HomeMy WebLinkAboutMINUTES - 07311990 - IO.2 (2) -- T --SCGf. THISIDE C0N lV';U1\ji 1-Y
BOARD CHAIRMAN
James L. Newson PROCRAM ARFAS
COmrnunity Sarvlcoe
EXECUTIVE DIRECTOR enttye Janes.Frog. Mgr.
Betty W. Fong (415) 237.4o3p
July 30, 1990 Richmond Head Start
Aurora Ruth. Nog. Mgr.
(415)237,5744
Ms. Joan Sparks, Director
Contra Costa Community Services Department (CSD)
2425 Bisso Lane, Suite 120
Concord, CA .94523
Dear Ms. Sparks:
Response to CSD Letter Dated July 24, 1990
1. No- These unearned revenue were received in 1988. Funds
remain in the Food Rebate Account.
2 . Organization Wide Audits (OWA) were not required of
contractors. CSD subcontractors were advised that the CSD
funds would be audited by an independent firm (Izabal,
Bernaciak & Co. ) and the CPA firm would perform a "field
audit" of all subcontractors to verify revenues and
expenditures of CSD contracts_ Prior to 1987 OWA
requirements, Southside's financial records were kept on a
cash basis coinciding with the monthly cash reports required
bv the Countv Auditors and CSD. -" il an
Mr. Corcoran identified the " lack of a general ledger" in the
recent meeting held on July 26, 1990 in Martinez.
Material Weakness:
Although no general ledger existed, journals were maintained
separately for each contract with appropriate supporting
documentation. Obviously, revenue and expenditures for all
contracts for 1986 through 1989 were accounted for.
Since Southside was never informed of the financial management
letter of 1986 identi ging "weakness" and since we received the
1987 final audit on July 23, 1990 with the 1988 audit due on July
30, 1990, it would have been impossible to implement the
financial management system changes for 1988 noted in the 1987
audit. This would also apply to 1989.
As reported in the July 26 , 1990 Martinez meeting, each year
since 1986, Southside requested financial workshops be conducted
for CSD contractors. It was very clear that all CSD pre-audit
subcontractors were experiencing on-going problems with that
system as well as budget preparations to date.
To date no such workshops have taken place.
989 1801 SLrect Richmond, CA 94$0] (415) 237-5744
Page 2
4, 5a, 7ai
No general ledger kept. Refer to comments on the 1986 , 1987
audit reports.
6. The 1989 audit was performed prior to the receipt of the 1988
audit. Adjustment to the .3.989 beginning balances cannot be
adjusted until the 1988 audit is received by Southside.
7b. These reportable conditions took place due to:
1. Southside yap, not notified of CSD 1986 audit report that
revealed system weakness for internal control
specifically a lack of a general ledger.
2. Despite the annual requests for technical assistance and
financial workshops to assist CSD subcontractors in
understanding the County Auditors preaudit and ' CSD
budgetary procedures; it appears Southside has maintained
the integrity of its record keeping for Head start and CSBG
revenues and expenditures for the discussion period of 1986
through 1989.
It was also noted that the Auditor's staff stated they
have no responsibility for monitoring CCFP expenditures
except when subcontractors submit CCFP remittance advice
confirmations. At that point, that amount is credited to
the subcontractors budget. Technical concerns, who then
receives and is responsible for excess Head Start funds �.
generated by CCFP offsets?
In terms of rectifying the inherent internal control
"weakness" Southside has contracted with an accountant with
fifteen (15) years non-profit accounting experience and
with a CPA whose responsibility includes ensuring a general
ledger is established and records are maintained as
required be General Accepted Accounting Procedures and as
required by our funding sources .
Page 3
Page 3 11711 - CUP Suspension:
Suspension of funds and not from program participation.
participation,
Southsidehad informed CCFP of the difficulty to force the
lrj�i_� �
CPA firm to conduct the 1987 and 1988 audits within CCFPts
time frame of an OWA by November 18th of their year. In
the previous years Auditors performed a 1'program specific
audit" - that is CCFP only. This could be conducted to
meet CCFP fiscal time frame. As a result of the OWA
requirement, many non-profits fell into the same status as
Southside. Since then Southside was sucessful in
negotiating a change of timeframes for OWA submission to
coincide with Southside's fiscal year and CSD contract
year, this institutional change took over a year to
achieve.
The County was not notified because Southside felt, the CPA
firm would finalize the 1987 and 19*88 audits prior to
October 1989. Southside also believed that this resolution
was the responsibility between Southside and CCFP.
Since CCFP was intended to supplement the Head Start
nutrition program it is inconceivable that CCFP funds held
by Southside would be liable for all salaries and fringe
benefits of the food service staff. Further, the period
CSD claim for this expense should be between October 1,
1989 through February 1990.
All matters relating to the cost owed to the County cannot
be determined at this time until the 1988 audit is
submitted and reviewed in respect to the other CCFP, funds
for 1987 and 1989.
Sincerely,
J'ames1 Newson
Chair n SSC Board
cc:
SOUTHSIDE CENTER, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31 , 1987
J 1
1
SOUTHSIDE CENTER , INC .
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31 , 1987
Page
Financial Statements
Independent Auditor ' s Report . . . . . . . . . . . . . . 1
Balance Sheet . . . . . . . . . . . . . . . . . . . . . 3
Statement of Revenue and Expenditures . . . . . . . . . 4
Statement of Changes in Fund Balance . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . 6
Supplementary Information
Opinion Supplementary Information . . . . . . . . . . . 8
Schedule of Restricted Revenue and Expenditures . . . . 9
1ZABAL, BERNACIAK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
SAN FRANCISCO
ONE MARKET PLAZA (415)898-5351
SPEAR STREET TOWER.SUITE 344 SAN JOSE
SAN FRANCISCO,CALIFORNIA 94105 (408)993.9191
Independent Auditor ' s Report
Board of Directors
Southside Center , Inc .
Richmond , California
We have audited the accompanying balance sheet of the Southside
Center , Inc . as of December 31 , 1987, the related statements of
revenue and expenditures , and changes in fund balance for the
year then ended . These financial statements are the responsibi -
Iity of the Southside Center , Inc . Our responsibility is to
express an opinion on these financial statements based on our
audit .
Except. as explained in the following paragraphs , we conducted
our audits in accordance with generally accepted auditing
standards . 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 esti -
mates made by management , as well _ as evaluating the overall
financial statementpresentation . We believe that our audit
provide a reasonable basis for our opinion .
This was our first audit of the agency' s financial statements .
The scope of our engagement did not include an audit of the
financial statements of the preceding year sufficient to enbable
us to express , and we do not express , an opinion on the consis-
tency of application of accounting principles with the preceding
year .
In our opinion , the financial statements referred to above pre-
sent fairly, in all material respects , the financial position of
the Southside Center , Inc . as of December 31 , 1987 and the
results of its operations and its changes in fund balance for
the year then ended in conformity with generally accepted
accounting principles .
As discussed in Note D to the financial statements , the agency
may be liable to funding agencies for noncompliance of contract
and grant requirements . These amounts would be established by
contract and grant specific audits .
-1 -
The ultimate outcome of this uncertainty can not presently be
determined . Accordingly , the accompanying financial statements
do not include any adjustments that miq_ ht result from the
outcome of this uncertainty .
;,&4 a"..,� .,
San Francisco , California
July 10, 1990
-2 -
SOUTHSIDE CENTER , INC .
BALANCE SHEET
DECEMBER 31 , 1987
Total
Current Funds (Memorandum
nres rTc e d R es t r i c UTT Only )
Assets
Cash $3, 006 $ 5, 776 S 8, 782
Grants Receivable
( Note B) -0- 59, 179 59, 179
Accounts Receivable
USDA & State -0- 5, 593 5, 593
Prepaid Expenses -0- 7 ,617 7 , 617
Due (To ) /From 6, 800 ( 6, 800 ) -0-
Total Assets $9 ,806 $71 , 365 $81 , 171
Liabilities and Fund Balance
Accounts Payables $-0- $61 , 775 $61 , 775
Unearned Revenue -0- 8,247 8, 247
Advances -0- 1 , 343 1 , 343
Total Liabilities -0- 71 ,365 71 , 365
Fund Balance
Unrestricted 9, 806 -0- 9, 806
Restricted -0- -0- -0-
Total Fund Balance 9, 806 -0- 9, 806
Total Liabilities and
Fund Balance $9 , 806 $71 , 365 $81 , 171
See notes to financial statements
-3-
• a
SOUTHSIDE CENTER , INC .
STATEMENT OF REVENUE AND EXPENDITURES
DECEMBER 31 , 1987
Total
Current Funds (Memorandum
Unrestricted Restricted Only )
Revenue
Grant Revenue $ -0- $431 , 828 $431 , 828
Grant Revenue/FEMA -0- 9 ,890 9 ,890
Grant Revenue/SSF -0- 2, 000 2 , 000
In-Kind ( Note D ) -0- 83 , 349 83 , 349
Total Revenue -0- 527, 067 527, 067
Expenditures
Personnel -0- 266, 163 266, 163
Fringe Benefits -0- 51 , 928 51 , 928
Travel -0- 1 , 397 1 , 397
Space Cost -0- 936 936
Food -0- 16, 682 16, 682
Shelter -0- 13 , 128 13 , 128
Equipment -0- 1 , 962 1 , 962
Supplies -0- _ 11 ,871 11 , 871
Contractual /Consulting -0- 17, 047 17, 047
Telephone -0- 336 336
Utilities -0- 732 732
Unreimbursed Head Start
Expenses 3, 082 -0- 3 , 082
Other -0- 63 , 556 63 , 556
In-Kind -0- 83, 349 83, 349
Transfer from Restricted
To Unrestricted 2, 020 ( 2 , 020 ) -0-
Total Expenditures 5 , 102 527 ,067 532 , 169
Revenue Over/ ( Under )
Expenditures $ ( 5, 102 ) $ -0- S ( 5 , 102 )
See notes to financial statements
-4 -
SOIITHSIDE CENTER , INC .
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED DECEMBER 31 , 1987
Total
Current Funds (Memorandum
Unrestricted Restricte Only )
Beginning Fund Balance
January 1 $14 , 908 $-0- $14, 908
Excess of Revenues
Over/ ( Under ) Expenditures ( 5 , 102 ; -0- ( 5 , 102 )
$ 9 , 806 $-0- $ 9 , 806
See notes to ` inancial statements
-5-
SOUTHSIDE CENTER , INC .
NOTES• TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31 , 1987
Note A: Summary of Significant Accounting Policies
1 . Background
The Southside Center , Inc . is a community based
non-•profit organization , incorporated in August
1967 . Its inception was the result of two local
community groups ' attempt to meet the unmet needs
in South Richmond , a financially low income
minority community. However , since 1979 some of
Southside ' s programs have been countywide .
Program services hav ebeen multi -displinary in the
field of human. services and agency budgets have
ranged from $200,000. 00 to 1 . 3 million dollars .
2 . Basis of Accounting
Southside Center , Inc . financial statements are
presented on the accrual basis of accounting .
Revenue is recognized when the services have been
rendered and expenses are recognized when
incurred .
3. Fund Accounting
The accounts of the Southside Center, Inc . are
organized on the basis of fund account groups .
Each fund of this entity is accounted for by a set
of self-balancing accounts comprised of assets ,
liabilities , fund equity, revenue and expenditures .
The two fund account groups presented in financial
statements are :
Unrestricted Fund
Accounts for all resources over which the governing
board has discretionary control without restriction
to use in carrying on the operations of the Clinic
in accordance with the limitation of its charter ,
bylaws and the laws to which it is subject . Within
the resources for specific purposes , projects ,
investment or the purchase of fixed assets .
Restricted Fund
Accounts for resources currently available for use
but expendable only for the operating purpose of
specified by the donor or grantor .
-6 -
Note B : Grants Receivable
Grants receivable at December 31 , 1987 consists of
amounts due from the following :
Contract Number Amount
HS/87-200 ( PA22 ) $55, 828
HS/87-216 ( PA20 ) 472
87-CS-03 CSBG 2 , 879
Total Restricted $59, 179
Note C : Fixed Assets
Fixed assets were not recorded on the books because
supporting records did not exist . However , purchases
of fixed assets during the year were expensed .
Note D : Uncertainties
The agency has been the recipient of grants and
contracts in prior years . These grants and contracts
contained specific requirements pertaining to compli -
ance matters and are subject to contract and grant
specific audits . Noncompliance may result in amounts
owed to funding agencies . These amounts if any cannot
be determined at this time . Management is of the
opinion that the agency has complied with all major
contract compliance matters .
Note E : In-Kind Contribution
The fair market value of services donated to the agency
have been recorded as in-kind revenue and the corre-
sponding entry is shown as in-kind expenditures . The
amounts are shown as part of the agency' s share of con-
tributions as required by the grantor of the Head Start
Program.
- 7 -
IZABAL, BERNACIAK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS ,
SAN FRANCISCO
ONE MARKET PLAZA
(b 15)898-5551
SPEAR STREET TOWER•SUITE 344 SAN JOSE
SAN FRANCISCO•CALIFORNIA 94105 (408)993-9191
Board of Directors
Southside Center , Inc .
Richmond , California
We have examined the financial statements of the Southside
Center , Inc . and our report thereon is presented in the
preceding section . That examination was made for the purpose of
forming an opinion on the basic financial statements taken as a
whole . The following information is presented for purposes of
additional analysis and is not a required part of the basic
financial statements . Such information has been subjected to
the auditing procedures applied in the examination of the basic
financial statements , and , in our opinion the information is
fairly stated in all material respects in relation to the basic
financial statements taken as a whole .
` f
San Francisco , California
July 10, 1990
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SOUTHSIDE CENTER, INC.
INDEPENDENT AUDITOR 'S REPORT ON INTERNAL CONTROL
STRUCTURE RELATED MATTERS
AND
INDEPENDENT AUDITOR 'S REPORT ON COMPLIANCE WITH
LAWS AND REGULATIONS
FOR THE YEAR ENDED DECEMBER 31, 1987
IZABAL, BERNACIAK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
ONE MARKET PLAZA BAN FRANCISCO
)898-5551
SPEAR STREET TOWER.SUITE 344 SAN JOSE
SAN FRANCISCO.CALIFORNIA 94105 (408)993.9191
Independent Auditor ' s Report On Internal Control
Structure Related Matters
Board of Directors
Southside Center , Inc .
San Francisco , California
We have audited the financial statements of Southside Center ,
Inc . for the year ended December 31 , 1987 and have issued our
report thereon dated July 10, 1990 .
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards , issued by
the Comptroller General of the United States revised 1988.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial state-
ments are free of material misstatement .
In planning and performing our audit of the financial statements
of Southside Center , Inc . for the year ended December 31 , 1987,
we considered its internal control structure in order to
determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and not to provide
assurance on the internal control structure .
The management of Southside Center , Inc . is responsible for
establishing and maintaining an internal control structure . In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures . The objectives of an internal control structure are
to provide management with reasonable , but not absolute ,
assurance that assets are safeguarded against loss from
unauthorized use of disposition , and that transactions are
executed in accordance with management ' s authorization and
recorded properly to permit the preparation of financial
statements in accordance with generally accepted accounting
principles . Because of inherent limitations , in any internal
control structure , errors or irregularities may nevertheless
occur and not be detected . Also , projection of any evaluation
of the structure to future periods is subject to the risk that
procedures may become inadequate because of chanoes in
conditions or that the effectiveness of the design and operation
of policies and procedures may deteriorate .
-1 -
For the purpose of this report , we have classified the signifi -
cant internal control structure policies and procedures . in the
following categories :
Cash
Revenue
Expenditures
Payroll
Receivables
For 'all of th.e control categories listed above , - we obtained an
understanding of the design and relevant policies and procedures
and whether they have been placed in operation , and we assessed
control risk .
We noted certain matters involving the internal control struc-
ture and its operation that we consider to be reportable condi -
tions under standards established by the American Institute of
Certified Public Accountants . Reportable conditions involve
matters coming to our attention relating to significant defi -
ciencies in the design or operation of the internal control
structure that , in our judgment , could adversely affect the
organization ' s ability to record , process , summarize , and report
financial data consistent with the assertions of management in
the financial statements .
A material weakness is a reportable condition in which the
design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that
errors or irregularities in amounts- that would be material in
relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the
normal course of performing their assigned functions .
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control struc-
ture that might be reportable conditions and , accordingly, would
not necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above . However ,
we noted the following reportable conditions that we believe to
be material weaknesses .
1 . No Agency General Ledger
Finding : The only formal set of accounting records were
check books and files with supporting documenta-
tion . Management had to reconstruct all transac-
tions to derive balances to be audited .
-2 -
Recommendation : A general ledger should be maintained by
Southside Center , Inc . utilizinq the
double-entry method of accounting .
2 . Proficiency of Accounting Personnel
Finding : Accounting staff were not proficient or knowledge-
able in accounting concepts , policies , and proce-
dures as demonstrated by the lack of an adequate
system of accounting .
Recommendation : Management should insure that accounting
staff are proficient and knowledgeable in
accounting matters and that 'they are pro-
perly trained and supervised to insure the
reliability of its accounting records .
Agency Response : Each. Southside accounting personnel had diffi -
culty attempting to reconcile records on both
a cash and accrual basis . Southside lost two
accountants due to this difficulty despite
every effort to ameliorate , dispute or under-
stand the expectations of the pre-audit
reimbursement system and maintain all records
on a cash basis to coincide with the County
auditors request for cash basis records only.
Annual requests for workshops for
subcontractors to discuss these issues never
materialized .
3 . Maintenance of Supporting Evidential Matter
Finding : It was noted during our examination that pertinent
supporting documentation was difficult to retrieve
due to the lack of, an adequate system of account-
ing and accounting personnel .
Recommendation : Management should establish a record system
that provides a method that enhances the
accounting system.
4 . No Fixed Asset Listing or Ledger
Finding : Fixed assets purchased with grant funds were not
accounted for in a formal set of records .
Recommendation : A formal fixed asset control policy should
be adopted .
This report is intended for the information of the board of
directors , management and funding agencies . This restriction is
not intended to limit the distribution of this report , which ,
upon acceptance by the funding agencies , is a matter of public
record .
San Francisco , California
July 10, 1990
-3-
IZABAL, BERNACIAK & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
SAN FRANCISCO
ONE MARKET PLAZA (415)898-5351
SPEAR STREET TOWER.SUITE 344 SAN JOSE '
SAN FRANCISCO.CALIFORNIA 94105 (408)993.9191
Independent Auditor' s Report On Compliance
With Laws and Regulations
Board of Directors
Southside Center , Inc .
Richmond , California
We have audited the financial statements of Southside Center ,
Inc . for the year ended December 31 , 1987, and have issued our
report thereon dated July 10, 1990.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards , issued by
the Comptroller General of the United States revised 1988.
Those standards require that we plan and perform the audit to
obtain- reasonable assurance about whether the financial state-
ments are free of material misstatement .
0
Compliance with laws , regulations , contracts , and grants appli -
cable .to the Southside Center , Inc . is the responsibility of the
Southside Center , Inc . ' s management . As part of obtaining
reasonable assurance about whether the financial statements are
free of material misstatement , we performed tests of the
Southside Center , Inc . Is compliance with certain provisions of
laws , regulations , contracts , and grants. However , it should be
noted that our objective was. not to provide an opinion on
overall compliance with such provisions .
The results of our tests indicate that , with respect to the
items tested , the Southside Center , Inc . complied , in all
material respects , with the provisions referred to in the
preceding paragraph . With respect to items not tested , nothing
came to our attention that causes us to believe that the
Southside Center , Inc . had not complied , in all material
respects , with those provisions .
This report is intended for the information of the board of
directors , management , .and funding agencies . This restriction
is not intended to limit the distribution of this report , which ,
upon acceptance by the funding agencies is a matter of public
record .
San Francisco , California
July 10, 1990
-4-
12:03 SOLITHS I DE CENTER - _ .. _ - •_ _ _ _ _
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SOUTHSIDE CENTER, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 319 1988
12:04 SOUTHSIDE CENTER
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SOUTHSIDE CENTER, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31 19$8
TABLE OF CONTENTS
financial Statements
Independent Auditor ' s Report 3
Balance Sheet
Statement of Rtvcnue and Expenditures 3
Statement of Changes in Fund Balance 4
Notes to- Financial Statements 5
Supplementary Information
Opinion Supplementary Information 1
Schedule of Restricted Revenue and Expenditures 8
Schedule of Federal financial Assistance 9
TJL 30 `90 12:04 SOUTHSIDE CENTER 4152375746 T0: 4156465551 PO4
07%'3u, 494u 10tG: FROM IIABAL B6F.t+ACI�/••..
JUL 30 '90 12:10 SOUTHSIDE CENTER 4152375746 T0: 4156Z65551'P01
SOUTHSIDE CENTER, INC .
NOIES TO FINANCIAL STATEMENTS
FOR THF YEAR ENDED DECEMBER 31, 1938
Note A Summary of Significant Accounting Policies-
1 .
olicies1 . Background
The Southside Center , Inc . is a community based
non-profit organization , incorporated in August
1967. Its inception, was the result of two local
community groups ' attempt to ineet the unmet need,;
in South Richmond , a financially low income
minority cummunity . However, since 1979 some of
Southside ' s programs have been countywide .
Program services have been multi -displinary in the
field of human services and agency budgets have
ranged from 3200,000. 00 to 1 . 3 million dollars .
2 . Basis of Accounting
Southside Center, Inc . financial statement, are
presented on the accrual basis of accounting.
Revenue is recognized when the services have becn
rendered and expenses are recognized when
incurred .
3 . Fund Accounting
The accounts of the Southside Center , Inc . are
organized on the basis of fund account groups .
Each fund of this entity is accounted for by a set
of self-balancing accounts comprised of assets ,
liabilities , fund equity, revenue and expenditures .
The two fund account grnups presented in financial
statements are :
Unrestricted Fund
Accounts for all resources over which the governing
board has discretionary control without restriction
to use in carrying -on the operations of the. Center
in accordance with the limitation of its charter ,
bylaws and the laws to which .i_t is subject . Within
the resources for specific purposes , projects ,
investment or the purchase of fixed assets .
AL 30'90 12:11 SOUTHSIDE CENTER 4152375746 TO 4156465551 P02
Restricted Fund
Accounts for resources currently available for use
but expendable only for the operating purpose of
a .
specified by the donor or grantor.
Note B: Grants Receivable
Grants receivable at December 31 . 1988 consists of
amounts due fpm the following :
Contract Number Amount
Headstart $1339176
CSBG 6,499
Tctal Restricted $1394675
Note C : Fixed Assets
Fixed assets were not recorded on the books because
supporting records did not exist . However : purchases
of fixed assets during the year were expensed .
Note G : In-Kind Contribution .
The fair market value or services donated to the agency
have been recorded as in-kind revenue and the corre-
sponding entry is shown as in-kine expenditures . Tha
amounts are shown as part of the agency's share of con-
tributions as .required by the grantor of the Head Start
Program.
�� • . . �� • •..V.• •�liV.•. ..r�fJVi iMi l.. S. LL' TIS •. .'t 7;i P
JUL 30 '90 12:12 SDUTHSIDE CENTER 4152375746 T0: 4156465551 P.03'
SOUTHSIDE DENIER , INC .
SCHEDULE OF FEDERAL. FINANCIAL ASSISTANCC
FOR THE YEAR ENDED DECEMBER 31 , 1968
t
CFDA
GrantorT Number Revenue Expenditures
U. S. Department of Health
and Human Services
• Passed through
Contra Costa County
Community Services
Department
Community Services Block
Grant 13.972 $ 459611 S 45,611
Headstart 13 .600 4882006 4889006
ILIITotal 533, 617 533, 617
U.S. Department of
Agriculture
tk
M Passed through
1 California State
Department of Education
Child Care F000d Program 10. 558 190727 191727
Total Federal Funds $553, 344 $553, 344
See notes to financial statements
�JL M„'90 12:12 SOUTHSIDE CENTER 4152375746 TO: 4156465551 PO4
r
Board of Directors
Southside Center , Inc .
Richmond . California
i
We have exam1ned the financial statements of the Southside
Center, Ir,c . and our report thereon is presented in the
preceding section . That examination was made for the purpose of
forming an opinion on the basic financial statements taken as a
whole . The following information is presented for purposes of
additional analysis and is not a required part of the basic
financial statements . Such information has been subjected to
the auditing procedures applied in the examination of the basic
financial statements , and , in our opinion the information is
fairly. stated in all material respects in relation to the basic e
financial statements taken as a whole .
San Francisco, California
July 20. 1990
JUL 30 190 12:13 SOUTHSIDE CENTER 4152375746 TO: 4156465551 P05`
SOUTHSIDE CENTER, INC .
SC14EDULE OF P,ESTRICTED REVENUE AND EXPENDITURES
FOR THE FISCAL YEAR, ENDED DECEMBER 31 , 1988
Headstart Prugra: Food
(PA 22) (?A 20) _Improvement Rebate CSBG iFj1A Total
Revenue
Grant Revenue $4190"7 $1,083 $2,450 S -0- $45,611 S -0- $468,731
Grant Revenue/FEMA -0- -0- -0- _U -0- 20,443 209443
.Grant Revenue/COFP -0- -0- -O- - 19,727 -0- -0- 19,727
In-Kind 64,886 -0- -0- -U- -0- -0- 64.886
Total Revenue 484,473 1.093 2,450 19,/Zl 45,611 20.1-1-3 573,787
Expenditures
Per►onnel 228,264 -0- -0- -0- 34,713 -0- 262,977
Fringe Benefits 46.951 -0- -0- -0- 5,635 -0- 52,586
Travel 4,844 75 -a- -0- -0- -Jz 4,919
Space Coat -0- -0- -0- -0- 10728 -0- 1,728 i
Food -0- -0- -0- 19,727 -0- -0- 19,721
Equipmcnt 15,097 -0- 2.450 -0- 1,115 -0- 181662
Supplies 199420 993 -0- -0- -0- -n- 20,413
Contract uallConouiting 28,615 -0- -0- -0- 300 -0- 28,915
Other . 76,396 15 -0- dl- 791ZU 209443 98,974
In-Kind 64,886 -0- -0- �!_� -0- -0- -64,886
Total Expenditures 484,473 1.063 2.450 19,727 0,611 20,443 573,787
Revenue Over/(Under)
Ei.pendituras S -0- S -0- $ -0- $ -0- $ -0• S -0- S -0-
See notes to financial statements
t
ML 30''90 12:07 SOOTHSIDE CENTER 4152375746 TO: 4156465551 P01
Independent Auditor 's Report
e
Board of Directors
Southside Center , Inc .
Richmond , California
We have audited the accompanying balance sheet of the Southside
Center , Inc . as of December 31 , 1988 the related statements of
revenue and expenditures , and changes in fund balance for the
year then ended . These financial statements are the
responsibility of the Southside Center , Inc . Our responsibility
is to exaress an opinion on these financial statements based on
our audit .
We conducted our audit in accordance with generally accepted
auditing Standards and Government Auditing Standards issued by
the Comptroller General of the United States , revised 1988.
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 d LesL bdsis , 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 audit
provide a reasonable basis for our opinion .
In our opinion , the financial statements referred to above pre-
sent fairly, in all material respect$ , the financial position of
the Southside Center, Inc. as of .Decembe.r 31, 1988 and the
results of Its operations and its changes in fund balance for
the year then ended in conformity with generally accepted
accounting principles .
San Francisco , California
July 20, 1990
JUL-30 190 12:08 SOUTHSIDE CENTER 4152375746 TO: 4156465551 P02
SOUTHSIDE CENTER , INC .
BALANCE SHEET
DECEMBER 31, 1988
a
Total
Current Funds (Memorandum
Unrestricted Restricts Only )
Assets
Cash $ 27687 S 39837 S 60524
Grants Receivable
(Note B) -0- 139,675 1399675
Accounts Receivable
USDA & State -0- 119231 119231
Due (To) /From 99131 9,131 ) -0-
Total Assets $119818 $1452612 51571430
Liabilities and Fund Balance
Accounts Payable S 2, 397 130, 544 $1329941
Unearned Revenue -0- 149173 149173
Advances -0- 895 895
Total Liabilities 2 ,397 1459612 1489009
Fund Balance
Unrestricted 91,421 -0- 91,421
Restricted -0- -0- -0-
Total Fund Balance 99421 -0- 99421.
Total Liabilities and
Fund Balance $119818 $1451612 $1572430
See notes to financial statements
10 237674$
07�30�1976 ias64 f►.^" I2pEkl BERNAC :9i" w Co.
SOUTHSIDE CENTER, INC.
STATEMENT OF REVENUE AND EXPENDITURES
DECEMBER 31t _1988
Total
Current Funds (Memorandum
Vnres ric a es r cte Only)
Revenue
Grant Revenue/H/S-CSBG $ -0- 5468,731 $4682731
Grant Revenue/FEMA -0- 201,443 20,443
Grant Revenue/CCFP -0- 190727 19, 727
Other Revenue 40747 -0- 49747
In-Kind (Note D) -il- 64,886 64 886
Total Revenue 49747 5736787 578,534
Expenditures
Personnel -0- 2629977 262,977
Fringe Benefits O- $20586 52 ,586
Travel -0- 4,919 40919
Space Cost -0- 1 ,728 10,126
Food -0- 199727 19, 727
Equipment -0- 18,662 18,662
Supplies -0- 20,413 200413
Contr4ctuel /Consulting -0- 28,915 28,915
Other 5, 132 980974 104, 106
In-Kind -0- 64,886 64,886
Total Expenditures 50132 573,787 578,919
Revenue over/ (Under )
Expenditures E 385) $ -0- $ 385)
See notes to financial statements
JUL 30 '96 ,12-09 SOUTHS I DE CENTER - _: � .
4152375746 T0: 4156465551 PO4
SOUTHSIDE CENTER, INC .
STATEMENT OF CONGES IN FUND BALANCE
FOR THE YEAR ENDEU DECEMBER 31, 1988
Total
Current Funds (Memorandum ,
nres ricte esttr_ci Only )_
Beginning Fund Balance
January $9,806 $-0- $99806
Excess of Revenues
over/ (Under ) Expenditures ( 385 ) -0- ( 385 )
$9,421 S-O- S9,a21
See notes to financial statements
JUL 30"90 12:24 SOUTHSIDE CENTER _ 4152375746 TO: 4156465551 P01
R
SOUTHSIDE CENTER , INC .
INDEPENDENT AUDITOR 'S REPORT ON INTERNAL CONTROL
STRUCTURE RELATED MATTERS
AND
TNnrocunruT ^iinvTno4c ar000T nu rnwnl Teurr I'll Y's
.11L 3o 190 12:25 SOUTMSIDE CENTER 4152375+46 TO: 4156465551 .P0='
Independent Auditor's Report On Internal Control
Structure Related Natters
Board of Directors
Southside Center , Inc .
San Francisco , .California
We have audited the financial statements of Southside Center ,
Inc . for the year ended December 31 , 1988 and have issued our
report thereon dated duly 20, 1990.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards , issued by
the Comptroller General of the United States revised 1988.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial state-
ments are free of material misstatement .
In planning and performing uur audit of the financial statements
of Southside Center , Inc . for the year ended December 31, 1987,
we considered its internal control structure in order to
determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and not to provide
assurance on the internal control structure.
The management of Southside Center , Inc . is responsible for
establishing and maintaining an internal control structure . In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. The objectives of an internal control structure are
to provide management with reasonable, but not absolute ,
.assurance that assets are safeguarded against loss from
unauthorized use of disposition, and that transactions are
executed in accordance with management' s authorization and
recorded properly to permit the preparation of financial
statements in accordance with generally accepted accounting
principles . Because of inherent limitations in any internal
control structure, errors or irregularities may nevertheless
occur and not be detected . Also, projection of any evaluation
of the structure to future periods is subject to the risk that
procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation
of policies and procedures may deteriorate .
JL1L. 30 '190 12:26 SOUTHSIDE CENTER 4152375746 T0: 4156465551 P03
IS, 0 ] 1e JY rf•w f9 i,w6ul r«IliML lwr. LV. .IV .. .7e 4I
For the purpose of this report , we have classified -tile signifi -
cant internal control structure policies and procedures in the
following categories :
Cash
Revenue
� . Expenditures
Payroll
Receivables
For all of the control categories listed above , we obtained an
understanding of the design and relevant policies and procedures
and whether they have been placed in operation , and we assessed
control risk .
We noted certain matters involving the internal control struc-
ture and . itc operaLion that we consider to be reportable condi -
tions under standards established by the American Institute or
Certified Public Accountants . Reportable conditions involve
matters coming to our attention relating to significant defi -
ciencies in the design or operation of the internal control
structure that , in our judgment , could adversely affect the
organization ' s ability to record , process, summarise, and report
financial data consistent with the assertions of management in
the financial statements .
A material weakness is a reportable condition in which the
design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur acid
not be detected within a timely period by employees in the
normal cnurse of performing their assigned functions .
Our consideration of the internal control structure would not
necessarily disclose all matters in the Internal control struc-
ture that might be reportable conditions and, accordingly, would
not necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above . However.
we noted the following reportable conditions that we believe Lo
be material weaknesses .
Status of Prior Period Reportable Conditions
1 . No Agency General Ledger
Finding : The only formal set of attounting records were
check books and files with supporting documenta-
I. ion . Management had to reconstruct all transac-
tions to derive balances to be audited .
JUL 30-'90 12:26 SOUTHSIDE CENTER- - 41523757.46 T0: 4156455551 -PO4
Recommendation : A general ledger should be maintained by
Southside Center , Inc . utilizing the
double-entry method of accounting .
Current : Recommendation has not been implemented .
Agency Response : 7o prior period reportable conditions . Since
1987,, .audit was received by Southside on July
23, 1990, any or all recommendations could not
be implemented prior to 1988.
Southside discovered at d county called meet-
ing on July 26, 1990 that an external audit of
1986 CSD subcontractors identified the lack of
a general ledger in Southside ' s accounting
procedure . This critical fact was never dis-
closed or discussed with Southside by the
Community Services department or the County
auditor ' s office to correct its accounting
procedures .
2. Proficiency of Accounting Personnel
Finding : Accounting staff were not proficient or knowledge-
able in accounting concepts, policies , and proce-
dures as demonstrated by the lack of an adequate
system of accounting .
Recommendation : Management should insure that accounting
staff are proficient and knowledgeable in
accounting matters and that .they are pro-
perly trained and supervised to insure the
reliability of its accounting records .
Agency Response : Each Southside accounting personnel had diffi-
culty attempting to reconcile records on both
a cash and accrual basis . Southside lost two
accountants due to this difficulty despite
every effort to ameliorate , dispute or under-
stand the expectations of the pre-audit
reimbursement system and maintain all records
on a cash basis to coincide with the County
auditors request for cash basis records only.
Annual requests for workshops for subcontrac-
tors to discuss these issues never material-
ized .
Current : Recommendation has not been implemented.
'I'�Vt+ I I t 44 Fwon s�uf:r i c.c,.�.. .... 4156465551 P05
' 4152375746 TO,
3UL' 30 90 12:27 SOUTHSIDE CENTER
V .
3. No Fixed Asset Listing or Ledger
Finding : Fixed assets purchased with grant funds were not
accounted for in a formal set of records .
Recommendation : A formal fixed asset control policy should
be adopted .
Current : Recommendation has not been implemented .
This report is intended for the information of the board of
directors , management and funding agencies . This restriction is
not intended to limit the distribution of this report , which ,
upon acceptance by the funding agencies , is a matter of public
record .
an Francisco, California
July 209 1990
' 1 i
J
SOUTHSIDE COMMUNITY CENTER
AUDITED FINANCIAL STATEMENTS
DECEMBER 31 , 1989
SOUTHSIDE COMMUNITY CENTER
TABLE OF CONTENTS
PAGE
AUDITOR 'S OPINION 1
BALANCE SHEET 3
STATEMENT OF REVENUE AND EXPENDITURES 4
STATEMENT OF CHANGES IN FUND BALANCE 5
NOTES TO THE FINANCIAL STATEMENTS 6
SUPPLEMENTARY INFORMATION
AUDITOR 'S REPORT ON INTERNAL CONTROL 8
COMPLIANCE REPORT FOR AUDITS PERFORMED IN ACCORDANCE .
VY
"1T1ILLT C0V7RNMENT AUDITING STANDARDS 12
SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL 14
ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH GENERAL
REQUIREMENTS APPLICABLE, TO MAJOR AND NONMAJOR
FEDERAL FINANCIAL ASSISTANCE PROGRAMS 15
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 17
i
DH ,
La Verne Braxton
Certified Public Accountant
46 Shattuck Square, Suite 23
Berkeley, CA 94704
(415)841-1710
Board of Directors
Southside Community Center
989 - 18th Street
Richmond, CA 94801
I have audited the accompanying balance sheet of Southside
Community Center as of December 31, 1989. and_the_related
statements of changes in fund balance and revenue and
expenditures for .the year then ended. These
financial statements are the responsibility of the agency's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
Except as discussed in the following paragraphs, I conducted - my
audit in accordance with generally accepted auditing standards
and the standards for financial and compliance audits contained
in the Standards for Audits of Governmental organizations,
Programs, Activities and Functions issued by the U.S. General
Accounting office and the Single Audit Act of 1984. Those .
standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
`^`^-^^}n A^ audit includes examining, on
free of material itil5o�n..<....,.......
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. I believe that my audit provides a reasonable
basis for my opinion.
The financial statements for the year ended December 31, 1988,
were unaudited. Consequently, beginning balance sheet items and
their effect on the current year's revenue, support, and
expenditures could not be completely determined.
In my opinion, except for the effects of such adjustments, if
any, as might have been determined to be necessary, had December
31, 1988 audited balances been available, the financial
statements referred to above present fairly, in all material
respects, the financial position of Southside Community Center on
December 31, 1989, and the results of its operations for the year
then ended, in conformity with generally accepted accounting
principles.
1
My audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplementary information is presented for purposes of additional
analysis and is not a required part of the basic financial
statements. The supplementary information has been subjected to
the auditing procedures applied in the audit of the basic
financial statements. In addition, the additional information on
pages A to 17 inclusive, is presented in conformity with the
Audit Guide for Auditors of Child Development programs Adminis-
tered by Private, Private NonProfit, and Public Agencies (for the
fiscal year 1989-90) issued by the California State Department of
Education. In my opinion, the accompanying supplementary infor-
mation, is fairly presented in all material respects in relation
to the basic financial statements taken as a/ whole.
LA VERNE BRAXTON
June 30, 1990
Revised July 2, 1990
t
2
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5
SOUTHSIDF. COMMUNITY CENTER
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31 , 1989
1 . Summary of Significant Accounting Policies
Southside Community center ( the agency ) is a non-profit
corporation recognized as tax exempt under Internal Revenue
Code Section 501 ( C )3 and California Revenue and Taxation Code
Section 27801 ( 4) .
Fixed assets are recorded at cost and depreciated over their
estimated useful lives .
2. Unaudited Prior Balances
At the date of this report, the financial statements for the
year ended December 31 , 1988 remained unaudited . As a result ,
the beginning fund balances appearing in these financial state-
ments are uuaud ted . If. and when , audited , those balances
might have an effect on the amounts reported herein, for
revenue and expenditures . The amouuts , if any , resulting
frow an;; adi>>stments from the beginning, balances , is believed
by management to be immaterial . However , the lack of .audited
beginning balances has precluded the presentation of an
audited Statement of Cash Flows , for the year ended December
31 , 1989 .
3. Grants Receivable
Southside Community Center has not been in compliance with
the requirements of the .Child Care Food Program due to lack of
submission of their organization wide audits to that funding
agency. As a result , the agency has not been reimbursed for
monthly claims submitted for the months beginning June 1989
to the present . The agency has submitted claims for reimburse-
ment for June - December 1989 in the amouut of $ 14 ,607. It is
unknown, at this report , what amount , if any, of those claims
will be reimbursed .
The agency erroneously billed- and was reimbursed , by its
Headstart contract for .food costs , properly reimbursed by the
Child -Care Food Program, in the amount of $ 11 , 228, for 1989 .
That amount has been deducted from the amount calculated as
otherwise due on the Headstart Contract at December 31 , 1989 ,
and is reflected in the net amount of interfund receivables
and payables at December 31 , 1989 .
4, Interfund Receivable/Payable
The interfund receivable and payable balances at December
31 , . 1989 represent net amounts due or receivable for expenses
advanced or erroneously reimbursed.
6
i
w. a
SOUTHSIDE COMMUNITY CENTER
NOTES TO THE FINANCIAL STATEMENTS - CONT 'D
DECEMBER 31 , 1989
5 . Fixed Assets
Purchases of fixed assets with County funds have been pre-
viously charged as expenditures to the funding contract . An
amount for fixed assets was not recorded on the books . However
an inventory of fixed assets has been maintained . Verified fixed
assets with a determinable remaining useful life, purchased in
prior years, have been capitalized in the . amount of $48, 200 ,
which represents historical costs . Accumulated and current
depreciation on those assets have been recognized in these
financial statements.
A copier and the telephone system on which monthly contract
payments ..are being made, are included in the amount -of fixed
assets capitalized, referred to .in the preceeding paragraph .
These amounts were capitalized as they represent purchases of
equipment , as opposed to lease payments . However , at the date
of this report the amount of the remaining contract payments ,
if any, could not be determined . Consequently, those payments
made in the current year have been charged .against fund balance
for the capitalized cost and unrecorded liability .
6 . Long Term Lease Ccmmnit e^tc
The agency is liable for lease payments on the site it
occupies, thru September 30 , 1991 .
Total rental payments for 1989 were $27 , 132.
Future lease commitments are as follows :
Year ending December 31 , 1990 $35 , 460
Period ending September 30 , 1991 $31 , 320
7
j La Verne Braxton
Certified Public Accountant
46 Shattuck Square, Suite 23
Berkelev, CA 94704
(415) 841-1710
Board of Directors
Southside Community Center
989 - 18th Street
Richmond, CA 94801
I have audited the general purpose financial statements of
Southside Community Center for the year ended December 31, 1989 ,
and have issued my report thereon dated June 20 , 1990. As part
of my audit, I made a study and evaluation of the internal
control systems, including applicable internal administrative
controls, used in administering federal financial assistance
programs to the extent I considered necessary to evaluate the
systems as required by generally accepted auditing standards,
Government Auditing Standards, issued by the Comptroller General
of the United States, the Single Audit Act of 1984 , and the
provisions of Office of Management and Budget Circular A-128,
"Audits of State and Local Governments. " For the purpose of this
report, we have classified the significant internal accounting
and ad P4 nistrative controls used in administering federal
financial assistance programs in the following categories:
Cash receipts
Cash disbursements
Payroll
Property and equipment
General ledger
External financial reporting
The management of Southside Community Center is responsible for
establishing and maintaining internal control systems used in
administering federal financial assistance programs. In
fulfilling that responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal
control systems used in administering federal financial
assistance programs are to provide management with reasonable,
but not absolute, assurance that, with respect to federal finan-
cial assistance programs, resource use is consistent with laws,
regulations, and policies; resources are safeguarded against
waste, loss, and misuse; and reliable data are obtained, main-
tained, and fairly disclosed in reports.
Because of inherent limitations in any system of internal
accounting and administrative controls used in administering
federal financial assistance programs, errors or irregularities
may nevertheless occur and not be detected. Also, projection of
8
any evaluation of the systems to future periods is subject to the
risk that procedures may become inadequate because of changes in
conditions or that the degree of compliance with the procedures
may deteriorate.
My study included all of the applicable control categories listed
above. During the year ended December 31, 1989 , Southside
Community Center expended 100 percent of its total federal finan-
cial assistance under major federal financial assistance pro-
grams. With respect to internal control systems used in adminis-
tering majcr federal financial assistance programs, my study and
evaluation included considering the types of errors and irregu-
larities that could occur, determining the internal control
procedures that should prevent or detect such errors and irregu-
larities, determining ;whether the necessary procedures are pre-
scribed and are being followed satisfactorily, and evaluating any
weaknesses.
With respect to the internal control systems used solely in
administering the nonmajor federal financial assistance programs
of Southside Community Center, my study and evaluation was
limited to a preliminary review of the systems to obtain an
understanding of the control environment and the flow of
transactionsr through the accounting system. My study and
evaluation of the internal control systems used solely in admin-
istering the nonmajor federal financial assistance programs of
Southside Community Can to aid .^.ot e:,=anal beyond this preliminary
review phase.
My study and evaluation was more limited than would be necessary
to express an opinion on the internal control systems used in
administering -he federal financial assistance programs of
Southside Community Center. Accordingly, I do not express an
opinion on the internal control systems used in administering
the federal fi,zai:cial assistance programs of Southside _ Communitv
Center. Further, I do not express an oainion on the internal con-
trol systems used in administering the major federal financial
assistance programs of Southside Community Center.
Also, my audit, made in accordance with the standards mentioned
above, would not necessarily disclose material weaknesses in the
internal control systems used solely in administering nonmajor
federal financial assistance programs .
However, my study and evaluation and my audit disclosed the
following conditions that I believe result in more than a
relatively low risk that errors or irregularities in amounts that
would be material to a federal financial assistance program may
occur and not be detected within a timely period.
9
' H
J Y
1. Southside Community Center maintained no general ledger for
the year under audit.
A general ledger is necessary for the proper classification
and accumulation of amounts expended, by funding source; and
to provide a proper audit trail from the original books of
entry to the financial statements. At the date of this
report, a general ledger system was in place for the year
beginning January 1, 1990.
2. Prior year's fixed asset acquisitions were not recorded in
the financial statements. Current year's fixed asset pur-
chases were expensed as program improvements.
Due to the lack of a general ledger (see comment #1 above)
and unaudited prior years' financial statements (see comment
#3 below) , fixed asset records have not been maintained,
except by inventory listing. This does not provide an
adequate record of items belonging to the agency (or return-
able to the funding source) with acquisition dates and
costs.
3. Southside Community Center has not obtained audited
financial statements (organization wide audits) for the
years ended December 31, 1987 and 1988 .
Southside Community Center is required by contract with the
California State Department of Education, Child Care Food
Program, to provide annual organization wide audits within
specified time periods. Those time deadlines have since
passed, making Southside Community Center out of compliance
with regulations regarding the Child Care Food Program.
These conditions were considered in determining the nature,
timing, and extent of the audit tests to be applied in (1) my
audit of the 1989 general purpose financial statements and (2) my
audit and review of compliance with laws and regulations,
noncompli^.nce with which we believe could have a material effect
on the allowability of program expenditures for each major feder-
al financial assistance program and nonmajor federal financial
assistance programs. This report does not affect our reports on
the general purpose financial statements and- on Southside Commu-
nity Center's compliance with laws and regulations dated June 30,
1990.
10
This report is intended solely for the use of management and the ,
California State Department of Education and the Community
Services Department of Contra Costa County and should not be used
for any other purpose. This restriction is not intended to limit
the distribution of this report, which, upon acceptance by
Southside Community Center, is a matter of public record.
LA VERNE BRAXTON
June 30, 1990
REVISED JULY 2, 1990
11
LB La Verne Braxton
Certified Public Accountant
46 5hattuck Swam Suite 23
Berkeley, (.A 14704
(415).9414770
Board of Directors
Southside Community Center
989 - 18th Street
Richmond, CA 94801
I have audited the financial statements of Southside Community
Center at December 31, 1989, and have issued my report therscr.
dated June 30, 1990.
I conducted my audit in accordance with generally accepted audi-�:-
.ng standards and Government Auditing Standards, issued by -he
Comptroller General of the United States. These standards
re-
quire that I plan and perform the audit tc obtain reasonable
assurance about whether the financial statements are `ree c
material misstatement.
Compliance with laws, r=_gulaticns, contracts, and grants
applicable to Southside Community Center is t7e responsibility cf,
Southside Community Center' s management. As part of . obtaining
reasonable assurance about whether the financial statements are
free of material misstatement, I performed tests of Southside
Community Center' s compliance with certain provisions of laws,
regulations, contracts, and grants. However, my objective was
not to provide an opinion on overall compliance with such provi-
sions.
Material instances of noncompliance are failures to follow
requirements or violations of prohibitions, contained in
statutes, regulations, contraL;LS, or grants that cause me to
conclude that the misstatement resulting from those failures or
vi-lations is material to the financial statements. The results
of my tests of compliance disclosed the following material in-
stance of noncompliance.
In accordance with the requirements of the Child Care Food
Program, organization-wide audits for the years ended December
31, 1987 , and December 31, 1988 , had not been submitted, as of
the date of this report.
I considered this material instance of noncompliance in forming
my opinion on whether Southside Community Center's 1989 financial
statements are presented fairly, in all material respects, in
conformity with generally accepted accounting principles, and
this report affects my report dated June 30, 1990, on those
financial statements.
12
Except as described above, the results of my tests of
noncomp li_ncA indicate that, with respect to the items tested,
Southside Community Center complied, in all material respects,
with the provisions referred to in the third paragraph of this
report, and with respect to items not tested, nothing came to my
attention that caused me to believe that. Southside Community
Center had - t conplied, in all material respects, with those
provisions.
This report is intended for the information of the Board of
Directors, management, the California State Department of
Education, and the Community Services Department of Contra Costa
county. This restriction is not intended to limit the
distribution of this report, which is a matter of public record.
LA VERNE BRAXTON
June 30, 1990
REVISED JULY 29 1990
13
9'
B La Verne Braxton
s
Certified Public Accountant
45 Shattuck Square, Suite 23
Berketev, CA 94:04
1415) 841-1710
Board of Directors
Southside Community Center
989 - 18th Street
Richmond, California 94801
I have audited Southside Community Center' s compliance with the
requirements governing types of seriices allowed or unallowed;
eligibility; matching level of effort, or earmarking; reporting;
claims for advances and reimbursements; and amounts claimed or
used for :Hatching that are applicable to each of its major feder-
al financial assistance programs, which are identified in the
accompanying schedule of federal financial assistance, for the
year ended December 31, 1989 . The management of Southside Commu-
nity Center, -, s resDonslble for the Southside Community Center' s
compliance with those recuirements. My responsibility is tz
express an opinion on compliance with those requirements based cn
my audit.
I conducted my audit in accordance with generally accepted audit-
ing standards , Government Auditing Standards, issued by the
Comptroller General of the United States, and OMB Circular A-128 ,
"Audits of State and Local Governments. " Those standards and CMB
Circular A-_�_ rorr,iiro that we plan and perform the audit to
-� -
obtain reasonable assurance about whether material noncom_oliance
with the requirements referred to above occurred. An audit
includes �xa^ i^i?1q, on a test basis, evidence about Southside
Communi ty Ceiit�ler' compliance with those requirements. I believe
-�
that my audit provides a reasonable basis for my opinion.
The .results of my audit procedures disclosed immaterial instances
of nonccmpliince with the requirements referred to above, which
are described in the accompanying schedule of findings and ques-
tioned costs. I considered these instances of noncompliance in
forming my opinion on compliance, which is expressed in the
following paragraph.
In my opinion, Southside Community Center complied, in all
material respects, with the requirements governing types of
services allowed or unallowed; eligibility; matching, level of
effort, or earmarking; reporting; claims for advances and
reimbursements; and amounts claimed or used for matching that are
applicable to each of its major federal financial assistance
programs for the year ended December 31, 1989 . 11
LA VERNE BRAXTON
June 30, 1990
REVISED JULY 29 1990
14
ti
B La Verne Braxton
Certified Public Accountant
46 Shattuck Square. Suite 13
Berkeie,l, CG 94704
14 1.5) 1141-1,'10
Board of Directors
Southside Community Center
989 - 18th Street
Richmond, CA 94801
I have applied procedures to test Southside Community Center' s
compliance with the following requirements applicable to each of
its major and nonmajor federal financial assistance pr-Igrams,
which are identified in the schedule of federal financial-
assistance,
inancialassistance, for the year ended December 31, 1989 .
Political Activitv
Civil Rights
Cash Manaaement
Federal Financial Reports
My procedures were limited to the applicable procedures described
in the Office of Manaaement and Budaet' s Compliance Supplement
for Single Audits of State and Local Governments. My procedures
were substantially less in scope than an audit, the objective of
which is the expression of an opinion on Southside Community
Center's compliance with the requirements listed in the preceding
paragraph. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures
disclosed one instance of material noncompliance with the
. requirements listed in the first paragraph of this report. The
results of my audit for the year ended December 313 , 1989,
disclosed that Southside Community Center did not comply with the
requirements to submit organizdtioii wide audits to its federal
funding source, for the years ended December 31, 1987 and 1988.
In ry opinion, failure to submit organization wide audits for
those years may have resulted in overpayments and/or underpay-
ments to Southside Community Center for those years.
With respect to items not tested, nothing came to my attention
that caused me to believe that Southside Community Center had not
complied, in all material respects, with those requirements.
However, the results of our procedures disclosed immaterial
instances of noncompliance with those requirements, which are
described in the accompanying schedule of findings and questioned
costs.
15
r
„ S
I ,
This report is intended solely for the use of management and the
California State Department of Education and the Community
Services Department of Contra Costa County and should not be used
for any other purpose. This restriction is not intended to limit
the distribution of this report, which, upon acceptance by
Southside Community Center, is a matter of public record.
A.��
LA VERNE BRAXTON
June 30, 1990
REVISED JULY 2, 1990
16
SOUTHSIDE COMMUNITY CENTER
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
FOR THE YEAR ENDED DECEMBER 317 1989
MAJOR FEDERAL FINANCIAL ASSISTANCE
Project Name: Headstart
Federal Catalogue #: 13. 600
Contract Amount : $497 , 614*
Revenue Recognized : $469 ,085*
Disbursements : $473, 121
NONMAJOR FEDERAL FINANCIAL ASSISTANCE
Projec* Name : Child Care Food Program
Federal Caltalogue # : 10 .558
Contract Amount : $ 19 , 352
Revenue recognized : $ 19 , 352
Disbursements : $ 14, 971
*Does not include matching funds amounts .
17