16,423 208348 385,419

2,367,106 100337

1,485352 331,062 540302

275,647

695,927 3338,440

864,087

1,561392 2,180,776

254387 4,065,652 215,036 119,481

343O6 471383

1,157,794 1,163,556

49305 6381371

246,631 3,(^5343

89387 8378342 1,665,909

520348 34,411

1,174308 567,034

232I3O8 543,982

12,454,062 563,763

2,941312 9,365,060

852,159 504393

2388,009 2325376

120336 656,976

573,078 138,414

137,156 19,697

7359,427 1359,926 1352,456

988309 371,684 91364

5392,040 -3,058358

799,021 797,407

205,938 743,723 24390

163332,170

647,483

164379353

- i 3 » 1388311

159

. 728,947 4312,079

220,002 1337,723 4309,717

95,730 46322373

16,423 208348 385,419

2367,106 100337

1,485352 331,062 540302 275347

-695,927 3338,440

864387

-I36I392 2,180,776

254387 4365352

215336 119,481

-343O6 471383

1,157,794 1,163356

49305 6381371

246331 1,025,143

89387 8378342 1365,909

520348 34,411

1,174308 567334

23213O8 543,982

12,454362 563,763

2,941312 9365,060

852,159 504393

2388309 2325376

120336 656,976 573378 138,414 137,156

19397 7359,427 1359,926 1352,456

988309 371384

91364 5392340 3358358

799321 797,407 205,938 743,723 24390

163332170

647,483

164379353

-

12,189

31,765

30332

IO3I6 83308

196,144

14)996

(WIS) 52364

11,122 (1,966)

(31382) (6,021)

99339

7,078

504368

S04368

J 3 1388311

159 12,189

728,947 4312379

251,767 1,037.723 4309,717

95,730 46322373

46355 208348 385,419

%367,106 100337

1,485352 331362 540302 286,463 83308

892371 3338,440

864387 14396

1361392 2,180,776

254387 4,065352

206,720 172345

13,122 32340

471383 1.157,794 1,163356

49305

6381371 246331

3325343 89387

8378342 1365,909

488,766 28390

1,174308 5 6 7 ^

232I3O8 543382

12,454362 563,763

2,941312 9365360

852,159 504393

2,688309 2,625376

120336 656,976 573378 138,414 236395

19397 7359,427 1359,926 1352,456

988309 371384

98,442 5392340 3)058358

799321 797,407 205,938 743,723 24390

164,136338

647,483

164,784321

See indqKndent auditors' npofl 13


SCHEDULE OF EXFENDmjRES OF FEDERAL AND NON-FEDERAL AWAKDS For the year ended June 30,2013

Pfogiam Name Contract Number

Federal CFDA

Nmnbcr Contract

Term Snbfccipient Egpenditiirc

F rapan i

Federal Award* contmued U S Dâdmentof Agpculture ("USDA"^

Quid and Adult Care Food ProgEam Pass-duou^ New Jersey D q i t of Agnculture, Bureau of Child

Nutntion Progams (a) 011112 Pass-duDU^ Penii8;^vania Oqit of Eduction, Bureau of Budget &

Rgcal Man^^ment, Dmsion of Food & Nutntion (a) Pass-d»ou{^ Fkmda D ^ t of Pbaldi, Bureau of Quid

Nutntion Prngranis (a) Paas-duDt^ PACNA, Semaos de Ahmenios y Nutncion (i0 Pass-duoug^ bidiana Dq>t of Educauoo (a) PasB-duDU^ Michigan Dipt of Education (a) Pasa-duou^ Vi ignuDqt t of Agnculture, Food &

Nutntion Services (a) Pass-duou^ ^n^pnia Dcpt of Agnculture, Food &

Nutntion Services (a) Pass-duDU^ Califbmta Dept of Education (a) Pass-tfaoHi^ California Dcpt of Education (a) Pass-thjDu^ Tîgwa Dtp t of Agnculture, Food Sc

Nutntion Services (lO Pass-diiDu^ Wasbiogtoa Office of Siqienntendent of

Pubhc Instmction (iQ Pass-dirou^NewYodcD^t ofPIealdi (a) Pass-duou^ Pennsi^vaniA Dq>t of EductKm, Bureau of Budget i

Fiscal Nbttêment; Chvision of Food & Nutntioa (a) Pass-throu^ Viiginta Dtp t of Agnculture (a) nus- throu^ Viigtma Dtp t of Agnculture (i^ Pus-tfaflou^ Noidi CanAna Dâttment of Piealdi and

Pbmian Services (i^ Pass-tfaaoue^ Txxusiana Dept ofEducation, Division of

Nutatun Assistance (i0 Pasa-tfarou^ Louisiana Dept of Education, Division of

Nutntion Assistance (i^ PassHfa&MgbPbttdaDqit ofPlealtfa, Bureau of Quid

Nutntion Pmgtams ^ Pass-tfarou^ Louisiana Oq)t of Educatmi, Division of

Nutntion Assistance (a) Pass-duDu^ PACNA, Semaos de Alimentos yNutncion (a) PassHhrou^ NficfaigVi Department of EducaUon (a) Pass-tfanw^ Afidngpn Department of Education (a) Pass^farou^ Adtansas D q i t of Health and Himan Semcea,

Division of Child Care and Eady Childhood Education ( Pass-duDU^ Oklahoma Dqjt of Education (lO Pasa^farou^ Oklahoma Dqtt of Etkicalian (a) Pass-tfarou^ Nfinnesota Dqit of Education (ft) Pass-duou^ Louisiana Dept of Education, Divmoi of

Nuution Assistance ( ^ Pass-duoug^ Adotnsas Dept of Piealdi and Piuman Services,

Dtnsion of Cbld Care and Eady Chddhood Education ( Pass-duou^ AAaosas Dq>t of Healdi and Piuman Services,

DmsKm of Quid Care and Eady Quldhood Educabm ( Pass-dtmu^FlondaDqpt of Piealdi, Buieau of Chdd

Nutntion Programs (a) Pass-difDu^FlondaDqH ofPiealdi, Buieau of Child

Nutation Prngrams (a) Pass-through PACNA, Semaos de Ahmentos yNutncion Fass-duou^ PACNA, Servuaos de Alunentos yNutncion Pua-duoug^ Qdifbnna Dqi t of Education (a) Pass-duovf^ Cahfonaa Dqi t of Education (a) Pass-duDu^ Cahfomia Dq>t of Education (a) Pass-tfaioue^ PACNA, Semaos de AlunentDs y Nutncion (i^ Pass-dumi^ PACNA, Semaos deAtuneatos yNutncion (a) Fass-dirou^ Califonwa I > p t of Education (a) Paas-throu^ Kansas State Dept of Education (a) Pass-thious^ Kansas State Dq>t of Education (a) Pass-diEou^ Cahfomu Dqi t of Education (a) Paas-diroug^ dhfonua D ^ t of Education (a) Pass-through Adtansas D q » of Healdi and Human Semces,

Dmsun of Quid Care and Eady Childhood Education ( Pass -d ian^ Cabfomia Dq>t of Education (a) Paas-throu^ Oklahoma Dq)t of Education {u} Pass-dimu^ Adcansas Dq>t of Piealdi and Piuman Services,

Dmsioa of Chid Care and Eady Ouldhood Education ( Pass-thmugb Adcansas Dqit of Healdi and Pbiman Semcea,

Division of Quid Care and Eady Ouldhood Education ( Pasa-tfaoou^ IDmou State Board of Education (a) Pass-duDUg^ Nbrdi Dakota Dept of PuUic Instmction (a) Total USDA

Total Federal Awards

30O-3+00O-1

S.2457 CCC208 1930220

73SPX0006

59583

59583 19-3149-OJ 19-3149<3]

59583

39031512 2403

30O-34«)0-l 59583 59583

10558

10558 10558 10558 10558

10558

10558 10558 10558

10558

10558 10558

10558 10558 10558

21-38 CCC208

73SPX0006 73SFX0006

Q30 DC 21-016 DC 21-016 2000010093

10558 10558 10558 10558

10558 10558 10558 10558

Q30

Q30

S-2457 CCC208 CCC208

19-3149-OJ 19-3149-OJ 19J1490J

CCC208 CCC208

19-3149-OJ P0605 P0605

19-31490J 19-3149-OJ

Q30 19-3149-OJ DC 21-016

Q 3 0

Q 3 0 19-022-065F00

53313

10558 10558 10558 10558 10558 10558 10558 10558 10558 10558 10558 10558 10558

10558 10558 10558

1 10558

10558 10558 10558

266,736

34312 163,303

433 439366

19,716

37,124 151307

2,698

147,937

26390 6372

3,137 280,780 47,182

157379

209,967

27351

314,400

9,142 33316 69,483 83,939

603382 302304

1,761

8,076

19325

239369

54,702

985385

6318 326365 71,402

114,036 537308

14,425 16,477

292388 979

25,764 10,658

484352 38,005

124,941 31303 16,010

369,955

244,460 27366 34.093

7329,8U

92334

266,736

34312

163303 433

439366

19,716

37,124 151307

2398

147,937

26390 6372

3,137 280,780 47,182

157379

209,967

27351

314,400

9,142 33316 69,483 83,939

603382 302304

1,761

8376

19325

239369

54,702

985385

6318 326365 71,402

114336 537308

14,425 16,477

292388 979

25,764 10358

484352 38305

124,941 31303 16310

369,955

244,460 27366 34393

92334

266,736

34312

163303 433

439,066

19,716

37,124 151307

2398

147,937

26390 6372

3,137 280,780

47,182

157379

209,967

27351

314)400

9,142 33316 69,483 83339

603382 302304

1,761 8376

19325

239369

54,702

6318 326365 71,402

114336 537308

14,425 16,477

292388 979

25,764 10358

484352 38305

124,941 31303 16310

369355

244,460 27366 34393

73293U 7329313

3293473B3 171,909,466 171309,466 504368 172^13334

See independent iwhtDis' report 14


SCHEDULE OF EXFENDITUKES OF FEDERAL AND NON-FEDERAL AWARDS For die year ended June 30,2013

PmgramNamc Contract N i m b e r

Federal CFDA

Number Contiact

Term GoveniincDt Revcime

XoO'îHletal Award BievardCo - Eady LeammgCoahtiQn,Pre-K Semces Brevard Co -United Way Fsedendc Coun^ - Head Start State Si^lemental Fundmg F t Greene - Universal Pte-K Semces "Haiaptoa Roads - Eady Reading First New Hanover County Duval County - Eady Leammg Coahtion, Prc-K Services Nordicast Aransas - Better êgftaaog^ Nordieast Oldahoma - Wrq) Around Northeast OUaboma - Pre lOndeigattea Otter Tail - Wn^ AiDund Otter Tail - State Head Start Ouchita Pansh - Umted Way San Gabnel Valley - LA County Office of Education

Preschool Services Soudi St Louis - State of Missoun Child Can Services Ta-Repon of Adamsas - United Way Waukegan - Wrq> Asound

16363 40382 38307 5,703

34379 40300

171,956 11,000 7,998

357350 39378

192,608 33,319

217.481 28323

7,414 233,096

16363 40382 38307 5,703

34379 40300

171,956 11300 7,998

357350 39378

I923O8 33319

217,481 28323

7,414 233,096

16363 40382 38307 5,703

34379 40300

171,956 11300 7,998

357350 39378

192308 33319

217,481 28323 7,414

233396

1.475,757 M75.757 M75.7S7

Total Federal and NonÂderal Amrda $ 171309,466 > M7S.757 8173385323 $ 504368 $ 1733WJ91

(14 Audited as a nuiorpiogam

1 Basu of Accounting- Hie Schedule of Eipendituies of Federal and Non-fedeial Avanb has been lepoited on acciual basis of accounung

2 CDI-HS IS eumpt fiom income lasatioo under Internal Revenue Code Secbon 501(c)(3)

3 Funds totaling $504368 wen passed duough to Comniumly Development Institute for admuustntion and numtonng the Head Start psignuns

See mdependent auditoa' lepoit IS

ADDITIONAL INFORMATION

Ill Harrington Group Certified Public Accountants. LLP

Independent Auditor's Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Audit ing Standards

1 () rht. Boiird ot" DirLCtof-rotntnuniU' Dcvtlopmcnt IiiNtiturt Mend ' r irt

Wt have audited, in accordancL with tliL auditing standard-* gtntrallv accepted in the United States of America and the-standards applicable xa financial audits contained in Govtrnment Auditmg Standards issued bv the f Comptroller Cicntral of the United States, the financial statements df (Ommunity Development Institute I lead Start {"(!D1-I IS"), which compnse the ^tatcme-nt of financial position as of |une- 30. 2013, and the related statements of activities, functional expenses and cash flows for the vear then ended, and the related notes to the financial statements, and have issued our report dated December 20. 2013

Intemal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered TDI-IIS' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of (]DI-1 IS' internal control Accordingly, we do not express an opinion on the effecnveness of (,D1-I IS' internal control

A defiaemy in iiitenialcontrolL\\-^X> when the design or operation of a control does nor allou' m.in:igement or employees, m the normal course of performing their assigned functions, to prevent, or detect anel correct misstatements on a timelv basis A matenal weakness is a deficiency, or a combination of deficiencies, in internal contrf)l, such that there is a reasonable pohsibilit)' that a matenal misstatement ofthe entiU''s financial statements will not be prevented, or detected and corrected on a timely basis A significant deficiency is a deficiency, or a combin'atu>n of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance

Our consideration of internal control was for the limited pur^iosi. descnljed in the first paragraph of this section and was not designed to identify al! deficiencies m internal control that might be material weaknesses or significant det'iciencies (liven these limitations, dunng our audit we did not identify anv deficiencies in internal ct>ntrol that we consider to be material weaknesses I lowever, material weaknesses may exist that have not been identified

Compliance and Other Matters

As part of obtaining reasonable assurance about whether (. Dl-I IS' financial statements are tree of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts I lowever. providing an opinion on compliance with rhost. proMsions was nor an r)b|tcrive of our aueiit, and accordinglv we do not express such an opinion Ihe results of our tests disclosed no instances of noncompliance or other matters that are ret-juired to be reported uneler Government Auditing Standards

Purpose of this Report

I he puqiose of tliis report is soleU to eiescribe 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 f'DI-IIS' interna! control or on compliance 1 his report is an integral part of an audit perfomied m accordance with Government Auditing Standards in considering (,DI-I IS' internal control and compliance Accordingly, this communication is not suitable for an\ other purpose

^ % i 4 4 ' C ^ ^ ^ S ^ C^^€14^

San 1 riUicisco, ralifornia

December 20, 2013

PASADENA ATrusted Nonprofit Partner SAN FRANCISCO 234 E Colorado B^d 50 Francisco St

Suite MI50 Expe r i ence Serv ice Respect Suite 160 Pasadena. CA 91101 San Francisco. CA 94133 Tel 6264036801 w w w n p o c p a s c o m ^^, ^ , ^ ^ ^ , 3,3,

Fax 626 403 6866 Fax 415 391 3233

Ill Harrington Group Certified Public Accountants LLP

Independen t Auditors ' Report on Compl iance for E a c h Major Program and on In temal Control Over Compl iance Required by O M B Circular A-133

To the Board of Directors Cominumt\' Development Institute Head Start

Report on Compliance for E a c h Major Federal Program

We have audited Community Development Institute Head Start ("CDI-HS") comphance with the t\pes of comphance requirements descnbed in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of CDI-HS' major federal programs for the year ended June 30, 2013 CDI-HS' ma)or federal programs for the \ear ended June 30, 2013 are identified in the summar\' of auditors' results secuon of the accompanying schedule of fmdings and questioned costs

Managemen t ' s Responsibility

Management is responsible for comphance with the requirements of laws, regulations, contracts, and grants apphcable to its federal programs

Auditors* Rcsponsibihty

Our responsibillt}' is to express an opinion on comphance for each of CDI-HS' major federal programs based on our audit of the tj-pes of compliance requirements referred to above We conducted our audit of compliance in accordance with auditmg standards generally accepted m the Umted States of America, the standards apphcable to fmancial audits contamed in Govemment Auditing Standards, issued by the Comptroller General of the Umted States and OMB Circular A-133, Audits of States. Loial Govemments, and Non-Profit Organizations Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncomphance with the t\pes of comphance requirements referred to above that could have a direct and material effect on a major federal program occiurred An audit mcludes examinmg, on a test basis, evidence about CDI-HS' comphance with those requirements and performmg such other procedures as we considered necessary- in the circumstances

We beheve that our audit provides a reasonable basis for our opinion on compliance for each maior federal program However, our audit does not provide a legal determination of CDI-HS' compliance

Opinion on Each Major Federal Program

In our opinion, CDI-HS complied, in all material respects, with the requirements referred to above that could have a direct and matenal effect on each of its major feeleral programs for the \ear ended June 30, 2013

PASADENA ATrusted Nonprofit Partner SAN FRANCISCO 234 E Colorado Blvd 50 Francisco St

Suite MI50 Expe r i ence Serv ice Respect Suite 160

Pasadena CA 91101 San Francisco, CA 94133 Tel 6264036801 WWWnpocpas com Tel 415391 3131

Fax 626403 6866 Fax 415 391 3233

Independent Auditors ' Report on Compliance for Each Major Program and on In temal Control Over Compl iance Required by O M B Circular A-133 contmued

Report on In temal Control Over Compl iance

Management of CDI-HS is responsible for estabhshing and maintaimng effective internal control over comphance with the tvpes of compliance referred to above In plannmg and performing our audit, we considered CDI-HS' mternal control over comphance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropnate in the circumstances for the purpose of expressing an opinion on comphance for each major federal program and to test and report on internal control over comphance in accordance with OMB Circubr A-133, but not for the purpose of expressmg an opimon on the effectiveness of mternal control over comphance Accordingly, we do not express an opinion on the effectiveness of CDI-HS' mternal control over comphance

A deficiency in intemal control over compliance exists when the design or operation of a control over comphance does not allow management or employees, m the normal course of performmg their assigned funcuons, to prevent, or detect and correct noncomphance with a t\'pe of compliance requirement of a federal program on a timely basis A matenal weakness in intemal control over compliance is a deficiency, or combmaaon of deficiencies, in internal control over compliance, such that there is a reasonable possibiUt)^ that matenal noncomphance with a tj-pe of comphance requirement of a federal program will not be prevented, or detected and corrected, on a umely basis A signifuant deficiency in intemal control over compliance is a deficiency, or a combination of deficiencies, m mternal control over comphance with a t\^e of comphance 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 comphance vtas for the limited purpose described m the first paragraph of this section and was not designed to idcntif)' all deficiencies in internal control over comphance that might be material weaknesses or significant deficiencies We did not identifH^ am deficiencies m mternal control over compliance that we consider to be material weaknesses However, material weaknesses may exist that have not been identified

The purpose of this report on intemal control over compliance is solely to describe the scope of our testing of mternal control over comphance and the results of that testing based on the requirements of OMB Circular A-133 Accordingly, this report is noi suitable for anv other purpose

San Francisco, Cahfornia December 20, 2013

C O M M U N I T Y D E V E L O P M E N T I N S T I T U T E H E A D START Schedule of Findings and Ques t ioned Costs I"'"or the year ended June 30, 2013

Section I - Summary of Auditors ' Results Financial Statements T\pc of auditors* report issued

Internal control over financial reporting Material weakness(es) identified-^ Significant deficiencv(ies) identified that are not considered to be matenal weaknesses'

Noncomphance material to financial statements noted-^

Federal Awards Internal control over major programs

Matenal weakness(es) idenufied^ Significant deficiency(ies) identified that are not considered to be matenal weaknesses'

T)pc of auditors' report issued on comphance for major programs

Any audit fmdmgs disclosed that are required to be reported m accordance with section 510(a) of Circular A-133"''

Dollar tlireshold used to disunguish between Tj'pe A and Type B programs

Auditee quahfied as low-risk auditee'*

Identification of Major Programs U S Department of Agriculmre

Child and Adult Care Food Program

U S Department of Health and Human Scr\'ices Head Start Program

Unmodified No No

No

No No

Unmodified

No

55,157,284

Yes

10 558

93 600

Section II — Financial Statements Fmdings

There are no findmgs required to be reported in accordance with Generally Accepted Govemment Auditing Standards

Section III - Federal Award Findings and Ques t ioned Costs

There arc neither fmdings nor questioned costs for I'cderal awards as defined m OMB Circular A-133

Section IV - Summary' Schedule of Prior Year Findings

None

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