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ST, HELENA COMMUNITir HEALTH CEIVTER

FINANCIAL STATEMENTS

FOR THE SIXTEEN MONTHS OCTOBER 31,2009

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

Release Date " f M / O

CONTENTS

Page

Independent Auditors' Report 1

Financial Statements

Statement of Financial Position 2

Statementof Activities and Changes in Net Assets 3

.Statement of Functional Expenses 4

Statement of Cash Flows , 5

Notes to Financial Statements 6-12

Schedule of Federal Financial Assistance Programs 13

Report on Internal Control Over Financial Reporting and On Compliance Based On an Audit of Finai cial Statements Performed in Accordance With Government Auditing Standards 14

Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 15-16

Schedule of Findings and Ouestioned Costs 17-18

Schedule of Prior Year Audit Findings 19-21

DAIGREPONT & BRIAN A Pmtesslonal Accounting Corporation Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

Board of Directors St. Helena Community Health Center Greensburg, Louisiana

We have audited the accompanying statements of fmancial position.of St. Helena Community Health Center (a non-profit oiganization), as of October 31,2009, and the related statements of activities and changes in net assets, fimctional expenses, and cash flows for the sixteen months then ended. These financial statements are the responsibility ofthe organization's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are fi-ee of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We'believe that our audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of St. Helena Community Health Center as of October 31,2009, and the changes hi its net assets and cash flows for the sixteen months then ended in conform!^ with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated June 30,2010, on our consideration of St. Helena Community Health Center's internal control over financial reporting and our tests of its

. compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testii^ of internal control over financial reporting and complicuice and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessii^ the results of our audit

Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional an^ysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part ofthe financial statements. Such information has been subjected to the auditing procedures applied in the audits ofthe financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole.

iX^su^^fl^-'- ^^'^ Baton Rouge, Louisiana June 30,2010

6641 Government Street» Baton Rouge, LA 70806 • P/7; (225) 927-3760 • Fax: (225) 927-3761

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ST. HELENA COMMUNITY HEALTH CENTER GREENSBURG, LOUISIANA

STATEMENT OF FINANCIAL POSITION OCTOBER 31,2009

ASSETS

Current Assets Cash and cash equivalents $ 238,235 Certificates of deposit 200,000 Patient receivables (net of allowances of $278,406) 165,246 Grants receivable 118,413 Inventory 29,600 Prepaid expenses 28,817 Due from LPC&A 150,000 Deposits 23,145 Other current assets 21,348

Total Current Assets 974.804

Properly and Equipment, net 1,557,364

Goodwill 114.000

Total Assets

LIABILITIES AND NET ASSETS

Current Liabilities , Current portion of notes payable $ 151,750 Accounts payable 138,949 Accrued expenses 170,126 Otiier current liabilities 25.704

. Total Current Liabilities 486.529

Long-term Debt Notes payable 720,871

Net Assets Unrestricted , 1,433,089 Temporarily restricted 5,679

Total Net Assets 1.438.768

Total Liabilities and Net Assets $ 2.646.168

The accompanying notes are an integral part of this statement.

ST. HELENA COMMUNITY HEALTH CENTER' GREENSBURG, LOUISIANA

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009

CHANGES IN UNRESTRICTED NET ASSETS

Revenues

Net patient revenue Federal grants School based clinic Interest income fi-om non

federal grant monies Other income Released fi-om restrictions

Total revenues

Expenses Program services Management and general

Total expenses

Increase (decrease) in net assets

Net assets - beginning of year

Net assets - end ofyear

Unrestricted

$ 1,567,942 3,500,997

565,976

8,553 3,553

16.586

5.663.607

3,433,120 1.903.316

5.336.436

327.171

1.105.918

S 1.433.089

Temporarily Restricted

-

8,544 06-586)

(8.042>

- •

(8.042)

13.721

5.679

Total

1,567,942 3,500,997

565.976

8,553 12,097

5.655.565

3,433,120 1.903.316

5.336.436

319.129

1.119.639

1.438.768



STATEMENT OF FUNCTIONAL EXPENSES FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009

Salaries and related expenses Salaries Employee fringe benefits Payroll taxes

Total salaries and related expenses

General Expenses Advertising and marketing Bad debt Conferences and meetings ' Contracted services Depreciation Dues and subscriptions Instu-ance Interest Meals and entertainment Miscellaneous Postage Professional fees Rent Repairs and mauitenance Staff training Supplies Taxes and licenses Telephone Theft losses Travel Utilhies

Total general expenses

Total expenses

Program Services

$ 1,968,145 211,118 163.319

2.342.582

25,326 -

1,369 276,147 191,550

15,657 14,894 58,600

1,498 4,886 1,229

26,041 17,436

135,514 14,257

236,663 3,581

15,293 -

15,584 35.013

1.090.538

.1! ^.433.12p

Management and General

$ 694,231 118,162 60.286

872.679

18,457 212,819

4,472 258,124

-24,075 2,832

-1,045 2,420 7,362

38,857 125,275 41,579 13,744 76,226 2,243

78,658 29.051 68,234 25.164

1.030.637

$ l,903,:jl6

Total

$ 2,662,376 329.280 223.605

3.215.261

43,783 212,819

5,841 534,271 191,550 39,732

. 17,726 58,600 2,543 7,306 8.591

64,898 142,711 177,093 28,001

312.889 5,824

93,951 29,051 83,818 60.177

2.121.175

S 5.336.436



STATEMENT OF CASH FLOWS FOR THE SIXTEEN MONTHS ENDED OCTOBER 31 y 2009

Cash Flows From Operating Activities

Changes in net assets Adjustments to reconcile change in net assets to net cash used by operating activities: Depreciation Bad debts Increase in patient receivables Increase in grants receivable Decrease in prepaid expenses Increase in due fi*6m LPC&A Increase m deposits Increase in other current assets Increase in accounts payable Increase in accrued expenses Increase in other current liabilities Decrease in deferred revenue Total adjustments

Net cash used by operating activities

Cash Flows From Investing Activities

Purchase of certificate of deposit Purchase of property and equipment

Net cash used by investing activities

S 319.129

191.550 212,819

(195.137) (71,828)

8,238 (150,000)

(8,220) (21,348) 106,555 24,788 25,704

(624.000) (500.879)

(200.000) (740.009)

(940.009)

Cash Flows From Financing Activities

Proceeds &om issuance of debt Principal reduction of long-term debt Principal reduction of long-term debt related parties

Net cash provided by financing activities

Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

Cash and Cash Equivalents, End of Year

494,321 (43,996)

(201.406)

248.919

(872,840)

1.111.075

Supplemental Disclosures Interest paid 58.600


ST. HELENA COMMUNITY HEALTH CENTER GREENSBURG, LOUISL\N A

NOTES TO FINANCL\L STATEMENTS OCTOBER 31,2009

1. Summary of Significant Accounting Policies

(a) Organization

The accompanying fmancial statements include the accounts ofthe St. Helena Community Healdi Center (the Center), a nonprofit corporation. The Center is exempt fi-om federal income taxes under 501(c)(3) ofthe Internal Revenue Code. The Center changed its fiscal year end fi^m June 30 to October 31 beginning with the sixteen months ended October 31,2009.

The St. Helena Community Health Center (The Center) serves the medical needs of patients in St. Helena Parish and surrounding areas including facilities in Greensburg, Kentwood. Albany mid Chaneyville, Louisiana. The purpose of The Center is to provide health care at a reasonable cost to those who caimot afford it financially. .

(b) Basis of Accounting and Net Assets

The financial statements of tiie Center have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables and ottier liabilities.

Financial statement presentation follows the recommendations ofthe Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements ofNot-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Net assets, revenues, expenses, gains and losses are classified based on the existence or absence of contributor imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:

Unrestricted Net Assets. Unrestricted net assets are for general use with no restrictions.

Temporarily Restricted Net Assets Temporarily restricted net assets can be expended currently, but only for a specified purpose designated by the grantor or donor. Once expended for their restricted purpose, these temporarily restricted net assets are released to unrestricted net assets and reported in the statement of activities as net assets released fi-om restriction.

Permanently Restricted Net Assets Netassetspermanently restricted for fiiture use by the grantor, donor or the board of directors. TheCenterhas no permanently restricted net assets.

(c) Cash and Cash Equivalents

The Center considers all highly liquid investments, including certificates of deposit with an initial maturity of three months or less, to be cash equivalents.

(d) Patient Receivables and Allowance for Uncollectible Accounts

The Center extends credit to patients, as well as third party intermediaries. Patient receivables are generally carried at the original billed amount less contractual adjustments and the allowance for uncollectible accounts.

. . This allowance is based on management's estimates, historical experience and a review of all outstanding amounts on an ongoing basis. Patient receivables are written-off when deemed wicollectible and recoveries, if any, are recorded when received.


NOTES TO FINANCIAL STATEMENTS OCTOBERS!, 2009

1. Summary of Significant Accounting Policies - Continued

(e) Inventories of Supplies

Inventories of medical supplies and drugs are stated at the lower of cost or market.

(f) Property and Equipment

Property and equipment is presented in the financial statements at cost less allowances, for depreciation. Depreciation is computed using the straight-lme method and is provided over the estimated useful lives ofthe assets which ranges fi"om 5 to 29 years.

The Center receives fimding under Section 330 ofthe Public Health Services Act with various restiictions placed on items obtamed with these fimds. According to the Public Health Service grants Policy Statement, title to real arid tangible property shall rest in the grantee upon acquisition, subject to the accountability requirements and the Public Health Service's right to transfer title.

(g) Goodwill

Goodwill represents the excess ofthe cost ofthe purchased Kentwood Medical Clinic over the fan- value ofthe ' net assets at the date of acquisition. In accordance with SFAS No. 142, "Goodwill and Other Intangible

Assets," goodwill having indefinite lives will no longer be amortized. Instead, goodwill is tested annually for impairment. There was no change m the carrying amount of goodwill during the sixteen months ended October 31,2009.

(h) Revenues

The Center receives the majority of its revenues fi-om Federal and State agencies. The Center recognizes contract revenue (up to contract ceiling) fi"om its contracts either on a pro-rata basis over the contract life or to the extent of expenses. Revenue recognition depends on the contract. Any ofthe timding sources may. at its discretion, request reimbursement for expenses or return of funds, or both, as a result of non-compliance by the Center with the terms of the grant/contract.

Federal fimds come fi-om the Unites States Department of Health and Human Services (DHHS) throu^ the Health Resources and Services Administration as part ofthe Consoliifeted Health Centers program (CHCP). Compliance is required based on the terms and agreements of the grant agreements, and DHHS may, at its discretion, request reimbursement for expense or the return of fiinds not expended, or both, based on noncompliance with the these terms.

Net Patient Revenue

Net patient service revenue is reported at the estimated net realizable amounts from patients, third-party payors (including Medicare and Medicaid), and others for services rendered, includmg estimated retroactive adjustments under reimbursement agreements with third-party payors. Retroactive adjustments are accrued on m estimated basis in the period the related services are rendered and adjusted m fiiture periods as final settlements are determined. It is reasonably possible that these estimates could change m the near term.

The Center has a sliding fee plan for patients without any third party payors and whose income level fall within die sliding fee guidelines. The minimum payment is $15.00 for a visit.


NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2009

1. Summary of Significant Accounting Policies - Continued

(i) Income Tax

The Center is exempt from federal income taxes under Section 501 (c)(3) ofthe Internal Revenue Code.

(j) Advertising Costs

The Center expenses its advertising costs as tiiey are incurred.

(k) Use of Estimates

The preparation of fmancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accor(^gly, actual results could differ from those estimates.

(1) Subsequent Events

The Center has evaluated subsequent events through June 30,2010, the date the financial statements were available to be issued, for recording and disclosure.

2. Property and Equipment

TTie following is a summary of property and equipment at October 31,2009:

Land $ 288,000 Buildings ' 979,019 Furniture and fixtures 66,323 Office Equipment 617,506 Medical Equipment 505,874 Leasehold improvements . 37.352

2,494,074 Less: Accumulated depreciation (936.710)

$ 1.557.364

Depreciation expense was $ 191,550 for 2009.

3. Certificate of Peposit

A certificate of deposit with a face value of $200,000 was held by the Center at October 31,2009. The certificate bears interest at 3.75%, with an issue date of February 13,2009 and a maturity date of February 13,2010. Interest earned for the sixteen months ended October 31,2009 was $4,932.


NOTES TO FINANCIAL STATEMENTS OCTOBER 31,2009

4. Fair Value of Financial Instruments

The Center's investments are reported at fair value m the accompanying statements of financial position.

Fair Value Measurements Using:

Quoted Prices In Active Markets

For Identical Assets October 31.2009 Fair Value (Level 1)

Certificates of deposit $ 200,000 $ 200,000

The Center uses a feir value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists ofthree broad levels: Level 1 inputs consist ofunadjusted quoted prices in active markets for identical assets and have ttie highest priority, and Level 3 inputs have the lowest priority. The Association uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, tiie Association measures fair value using Level 1 inputs because they generally provide the most reliable evidence of feir value.

5. Due from LPC&A

During the year, the Center advanced $ 150,000 to Louisiana Partnership for Choice and Access, LLC (LPC&A) in response to an offering by LPC&A. This offering, a proposed subscription agreement, would allow the Center to own units in LPC&A and the funds would be used to capitalize a joint venture in another company called Louisiana Healthcare Connection. Louisiana Healthcare Connection would ultimately provide the Center vrith access to contractual agreements and provider relationships with future payors. As of October 31,2009, the offering period was still open and had been extended until June 30,2010. No format agreements or investment terms existed between the Center and LPC&A. In the event that no investment or joint venture materializes in the fiiture, the advanced amount would be returned to the Center.

6. Notes Payable

Long-term debt consists ofthe following:

Note I dated March 2007, with an original balance of $454,796, due in 36 monthly payments of $3,689 which mcludes interest at a rate of 6.5% and then 35 monthly payments of $4,967 which includes interest at a rate of 7.25%, plus one fmal payment of $278,198 due on ApriM, 2013. The note is secured by land and a building. $ 385,310

Less: current installments ("28.542) Long-term debt $ 356.768

Note 2 dated June 10,2009, witii an origmal balance of $174,846, Due in 59 monthly payments of $1,315 which includes interest at a rate of 4.25%, plus one final payment of $129,719 due on June 10,2014. The note is seciued by land and a buildii^, $ 172,304

Less: current instalhnents (8,639) Long-term debt $ 163.665



6. Notes Payable - Continued

Note 3 dated June 10,2009, witii an original balance of $175,154, due in 59 monthly payments of $ 1,794 which includes interest at a rate of 4.25%. plus one filnal payment of $98,625 due on June 10,2014. The note is secured by land and a building. $ 170,686

Less: current mstallments (14.569) Long-term debt $ 156.117

Note 4 dated July 10,2009, with an original balance of $150,000, due in.3 equal installments of $50,000 on January 1,2010, July 1,2010 and January 1,2011. This note carries no interest and is unsecured. $ 144,321

Less: current instalhnents f 100.000) Long-term debt $ 44.321

Total notes payable $ 872,621 Less: total current instalhnents (151.750) Total long-term debt $ 720.871

Note 1 above is owed to Bank of Greensburg and is secured by the clinic property operated m Greensburg, LA. Subsequent to the fiscal year end of October 31,2009, this note was refinanced with a maturity date of April 1,2013.

Notes 2 and 3 above were obtained through Louisiana Rural Health Services Corporation in order to refinance and payoff the previous related party debt attached to the building located in Kentwood, LA which is operated by the Center. The previous debt consisted ofthree unsecured notes payable to Carlton S. Faller, M.D., former owner and seller of Kentwood Medical Clinic to the Center. Dr. Faller is also a current employee ofthe Center. The balance of these three related party notes was $201,406 at June 30,2008 and was paid during 2009.

Note 4 above is owed to an individual and represents the purchase of land adjacent to the current clinic in Greensburg, LA to be used for possible fiiture expansion or parking. The loan is mterest free and the Center has used an average maricet rate of 6% to determine the present value of future payments on this loan. The interest free component ofthe loan has been recorded as contribution revenue in these fmancial statements.

Long-term d^ t obligations mature in years ended October 31 as follows:

. 2010 $ 151,750 2011 100.064 2012 56.148 2013 320,712 2014 243,947 Thereafter _-

£ 872.621

The Center paid a total of $58,600 in interest for the sixteen months ended October 31,2009.

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7. Retirement Plan

The Center sponsors a 403 (b) tax-sheltered annuity plan, \Vhich covers substantially all of its employees who meet eligibility requhements. Eligible employees are allowed to contribute, on a tax-deferred basis, a portion of their compensation, up to federally designated limits. The Center matches 100% of employee confributions up to a maximum of 5% ofthe employee's annual salary. Employees are vested in the plan at 25% after one year, 50% after two years, 75% after three years and 100% after four years. The Center's contributions to the plan for the sixteen months ended October 31,2009 amounted to $42,634.

8. Concentrations of Credit Risk

The Center receives approximately 68% of its operating income from Federal and State agencies and performs , substantially all of its activities in the state of Louisiana. Approximately 31 % of the Center's revenues are generated

from providing patient services. The Center grants credit witiiout collateral to its patients, most of who are local residents that may or may not be insured by a third-party payor. Revenue and receivables from patients and third-party payors was as follows:

Revenue Receivables Medicare 21% 17% Medicaid 53% 57% Third party insurance 12% 14% Private pay/sliding fee 14% 12%

100% 100%

Financial instruments, which potentially subject tiie Center to concentrations of credit risk, consist principally of cash accounts, savings accounts and certificates of deposit Cash accounts are insured by the Federal Deposit Insurance Corporation for up to $250,000. At various times during the year, amounts in one financial institution exceeded insured limits. The Center places its cash and certificates of deposits with high-credit, quality financial institutions and does not believe that it is exposed to any significant credit risk on uninsured amounts.

9. Commitments and Contingencies

funding The Center receives federal and state grants for specific purposes that are subject to audit by the grantor agencies. Such audits could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms ofthe grant. It is the opinion ofthe Center's management that its compliance with the terms ofthe grant will result in negligible, if any, disallowed costs'and no provision has been recorded in the accompanying financial statements for such contingencies.

Legal proceedings The Center is involved in various claims and legal actions in the normal course of business. Hiose events that are probable and estimable have been recorded in these financial statements in the amount of $6,702. One event occurring after October 31,2009 was settled in the amount of $24,000 and will be recorded in the appropriate period after this fiscal year erid. After consultation with legal counsel, management estimates that any remaining matters will be resolved without material adverse effect on the Center's financial position.

Theft losses Early in 2009, the Center discovered that a now former employee had been spending the Center's ftmds for their own personal use. The Center determined that a total of $29,051 had been used without autfiorization. These theft losses have been recorded in the financial statements for the sbcteen montiis ended October 31,2009. The Center is evaluating strategies to pursue repayment ofthe amount.

11

ST. HELENA COMMtJNlTY HEALTH CENTER GREENSBURG, LOUISIANA

NOTES TO FINANCL\L STATEMENTS OCTOBER 31, 2009

10. Leases

The Center rents space, facilities or equipment under several operating leases as follows:

The Center entered into a lease agreement that began on October 18,200 7 and ends on October 31,2010. The monthly rental was $6,970 for four months and $7,157 for the remaining twelve months during the sbcteen monflis ended October 31,2009. BeginningNovember 1,2009, tiie monthly rent increased to $7,434.

The Center leases space at its Greensburg, Louisiana location on a month-to-montii basis at $ 1,000 per month and at its Chaneyville, Louisiana location on a month-to-month basis at $250 per month. The center also rents various office equipment on a month-to-month basis.

Total rent expense for tiie sbtteen months ended October 31,2009 was $ 142,7 II.

Future lease payments that have initial or remaining terms in excess of one year as of October 31.2009 are as follows:

YearendmgOctober31,20I0 !R89.208 11. Economic Dependency

The Center receives the majority of its revenue from ftmds provided by the U.S. Department of Health and Human Services Community Health Center Program- All fiinds received under the grant, are federal fiinds and are appropriated each year by the federal government. If significant budget cuts are made at the federal level, the amount of fimds received by the Center could be reduced by an amount that could adversely impact its operations. Management is not avrare of any actions that have been taken or are proposed to be taken by the federal government that will adversely impact the Center's grant for the coming fiscal year.

12. Board of Directors Compensation

The Board of Directors is a voluntary board; therefore, no compensation or per diem has been paid to any Director.

13. Temporarily Restricted Net Assets

Temporarily restricted net asisets are available for the following specific program services as follows:

Contribution received from individual (mterest free loan for land in Greensburg) $ 8,544 Amounts released from restriction during current period (2.865)

Temporarilyrestricted net assets atOctober 31,2009 $ 5.679

14. Medical Malpractice Claims

The Center's medical malpractice insurance is covered by the Federal Tort Clauns Act.

15. Subsequent Events In December, 2009, the Center purchased land in Zachary, Louisiana for possible fiiture expansion. A note payable in tiie amount of $350,222 was obtained payable over three years at a variable interest rate which is prime rate plus two

, percentage points.

in April, 2010, note 1 (loan for Greensburg Building) was refinanced for a three year term at a fixed interest rate of 7.25%.

The Center is currently involved in exploring expansion opportunities through federal fundmg, loans, etc.

12

ST. HELENA COMMUNITY HEALTH CENTER SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS

FOR THE SIXTEEN MONTHS ENDED OCTOBER 31.2009

FEDERAL GRANTOR/ PASS-THROUGH GRANTOR/

PROGRAM TITLE

CFDA PASS-THROUGH

GRANTOR'S NUMBER

DISBURSEMENTS/ EXPENDITURES

FEDERAL

Department of Health and Human Services .<!ommtmity Health Center Program

Department of Health and Human Services -Health Center Integrated Services Development Initiative

Department of Health and Human Services -Block Grants for Prevention and Treatment

of Substance A buse

TOTALS

CFDA 93.224

CFDA 93.703

CFDA 93.959

S 3,391,201

29,643

80.153

3.500-997

13

DAIGREPONT & BRIAN A Professional Accounting Corporation Certified Public Accountants

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 A UDITING STANDARDS


We have audited die financial statements of St. Helena Community Health Center, (a non-profit organization) as of October 31,2009, and for the sixteen months then ended, and have issued our report tiiereon dated June 30,2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performmg our audit, we considered St. Helena Community Health Center's internal control over financial reportmg as a basis for designing our auditing procedures for the pmpose of expressmg our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of St. Helena Community Health Center's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe organization's internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned fimctions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a cbmbmation of deficiencies, in internal control such tiiat fiiere is a reasonable possibility that a material misstatement ofthe entity's financial statements will not be prevented, or detected and corrected on a timely b a s i s . . . .

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify, all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We identified a certain deficiency in mtemal control over financial reporting, described in the accompanying schedule of findings and questioned costs that we consider to be a material weakness in internal control over financial reporting (finding 2009-1).

Compliance

As part of obtaining reasonable assurance about whether St. Helena Community Health Center's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance vrith which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and. accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

This report is intended solely for the mformation and use ofthe audit committee, management, others witiiin the organization, and federal awarding agencies and pass-throu^ entities and is not intended to be and should not be used by anyone other than these specified parties.

Baton Rouge, Louisiana June 30,2010

6647 Government Street • Baton Rouge, U\ 70806 • Ph:(225) 927-3760 • Fax: (225) 927-3761

14

•r"r

DAIGREPONT & BRIAN A Professional Accounting Corporation Certified Public Accountants

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE

IN ACCORDANCE WITH OMB CIRCULAR A-133


Compliance We have audited the compliance of St. Helena Community Health Center (a non-profit organization) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement tiiat are applicable to each of its major federal programs for tiie sixteen months ended October 31,2009. St. Helena Community Health Center's major federal programs are identified in the smnraary of auditor's results section ofthe accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of St. Helena Community Health Center's management. Our responsibility is to express an opinion on St. Helena Community Health Center's compliance based on our audit.

We conducted our audit of compliance m 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 tiie United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profu Organizations. Those standards and OMB Circular A-133 require that we plan and perform die audit to obtain reasonable assiu-ance about whether noncompliance witii 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 St Helena Community Healtii Center'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. Our audit does not provide a legal determination on St. Helena Community Health Center's compliance with those requirements.

In our opinion, St. Helena Community Health Center complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the sixteen months ended October 31,2009.

Internal Control Over Compliarice Management of St. Helena Community Health Center is responsible for establishing and niamtaining effective internal control over compliance with requirements of laws, regulations, confracts and grants applicable to federal programs. In planning and performing our audit, we considered St. Helena Commimity Health Center's internal control over compliance with the requhements that could have a direct and material effect on a major federal program in order to determme our auditing procedures for Uie purpose of expressing our opinion on compliance, but not for the pmpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the organization's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of control over compliance does not allow management or employees, in the normal course of performing their assigned fimctions, 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, such 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 corrected, on a timely basis.

Our consideration of the internal confrol over compliance was for tiie limited purpose desq-ibed in tile first paragr^h of this section and was not designed to identify all deficiencies in internal confrol over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did hot identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

6641 Government Street • Baton Rouge, LA 70806 • Ph: (225) 927-3760 'Fax: (225) 927-3761

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This report is mtended solely for the information and use ofthe audit committee, management, others within the organization, and federal awarding agencies and pass-tiirough entities and is not intended to be and should not be used by anyone other than these specified parties.

d^y^JL^,.^ ^ / ^ ' ^ / 2 A ^

Baton Rouge, Louisiana June 30,2010

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ST. HELENA COMMUNITY HEALTH CENTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009

We have audited the fmancial statements of St. Helena Community Health Center, as of October 31,2009, and for the sixteen monUis tiien ended, and have issued our report Uiereon dated June 30,2010. 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 m Government Auditing Standards, issued by the Comptroller General ofthe United States and the provisions of OMB Circular A133. Our audit ofthe financial statements as of October 31,2009 resulted in an unqualified opinion.

Summary of Auditor's Reports

a. Report on Internal Control and Compliance Material to the Financial Statements Intenml Control

Material Weaknesses X Yes _No Significant Deficiencies Yes _X, No Compliance

Compliance Material to Financial Statements __ Yes X No b. Federal Awards

Intemal Confrol • Material Weaknesses _Yes X No Significant Deficiencies Yes X No

Type of Opinion On Compliance Unqualified X Qualified . For Major Programs Disclaimer .Adverse .

Are their'findmgs required to be reportedin accordance with Circular A-133, Section .510(a) Yes 0C_ No Was a management letter issued? _Yes X No

c. Identification of Major Programs: CFDA Number (s) \ Name of Federal Program (or Cluster)

93.224 Community Health Center Program 93.703 Health Center Integrated Services Development Initiative 93.959 Block Grants for Prevention and Treatment of Substance Abuse

Dollar threshold iised to distinguish between Type A and Type B Programs: $ 300.000 Is the auditee a'low-risk'auditee, as defined by OMB Circular A-133? _Yes XNo

Ouestioned Costs

There are no questioned costs for the sixteen months ended October 31,2009.

Finding - Financial Statement Audit

Finding 2009-1

Condition Early in 2009, the Center discovered that a now former employee had used the Center's fimds for their own personal use. Context During the year there was a change in administrative management and oversight ofthe facility. Accounting records were being scrutinized and reconciled for entry into a new general ledger system at which point management discovered the tiieft.

Effect The Center determined that a total of $29,051 had been used without autiiorization.

Cause The Center was undergoing a period of changes m administration and failed to closely monitor flie cash disbursement activities.

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ST. HELENA COMMUNITY HEALTH CENTER SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE SIXTEEN MONTHS ENDED OCTOBER 31, 2009 (Continued)

Recommendations: We suggest management implement policies and procedures over all disbursements. Such procedures would include, but not be limited to, requiring supervisor or board approval of expenditures and monthly review of bank statements and checks, bank drafts or electronic withdrawals and credit card charges.

Management's corrective action plan: St. Helena Community Health Center had aheady identified the areas for improvement and implemented financial accoimting policies and procedures to address these issues. These policies include appropriate segregation of duties witii respect to employees involved with cash disbursements, requirement for multiple signatures on disbursements exceeding $2,500 as well as board oversight.

Finding 2009-2

Condition. St. Helena Conununity Health Center failed to submit their audit report to the Legislative Auditor's office within sbc months of their fiscal year end, but did obtain an approved extension. Many changes occurred during the sixteen months ended October 31,2009, including establishing new adminisfrative and clinical management, and switching the Center's fiscal year end from June 30 to October 31.

Context The filing deadline was extended to allow more time to complete the sixteen month audit.

Effect / This findmg has no material effect on the financial statements.

Recommendations We suggest planning and preparation be made to anticipate circumstances which would delay the report beyond the required filing date.

Management's corrective action plan: St. Helena Community Health Center will focus on advanced and appropriate preparation for fiiture audits to assure timely filing of the audit reports.

ST. HELENA COMMUNITY HEALTH CENTER SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS

FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009

Summary of Prior Audit Findings

Finding 2008-1

Condition Lack of documentation for employees' and board members' travel expenses.

Recommendation Attach documentation to the travel expense reports.

Management's Response Effective July 1,2008, St. Helena Community Health Center's Board adopted new travel policies consistent witii ttie audit recommendation mandating proper documentation priw to reimbursement to St. Helena Conununity Health Center employees and/or Board members.

Status . . .

This issue has been resolved.

Finding 2008-2 .

Condition Lack of approval for employees' and board members' fravel expenses. Recommendation Travel expense reports should be approved by the Executive Director.

Management's Response , Effective July 1,2008, St. Helena Community Health Center's Board adopted new travel policies consistent with the audit recommendation. Prior approval is mandated for all employees and Board travel must be approved through full disclosure, discussion and approval by the St. Helena community Health Center's Board.

Status


Finding 2008-3 ,

Condition . The Center is not reconciling the general ledger to the accounts receivable subsidiary. The general ledger was adjusted by $303,485 on June 30, 2008. , Recommendation The Center needs to reconcile general ledger to the subsidiary on a monthly basis.

Management's Resiionse Effective July 1,2008, St. Helena Community Health Center hired new management for fiscal affairs and operations, and all general ledger activities are now reconciled monthly by the Center's fiscal staff and reviewed by management staff for accuracy and timely actions.

Status . This issue has been resolved.

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FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009 (Continued)

Summary of Prior Audit Findings-continued

Finding 2008-4

Condition An employee was being paid an hourly rate that differs from the approved pay rate in the personnel file.

Recommendation Employees should be paid the approved rate m their personnel file.

Management's Response . All personnel files are under review for salary and wage descriptions, updated job descriptions and the Center's board will consider approval of an updated step-based salary and wage scale. All pay increases and pay assignment (new hires) require review and approval by the CEO.

Status This issue has been resolved.

Finding 2008-5

Condition •The Center could not locate minutes for tiie May board meeting.

Recommendation The Center should keep minutes for all board meeting.

Management's Response. : Effective July 1,2008, St. Helena Conununity Health Center's Board minutes are maintained in a designated Board file, as well as the CEO office file, and in a data format m a secure administrative folder on the Center's network.

Status


Finding 2008-6

Condition Grant fiinds have been drawn down in excess of iunount awarded. Recommendation The Center should prepare a financial status report quarterly and determine whether additional fimds should be requested.

Management's Response TheCenter disagrees with tiiis finding. The amount drawn down was based on fimds availability as demonstrated in the DPMS-272 reports and system (complete documentation was provided to auditors). The interim management made a decision to fimd obligations relative to previous and planned operational services (dental, management, provider recruitment, equipment). These obligations have now been paid or were pending payment. The NOGA referenced serves only as authorization for what has been obligated by BPHC for ttie budget period indicated, but does not serve as flie sole source of what can and cannot be spent by the Center during a fiscal period.

Status Management feels tiiis issue has been resolved and has continued to work with HRSA to satisfy any requests for information.

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FOR THE SIXTEEN MONTHS ENDED OCTOBER 31,2009 (Continued)

Summary of Prior Audit Findings-continued

Finding 2008-7

Condition The audit report is to be submitted to the Legislative Auditor's office no more than sbt months after the end ofthe fiscal year.

Recommendation Planning and preparation should be made to anticipate circumstances which would delay report beyond the required filing date.

Management's Response Current St. Helena Community Health Center's management and the Center's Board will address timely engagement of auditor to assure timely filing for all local, state and federal compliance.

Status This issue has been repeated in 2009. An extension was granted by the Legislative Auditor's office allowing the Center to file the audit report by June 30,2010.

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