Venice Family Clinic
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VENICE FAMILY CLINIC (A NONPROFIT ORGANIZATION) CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2014 AND SUPPLEMENTAL SCHEDULES REQUIRED BY OMB CIRCULAR A-133 AND THE CALIFORNIA DEPARTMENT OF EDUCATION FOR THE YEAR ENDED JUNE 30, 2014 VENICE FAMILY CLINIC (A NONPROFIT ORGANIZATION) CONTENTS June 30, 2014 Page INDEPENDENT AUDITOR’S REPORT 1 -- 2 FINANCIAL STATEMENTS Consolidated Statement of Financial Position 3 Consolidated Statement of Activities 4 Consolidated Statement of Functional Expenses 5 Consolidated Statement of Cash Flows 6 Notes to the Consolidated Financial Statements 7 – 33 SUPPLEMENTAL INFORMATION – CONSOLIDATING SCHEDULES Consolidating Statement of Financial Position by Entity 34 Consolidating Statement of Activities by Entity 35 SUPPLEMENTAL INFORMATION – OMB CIRCULAR A-133 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 36 – 37 Report on Compliance for each Major Federal Program and Report on Internal Control over Compliance Required by OMB Circular A-133 38 – 39 Schedule of Expenditures of Federal and State Awards 40 – 41 Notes to Schedule of Expenditures of Federal and State Awards 42 Schedule of Findings and Questioned Costs 43 – 44 Schedule of Prior Year Audit Findings 45 VENICE FAMILY CLINIC (A NONPROFIT ORGANIZATION) CONTENTS June 30, 2014 Page SUPPLEMENTAL INFORMATION – CHILD DEVELOPMENT PROGRAM General Information 46 Combining Schedule of Administrative Costs 47 Combining Schedule of Expenditures by State Categories 48 Audited Final Attendance and Fiscal Report 49 – 51 Combining Statement of Activities 52 Schedule of Renovation and Repair Expenditures 53 Schedule of Equipment Expenditures 54 Notes to Schedules of Revenue and Expenditures and Final Attendance and Fiscal Report 55 Schedule of Findings and Questioned Costs 56 Schedule of Prior Year Findings 57 Control Deficiency Letter 58 – 59 INDEPENDENT AUDITOR’S REPORT To the Board of Directors Venice Family Clinic Venice, California Report on the Financial Statements We have audited the accompanying consolidated financial statements of Venice Family Clinic and affiliate (the “Clinic”), which comprise the consolidated statement of financial position as of June 30, 2014, and the related consolidated statements of activities, functional expenses and cash flows for the year then ended and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Clinic as of June 30, 2014, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. To the Board of Directors Venice Family Clinic Independent Auditor’s Report Page 2 of 2 Report on Summarized Comparative Information We have previously audited the Clinic’s 2013 consolidated financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated December 7, 2013. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2013 is consistent in all material respects with the audited consolidated financial statements from which it has been derived. Other Matters Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by U.S. Office of Management and Budget (“OMB”) Circular A-133, Audits of States, Local Governments and Non-profit Organizations, and consolidating and other supplementary information is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The schedule of expenditures of federal awards and consolidating and other supplementary information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2014 on our consideration of the Clinic’s 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Clinic’s internal control over financial reporting and compliance. SingerLewak LLP Los Angeles, California December 15, 2014 VENICE FAMILY CLINIC (A NONPROFIT ORGANIZATION) CONSOLIDATED STATEMENT OF FINANCIAL POSITION June 30, 2014 (with Comparative Totals at June 30, 2013) ASSETS 2014 2013 Current assets Cash and cash equivalents$ 1,687,685 $ 2,199,137 Short-term investments 405,266 2,146,962 Accounts receivable, net of allowance for doubtful accounts of $564,958 and $328,689, respectively 1,637,977 1,020,009 Grants and contributions receivable – short-term, net of allowance for doubtful accounts of $25,000 and $25,000, respectively 3,860,421 3,383,500 Pharmaceutical inventories 1,120,684 975,104 Prepaid expenses and other assets 96,553 115,551 Total current assets 8,808,586 9,840,263 Long-term investments 4,948,490 4,348,161 Contributions receivable – long-term, net of present value discount 495,608 1,759,934 Beneficial interest in charitable remainder trusts 526,904 486,808 Property and equipment, net 5,492,955 5,466,144 Total assets $ 20,272,543 $ 21,901,310 LIABILITIES AND NET ASSETS Current liabilities Notes payable, current portion$ 233,722 $ 561,603 Accounts payable and accrued expenses 417,069 267,348 Total current liabilities 650,791 828,951 Line of credit 1,587,759 - Notes payable, net of current portion 121,693 1,786,383 Total liabilities 2,360,243 2,615,334 Commitments and contingencies (Note 13) Net assets Unrestricted 6,445,492 7,623,317 Temporarily restricted 5,492,751 6,188,602 Permanently restricted 5,974,057 5,474,057 Total net assets 17,912,300 19,285,976 Total liabilities and net assets $ 20,272,543 $ 21,901,310 The accompanying notes are an integral part of these consolidated financial statements. 3 VENICE FAMILY CLINIC (A NONPROFIT ORGANIZATION) CONSOLIDATED STATEMENT