OMB No 1545-0047 Form 990 Return of Organization Exempt from Income Tax 1 Under section 501 (c), 527, or 4947(axl) of the Internal Revenue Code 2004 (except black lung benefit trust or private foundation) Open to Public Department of the Treasu ry Internal Revenue S ervice ► The anlzatlon may have to use a copy of this return to satisfy state reporting requirements Inspection A For the 2004 calendar year, or tax year beginning July 1, , 2004 , and ending June 30, , 2005 B Check if applicable C Name of organization D Employer Identi fi cation Number Please use Address change IRS label Leake & Watts Services, Inc 13-1860451 or F riotP. Name change or . Number and street (or P O box if mad is not delivered to street addr) Room /suite E Telephone number See Initial return specific 463 Hawthorne Avenue (914) 375-8717 mstruc- town or count ZIP + 4 Accounting Final return lions City, �' State code F metho ❑ Cash Accrual Amended return Yonkers NY 10705 11 Other (specdy) l" ❑ Application pending • Section 501 (cx3) organizations and 4947(a)(1) nonexempt H andI are not applicable to section 527 organizations charitable trusts must attach a completed Schedule A H (a) Is this a group return for affdiates7 ❑ Yes X❑ No (Form 990 or 990-EZ). H (b) if 'Yes ,' enter number of affiliates G Web site: 0, www. leakeandwatts . org H (c) Are all affiliates included? ❑ Yes ❑ No J Organization type (If 'No.' attach a list See instructions ) (che c k on l y one ) X❑ 501 (c) 3 4 (insert no ) ❑ 4947 (a)( 1 ) or ❑ 527 H (d) is this a separate return filed by an K Check here 01 L] if the organization's gross receipts are normally not more than organization covered by a group rut ng 7 Yes FX] $25,000 The organization need not file a return with the IRS, but if the organization received a Form 990 Package in the mail , it should file a return without financial data I Group Exemption Number 111- Some states require a complete return . M Check ► If the organization is not required L Gross receipts Add lines 6b, 8b, 9b, and 1 Ob to line 12 01 7 8 , 4 2 0 , 8 3 9 . to attach Schedule B (Form 990, 990-EZ, or 990-PF). Pa rt I Revenue . Expenses . and Chances in Net Assets or Fund Balances (See Instructions) 1 Contributions, gifts, grants, and similar amounts received a Direct public support 1 a 706,790. b Indirect public support lb 60,000. c Government contributions (grants) 1 c d Total (add [inis la through lc) (cash $ 735, 030. noncash $ 31,760. ) 1 d 766,790. 2 Program service revenue including government fees and contracts (from Part VII, line 93) 2 59,139,967. 3 Membership dues and assessments 3 4 Interest on savings and temporary cash investments 4 5,133. 5 Dividends and interest from securities 5 544,937. 6a Gross rents 6a b Less- rental expenses 6b c Net rental income or (loss) (subtract line 6b from line 6a) 6c R 7 Other investment income (describe ) 7 E (A) Securities (B) Other v 8a Gross amount from sales of assets other N than inventory 17 910, 759. 8a E b Less cost or other basis and sales expenses 16, 598, 211. 8b c Gain or (loss) (attach schedule) A' p - A 1,312,548. 8 c d Net gain or (loss) (combine line 8c, columns (A) and (B)) 8d 1,312,548. 9 Special events and activities (attach schedule) If any amount is from gaming , check here 111- ❑ a Gross revenue (not includin $ 133,927. of contributions reported on Iln Pp.- A 9a 51, 143. b �cbt an fundraising expenses 9b 51, 143. c Net is s from lal events (subtract line 9b from line 9a) 9c 0. 10 s s s�s of Inve,{��, le � turns and allowances 10a L ITSold s: 000i oti 10b C s profit or (loss) fr InVen ry (attach schedule) (subtract line 10b from line 10a) 10c 11 t IPbtt 103) 11 2, 110 . 12 otal r nes 1 d, 2, 3, 4, 5, 6c, 7, 8d, 9c, 1 Oc, and 11 12 61,771,485. E 13 m services (from line 44, column (B)) 13 57,388,900. 14 P Management and general (from line 44, column (C)) 14 6,575,320. E N 15 Fundraising (from line 44, column (D)) 15 187,500. E 16 Payments to affiliates (attach schedule) 16 S 17 Total expenses (add lines 16 and 44, column (A)) 17 64, 151, 720. A 18 Excess or (deficit) for the year (subtract line 17 from line 12) 18 -2, 380,235. N S 19 Net assets or fund balances at beginning of year (from line 73, column (A)) 19 20, 122,252 . T T 20 Other changes in net assets or fund balances (attach explanation) 20 -430,436. S 21 Net assets or fund balances at end of year (combine lines 18, 19, and 20) 21 17,311,581. BAA For Privacy Act and Paperwork Reduction Act Notice , see the separate instructions. TEEA0101 01/07/05 Form 990 (2004) Forrx1990 2004) Leake & Watts Services, Inc 13-1860451 Page 2 Part 11 Statement of Functional Ex enses All organizations must complete column (A) Columns (B), (C), and (D) are required for section 501(c)(3) and (44) organizations and section 4947(a)(1) nonexempt charitable trusts but optional for others.
amounts reported on line (B) Program (C) Management Do not include ( Fundraisin 6b, 8b, 9b, 10b, or 16 of Part / A) Total services and general (D) g 22 Grants and allocations (aft sch) (cash $ non-cash $ ) 22 23 Specific assistance to individuals (alt sch) A (Q A 23 5,431, 200. 5, 431, 200. 24 Benefits paid to or for members (aft sch) 24 25 Compensation of officers, directors , etc 25 718, 000. 133, 000. 585, 000. 0 . 26 Other salaries and wages 26 31, 500, 200. 28, 720, 200 2, 684, 500. 95,500. 27 Pension plan contributions 27 1, 136, 800. 1,012, 500. 120, 800. 3,500. 28 Other employee benefits 28 5, 128 , 100. 4, 559, 700. 553, 500. 14,900. 29 Payroll taxes 29 2, 514, 500. 2, 247, 600. 259, 500. 7,400. 30 Professional fundraising fees 30 31 Accounting fees 31 179, 000. 50,600. 128, 400. 0. 32 Legal fees 32 543, 300. 295, 900. 247, 400. 0 33 Supplies 33 1,844, 100. 1, 719, 500. 85, 400. 39,200. 34 Telephone 34 677, 800. 611, 400. 64,600. 1,800. 35 Postage and shipping 35 48,120. 29,920. 17,900. 300. 36 Occupancy 36 3, 426, 100. 3, 083, 100. 340, 000. 3,000. '37 Equipment rental and maintenance 37 467, 900. 427, 900. 39,300. 700. 38 Printing and publications 38 37,880. 21,980. 15, 500. 400. 39 Travel 39 807, 300. 706, 000. 99,400. 1,900. 40 Conferences , conventions, and meetings 40 41 Interest 41 3, 497, 700. 3, 058, 900. 434, 900. 3,900. 42 Depreciation , depletion , etc (attach schedule)Arr 4 42 2 , 070, 500. 1, 770, 300. 297, 600. 2,600. 43 Other expenses not covered above (itemize) a Insurance 43a 915,300 . 778,700. 133,500. 3,100. ------bOther _Professional App_ A_ 43b 2 , 597, 420. 2, 298, 200. 291, 020. 8,200. ------cO t her _E_xpenses_ App-A_ _ _ _ 43c 610, 500. 432, 300. 177, 100. 1,100. d 43d ------43e e ------44 Total functional expenses (add lines 22 - 43 Organizations completing columns (B) - (D� carry these totals to lines 13 - 15 44 64 ,151,720. 57,388,900. 6,575,320. 187,500. Joint Costs. Check '[ if you are following SOP 98-2 Are any joint costs from a combined educational campaign and fundraising solicitation reported in (B) Program services' -F] Yes © No If 'Yes,' enter (i) the aggregate amount of these j oint costs $ , (ii) the amount allocated to Program serv ices $ (iii) the amount allocated to Management and general $ , and (iv) the amount allocated to Fundraising $ Part III I Statement of Program Service Accomplishments What is the organization's primary exempt purpose? Tooperate child, familycare and community based progra_ms_ Program Service Expenses exempt (Required for 501(c)(3) and All organizations must describe their purpose achievements in a clear and concise manner State the number of 494organizations clients served, publications issued etc Discuss achievements that are not measurable (Section 501(c)(3) & (4) organ- , b� izations and 4947(a)(1) nonexempt charitable trusts must also enter the amount of grants & allocations to others) optional for others ) a Fostercare (FC) : Fostercare and Adoption Pros .Specialized FC with HIV or other health problems ------Therapeutic FC for children with emotional, and behavioral problems, Community based group care-residences, ------Mother-Infants Pro -Independent Livin Pro and Clinical services. # Clients se rv ed #1707 (Grants and allocations $ 0. ) 30,744,200. b Education and Early Childhood Provide special education to residents and other community students in grades 1 to 12
Special education se rv ices-to children ages 3 to 5 Early childhood center for toddler and preschool children - # Clients served #948 (Grants and allocations $ 0. 20,542,900. c Community based: Adolescent offenders in secure detention ------Prog._Daycare and Headstart Proms -for children aces 3to5 Preventive services to children and families in the community ------when the child is at risk of placement in FC or returning to FC_ # Clients se rv ed #551 0_ (Gran ts and allocations 6,078,000. d OMRDD- Medicaid Service Coordination ------#clients served #7 ------(Grants and allocations S 0. ) 23,800. e Other program se rvices (G rants and allocations $ ) f Total of Program Service Expenses (should equal line 44, column (B), Program services) 57,388,900. BAA TEEA0102 01/07/05 Form 990 (2004) Form 990 (2004) Leake & Watts Services, Inc 13-1860451 Page3
Part IV Balance Sheets (See Instructions)
Note: Where required, attached schedules and amounts within the description (A) (B) column should be for end-of-year amounts only. Beginning of year End of year 45 Cash - non-interest-bearing 34, 356. 45 48,092. 46 Savings and temporary cash investments . .. 640, 638. 46 312,642.
47a Accounts receivable 47a 4,527,595. b Less allowance for doubtful accounts 47b 355, 000. 4, 840, 604 . 47c 4, 172, 595.
48a Pledges receivable 48a 17,700. bLess allowance for doubtful accounts 48b 0. 21,316. 48c 17,700. 49 Grants receivable 49
A 50 Receivables from officers, directors, trustees, and key s employees (attach schedule) 0. 50 s E 51 a Other notes & loans receivable (attach sch) 51 a T s b Less allowance for doubtful accounts 51 b 51 c 52 Inventories for sale or use 52 53 Prepaid expenses and deferred charges 644, 895. 53 467,297. 54 Investments - securities (attach schedule) App-A . "LI Cost[] FMV 19 885 049. 54 18,795,174. 55a Investments - land, buildings, & equipment basis b Less: accumulated depreciation (attach schedule) N55 55 56 Investments - other (attach schedule) 56 57a Land, buildings, and equipment basis 57a 49, 615, 769. b Less- accumulated depreciation (attach schedule) Aft-A 57b 14,502,611. 36,290 326. 57c 35,113,158. 58 Other assets (describe 1, Appendix-A ) 6, 777, 060. 58 6,363,924. 59 Total assets (add lines 45 through 58) (must equal line 74) 69, 134, 244. 59 65,290,582. 60 Accounts payable and accrued expenses 11, 164, 241. 60 10, 745, 467. L 61 Grants payable 61 A 62 Deferred revenue 62 a 1 63 Loans from officers, directors, trustees, and key employees (attach schedule) 63 I 64a Tax-exempt bond liabilities (attach schedule) Ape A T 35 547, 751. 64a 35,488,534. b Mortgages and other notes payable (attach schedule) E " ' 64b s 65 Other liabilities (describe 1, L/C & Short Term Borrowings ) 2,300,000. 65 1,745,000. 66 Total liabilities (add lines 60 through 65) 49, 011, 992. 66 47,979,001. Organizations that follow SFAS 117, check here ► and complete lines 67 N through 69 and lines 73 and 74 A 67 Unrestricted ... 17, 304, 342. 67 14 447 665. 68 Temporarily restricted 456 814. 68 502,820. 69 Permanently restricted 2, 361, 096. 69 2, 361, 096. o Organizations that do not follow SFAS 117, check here ► and complete lines F 70 through 74 N 70 Capital stock, trust principal, or current funds 70 D 71 Paid-in or capital surplus, or land, building, and equipment fund 71 A 72 Retained earnings, endowment, accumulated income, or other funds 72 A N 73 Total net assets or fund balances (add lines 67 throug h 69 or lines 70 throu g h 72, column (A) must equal line 19; column (B) must equal line 21) 20, 122, 252. 73 17, 311, 581. 74 Total liabilities and net assets/fund balances (add lines 66 and 73) 69, 134, 244. 74 65,290,582. Form 990 is available for public inspection and, for some people, serves as the primary or sole source of information about a particular organization How the public perceives an organization in such cases may be determined by the information presented on its return. Therefore, please make sure the return is complete and accurate and fully describes, in Part III, the organization's programs and accomplishments.
BAA
TEEA0103 01 107/05 Form990 (2004) Leake & Watts Services, Inc 13-1860451 Page 4 Pa rt IV-A Reconciliation of Revenue per Audited Part IV- B Reconciliation of Expenses per Audited Financial Statements with Revenue Financial Statements with Expenses per Return (See instructions.) per Return
a Total revenue, gains, and other support a Total expenses and losses per audited per audited financial statements a 61, 403, 423. financial statements a 64, 260, 100. b Amounts included on line a but b Amounts included on line a but not not on line 12, Form 990 on line 17, Form 990. (1) Net unrealized (1) Donated serv- gains on ices and use investments $ -430, 436. of facilities $ 387, 300. (2) Donated serv- (2) Prior year adjust- ices and use ments reported on of facilities $ 387, 300. line 20, Form 990 $ (3) Recoveries of prior (3) Losses reported on year grants $ line 20, Form 990 $ (4) Other (specify) (4) Other (specify)- Development ______Expenses $ -187,500. ------$ ---- Add amounts on lines (1) through (4) ' b -230,636. Add amounts on lines (1) through (4) 0- b 387,300. c Line a minus line b c 61 639 059. c Line a minus line b ' c 63 872 800. d Amounts included on line 12, d Amounts included on line 17, Form 990 but not on line a: Form 990 but not on line a:
(1) Investment expenses (1) Investment expenses not included on line not included on line 6b, Form 990 $ 91,420. 6b, Form 990 $ 91, 420. (2) Change-in-Other (specify): (2) Other (specify) Devel pTent_ Ternp Rest. . $ 46, 006. Expenses __ $ 187, 500. _J Add amounts on lines (1) and (2) ► d 137, 426. Add amounts on lines (1) and (2) ► 278 920 . e Total revenue per line 12, Form a Total expenses per line 17, Form 990 (line c plus line d) 111. a 61, 771, 485. 990 (line c plus line d) 64,151,720. Iran v I LIST or urrtcers . uirecrors . I rusrees _ ann Kiev tmnrnveec (I ict aarh nne avan if nnr rmmnnncatariFe cpp incfnirfinnc 1 (B) Title and average hours (C) Compensation (D) Contributions to (E) Expense (A) Name and address per week devoted (i f not paid , employee benefit account and other to position enter -0-) plans and deferred allowances compensation Appendix-A_& B
------
------
------
------
------
------
75 Did any officer, director, trustee. or key employee receive aggregate compensation of more than $100,000 from your organization and all related organizations, of which more than $10,000 was provided by the related organizations? Yes QNo If 'Yes,' attach schedule - see instructions BAA Form 990 (2004)
TEEA0104 0 1/07105 Form 990 (2004) Leake & Watts Services, Inc 13-1860451 Pages Pa rt VI Other Information (See instructions .) Yes No 76 Did the organization engage in any activity not previously reported to the IRS? If 'Yes,' - attach a detailed description of each activity 76 X 77 Were any changes made in the organizing or governing documents but not reported to the IRS? 77 X If 'Yes,' attach a conformed copy of the changes 78a Did the organization have unrelated business gross income of $1,000 or more during the year covered by this return? 78a X b If 'Yes,' has it filed a tax return on Form 990-T for this year? 78b 79 Was there a liquidation, dissolution, termination, or substantial contraction during the year? If 'Yes,' attach a statement 79 X 80a Is the organization related (other than by association with a statewide or nationwide organization) through common membership , governing bodies, trustees, officers , etc, to any other exempt or nonexempt organization? 80a X b If 'Yes,' enter the name of the organization ______------andcheckwhetheritis flexemptor 0nonexempt 81 a Enter direct and indirect political expenditures See line 81 instructions 1 81 al A b Did the organization file Form 1120-POL for this year? 81 b U- A 82 a Did the organization receive donated services or the use of materials, equipment , or facilities at no charge or at substantially less than fair rental value? 82a X b If 'Yes,' you may indicate the value of these items here. Do not include this amount as revenue in Part I or as an expense in Part II. (See instructions in Part III ) 182b 83a Did the organization comply with the public inspection requirements for returns and exemption applications? 83a X b Did the organization comply with the disclosure requirements relating to quid pro quo contributions? 83b X 84a Did the organization solicit any contributions or gifts that were not tax deductible? 84a X b If 'Yes,' did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible 84 b 11,4 A 85 501(c)(4), (5), or (6) organizations. a Were substantially all dues nondeductible by members? b Did the organization make only in-house lobbying expenditures of $2,000 or less? If 'Yes' was answered to either 85a or 85b, do not complete 85c through 85h below unless the organization received a waiver for proxy tax owed for the prior year c Dues, assessments, and similar amounts from members d Section 162(e) lobbying and political expenditures e Aggregate nondeductible amount of section 6033(e)(1)(A) dues notices f Taxable amount of lobbying and political expenditures (line 85d less 85e) r85 g Does the organization elect to pay the section 6033(e) tax on the amount on line 85f' h If section 6033(e)(1)(A) dues notices were sent, does the organization agree to add the amount on Ime85f to its reasonable estimate of dues allocable to nondeductible lobbying and political expenditures for the following tax year? 85hl NIA 86 501(c)(7) organizations Enter. a Initiation fees and capital contributions included on line 12 . . 1 86al Nl b Gross receipts, included on line 12, for public use of club facilities. 87 501(c)(12) organizations Enter. a Gross income from members or shareholders
b Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them) . 87b N A 88 At any time during the year, did the organization own a 50% or greater interest in a taxable corporation or partnership, or an entity disregarded as separate from the organization under Regulations sections 301 7701-2 and 301.7701.37 If 'Yes,' complete Part IX ... 89a 501 (c)(3) organizations. Enter Amount of tax imposed on the organization during the year under: section 4911 ► N& NE , section 49121, NO N6 ; section 4955 1, No)yE b 501(c)(3) and 501(c)(4) organizations Did the organization engage in any section 4958 excess benefit transaction during the year or did it become aware of an excess benefit transaction from a prior year? If 'Yes,' attach a statement explaining each transaction . 89bl I X c Enter Amount of tax imposed on the org anization managers or disqualified persons during the year under sections 4912, 4955, and 4958 . . 1.(0 NE d Enter Amount of tax on line 89c, above , reimbursed by the organization N o xr C- 90 a List the states with which a copy of this return is filed 1, New York b Number of employees employed in the pay period that includes March 12, 2004 (See instructions) No bl Q, io 91 The books are in care of ► Michael K. Mazzocco CFO. Telephone number ► ( 914) 375-8717 ------Locatedat ► 463 Hawthorne Avenue, Yonkers, New York ZIP + 4 ► 10705 ------92 Section 4947(a)(1) nonexempt charitable trusts filing Form 990 In lieu of Form 1041 - Check here and enter the amount of tax-exempt interest received or accrued during the tax year -192 I N A BAA Form 990 (2004) TEEA0105 01/07/05 Form 990 (2004) Leake & Watts Services, Inc 13-1860451 Page 6 Lai•tVVll Analysis of Income-Producing Activities (See Instructions.) Unrelate d business income Excluded by section 512, 513, or 514 Note: I Inter gross amounts unless (A) (B) (C) (D) Related( exempt otherw ise indicated. Business code Amount Exclusion code Amount functionorincome 93 Program service revenue a Fostercare 30,745,788. h Educational 22,065,909. c Community based 61310,225. d OMRDD 18,045. e f Medicare/Medicaid payments 9 Fees & contracts from government agencies 94 Membership dues and assessments 95 Interest on savings & temporary cash invmnts 14 5,133. 96 Dividends & interest from securities 14 544, 937. 97 Net rental income or (loss) from real estate a debt-financed property h not debt-financed property 98 Net rental income or (loss) from pers prop 99 Other investment income 100 Gain or (loss) from sales of assets other than inventory. 18 1-13-12,548. 101 Net income or (loss) from special events 102 Gross profit or (loss) from sales of inventory 103 Other revenue: a ' - b Miscellaneous 03 2,110. c d e 104 Subtotal (add columns (B), (D), and (E)) 1,864,728.1 59,139,967. 105 Total (add line 104, columns (8), (D), and (E)) . . 61,004,695. Note: Line 105 plus line Id, Part 1, should equal the amount on line 12, Part I Part Vlll Relationship of Activities to the Accomplishment of Exempt Purposes (See Instructions.) Line No . Explain how each activity for which income is reported in column (E) of Part VII contributed importantly to the accomplishment of the organization's exempt purposes (other than by providing funds for such purposes). 93a Activities related to the providing of fostercare, education, daycare, toheadstart, clinical services or service coordination, preventive 93c services to children and families, and secured detention for juveniles.
Part IX Information Regarding Taxable Subsidiaries and Disregarded Entities (See instructions.) N/A (A) (B) (C) (D) (E)
Name, address, and EIN of corporation, Percentage of Nature of activities Total End-of-year partnership, or disregarded entity ownership interest income assets
Part X Information Regarding Transfers Associated with Personal Benefit Contracts (See Instructions.) a Did the organization, during the year, receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? . . . Yes X No b Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? Yes X No Note : If 'Yes' to (b), file Form 8870 and Form 4720 (see instruction H Organization Exempt Under No 1545-0047 SCHEDULE A (Form 990 or 990-EZ) Section 501(cx3) (Except Private Foundation) and Section 501(e), 501(f), 501(k), 501(n ), or Section 4947(aXl) Nonexempt Charitable Trust Supplementa ry Information - (See separate instructions.) 2004 Department of the Treasury Internal Revenue Se rvice MUST be completed by the above organizations and attached to their Form 990 or 990-EZ. Name of the organization Employer identification number L eake & Watts Services, Inc 13-1860451 Part I I Compensation of the Five Highest Paid Employees Other Than Officers , Directors , and Trustees (See Instructions List each one If there are none, enter 'None.') (a) Name and address of each (b) Title and average (c) Compensation (e) Expense employee paid more hours per week to(dmCPotriY utions t account and other devoted plans and deferred than $50,000 to position compensation allowances
Callejas JaccLueline E.
463 Hawthorne Ave.Yonkers, NY 10705 Psychiatrist-35 146,209. 20,432. 0.
Margolies-Steven L.
463 Hawthorne Ave.Yonkers, NY 10705 Director Clinical-35 132,387. 28,088. 0.
Nesbit Peter ------
463 Hawthorne Ave.Yonkers, NY 10705 DirGeneralServices-35 111,665. 24,990. 0.
Reece June B. ------
463 Hawthorne Ave.Yonkers, NY 10705 Asst Exec Dir-35 110,078. 24,874. 0.
Dewar Thomas M. ------
463 Hawthorne Ave.Yonkers, NY 10705 Dir MIS and QI-35 104,729. 13,346. 0. Total number of other employees paid over $50,000 ► 141 Pa rt ;ll Compensation of the Five Highest Paid Independent Contractors for Professional Services (See Instructions List each one (whither individuals or firms) If there are none, enter 'None ')
(a) Name and address of each independent contractor paid more than $50,000 (b) Type of service (c) Compensation
Jackson Lewis ------
One North Broadway, White Plains NY 10601 Legal 163,907.
Rosin_& Reiniger ------
630 Third Ave. 5th Floor, NY 10017 Legal 209,390.
Emmet Marvin & Martin,-LLP_ ------
120 Broadway, NY 10271 Legal 151,288.
James-M.- Abramson ------
12 East 41st Street, Suite#1401 NY 10017 Legal 103,395.
Deloitte &_Touche_LLp ------
Two World Financial Center, NY 10281 Audit 102,550. Total number of others receiving over $50,000 for professional services 3 BAA For Paperwork Reduction Act Notice, see the Instructions for Form 990 and Form 990-EZ. Schedule A (Form 990 or 990-EZ) 2004
TEEA0401 07/22/04 Schedule A (Form 990 or 990-EZ) 2004 Leake & Watts Services, Inc 13-1860451 Page2 Part III Statements About Activities (See instructions .) Yes No
1 During the year, has the organization attempted to influence national, state, or local legislation, including any attempt to influence public opinion on a legislative matter or referendum? If 'Yes,' enter the total expenses paid or incurred in connection with the lobbying activities I- $ (Must equal amounts on line 38, Part VI-A, or line i of Part VI-B) 1 X Organizations that made an election under section 501(h) by filing Form 5768 must complete Part VI -A Other organizations checking 'Yes' must complete Part VI-B AND attach a statement giving a detailed description of the lobbying activities 2 During the year, has the organization, either directly or indirectly, engaged in any of the following acts with any substantial contributors, trustees, directors, officers, creators, key employees, or members of their families, or with any taxable organization with which any such person is affiliated as an officer, director, trustee, majority owner, or principal beneficiary? (If the answer to any question is 'Yes,' attach a detailed statement explaining the transactions) a Sale, exchange, or leasing of property? 2a X
b Lending of money or other extension of credit? 2b X
c Furnishing of goods, services, or facilities? 2c X See Part V, Form 990 d Payment of compensation (or payment or reimbursement of expenses if more than $1,000)' 2d X
e Transfer of any part of its income or assets? 2e X 3a Do you make grants for scholarships, fellowships, student loans, etc? (If 'Yes,' attach an explanation of how you determine that recipients qualify to receive payments) 3a X b Do you have a section 403(b) annuity plan for your employees? 3b X 4a Did you maintain any separate account for participating donors where donors have the right to provide advice on the use or distribution of funds? 4a X b Do you provide credit counseling, debt management, credit repair, or debt negotiation services?. 4b X Part IV Reason for Non-Private Foundation Status (See instructions)
The organization is not a private foundation because it is (Please check only ONE applicable box.) 5 A church , convention of churches , or association of churches Section 170(b)(1)(A)(i). 6 A school Section 170(b)(1)(A)( ii) (Also complete Part V ) 7 A hospital or a cooperative hospital se rvice organization Section 170 (b)(1)(A)( 11 i) 8 A Federal , state, or local government or governmental unit Section 170(b)(1)(A)(v) 9 A medical research organization operated in conjunction with a hospital . Section 170 (b)(1)(A)(m). Enter the hospital 's name, ci ty, and state ______10 An organization operated for the benefit of a college or university owned or operated by a governmental unit Section 170(b)(1)(A)(iv) (Also complete the Suppo rt Schedule in Part IV-A.)
11 a X] An organization that normally receives a substantial part of its sup port from a governmental unit or from the general public. Section 170(b)(1)(A)(vi) (Also complete the Suppo rt Schedule in Part IV-A )
11 b F] A community trust. Section 170(b)(1)(A)(vi). (Also complete the Suppo rt Schedule in Part IV-A.)
12 LI An organization that normally receives : (1) more than 33-1/3% of its support from contributions , membership fees, and gross receipts from activities related to its charitable , etc, functions - subject to certain exceptions, and (2) no more than 33-1/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30 , 1975. See section 509(a)(2). (Also complete the Suppo rt Schedule in Part IV-A ) 13 ❑ An organization that is not controlled by any disqualified persons (other than foundation managers) and supports organizations described in. (1 ) lines 5 through 12 above , or (2) section 501(c)(4), (5), or (6), if they meet the test of section 509(a)(2) (See section 509(a)(3) )
Provide the following information about the supported organizations. (See instructions )
(a) Name(s) of supported organization(s) (b) Line number from above
14 n An organization organized and operated to test for public safety Section 509(a)(4) (See instructions ) BAA TEEAO4O2 07127/04 Schedule A (Form 990 or Form 990-EZ) 2004 Schedule A (Form 990 or 990-EZ) 2004 Leake & Watts Se rv ices, Inc 13-1860451 Page 3 Pa rt IV-A Support Schedule (Complete only if you checked a box on line 10, 11, or 12.) Use cash method ofaccounting. Note: You may use the worksheet in the instructions for converting from the accrual to the cash method of accounting Calendar year or fiscal ear (a) (b) (c) (d) e beginningin) ( y 2003 2002 200 1 2000 To tal 15 Gifts, grants, and contributions received (Do not include unusual rants See line 28) 198, 890. 474, 946. 699 655. 323, 815. 1, 697, 306. 16 Membership fees received 17 Gross receipts from admissions, merchandise sold or services performed, or furnishing of facilities in any activity that is related to the organization's charitable, etc, purpose 60,077,136. 59,996 603. 63,495 240. 63,889,970. 247,458,949. 18 Gross income from interest, dividends, amounts received from payments on securities loans (section 512(a)(5)), rents, royalties , and unrelated business taxable income ( less section 511 taxes) from businesses acquired by the organ- ization after June 30, 1975 538, 087. 583, 688. 1, 312, 938. 751, 246. 3, 185, 959. 19 Net income from unrelated business activities not included in line 18 20 Tax revenues levied for the org an ization 's benefit and either paid to it or expended on its behalf 21 The value of services or facilities furnished to the organization by a governmental unit without charge Do not include the value of services or facilities generally furnished to the public without charge 245, 700. 131, 450. 108, 600. 108, 600. 594,350. 22 Other income Attach a schedule. Do not include gain or (loss) from sale of capital assets h -R 2,824. 2,455. 562. 17, 091. 22,932. 23 Total of lines 15 through 22 61, 062, 637. 61, 189, 142. 65,616, 995. 65, 090, 722. 252, 959, 496. 24 Line 23 minus line 17 985 501. 1, 192, 539. 2,121,755. 1,200,752. 5, 500, 547. 25 Enter l % of line 23 610, 626. 611, 891. 656 170. 650, 907. 26 Organizations descri bed on lines 10 or 11: a Enter 2 % of amount in column (e), line 24 26a 110,011. b Prepare a list for your records to show the name of and amount contributed by each person (other than a governmental unit or publicly supported organiza tion) whose tota l gifts for 2000 th rough 2003 exceeded the amoun t s hown in l ine 26a . Do not fi le this l ist wi th your return . Enter the total of all these excess amounts .. . . 26b c Total support for section 509(a)(1) test Enter line 24, column (e) 26c 5,500,547. d Add: Amounts from column (e) for lines- 18 3,185,959. 19 22 22 , 932. 26b 26d 3,208,891. e Public support (line 26c minus line 26d total ) ' 26e 2,291,656. If Public support percentage (line 26e (numerator) divided by line 26c (denominator)) 2611 41.66 % 27 Organizations descri bed on line 12: a For amounts included in lines 15, 16, and 17 that were received from a 'disqualified person,' prepare a list for your records to show the name of, and total amounts received in each year from, each 'disqualified person ' Do not file this list with your return . Enter the sum of such amounts for each year: (2003) (2002) (2001) (2000) ------bFor any amount included in line 17 that was received from each person (other than 'disqualified persons'), prepare a list for your records to show the name of, and amount received for each year, that was more than the larger of (1) the amount on line 25 for the year or (2) $5,000. (Include in the list organizations described in lines 5 through 11, as well as individuals .) Do not file this list with your return. After computing the difference between the amount received and the larger amount described in (1) or (2), enter the sum of these differences (the excess amounts) for each year: (2003) (2002) (2001) (2000) ------c Add. Amounts from column (e) for lines 15 16 17 20 21 ► 27c d Add Line 27a total and line 27b total ► 27d e Public support (line 27c total minus line 27d total) 27e f Total support for section 509(a)(2) test Enter amount from line 23, column (e) 27f g Public support percentage (line 27e (numerator) divided by line 27f (denominator)) ► 27g h Investment income percentage (line 18, column (e) numerator) divided by line 27f (denominator)) 27h 28 Unusual Grants : For an organization described in line 10, 11, or 12 that received any unusual grants during 2000 through 2003, prepare a list for your records to show, for each year, the name of the contributor, the date and amount of the grant, and a brief description of the nature of the grant. Do not file this list with your return . Do not include these grants in line 15 BAA TEEAO403 07/23104 Schedule A (Form 990 or 990-EZ) 2004 Schedule A (Form 990 or 990-EZ) 2004 Leake & Watts Services, Inc 13-1860451 Page 4 Part V Private School Questionnaire (See instructions.) (To be completed ONLY by schools that checked the box on line 6 in Part IV) N/A No
29 Does the organization have a racially nondiscriminatory policy toward students by statement in its charter, bylaws, other governing instrument , or in a resolution of its governing body? 29
30 Does the organization include a statement of its racially nondiscriminator y policy toward students in all its brochures, catalogues , and other written communications with the public dealing with student admissions , programs, - and scholarships? 30
31 Has the organization publicized its racially nondiscriminatory policy through newspaper or broadcast media durin g the period of solicitation for students, or during the registration period if it has no solicitation program, in a way that makes the policy known to all parts of the general community it serves? 31 If 'Yes,' please describe , if 'No,' please explain (If you need more space, attach a separate statement.)
------32 Does the organization maintain the following- a Records indicating the racial composition of the student body, faculty, and administrative staff? 32a b Records documenting that scholarships and other financial assistance are awarded on a racially nondiscriminatory basis? 32b c Copies of all catalogues , brochures , announcements , and other written communications to the public dealing with student admissions , programs , and scholarships? . 32c dCopies of all material used by the organization or on its behalf to solicit contributions? 32d
If you answered 'No' to any of the above, please explain (If you need more space, attach a separate statement )
33 Does the organization discriminate by race in any way with respect to:
a Students' rights or privileges? 33a
b Admissions policies? 33 b
c Employment of faculty or administrative staff? 33 c
d Scholarships or other financial assistance? 33 d
e Educational policies? 33e
f Use of facilities? 33f
g Athletic programs? 33g
h Other extracurricular activities? 33 h
If you answered 'Yes' to any of the above , please explain . (If you need more space , attach a separate statement )
34a Does the organization receive any financial aid or assistance from a governmental agency? I Ma
b Has the organization's right to such aia ever been revoked or suspended? 34b If you answered 'Yes' to either 34a or b, please explain using an attached statement
35 Does the organization certify that it has comp lied with the a pp licable requirements of sections 4 01 through 4 05 of Rev Proc 75-50, 1975-2 C B 587, covering racial nondiscrimination? If 'No,' attach an explanation 35 BAA TEEA0404 07/23/04 or Schedule A (Form 990 or 990-EZ) 2004 Leake & Watts Services, Inc 13-1860451 Page 5 Pa rt VI-A Lobbying Expenditures by Electing Public Charities (See instructions) (To be completed ONLY by an eligible organization that filed Form 5768) NA Check ► a fl if the organization belongs to an affiliated group. Check ► b fl if you checked 'a' and 'limited control' provisions apply (a) (b) Limits on Lobbying Expenditures Affiliated group To be completed totals for ALL tiosg (The term 'expenditures' means amounts paid or incurred) organizaationns 36 Total lobbying expenditures to influence public opinion (grassroots lobbying) 36 0. 37 Total lobbying expenditures to influence a legislative body (direct lobbying) 37 38 Total lobbying expenditures (add lines 36 and 37) 38 39 Other exempt purpose expenditures 39 40 Total exempt purpose expenditures (add lines 38 and 39) 40 41 Lobbying nontaxable amount Enter the amount from the following table - If the amount on line 40 is - The lobbying nontaxable amount is - Not over $500,000 20% of the amount on line 40 Over $500,000 but not over $1,000,000 $100,000 plus 15% of the excess over $500,000 Over $1,000,000 but not over $1,500,000 $175,000 plus 10% of the excess over $1,000,000 41 Over $1,500,000 but not over $17,000,000 $225,000 plus 5% of the excess over $1,500,000 Over $17,000,000 $1,000,000 . . . . - j 42 Grassroots nontaxable amount (enter 25% of line 41) 42 43 Subtract line 42 from line 36 Enter -0- if line 42 is more than line 36 43 44 Subtract line 41 from line 38 Enter -0- if line 41 is more than line 38 44 Caution : If there is an amount on either line 43 or line 44, you must file Form 4720 4 -Year Averaging Period Under Section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns below See the instructions for lines 45 through 50 )
Lobbying Expenditures During 4 -Year Averaging Period
Calendar year (a) (b) (c) (d) (e) (or fiscal year 2004 2003 2002 2001 Total beginning in)
45 Lobbying nontaxable amount 46 Lobbying ceiling amount (150% of line 45(e))
47 Total lobbying expenditures 48 Grassroots non- taxable amount 49 Grassroots ceiling amount (150% of line 48(e)) 50 Grassroots lobbying expenditures Part Vl-B Lobbying Activity by Nonelectin g Public Charities (For reporting only by organizations that did not complete Part VI-A) (See instructions.) During the year, did the organization attempt to influence national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of Yes No Amount a Volunteers X b Paid staff or management (Include compensation in expenses reported on lines c through h.) X c Media advertisements X d Mailings to members, legislators, or the public X e Publications, or published or broadcast statements X f Grants to other organizations for lobbying purposes , . X g Direct contact with legislators, their staffs, government officials, or a legislative body X h Rallies, demonstrations, seminars, conventions, speeches, lectures, or any other means X i Total lobbying expenditures (add lines c through h.) NONE If 'Yes' to any of the above, also attach a statement giving a detailed description of the lobbying activities. BAA Schedule A (Form 990 or 990-EZ) 2004
TEEA0405 07/23/04 Schedule A (Form 990 or 990-EZ) 2004 Leake & Watts Services, Inc 13-1860451 Page 6 Pa rt VII Information Regarding Transfers To and Transactions and Relationships With Noncharitable Exempt Organizations (See instructions)
51 Did the reporting organization directly or indirectly engage in any of the following with any other organization described in section 501(c) of the Code (other than section 501 (c)(3) organizations) or in section 527, relating to political organizations? a Transfers from the reporting organization to a noncharitable exempt organization of Yes No (i)Cash 51 a i X (i)Other assets a (H) X b Other transactions (i)Sales or exchanges of assets with a noncharitable exempt organization b (i) X (ii)Purchases of assets from a noncharitable exempt organization b ii X (iii)Rental of facilities, equipment, or other assets b (ii) X (iv)Reimbursement arrangements b (iv) X (v)Loans or loan guarantees b (v) X (vi)Performance of services or membership or fundraising solicitations b (vi) X c Sharing of facilities, equipment, mailing lists, other assets, or paid employees c X d If the answer to any of the above is 'Yes,' complete the following schedule Column (b) should always show the fair market value of the goods, other assets, or services given by the reportin organization If the organization receivedless than fair market value in an transaction or sharing arrangement, show in column (d) the value of the goods, other assets, or se rvices received (a) (b) (c) (d) Line no Amount involved Name of nonchantable exempt organization Description of transfers, transactions, and sharing arrangements
52a Is the organization directly or indirectly affiliated with, or related to, one or more tax-exempt organizations described in section 501(c) of the Code (other than section 501 (c)(3)) or in section 527? ► F] Yes © No
BAA Schedule A (Form 990 or 990-EZ) 2004
TEEA0406 11/29/04 LEAKE AND WATTS SERVICES, INC. APPENDIX - A
ATTACHMENT TO IRS FORM 990 -2004 EIN # 13-1860451
SCHEDULE TO PAGE 1, LINE 8c
Gain (loss ) on sale of publicly traded secu rities
Fund Secun Cost Sales Proceeds Net Gain(Loss)
UNRESTRICTED FUNDS
Ori ginal Fund Bank of New York - Bonds & Mutual funds $6,327,363 $6,885,615 $558,252
Ori ginal Fund Bank of New York - Stocks $8,171,923 $8,922,563 $750,640
Subtotal $14,499,286 $15,808,178 $ 1,308,892
ENDOWMENT FUNDS
Peck Fund Bank of New York - Bonds $279,091 $279,087 ($4)
Sevilla Fund Bank of New York - Bonds $600.824 $616,651 $15,827
Hopewell Fund Bank of New York - Bonds $10,220 $10,216 ($4)
Orphan Fund Bank of New York - Bonds $1,208 ,790 $1,196,627 ($12,163)
Subtotal $2,098,925 $2,102,581 $3,656
Total
SCHEDULE TO PAGE 1 PART I item # 9
SPECIAL EVENTS AND ACTIVITIES
Name of events and activities 2004 Award Benefit Dinner Mats Total
Date of events and activities November 9, 2004 June 02, 2005
Gross Receipts 168 ,429 16,641 185,070
Less Contnbutions 127,352 6 ,575 133,927
Gross Revenue 41 ,077 10 ,066 51,143
Less Direct Expenses 41,077 10,066 51,143
Net Income or (Loss)
Page-1 LEAKE AND WATTS SERVICES, INC. APPENDIX - A
ATTACHMENT TO IRS FORM 990 -2004 EIN # 13-1860451
SCHEDULE TO PAGE 1. PART I LINE 20
Other changes in net assets or fund balances
As of July 1, 1996 Leake and Watts adopted the accounting principles and financial reporting practices prescribed by Statement of Financial Accounting Standard No 124 (' SFAS NO 124'),' Accounting for Certain Investments Held by Not-for-Profit Organizations' In accordance with SFAS NO 124. all investments in debt and equity secunbes with readily determinable fair values are carried at fair value (quoted market value)
Decrease in unrealized gains from July 1, 2004 to June 30, 2005 are $ 430,436
SCHEDULE TO PAGE 2, PART tl LINE 23
Specific assistance to individuals
Payment to foster parents $3,539,100
Food $991,500
Clothing $231,500
Children's allowance and activities $475,400
Hair care $74,437
Tutonng $52,100
Laundry/dry cleaning $26,599
Other $40,564
Total $5.431.200
SCHEDULE TO PAGE 2, PART II LINE 42
Depreciation and amortization
Buildings and $ 1,379,364 Building Improvements
Leasehold Improvement and 201,812 Start-up Cost-Amorbzabon
Furniture Fixtures and Equipment 481,480
Transportation Equipment 7,844
Total $ 2,070,500 Page-2 LEAKE AND WATTS SERVICES , INC. APPENDIX - A
ATTACHMENT TO IRS FORM 990 - 2004 EIN # 13- 1860451
SCHEDULE TO PAGE 2, PART 11 LINE 43 b
Other Professional fees
Health services 1.333,500
Food Management 107,100
Educational services 186,590
Other services 970,230
Total $ 2.597,420
SCHEDULE TO PAGE 2, PART 11 LINE 43 c
Other expenses
Staff development 326.700
Staff recruitment 72,400
Dues, licenses , permits 119.600
Miscellaneous 91,800
Total $ 610,500
SCHEDULE TO PAGE 3, PART IV LINE 54
Investments - securities
Market value of Investments
U S Treasury obligations $ 2,848,348
Common stocks 6.411,818
Mutual funds 4.617,856
Corporate bonds 4.917,152
Total 18,795,174
SCHEDULE TO PAGE 3, PART IV LINE 57
Land buildings and equipment
Land and land improvements $ 599.100
Building and building improvements 44,109,358
Furniture, fixtures and equipment 4,907,311
Total Cost 49,615,769
Depreciation
Land improvements (144,833)
Building and building improvements (11,517,554)
Furniture, fixtures and equipment (2,840,224)
Less Accumulated Depreciation (14,502,611)
Net Asset $ 35,113,158
SCHEDULE TO PAGE 3, PART IV LINE 58
Other assets
Cash and Investments held by Bond Trustees $5,245,110
Bond issuance costs, less amortization 1,118.814
Total $6,363,924 Page-3 LEAKE AND WATTS SERVICES , INC. APPENDIX - A
ATTACHMENT TO IRS FORM 990 - 2004 EIN # 13-1860451
SCHEDULE TO PAGE 3 PART IV LINE 64a
Tax-exempt bond liabilities
DASNY Bond Information
a) On December 21, 2004 the Dormitory Authority of the State of New York ( the "Authonty") issued Series 2004 Bonds primarily to refund the Authonty's Series 1994 Bonds b) The purpose of the Series 1994 Bond issue was to finance construction of a new school building, children's residential cottages, and renovation cost of existing buildings located at Leake and Watts' main Yonkers New York location c) Series 2004 Bonds issue was for $ 33,105,000 d) Form 8038 was filed
Outstanding Bond information
a) The project was substantially completed at June 30, 1998 b) As of June 30, 2005, the outstanding issue amount is
Series 2004 Bond issue $33,105,000 Less Bonds retired - Unamortized bond discount 8 premium(net) 63,534 sub total $33,168,534
c) As of June 30, 2005 the unexpended Bond proceeds, including the Debt Service Reserve Fund and the Debt Service Retirement Fund held by the Bond Trustees, were $ 5,479,400 No portion of any Bond-financed facility is used by a third party
Details of Mortgage
Matunty date of mortgage debt July 1, 2023 Repayment terms Principal payments commence July 2005 Interest rate 3 0% to 5 0% Security provided First mortgage lien on land, buildings and equipment at Yonkers campus of Leake and Watts
NYCIDA Bond Information
a) On December 10. 1999 the New York City Indust rial Development Agency (NYCIDA) issued Seri es 19998 Bonds b) The purpose of the Bond issue was to finance or refi nance the costs of the acquisiti on , construction, equipping and finan cing of seven group homes c) The ori ginal amount of the issue was $ 2,889,200 d) Form 8038 was filed on December 10, 1999
Outstanding Bond information
a) The project was substantially completed at June 30, 2000
b) As of June 30, 2005, the outstanding issue amount is
Original issue $2,889,200 Less Bonds retired (569,200) sub total $2,320,000
c) As of June 30, 2005 the unexpended Bond proceeds, including the Debt Service Reserve Fund and the Debt Service Retirement Fund held by the Bond Trustees, were $ 630,300 No portion of any Bond-financed facility is used by a third party
Details of Mortgage
Maturity date of mortgage debt August 1, 2015 Repayment terms Principal payments commence August 1, 2000 Interest rate 7 125% to 8 75% Secunty provided First mortgage lien on and a security interest in the seven group homes facilities
Page-4 • LEAKE AND WATTS SERVICES. INC. APPENDIX - A
ATTACHMENT TO IRS FORM 990 -2004 EIN # 13-1860451
SCHEDULE TO PAGE 4 PART V EIN # 13-1860451
LIST OF DIRECTORS
(A) NAME, ADDRESS & TITLE
01 Margery E Ames (Vice President)
02 Patricia Escallon de Ardila
03 Susan S Benedict
04 Jeanette Betancourt
05 Robert L Davis
06 Anita-Agnes 0 Hassell
07 Mary Nugent Henninger
08 Joseph C Hoopes Jr
09 Karen M Hopkins
10 William A Kirk, Jr ( President )
11 Rev Dr James A Kowalski
12 Anthony D LeCour
13 Ernesto Loperena
14 Joyce R Coppin Mondesire
15 Patricia Garland Monsey ( Vice President)
16 Frances R Olivien
17 Elinor G Ratner ( Secretary)
18 Elizabeth M Renyi
19 G Crosson Seybolt, Jr ( Treasurer)
20 Michael J Spano
21 Phoebe R Stanton
All officers and directors listed may be contacted at 463 Hawthorn Avenue, Yonkers, New York 10705
(B.C,D,E) All officers and directors received NO compensation, employee benefits , expenses account or other allowances
SCHEDULE TO SCHEDULE A PART IV-A Page 3
Line # 22 Other Income
Year Miscellaneous Income
2003 2,824
2002 2,455
2001 562
2000 17,091 Page-5 LEAKE AND WATTS SERVICES, INC. APPENDIX - B ATTACHMENT TO IRS FORM 990 (2004 ) EIN # 13 - 1860451
SCHEDULE TO PAGE 4 PART V
PART List of Officers, Directors , Trustees , and Key Employees (List each one even if not compensated; see instructions on page 19.)
(D) Contributions to Expense (A) Name and address (B) Title and average hours per (C) Compensation employee benefit plans & account and other week devoted to position (if not paid enter -0-) deferred compensation allowances
James J. Campbell Executive Director ------C\O 463 Hawthorne Ave, Yonkers NY 10705 100 % $ 239,384 $ 108,780 $24,000
Dionisio Castro Assoc. Executive Director ------C\O 463 Hawthorne Ave, Yonkers NY 10705 100% $ 181,544 $ 30,032 0
Donald Batista Assoc. Executive Director ------C\O 463 Hawthorne Ave, Yonkers NY 10705 100 % $ 132,969 $ 16,313 0
Michael K Mazzocco Chief Financial Officer ------C\O 463 Hawthorne Ave, Yonkers NY 10705 100 % $ 164,074 $ 27,660 0 LEAKE AND WATTS SERVICES, INC. QUICK REFERENCE GUIDE
463 Hawtho rne Avenue Yonkers, NY 10705 (914) 375-8700 www.leakeandwatts org
1. WHO WE ARE
Leake and Watts Services, Inc., over 174 years old, is one of the most respected child welfare agencies in the country. It is also one of the largest agencies, providing a full continuum of services for more than 3,000 children and families.
Leake and Watts originally opened in 1831 as an orphanage for 60 boys, located in downtown Manhattan. In 1843, it relocated to the current location of the Cathedral of St. John the Divine. Today, the Agency overlooks the Hudson River in Yonkers, on the border of the Bronx and Westchester County.
The mission of the Agency has evolved through the years in accordance with the changing nature of the problems faced by children and families. However, Leake & Watts remains committed to the spirit of the original charter.
Mission Statement Leake and Watts is a private not-for-profit corporation dedicated to strengthening resources for vulnerable children and families in the Greater New York region by providing a continuum of high quality community-based programs and specialized residential, educational and therapeutic services.
Motto "Building brighter tomorrows for children and families since 1831
Governance Leake & Watts is governed by a Board of Directors consisting of individuals who have extensive experience in the fields of social services, finance, medicine, law, architecture, and business management , as well as professional volunteers. The Board reflects the Leake & Watts tradition of ethnic and occupational diversity.
Board President: William A. Kirk, Jr. Executive Director: James J. Campbell
II. WHO WE SERVE
Our services are primarily directed at children from birth to 21 years who require specialized care. These children are seriously ill, poor, abandoned, sexually, physically, and emotionally abused and/or neglected.
Approximately 92% of Leake & Watts children are from the five boroughs of New York City, of which 66% are African-American or African-Caribbean, 28% are Latino, and the remainder is White/Caucasian.
III. WHAT WE DO
We believe that every child has a fundamental right to a safe, caring, secure, and nurturing home, as well as the right to reach his or her full potential. Leake and Watts upholds these rights by pledging to provide quality services, to practice the highest ethics, to respond to changing needs, and to build brighter tomorrows for our children, families and communities.
Services provided by Leake and Watts:
• foster care and adoption programs • specialized foster care for children with HIV or other serious health problems • therapeutic foster care for children with serious emotional , behavioral and other challenging conditions • community-based group care • group residences • supervised independent living • neighborhood centers • mother-infant programs • juvenile justice programs • preventive services • medical and mental services • early education (day care, head start and early intervention programs) for children with special needs • residential treatment for adolescents in need of intensive and integrated clinical, educational and vocational services
2 IV. PROGRAMS
Foster Boarding Home Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8200 Fax: 718-794-7801 The Program provides foster care placement and adoption services. It accepts placements for children ages 0-17, and provides care through age 21.
Kinship Foster Care Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8300 Fax: 718-794-8301 The Kinship Program identifies the relatives of foster children who can provide safe and appropriate foster care. It places the children within this familial environment and ensures that the Kinship Foster Parents are licensed to care for their approved relatives.
Specialized Foster Care Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8300 Fax: 718-794-8301 The Program locates foster homes for children affected by HIV or AIDS and who are medically fragile . It provides medical case management and supportive services to the foster families.
Therapeutic Foster Care Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone: 718-794-8300 Fax: 718-794-8301 Therapeutic Foster Care embraces the concept of family empowerment to foster the growth and development of children with severe emotional and/or behavioral problems. They usually require intense interaction and frequent medication. Early Permanency Planning Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8300 Fax: 718-794-8301 Early Permanency Planning identifies pre-adoptive homes for children with parents who are terminally ill due to HIV or other diseases.
Residential Treatment Center 463 Hawthorne Avenue Yonkers , NY 10705 Phone : 914- 375-8841 Fax: 914-963-0530 The Residential Program offers cottage living and specialized education for children between the ages of 12 and 21. This nurturing program provides intense counseling and behavior modification to boost each resident's growth potential. Residents are also offered religious education and therapeutic recreation, as well as comprehensive clinical, medical, and social services.
Council for Unity 463 Hawthorne Avenue Yonkers , NY 10705 Phone : 914-375-8700 Leake & Watts is one of 42 schools in the New York City area that maintains a Council for Unity chapter. It is a youth group that promotes youth leadership, empowerment, self-esteem, and unity. A main goal of the group is conflict-resolution.
Vocational Services Employment Program 463 Hawthorne Avenue Yonkers, NY 10705 Phone : 914- 375-8946 Fax: 914-968-2099 The Vocational Program provides residents with education, training, and on-the-job work experience to prepare them for community employment. It is organized into three phases: pre-employment classes, work study, and community employment.
4 Clinical Services 463 Hawthorne Avenue Yonkers, NY 10705 Phone : 914- 375-8808 Fax: 914-963-0124 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8450 Fax: 718-794-8401 The Leake & Watts Clinical team provides comprehensive medical and mental health care. Staff physicians and nursing staff perform both primary and follow-up care, as well as specialty care for the Pediatric AIDS and Therapeutic Foster Boarding Programs. Psychiatrists and psychologists provide group therapy as well as individualized behavior modification programs designed to fit the needs of each child.
Pastoral Care 463 Hawthorne Avenue Yonkers, NY 10705 Phone : 914-375-8819 Pastoral Care provides one-on-one spiritual counseling to all Agency youths. Conducts the WELLNESS program, which allows residents to deal with and discuss interpersonal issues. Directs the Leake & Watts choir program.
Physical Education, Aquatics/Athletics, and Recreation (PEAR) 463 Hawthorne Avenue Yonkers , NY 10705 Phone : 914-375-8971 PEAR facilitates the development, maintenance , and expression of an appropriate leisure lifestyle. It provides the residents of Leake & Watts with an array of programs including opportunities for Section 1 athletic team competition with public schools.
Group Homes 1529-35 Williamsbridge Road Bronx, NY 10461 Phone: 718-794-8450 Fax: 718-794-8582 Provides group residences. The eight Leake & Watts Group Homes create a safe and nurturing living environment while preparing residents for independence. Services include individual, group and family psychotherapy, casework counseling, tutorial and vocational support, GED preparation, life skills training, job preparation and placement assistance. Supervised Independent Living Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8450 Fax: 718-794-8582 Offers a 24-hour transitional living arrangement in five apartments for youths ages 17-20. It prepares adolescents to live independently in the community after discharge from foster, group, or residential program care.
Mother/Infant Program 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8450 Fax: 718-794-8582 Provides specialized residence for hard-to-place adolescent mothers ages 16-20. The program offers a safe and caring environment to mothers and infants while teaching parenting and daily living skills, and providing clinical, medical, and casework services.
Woodfield Detention Facility Hammond House Road Valhalla, NY 10595 Phone : 914- 347-6070 Fax: 914-347-6118 Provides an integrated therapeutic program and related social services for adolescent offenders in secure detention and their families.
The Carol & Frank Biondi Education Center 463 Hawthorne Avenue Yonkers, NY 10705 Phone : 914- 375-8946 Fax: 914-968-2099 Provides education programs to Leake & Watts residents and day students in grades I through 12. The three-level contemporary facility was specifically engineered to maximize learning. It is equipped with a multi-media room, a campus store, an Olympic size swimming pool, a state-of-the-art gymnasium, a theater, and several computer labs.
6 The Marion P. Ames Early Childhood Center 463 Hawthorne Avenue Yonkers, NY 10705 Phone: 914- 375-8820 Fax: 914-963-0950 A fully integrated early childhood center which provides a comprehensive preschool experience. The Center is designed for typically developing toddler and preschool children ages 18 months - 5.1 1 years old, as well as children with disabilities.
Dr. Katharine Dodge Brownell School 450 Castle Hill Avenue Bronx, NY 10473 Phone : 718- 430-7938 Fax: 718-430-9474 A 12-month program which provides evaluations and special education services to children ages 3-5 years old who exhibit delays and/or concerns in the following developmental domains: speech and language, cognitive/learning skills, social-emotional development, self-help skills, and fine motor/sensory skills.
Dr. Richard Green Child Day Care Center 450 Castle Hill Avenue Bronx, NY 10473 Phone : 718- 904-1689 Fax: 718-904-1833 Multi-cultural comprehensive program which meets the emotional, social, nutritional, and psychological needs of children ages 2.5-6 years old.
Dr. Richard Green Learning Center/Headstart 450 Castle Hill Avenue Bronx, NY 10473 Phone : 718- 829-9595 Fax: 718-829-3005 Early childhood education and recreational program for children ages 3-5 years old. Social, health, and dental services are included.
Highbridge Nursery School 1531 University Avenue Bronx, NY 10453 Phone : 718-294-0660 Fax: 718-294-0727 Early childhood educational and recreational program for children ages 2-6 years old.
7 Satellite Child Care Program 450 Castle Hill Avenue Bronx, N.Y. 10473 Phone : 718- 863-8744 Fax: 718- 430-9474 A family day care program that provides home-based childcare services to children between the ages of six weeks and five years of age. Each licensed home provides extended day services to typically developing children and children with developmental delays/disabilities.
Soundview Child Care Center 1700 Seward Avenue Bronx, NY 10473 Phone : 718-991-7462 Fax: 718-991-1690 Early childhood educational and recreational program for children ages 2-6 years old.
SAPIE (Substance Abuse Prevention , Intervention , and Education Program) 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8500 Fax: 718-794-8401 A rehabilitation program that provides intensive casework services to families with substance abuse or chemical dependency problems.
Preventive Services
East Bronx Family Service Center 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8500 Fax: 718-794-8401 Direct casework services are provided to children and families in the community when the child is at risk of placement in foster care or returning to foster care. Services include: case planning and management, family and marital counseling, and parent training groups. Counseling and support to PINS (persons in need of supervision) and other youths from the juvenile justice system are also provided by the Center. Project HEAL (Help, Education, Alleviation, Life) 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8500 Fax: 718-794-8401 Provides intensive family counseling service for parents with children under 17 years of age who have HIV or AIDS. It helps prevent the deterioration of families.
The Family Resource Center 1529-35 Williamsbridge Road Bronx, NY 10461 Phone : 718-794-8500 Fax: 718-794-8401 A consumer-run and operated center that empowers families through education, advocacy, and support. Services are available to families with children involved in the child welfare system. Workshops and socialization activities are also offered.
V. FUNDING SOURCES
During the 2005's, Leake and Watts received approximately 99 percent of its funding from the Federal, State, and Local Governments and 01 percent from private sources, including individuals.
Public Funding Organizations include: • NYC Administration for Children's Services* • NYS Education Department • NYC Agency for Child Development • NYC Board of Education • Yonkers Public School District • Westchester County Department of Social Services • NYS Office of Children and Family Services • NYS Department of Juvenile Justice
*The Foster Care and Congregate Care programs are primarily funded by the New York City Administration for Children's Services (ACS).
Donations may be forwarded to: Leake and Watts Services, Inc. Development Office 463 Hawthorne Avenue Yonkers, NY 10705 (914) 375-8898
90% ofevery dollar goes toward program development and implementation.
9 VI. ACCREDITATIONS and AFFILIATIONS
• Alliance for Children and Families • Child Welfare League of America • Council of Family & Child Care Agencies • Interagency Council for Mental Retardation & Developmental Disabilities • Federation of Protestant Welfare Agencies • Community Planning Council of Yonkers • Council on Accreditation of Services for Families and Children, Inc. • Day Care Council • Empire State Coalition of Youth and Family Services • Family Resource Coalition of America • Mott Haven Act Collaborative • United Way of New York City • Yonkers Chamber of Commerce • Yonkers Historical Society
10 - S UD Page 2 • If you are filing for an Additi onal (not automati c) 3-Month Extension , complete only Part II and check this box _ ► Note. Only complete Part II if you have already been granted an automatic 3-month extension on a previously filed Form 8868 • If you are filing for an Automatic 3-Month Extension , complete only Pa rt I (on page 1) Additional (not automatic) 3-Month Extension of Time-Must File Origin I and One Copy. Type or Name of Exempt Organization - Employer Identification number print LEAKE AND WATTS SERVICES, INC. 13:1860451 File by the Number, street, and room or su ite no. If a P 0 box, see instructions For IRS use only extended 463 HAWTHORNE AVENUE due date for filing the City town or post office, state, and ZIP code . For a foreign address , see instructions return See instructions YONKERS, NY 10705 Check type of return to be filed (File a separate application for each return). ( Form 990 ❑ Form 990-T (sec. 401(a) or 408(a) trust) ❑ Form 5227 ❑ Form 990-BL ❑ Form 990-T (trust other than above) ❑ Form 6069 ❑ Form 990-EZ ❑ Form 1041-A ❑ Form 8870 ❑ Form 990-PF ❑ Form 4720 STOP: Do not complete Part II if you were not already granted an automatic 3-month extension on a previously filed Form 8868.
• The books are in the care of ► ------•-•-•--••--•-•------•------•------• Telephone No. ► (--•--••--)•--••-•------• FAX No. ► ( ...... ) • If the organization does not have an office or place of business in the United States, check this box . . . . . ► ❑ • If this is for a Gro up Retu rn, enter the organization's four digit Group Exemption Number (GEN) If this is for the whole group, check this box ► ❑ . If it is for pa rt of the group, check this box ► ❑ and attach a list with the names and EINS of all members the extension is for. 4 1 request an additional 3-month extension of time until __ MAY 15 -2BQ 6. 5 For calendar year ...... or other tnsion beginning -----JULY _-1------,20.04-, and ending JUNE . 30 20 05 6 If this tax year is for less than 12 months , check reason : ❑ Initi al return ❑ Final retu rn ❑ Change in accounting period TO ACCURATELY COMPLETE AND HAVE REVIEWED BY 7 State in detail wh ou need the extension ------OUR AUDITO DELOITTE & TOUCHE LLP ALL DATA REQUIRED FOR THIS FILING. ----•------••-•------•--•---•------•------•-•---•------•------•-•------8a If this application is for Form 990-BL , 990-PF, 990-T, 4720, or 6069 , enter the tentative tax, less any nonrefundable credits. See instructions ...... $ b If this application is for Form 990-PF, 990-T, 4720 , or 6069 , enter any refundable credits and esti mated tax payments made . Include any pnor year overpayment allowed as a credit and any amount paid previously with Form 8868 ...... $ c Balance Due. Subtract line 8b from line Ba. Include your payment with this form , or, if required , deposit with FTD coupon or, if required , by using EFTPS (Electronic Federal Tax Payment System) See instructions $ Signature and Verification Under penalties of perju ry, I declare that I have examined this form , including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, omplete , and that I am authorized to prepare this form Signature ► Title CHIEF FINANCIAL OFFICERate ► 2-16 OG i Notice to Applicant-To Be Completed by the IRS We have approved this application . Please attach this form to the organization ' s return. ❑ We have not approved this application However, we have granted a 10-day grace period from the later of the date shown below or the due date of the organization ' s return (including any prior extensions). This grace period is considered to be a valid extension of time for elections otherwise required to be made on a timely return . Please attach this form to the organization's return ❑ We have not approved this application . After conside ri ng the reasons stated in item 7 , we cannot grant your request for an extension of time to file. We are not granting a 10-day grace pe ri od ❑ We cannot consider this application because it was filed after the extended due date of the return for which an extension was requested ❑ Other ------•------
By Director Date Alternate Mailing Address - Enter the address if you want the copy of this application for an additional 3-month extension returned to an address different than the one entered above Name EXTENSION APPROVED
Type or HL'umber and street (include suite, room, or apt . no.) or a P .O. box number MAR 14 9n06 REC D li t , province or state , and count ry (including postal or ZIP code) 19 , FIELD DIRECTOR, - 12-2004) X89 rM 4 :J` l I. IRS 114nCETEA K-1 iVgVILLE NAY10174 2 EN 10
i
•
Leake and Watts Services, Inc. Financial Statements for the Years Ended June 30, 2005 and 2004, and Independent Auditors' Report
Report on Compliance Over Financial Reporting as Required by Governmental Auditing Standards for the Year Ended June 30, 2005
I•
•
16
J LEAKE AND WATTS SERVI CES, IN C.
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1-2
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2005 AND 2004:
Statements of Financial Position 3 • Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6-12
SUPPLEMENTAL SCHEDULE FOR THE YEAR ENDED JUNE 30, 2005 (WITH COMPARATIVE TOTALS FOR 2004):
Schedule of Functional Expenses 13
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 14
•
•
J Deloitte & Touche LLP Deloitte0 Third Floor 750 College Road East Princeton , NJ 08540 USA • Tel: +1 609 514 3600 Fax, +1 609 514 3603 www.deloitte.com
INDEPENDENT AUDITORS' REPORT
O Leake and Watts Services, Inc. 463 Hawthorne Avenue Yonkers, NY 10705
We have audited the accompanying statements of financial position of Leake and Watts Services, Inc. • ("Leake & Watts") as of June 30, 2005 and 2004, and the related statements of operations and of cash flows for the years then ended. These financial statements are the responsibility of Leake & Watts 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 for 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 consideration of internal control over financial reporting as a basis for designing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Leake & Watts' internal control over financial reporting. O Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, such financial statements present fairly, in all material respects, the financial position of Leake & Watts as of June 30, 2005 and 2004, 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.
As discussed in Note 11 to the financial statements, in 2005 Leake & Watts identified contributed fixed assets which were not being recorded. The accompanying 2004 financial statements were retroactively 40 restated for this change.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of functional expenses for the year ended June 30, 2005, (with comparative totals for June 30, 2004), is presented for purposes of additional analysis and is not a required part of the financial statements. This schedule is the responsibility of Leake and Watts' management. Such schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
O
• Member of Deloitte Touche Tohmatsu 0
In accordance with Government Auditing Standards, we have also issued our report dated • October 6, 2005 on our consideration of Leake & Watts' internal control over financial reporting and 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 read in conjunction with this report in considering the results of our audit.
r October 6, 2005
•
-2- J LEAKE AND WATTS SERVICES, INC.
STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 2005 AND 2004
ASSETS 2005 2004 (As Restated)
CASH $ 65,363 $ 51,808
ACCOUNTS RECEIVABLE-Net of estimated uncollectible amounts ($355,000 and $578,000 in 2005 and 2004, respectively): Board, maintenance and education of children: City of New York (Note 5) 1,728,477 2,143,228 Other public agencies 2,228,788 2,543,966 Other 133,574 77,437
ACCRUED INTEREST RECEIVABLE 99,456 97,289
PREPAID EXPENSES 467,297 644,895 e INVESTMENTS (Notes 2,3 and 6) 19,090,545 20,508,235
FIXED ASSETS (Notes 2,4,7 and 11) 35,113,158 36,290,326
CASH AND INVESTMENTS HELD BY BOND TRUSTEES (Note 7) 5,245,110 5,666,785
BOND ISSUANCE COSTS (Notes 2 and 7) 1,118,814 1,110,275
TOTAL $65,290,582 $69,134,244
• LIABILITIES AND NET ASSETS
LIABILITIES: Accounts payable $ 1,630,612 $ 1,689,892 Accrued payroll and employee benefits 5,160,221 4,843,758 Accrued expenses and other liabilities (Note 5) 3,954,634 4,630,591 Line of credit and short term borrowings (Note 6) 1,745,000 2,300,000 Bonds payable-Net of unamortized discount and premium of $63,534 and $742,249 in 2005 and 2004, respectively (Notes 2 and 7) 35,488,534 35,547,751
Total liabilities 47,979,001 49,011,992
NET ASSETS (Note 2): Unrestricted 14,447,665 17,304,342 Temporarily restricted by donor (Notes 10 and 11) 502,820 456,814 Permanently restricted by donor (Note 10) 2,361,096 2,361,096
Total net assets 17,31 1,581 20,122,252
TOTAL $65,290,582 $69,134,244
See notes to financial statements.
• -3- L
LEAKE AND WATTS SERVICES, INC.
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2005 AND JUNE 30, 2004
2005 2004 (As Restated) S OPERATING REVENUES: City of New York (Note 5) $ 48,676 ,640 $ 49,849,024 Other public agencies 9, 880,637 10 , 802,092 Other operating revenue 732 ,418 609,616 Net assets released from restrictions (Notes 10 and 11) 258,035 168,478
Total operating revenues 59,547 ,730 61,429,210
OPERATING EXPENSES: Program services (Note 11 ) 57,776, 200 56,121,000 Management and general 6,483,900 5 , 879,300
Total operating expenses 64,260,100 62,000,300
EXCESS OPERATING EXPENSES (4,712,370 ) (571,090)
• NONOPERATING ITEMS : Public support-Donations and legacies 706,790 196,360 Development expenses ( 187,500) (177,100) Investment income (Note 3 ) 1,336,403 2,104,652
• Total nonoperating items 1,855 ,693 2,123,912
CHANGE IN UNRESTRICTED NET ASSETS (2,856 ,677) 1,552,822
CHANGE IN TEMPORARILY RESTRICTED NET ASSETS 46,006 (45,766) (Notes 10 and 11)
TOTAL CHANGE IN NET ASSETS (2,810,671) 1,507,056
NET ASSETS-Beginning of year (Note 11 ) 20,122,252 18 , 615,196
NET ASSETS-End of year $17,311,581 $20,122,252 •
See notes to financial statements.
L
-4- S 0
LEAKE AND WATTS SERVICES, INC.
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2005 AND 2004
2005 2004 (As Restated) • CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ (2,810,671) $ 1,507,056 Adjustments to reconcile change in net assets to cash (used in) provided by operating activities Depreciation expense 2,070,418 2,027,615 Amortization of bond issuance costs 1,413,673 64,434 Amortization of bond discount 39,066 39,066 • Amortization of bond premium (21,298) - Realized gains-net (1,312,548) (204,035) Write off of receivables (222,420) (395,673) Change in unrealized appreciation on investments 430,436 (1,480,181) Contributions for capital construction (60,000) - Donated fixed assets (138,993) (75,925) Changes in assets and liabilities • Accounts receivable-Board, maintenance and education City of New York 564,626 (1,470,002) Other public agencies 387,724 941,329 Other receivables (56,138) (8,183) Accrued interest receivable (2,167) 22,728 Prepaid expenses 177,598 (345,527) Accounts payable (59,280) 312,334 Accrued payroll and employee benefits 316,464 (69,535) S Accrued expenses and other liabilities (675,957) (1,226,543)
Net cash provided by (used in) operating activities 40,533 (361,042)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments (15,610,957) (11,485,206) Proceeds from sale of investments 17,910,759 11,885,842 Reduction and (addition to) bond proceeds held by bond trustees 421,675 (83,086) Additions to fixed assets-net (754,258) (1,563,145)
Net cash provided by (used in) investing activities 1,967,219 (1,245,595)
CASH FLOWS FROM FINANCING ACTIVITIES Short-term borrowing and (repayments) (555,000) 2,300,000 Contributions for capital construction 60,000 - Bond issue cost-Series 2004 (1,422,212) - Bond premium received-Series 2004 1,445,615 - Bond premium paid-Series 1994 (657,600) - Proceeds from bonds issued 33,105,000 - Bond retirement (33,970,000) (1,030,000)
. Net cash (used in) provided by financing activities (1,994,197) 1,270,000
INCREASE (DECREASE) IN CASH 13,555 (336,637)
CASH-Beginning ofyear 51,808 388,445
CASH-End of year $ 65,363 $ 51,808
Q SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION- Cash paid during the year for interest $ 2,387,544 $ 2,223,903
See notes to financial statements
-5- L]
LEAKE AND WATTS SERVICES, INC.
• NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2005 AND 2004
1. ORGANIZATION
• Leake and Watts Services, Inc. ("Leake & Watts") is a not-for-profit organization exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. Leake & Watts operates many out-of-home and community-based child and family care programs, principally in the Bronx and Westchester County. A substantial portion of its operating revenue and accounts receivable is from the City of New York and from other public agencies. • 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis ofPresentation-The financial statements of Leake & Watts have been prepared on the accrual basis and in accordance with generally accepted accounting principles. Among other things, generally accepted accounting principles require that a not-for-profit organization's financial statements report the • amounts for, and changes in, each of three classes of net assets - permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets - based on the existence or absence of donor-imposed restrictions. Assets and liabilities are presented in order of liquidity on the accompanying statement of financial position.
Use ofEstimates-The preparation of financial statements in conformity with generally accepted • accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Board Designated Fundfor Investment Purposes-A portion of unrestricted net assets is designated by the Board of Directors for investment purposes. Income earned on the investments is used to support the operations of Leake & Watts. Board designated investments at market value were $14,448,000 and $17,304,000 at June 30, 2005 and 2004, respectively. Included in these amounts are gains from endowment funds of $644,000 and $561,000 in 2005 and 2004, respectively.
• Fixed Assets-Fixed assets are stated at cost or contributed value. Depreciation is computed on the straight-line basis over the estimated useful lives of the assets as provided by the New York State Standards of Payment for Foster Care of Children and New York State Education Department Consolidated Fiscal Reporting Manuals. It is Leake & Watts' policy to eliminate from the financial statements the cost and associated accumulated depreciation of fully depreciated assets. The estimated useful lives of such assets are as follows:
Land and land improvements 20 to 40 years Building and building improvements 20 to 40 years Furniture, fixtures and equipment 5 to 20 years
C
-6- • Bond Discount, Premium and Issuance Costs-The costs associated with the issuance of the 1994 Series Insured Revenue Bonds and those associated with the 1999 New York City Industrial • Development Agency Bonds have been deferred and are being amortized over the life of the bonds. A portion of the costs associated with the Series 2004 Insured Revenue Bonds have been deferred and are being amortized over the life of the bonds.
Contributions and Grants-Leake & Watts reports as increases in restricted net assets gifts of cash and other assets received with donor stipulations, including unconditional promises to give with payments due in future periods, that limit the use of the donated assets. When a donor restriction expires, that is, after a stipulated time restriction ends or purpose restriction is accomplished, such net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Donated fixed assets that are restricted for use in specific programs are released from restriction over the useful lives of the assets.
Reclassification ofAmounts-Certain 2004 amounts have been reclassified to conform with the 2005 presentation.
3. INVESTMENTS
The market value of investments at June 30, is as follows:
2005 2004
Money market funds $ 295,371 $ 623,186 U.S. Treasury obligations 2,848,348 1,903,122 Common stocks 6,411,818 7,653,792 Mutual funds 4,617,856 5,339,177 Corporate bonds 4,917,152 4,988,958
Total investments-at fair value $ 19,090,545 $20,508,235
• Included in investments are $2,361,096 of permanently restricted funds at June 30, 2005 and 2004.
Net investment income consists of the following at June 30,:
2005 2004
• Interest and dividend income $ 545,711 $ 513,168 Realized gains-net 1,312,548 204,035 Change in unrealized appreciation on investments (430,436) 1,480,181 Investment expenses (91,420) (92,732)
• Investment income-net $ 1,336,403 $ 2,104,652
•
-7- • •
The following table shows Leake and Watts' investments' gross unrealized losses and fair value, aggregated by investment category and length of time that individual secunties have been in a continuous unrealized loss position, at June 30, 2005 and 2004, respectively:
2005 - Gross Unrealized Losses Less than 12 Months Investment Category 12 Months or Longer Total Fair Value
Common stock $ (50,685 ) ( 166,494) $ (217,179) $ 2,515,537 0 $
2004 - Gross Unrealized Losses Less than 12 Months Investment Category 12 Months or Longer Total Fair Value
Common stock $ (42,944) $ 252,981 $ 295 ,925 $ 2,273,347
Management has concluded that the impairments are not other-than-temporary because the investments • reflected appear to have the ability to recover from their current loss position. In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities . SFAS No. 133 requires that all deri vative instruments be recorded on the balance sheet at fair value . In conjunction with certain investing activities , Leake & Watts may from time to time acquire deri vative securi ties . Leake & Watts had no such instruments at • June 30, 2005 and 2004.
4. FIXED ASSETS
During the 2005 fiscal year, Leake & Watts retired $716,816 of fully depreciated assets from fixed assets. As of June 30, fixed assets consist of the following:
2005 2004
Land and land improvements $ 599,100 $ 575,200 Building and building improvements 44,109,358 43,771,565 Furniture, fixtures and equipment 4,907,311 5,092,569
Total cost 49,615,769 49,439,334
Less accumulated depreciation (14,502, 611 ) (13,149,008 )
Fixed assets-net $35,113,158 $36,290,326 •
5. REVENUE ADJUSTMENTS
The principal source of revenue consists of support payments received from the City of New York (the "City"), Westchester County, New York State, and individual school districts for congregate and foster Q boarding home care, education, and health care provided to children referred to Leake & Watts. Such payments, based initially upon per diem rates established annually by the New York State Office of Children and Family Services, the New York City Administration for Children's Services, the State
-8- Department of Health , and the State Education Department, are finalized after audit of reported costs, days of care , and school attend ance . Interi m reconciliations have been finalized for 1998 through • December 2004, and no significant adjustments have been required to revenue as a result of these reviews . During 2005 , the reserve for uncollectible receivables was reduced by $223,000 because Leake and Watts wrote off certain receivables due from New York City for the years 2001 to 2003 that were deemed to be uncollectible.
Revenue from support payments from the City are subject to audit for the fiscal years ended June 30, 1998 through June 30, 2005. The City has finalized the settlement of audits up to fiscal year 1997. The City auditors have completed the audit for the years ended June 30, 1998 and June 30, 1999, and we are expecting a draft report shortly. The eventual liability, if any, upon final settlement of the open years has not been determined. However, without admitting liability, Leake & Watts has recorded provisions for the eventual settlement of the open cost reporting periods.
• 6. LINE OF CREDIT/SHORT-TERM BORROWINGS
Leake & Watts maintains a line-of-credit with the Bank of New York for $10,000,000. As of June 30, 2005 and 2004, Leake & Watts had outstanding borrowing of $1,745,000 and $2,300,000, respectively, under this line-of-credit. Borrowings are payable on demand, bear interest at the prime rate mmus two percent (2%) at June 30, 2005 and at June 30, 2004, and are collateralized by assets held by the Bank of • New York in the custodial investment accounts of Leake & Watts. The market value of investments held in this account approximates $19,090,000 and $20,508,000 at June 30, 2005 and 2004, respectively.
7. BONDS PAYABLE
• On December 21, 2004, the Dormitory Authority of the State of New York (the "Authority") issued Series 2004 Bonds aggregating $33,105,000 primarily to refund the Authority's Series 1994 Bonds ("Refunded Bonds"). The Series 2004 bonds were sold at a premium (net of discounts) of $1,445,600, and are due in 2023. On January 25, 2005, the entire outstanding balance of the Series 1994 Bonds, totaling $32,880,000, was refunded with a 2% additional call premium of $657,600. Bond proceeds were also used to pay the issuance cost of the Series 2004 Bonds totaling $1,422,200. A major portion of • these costs, $1,349,200, were expensed in 2005; the remainder is included in bond issuance costs and will be amortized over the life of the bonds. The Series 1994 Bonds were used for construction costs of a new school building, children's residential cottages, and renovations to existing buildings. The retirement of the Series 1994 Bonds and the issuance of the Series 2004 Bonds were accounted for as a modification of debt terms in accordance with Emerging Issues Task Force ("EITF") 96-19: Debtor's Accounting for a Modification or Exchange of Debt Instruments. Accordingly, the call premium paid on • the refunded 1994 Bonds, the unamortized bond discount on the refunded 1994 Bonds, and the premium received on the 2004 Bonds have been aggregated into one account which nets to $63,500. This amount will be amortized as a reduction to interest expense over the life of the 2004 Bonds.
The Series 2004 Bonds are special revenue obligations of the Authority and are secured by a mortgage on the real property on which the project is located, and by a security interest in certain fixtures, • furnishings, and equipment now or hereafter located therein, or used in connection therewith. The Series 2004 Bonds are also secured by the pledge and assignment of revenues, and the Authority's security interest in the pledged revenues, and Leake & Watts must maintain unrestricted assets equal to the maximum annual debt service payment. The Series 2004 Bonds are insured as to scheduled payment of principal and interest by a financial guaranty insurance policy issued by MBIA Insurance Corporation. 0 The principal balance outstanding at June 30, 2005 on the Series 2004 Bonds is $33,105,000.
-9- • •
The 2004 Bonds loan agreement requires principal payments through July 1, 2023, and the maintenance of certain reserve funds. At June 30, 2005 and 2004, the amounts held in the debt service fund were . $2,803,000 and $1,979,500, respectively; amounts held in the debt service reserve fund were $2,634,000 and $2,950,800, respectively; amounts held in the construction fund were $ 42,400 and $0, respectively, and amounts held in the building and equipment reserve funds were $0 and $1,218,000, respectively. These amounts are reflected as cash and investments held by bond trustees on the accompanying statements of financial position. The interest payments due July 1, 2005 and 2004, of $ 789,400 and $1,000,500, respectively, are reflected as a reduction of the debt service fund for financial statement • purposes. The rates of interest on the bonds range from 3.0% to 5.0%. During fiscal 2005, interest income earned on funds held by bond trustees totaled $55,000, which is shown as a reduction of bond interest expense. The Authority refunded the balance of the building and equipment reserve fund.
On December 10, 1999, the New York City Industrial Development Agency ("NYCIDA") issued Series 1999B Bonds aggregating $2,889,200 to finance or refinance the costs of the acquisition, • construction, equipping and financing of seven group homes. The bond proceeds were also used to pay the issuance costs of the bonds, totaling $220,800. The bonds are secured by a first mortgage lien on and a securi ty interest in the facilities . In addition , Leake & Watts may not create or permit any mortgage, encumbrance, lien, security interest, claim or charges against the facilities without NYCIDA approval. The principal balance outstanding on the Series 1999B Bonds is, as of June 30, 2005 and 2004, • $2,320, 000 and $2 ,470,000 , respectively.
The 1999 Bonds loan agreement requires principal payments through August 1, 2015 and the maintenance of certain reserve funds. At June 30, 2005 and 2004, the amounts held in the debt service reserve fund were $370,100 and $345,000, respectively, amounts held in the rental repayment accounts were $258,900 and $251,800, respectively; and amounts held in the construction fund were $1,300 and • $1,300, respectively. These amounts are reflected as cash and investments held by bond trustees on the accompanying statements of financial position. The accrued interest through June 30, 2005 and 2004 in the amount of $75,100 and $79,500, respectively, is reflected as a reduction in the rental payment account for financial statement purposes. The rate of interest on the bonds ranges from 7.125% to 8.75%. During fiscal year 2005, interest income earned on funds held by bond trustees totaled $26,900 and is shown as a reduction of bond interest expense. • Annual debt service amounts payable during the next five years are as follows: 2006 $ 2,145,000 2007 1,355,000 2008 1,405,000 2009 1,455,000 2010 1,515,000 Thereafter 27,550,000
Sub total 35,425,000 Plus net unamortized premium 64,000 �• Total $ 35,489,000
8. RETIREMENT PLAN
Effective July 1, 1989, Leake & Watts established a defined contribution retirement plan (the "Plan") covering all employees with more than one year of service and who are over age 21. The aggregate annual contribution to the Plan, which is generally based on a percentage of total compensation of
-10- • I•
eligible employees, as authorized by the Board of Directors, is allocated to participants' accounts in amounts equal to such percentage of their compensation. For the years ended June 30, 2005 and 2004, contributions to the Plan totaled $1,322,000 and $1,277,500, respectively. • 9. COMMITMENTS AND CONTINGENCIES
Total minimum lease payments through the year 2010 are $5,720,000 as of June 30, 2005 for all long- term non cancellable operating leases (principally for office space, residential housing, office equipment, and automobiles). Annual amounts for the next five years are $1,430,000, $1,320,000, $1,060,000, $990,000, and $920,000.
Total rental expense for all operating leases amounted to $1,820,000 and $1,720,000 for the years ended June 30, 2005 and 2004, respectively.
Workers compensation coverage is provided by the Provider Agency Trust for Human Services. The agency was informed that the Trust's reserves for claims were insufficient, resulting in an assessment of $1,237,000, which was recorded as a liability during the year ended June 30, 2005.
Leake & Watts is involved in various legal matters in which damages and other remedies are sought. In the opinion of management, after review with counsel, the eventual disposition of these matters will not • have a material adverse effect on Leake & Watts' financial position and results of its operations.
10. RESTRICTED NET ASSETS
Temporarily restricted net assets at June 30, 2005, are available for the following purposes:
• Computer literacy (E-Rate) $ 289,400 Fire safety 211,000 Awarding of educational scholarships 2,200 Unreimbursable expenses of foster parents 200 $ 502,800 •
Changes in temporarily restricted net assets are comprised of the following for the years ended June 30, 2005 and 2004: 2005 2004
• New gifts $ 304,000 $ 122,700 Less amounts released from restrictions: Computer literacy (E-Rate) 93,100 120,100 Fire safety 40,700 40,700 Awarding of educational scholarships 4,200 7,700 Strategic Planning-United Way 60,000 Capital construction 60,000
Total released from restrictions 258,000 168,500
Changes in temporarily restricted net assets $ 46,000 $ (45,800)
2
-11- • Permanently restricted net assets, representing gifts to be held in perpetuity, generate investment income (i.e., interest, dividends, and gains on investment transactions), which is available to support the general operations of Leake & Watts and for awarding of educational scholarships. There were no permanently restricted gifts received in 2005 or 2004.
11. PRIOR PERIOD ADJUSTMENT
Commencing in fiscal 1999, Leake and Watts received, but did not record, the benefit of funding provided by the Federal Government through the Schools and Libraries Universal Service Support Mechanism (E-Rate) program. The purpose of the program is to improve internet access and computer literacy for students. Under the terms of the E-Rate program, Leake and Watts pays for 10% of the total cost. The remaining 90% is paid directly to a computer vendor by the government's agent, Universal Service Administration Company ("USAC"). Leake and Watts reflects the full benefit received from this program on its books. O Accordingly, the agency has recorded temporarily restricted revenue and related depreciation expenses as follows:
Tempora ri ly Released from Addition to Restricted Restriction Tempora ri ly Revenue for Depreciation Restricted
Through June 30, 2003 $ 407,903 $ 205,532 $ 202,371 For fiscal year ended June 30, 2004 120,521 120,087 434
IO The effect of the prior period adjustment as of June 30, 2003 and 2004 is as follows;
As Previously Stated Addition As restated
O Total net assets as of June 30, 2003 $ 18,412,825 $ 202,371 $ 18,615,196 Temporarily restricted net assets as of June 30, 2004 254,009 202,805 456,814 Total net assets as of June 30, 2004 19,919,447 202,805 20,122,252 Total fixed assets as of June 30, 2004 36,087,521 202,805 36,290,326 Net assets released from restrictions 48,391 120,087 168,478 Depreciation expense as of June 30, 2004 1,952,100 75,500 2,027,600 Change in temporarily restricted net assets as of June 30, 2004 (46,200) 434 (45,766)
O
-12- O LEAKE AND WATTS SERVICES, INC.
SCHEDULE OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2005 (WITH COMPARATIVE TOTALS FOR 2004)
Total Total Education Total Total Year Ended Year Ended Foster and Early Community Program Management Support June 30, June 30, Care Childhood O.M.R.D.D. Based Services Development & General Services 2005 2004 EXPENSES Employee Compensation And Benefits Salaries and Wages S 13,867,000 S 11,040,300 S 12,500 S 3,933,400 S 28,853,200 $ 95,500 S 3,269,500 S 3,365,000 $ 32 218,200 S 32,208,900 Benefits 3,918 400 3,086,200 3,500 811,700 7,819,800 25 800 933 800 959,600 8,779,400 7,768 800
Total 17,785,400 14,126,500 16,000 4,745,100 36,673 000 121,300 4,203,300 4,324,600 40,997,600 39,977,700
Professional Fees Health Services 679,800 566,500 - 87,200 1,333,500 - - - 1.333,500 1,272,000 Food Management - - - 107,100 107,100 - - - 107,100 101,000 Audit 9,800 30,000 - 10.800 50.600 - 128,400 128,400 179,000 171,000 Legal 295,900 - - - 295,900 - 247.400 247,400 543,300 622,600 Other 394,200 286,000 7,800 169,600 857,600 8,200 199,600 207,800 1,065,400 1,064,000
Total 1,379,700 882 500 7,800 374,700 2,644 700 8,200 575,400 583,600 3,228,300 3,230,600
Specific Assistance to Individual'. Payments to Foster Parents 3,539,100 - - - 3,539,100 - - - 3,539,100 3,971,600 Food 648,000 166,700 - 176,800 991,500 - - - 991.500 944.400 Clothing 231,500 - - - 231,500 - - - 231,500 234,100 Children's Allowances and Actn ties 325.900 130 200 - 19.300 475,400 - - - 475,400 537,900 Tutoring 52,100 - - - 52,100 4,000 4,000 56,100 32,000 Other 122,400 19,200 141,600 141,600 143,000
Total 4,919,000 296,900 215,300 5,431,200 4,000 4,000 5,435,200 5,863,000
Occupancy Rent 465,700 580,000 - 430,200 1,475,900 12,600 12,600 1,488,500 1,366,600 Utilities 495,000 335,200 - 13,600 843,800 1,500 126,500 128,000 971,800 849,400 Janitorial Sen ices 99,300 219,800 19,400 338,500 400 42,700 43,100 381,600 416,500 Security 158,000 84,700 - 24,300 267,000 400 36,700 37,100 304,100 335,000 Property Maintenance and Repaus 229,400 90,300 - 26,700 346,400 600 110,300 110,900 457,300 492,800 Interest on Bonds 1,616,800 1,441,200 - 900 3,058,900 3,900 339,200 343,100 3,402,000 2,249,200 Other 57,700 18,500 500 76,700 100 11,200 11,300 88,000 81,300
Total 3,121,900 2,769,700 515,600 6,407,200 6 900 679,200 686 100 7,093,300 5,790,800
Other Supplies 970,700 655,200 215,700 1,841,600 39,200 85,400 124,600 1,966,200 1,908,600 Telephone 282,700 267,300 - 61,400 611,400 1,800 64,600 66,400 677,800 683,500 Insurance 503,000 228,700 - 47,000 778,700 3,100 133.500 136,600 915,300 897,200 Transportation and other Travel Related Expenses 471,300 81,400 - 46,400 599,100 1,900 67,300 69,200 668,300 594,900 Vehicle Rentals, Repairs and Rep] 88,300 2,600 - 16,000 106,900 - 32,100 32,100 139,000 110,900 EgpmtFum Rentals, Repairs and Rep) 185,200 184,100 - 58,600 427,900 700 39,300 40,000 467,900 456,900 Pnntmg, Postage, Subscriptions, Pub] 29,600 16,200 - 6,100 51,900 700 33,400 34,100 86,000 116,600 Dues, Licenses, Permits 8,000 11,700 - 3,700 23,400 300 95,900 96,200 119,600 95,800 Staff Development 17,000 282,900 - 24,300 324,200 too 2,400 2,500 326,700 236,200 Staff Recru fitment 41,700 20.600 - 3.000 65,300 300 6,800 7 100 72,400 98 100 Line of Credit ------95,700 95,700 95,700 3,800 Miscellaneous 10,500 5,900 3,000 19,400 400 68,000 68 400 87,800 85,200
Total 2,608,000 1,756 600 485,200 4,849,800 48,500 724,400 772 900 5,622,700 5,287,700
Total Expenses before Depreciation 29,814,000 19,832,200 23,800 6,335,900 56,005,900 184,900 6,186,300 6,371,200 62,377,100 60,149,800
Depreciation of Property And Equipment 930,200 832,800 7,300 1,770,300 2,600 297,600 300 200 2,070,500 2,027,600
TOTAL S 30,744,200 S 20,665,000, S 23.800 S 6,343,200 S 57,776,200 S 187,500 S 6,483,900 S 6 671 400 S 64.447.600 S 62,177400 0
Deloitte & Touche LLP Deloitteo Third Floor 750 College Road East Princeton , NJ 08540 USA 0 Tel: +1 609 514 3600 Fax. +1 609 514 3603 www deloitte com
0
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON OUR AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS •
Leake and Watts Services, Inc. 463 Hawthorne Avenue Yonkers, NY 10705
We have audited the consolidated financial statements of Leake and Watts Services, Inc. ("Leake and Watts"), as of and for the year ended June 30, 2005, and have issued our report thereon dated October 6, 2005. 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 Governmental Auditing Standards, issued by the Comptroller General of the United States. r Internal Control over Financial Reporting
In planning and performing our audit, we considered Leake and Watts' internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the consolidated 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. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Leake and Watts' financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect on the determination of consolidated 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 or other matters that are required to be reported under Government Auditing Standards.
14 - Member of Deloitte Touche Tohmatsu This report is intended solely for the information and use of Leake and Watts' audit committee, management, federal awarding agencies, state funding agencies, and pass-through entities and is not intended to be and • should not be used by anyone other than these specified parties. &&t& �zuC4 Z_Z_ a
0 October 6, 2005
•
I•
I•
I•
•
I•
O
15-