HAWAII DISABILITY RIGHTS CENTER FINANCIAL AUDITS YEARS ENDED SEPTEMBER 30, 2004 AND 2003_part1 pptx

HAWAII DISABILITY RIGHTS CENTER FINANCIAL AUDITS YEARS ENDED SEPTEMBER 30, 2004 AND 2003 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER FINANCIAL AUDITS YEARS ENDED SEPTEMBER 30, 2004 AND 2003 TABLE OF CONTENTS Page AUDITORS' REPORT AND FINANCIAL STATEMENTS Independent Auditors' Report 2-3 Statements of Financial Position 4 Statements of Activities 5-6 Statements of Functional Expenses 7 Statements of Cash Flows 8 Notes to Financial Statements 9 -12 Schedule of Expenditures of Federal Awards 13 - 14 Note to Schedule of Expenditures of Federal Awards 15 OTHER REPORTS AND SCHEDULES Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 17 - 18 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMS Circular A-133 19 - 20 Schedule of Findings and Questioned Costs 21 Summary Schedule of Prior Audit Findings 22 This is trial version www.adultpdf.com AUDITORS' REPORT AND FINANCIAL STATEMENTS This is trial version www.adultpdf.com CGM Carr, Gouveia + Matsumoto, CPAs, Inc. INDEPENDENT AUDITORS' REPORT To the Board of Directors of Hawaii Disability Rights Center Honolulu, Hawaii We have audited the accompanying statements of financial position of Hawaii Disability Rights Center (a nonprofit organization) as of September 30, 2004 and 2003, and the related statements of activities, functional expenses, and cash flows for the years then ended. These financial statements are the responsibility of the Center's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 financial statement presentation. We believe that our audits 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 Hawaii Disability Rights Center as of September 30, 2004 and 2003, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated March 29, 2005 on our consideration of Hawaii Disability Rights Center's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 assessing the results of our audit. 2 680 Iwilei Road, Suite 410 Honolulu, Hawaii 96817 Telephone: (808) 833-1183 Fax: (808) 833-0892 This is trial version www.adultpdf.com Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis 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 of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. March 29, 2005 3 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER STATEMENTS OF FINANCIAL POSITION September 30, 2004 and 2003 ASSETS Cash Accounts receivable Grants receivable Prepaid expenses Property, net of accumulated depreciation Deposits $ 2004 250,253 2,139 63,996 39,748 67,870 8,773 $ 2003 339,372 50,067 14,259 93,077 8,773 TOTAL ASSETS $ 432,779 $ 505,548 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable Refundable advance Accrued lease rent TOTAL LIABILITIES $ 11,206 3,478 12,598 27,282 $ 16,362 7,916 20,998 45,276 NET ASSETS Unrestricted Temporarily restricted TOTAL NET ASSETS 267,157 138,340 405,497 310,202 150,070 460,272 TOTAL LIABILITIES AND NET ASSETS $ 432,779 $ 505,548 See accompanying notes to 'financial statements. 4 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER NOTES TO FINANCIAL STATEMENTS September 30, 2004 and 2003 NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities Hawaii Disability Rights Center (Center) is a private, nonprofit corporation which was formed primarily to provide protection and advocacy services. These services include protecting and guaranteeing the human, civil, and legal rights of individuals of all ages with hardships, including those who are developmentally disabled, 'frail, elderly, and mentally ill, and serving as advocates on their behalf. The Governor of the State of Hawaii has designated the Center as the advocacy agency in Hawaii to receive federal funds under the Developmental Disabilities Assistance and Bill of Rights Act of 1975, the Rehabilitation Act of 1973, and the Protection and Advocacy for Mentally III Individuals Act of 1986, all as amended. The Center is supported primarily through government grants. The Center is exempt from income taxes under Internal Revenue Code Section 501(c)(3), and is not classified as a private foundation. Contributions to the Center are tax deductible. Basis of Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-far-Profit Organizations. Under SFAS No. 117, the Center 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. The Center has no permanently restricted net assets. Property and Depreciation Property acquisitions are recorded at cost. Expenditures for property costing over $500 are capitalized. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, principally five years. Contributions Contributions are recognized when received, and are recorded as unrestricted, temporarily restricted, or permanently restricted based on the nature of any donor-imposed restrictions. Restricted net assets are reclassified to unrestricted net assets upon satisfaction of purpose or time restrictions. Contributions and grants are considered to be available for unrestricted use unless specifically restricted by donor. 9 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2004 and 2003 NOTE 1 - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Promises to Give Unconditional promises to give are recognized as revenues in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional. Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities and in the statements of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. NOTE 2 - CASH Cash held by the Center at September 30, 2004 and 2003 included $203,951, and $239,247, respectively, that was not covered by insurance provided by the federal government. NOTE 3 - PENSION The Center has a simplified employee pension plan (SEP) covering all employees who have worked in at least two years of the immediately preceding five years. Total pension expense for the years ended September 30,2004 and 2003 was $58,333, and $57,848, respectively. NOTE 4 - CONCENTRATION OF REVENUE In 2004 and 2003, approximately 79%, and 73%, respectively, of the Center's revenues were provided by one State and four Federal grants. 10 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2004 and 2003 NOTE 5 - PROPERTY As of September 30, 2004 and 2003, the cost and accumulated depreciation of the Center's property were as follows: 2004 2003 Computers $ 99,743 $ 99,743 Equipment 90,845 90,845 Furniture and fixtures 20,518 16,466 Leasehold improvements 6,630 6,630 217,736 213,684 Less accumulated depreciation (149,866) (120,607) Property, net $ 67,870 $ 93,077 NOTE 6 - LEASE COMMITMENTS The Center rents office space for its operations on four islands in Hawaii. The office lease on Oahu has an expiration date of March 2006. Offices on other islands are rented on a month-to- month basis. Rent expense during the year ended September 30, 2004 and 2003 was $101,040, and $79,945, respectively, and is included in occupancy expense. Future minimum office lease payments are as follows: Fiscal year ending September 30: 2005 $ 108,413 2006 54,206 $ 162,619 The Center leases a color copier for 60 months that expires in September 2005. Rent expense during the years ended September 30,2004 and 2003 was $12,253 and $12,457, respectively, and is included in equipment rental and maintenance expense. 11 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER NOTES TO FINANCIAL STATEMENTS - Continued September 30, 2004 and 2003 NOTE 7 - CONDITIONAL PROMISES TO GIVE Conditional promises to give at September 30, 2004 and 2003 consisted of the following grants: 2004 2003 Refundable Advance as of June 30 $ 3,478 $ 7,916 Traumatic Brain Injury Protection and Advocacy Grant 46,974 35,831 Protection and Advocacy Systems: Help America to Vote 26,004 28,731 Protection and Advocacy for Beneficiaries of Social Security 22,703 Assistive Technology - State Grants for Protection and Advocacy 13,890 37,500 $ 113,049 $ 109,978 NOTE 8 - TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets as of September 30, 2004 and 2003 consisted of $138,340, and $150,070, respectively, restricted for the Protection and Advocacy for Individuals with Mental Illness program. 12 This is trial version www.adultpdf.com . HAWAII DISABILITY RIGHTS CENTER FINANCIAL AUDITS YEARS ENDED SEPTEMBER 30, 2004 AND 2003 This is trial version www.adultpdf.com HAWAII DISABILITY RIGHTS CENTER FINANCIAL AUDITS YEARS. Disability Rights Center Honolulu, Hawaii We have audited the accompanying statements of financial position of Hawaii Disability Rights Center (a nonprofit organization) as of September 30, 2004 and. opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hawaii Disability Rights Center as of September 30, 2004 and 2003, and the