Collaborative For Children Financial Statements and Single Audit Reports for the year ended December 31, 2007
B lazek & Vetterling LLP C
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C C O U N T A N T S
Independent Auditors’ Report
To the Board of Directors of Collaborative For Children: We have audited the accompanying statements of financial position of Collaborative For Children as of December 31, 2007 and 2006 and the related statements of activities, of functional expenses, and of cash flows for the years then ended. These financial statements are the responsibility of the management of Collaborative For Children. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform our audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Collaborative For Children as of December 31, 2007 and 2006 and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we also have issued a report dated June 13, 2008, on our consideration of Collaborative For Children’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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Our audit was performed for the purpose of forming an opinion on the basic financial statements of Collaborative For Children taken as a whole. The accompanying schedule of expenditures of federal awards for the year ended December 31, 2007, is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. The information in this schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
June 13, 2008
2900 Weslayan, Suite 200
Houston, Texas 77027-5132
(713) 439-5757
Fax (713) 439-5758
Collaborative For Children Statements of Financial Position as of December 31, 2007 and 2006
2006
2007 ASSETS Cash and cash equivalents (Note 2) U. S. Treasury securities (Note 5) Receivables: Pledges (Note 3) Government agencies United Way service contracts Other Prepaid expenses and other assets Property, net (Note 4)
$
801,727 203,308
$
706,281 203,551
687,334 92,108 29,067 10,535 16,997 141,430
434,450 110,400 94,058 12,921 24,205 31,540
TOTAL ASSETS
$ 1,982,506
$ 1,617,406
$
$
LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses Space contraction liability (Note 9) Line of credit payable (Note 5) Deferred revenue Total liabilities Net assets: Unrestricted Temporarily restricted (Note 6) Total net assets TOTAL LIABILITIES AND NET ASSETS
See accompanying notes to financial statements.
–2–
217,663 149,337 39,855 7,875
114,268
3,302
414,730
117,570
484,938 1,082,838
524,140 975,696
1,567,776
1,499,836
$ 1,982,506
$ 1,617,406
Collaborative For Children Statement of Activities for the year ended December 31, 2007
UNRESTRICTED
TEMPORARILY RESTRICTED
TOTAL
REVENUE: Government grants (Note 7) Contributions United Way service contracts Special events Cost of direct donor benefits Program service fees Investment return Other income
$ 1,378,128 483,739 770,143 155,047 (30,418) 126,511 35,692 13,320
Total revenue
2,932,162
Net assets released from restrictions: Expenditure for program purposes Expiration of time restrictions
477,021 360,000
Total
3,769,183
$
944,163
944,163
$ 1,378,128 1,427,902 770,143 155,047 (30,418) 126,511 35,692 13,320 3,876,325
(477,021) (360,000) 107,142
3,876,325
EXPENSES: Program services: Provider Engagement Family Engagement Community Engagement
1,782,862 498,354 376,392
1,782,862 498,354 376,392
Total program services
2,657,608
2,657,608
Management and general Fundraising Space contraction costs (Note 9)
695,447 289,115 166,215
695,447 289,115 166,215
3,808,385
3,808,385
Total expenses CHANGES IN NET ASSETS
(39,202)
107,142
67,940
Net assets, beginning of year
524,140
975,696
1,499,836
484,938
$ 1,082,838
$ 1,567,776
Net assets, end of year
$
See accompanying notes to financial statements.
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Collaborative For Children Statement of Activities for the year ended December 31, 2006
UNRESTRICTED
TEMPORARILY RESTRICTED
TOTAL
REVENUE: Government grants (Note 7) Contributions United Way service contracts Special events Cost of direct donor benefits Program service fees Investment return Other income
$ 1,515,571 167,465 577,930 168,807 (14,843) 103,064 25,383 556
Total revenue
$
2,543,933
Net assets released from restrictions: Expenditure for program purposes Expiration of time restrictions Total
358,050
358,050
834,381 412,500
(834,381) (412,500)
3,790,814
(888,831)
$ 1,515,571 525,515 577,930 168,807 (14,843) 103,064 25,383 556 2,901,983
2,901,983
EXPENSES: Program services: Provider Engagement Family Engagement Community Engagement Total program services Management and general Fundraising Total expenses
1,834,943 623,230 166,463
1,834,943 623,230 166,463
2,624,636
2,624,636
756,401 234,189
756,401 234,189
3,615,226
3,615,226
CHANGES IN NET ASSETS
175,588
Net assets, beginning of year
348,552
Net assets, end of year
$
See accompanying notes to financial statements.
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524,140
(888,831)
$
(713,243)
1,864,527
2,213,079
975,696
$ 1,499,836
Collaborative For Children Statement of Functional Expenses for the year ended December 31, 2007
EXPENSES
PROVIDER ENGAGEMENT
FAMILY ENGAGEMENT
Salaries, related taxes and benefits Occupancy Professional and contract services Equipment and incentive grants Conferences, meetings, and workshops Travel Office supplies Staff development College tuition, continuing education, and awards to caregivers Depreciation Telephone lease Printing Computer technology expense Postage and shipping Equipment rental and maintenance Internet service fees Telephone Advertising Other
$
Total expenses
$ 1,782,862 $
COMMUNITY ENGAGEMENT
MANAGEMENT AND GENERAL
789,372 $ 142,597 303,626 307,964 85,384 32,054 12,335 20,188 34,561 10,702 10,081 3,821 7,685 4,759 3,785 2,379 5,384
375,196 $ 66,205 6,749 3,765 2,670 1,928 5,263 4,011 17 5,014 4,624 3,741 2,436 8,155 1,766 4,564 911
258,613 $ 51,640 12,666
6,185
1,339
1,617
498,354 $
376,392 $
Space contraction costs (Note 9)
5,349 7,256 13,767 1,094 152 4,799 3,373 9,824 3,148 436 1,253 678 727
FUNDRAISING
520,805 $ 86,083 21,783 4,183 4,617 10,135 4,282 679 12,003 6,804 2,761 5,780 1,038 2,643 1,465 1,554 3,939 4,893 695,447 $
TOTAL EXPENSES
196,375 $ 2,140,361 34,866 381,391 6,236 351,060 311,729 20,746 118,332 40 45,895 3,526 45,026 8,058 37,633 35,409 2,391 34,909 2,437 27,319 5,715 25,862 3,829 22,878 1,824 16,212 918 10,365 515 9,601 622 9,198 138 4,077 879 14,913 289,115
3,642,170 166,215
Total
$ 3,808,385
See accompanying notes to financial statements.
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Collaborative For Children Statement of Functional Expenses for the year ended December 31, 2006
EXPENSES
PROVIDER ENGAGEMENT
FAMILY ENGAGEMENT
Salaries, related taxes and benefits Occupancy Professional and contract services Equipment and incentive grants Conferences, meetings, and workshops Travel Office supplies Staff development College tuition, continuing education, and awards to caregivers Depreciation Telephone lease Printing Computer technology expense Postage and shipping Equipment rental and maintenance Internet service fees Telephone Advertising Other
$
Total expenses
$ 1,834,943 $
COMMUNITY ENGAGEMENT
953,053 $ 156,488 201,762 250,762 90,633 30,465 14,536 12,677 70,595 2,455 14,730 5,104 2,868 7,553 3,802 3,627 8,433
432,886 $ 75,148 41,843
5,400
See accompanying notes to financial statements.
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MANAGEMENT AND GENERAL
FUNDRAISING
TOTAL EXPENSES
125,520 $ 21,023 7,283
550,292 $ 96,758 59,841
22,429 2,367 4,563 1,407
1,373 1,069 1,973 12
1,395 7,216 10,840 5,248 9,641 2,093 2,002 1,946
2,666 1,848 938 445 239 525 277 376
2,206
896
2,228 879 6,796 1,012 426 7,134 9,495 2,191 1,082 582 3,667 1,831 2,269 7,650 2,268
137,508 $ 2,199,259 23,811 373,228 14,349 325,078 250,762 41,207 157,870 145 34,925 3,115 30,983 473 15,581 71,021 381 14,031 2,359 35,648 2,096 21,169 2,637 12,280 3,190 21,205 688 10,775 480 8,217 831 13,855 200 7,850 719 11,489
623,230 $
166,463 $
756,401 $
234,189 $ 3,615,226
Collaborative For Children Statements of Cash Flows for the years ended December 31, 2007 and 2006
2006
2007 CASH FLOWS FROM OPERATING ACTIVITIES: Changes in net assets Adjustments to reconcile changes in net assets to net cash provided by operating activities: Unrealized gain on U.S. Treasury securities Depreciation Changes in operating assets and liabilities: Receivables Prepaid expenses and other assets Accounts payable and accrued expenses Space contraction liability Deferred revenue
$
Net cash provided by operating activities
67,940
$
(713,243)
(7,547) 34,909
(8,784) 14,031
(167,215) 7,208 103,395 149,337 4,573
892,646 (3,406) (106,508)
192,600
69,288
412,000 (404,210) (144,799)
410,000 (402,855)
(5,448)
CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of U. S. Treasury securities Purchases of U. S. Treasury securities Purchases of property Net cash provided (used) by investing activities
(137,009)
7,145
CASH FLOWS FROM FINANCING ACTIVITIES: Advances on line of credit
39,855
Net cash provided by financing activities
39,855
NET CHANGE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year
$
See accompanying notes to financial statements.
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95,446
76,433
706,281
629,848
801,727
$
706,281
Collaborative For Children Notes to Financial Statements for the years ended December 31, 2007 and 2006
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization – Collaborative For Children (CC) is located in Houston, Texas and was formed in 2004 through a merger of the Greater Houston Collaborative For Children (GHCC) and Initiatives for Children, Inc. (IFC), two non-profit organizations with more than 20 years of combined experience in serving the community. CC works with families and those that deliver educational and other support services to children to positively impact the care and education of young children. CC works to fulfill its mission of building a strong education foundation for young children to succeed in school and life by focusing its programs and services on the following goal areas: • Provider Engagement programs support and develop child care and early education professionals through oneon-one consulting, training and mentoring for teachers and directors in early care and education centers, scholarships for professional development conferences, and wage enhancement programs to reward teachers for obtaining higher educational credentials. • Family Engagement programs provide families with information, resources and support to launch their children toward academic and life success by providing parent education, printed parenting tips, resource materials, and referrals for early education, after-school programs and children with special needs. • Community Engagement programs provide a speaker’s bureau, partnerships to promote healthy child development and strengthen policy and regulations impacting young children. Early childhood education is promoted as a high - priority public policy issue in our region with adequate support necessary to deliver quality programs for parents, children, and teachers. Tax status – CC is exempt from federal income taxes under §501(c)(3) of the Internal Revenue Code and is classified as a public charity under §509(a)(2). Net asset classification – Contributions and the related net assets are classified based on the existence or absence of donor-imposed restrictions, as follows: •
Unrestricted net assets include those net assets whose use is not restricted by donor-imposed stipulations even though their use may be limited in other respects such as by contract or board designation.
•
Temporarily restricted net assets include contributions restricted by the donor for specific purposes or time periods. When a purpose restriction is accomplished or a time restriction ends temporarily restricted net assets are released to unrestricted net assets.
Estimates – Management must make estimates and assumptions to prepare financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, the amounts reported as revenue and expenses, and the allocation of expenses among various functions. Actual results could vary from the estimates that were used. Cash equivalents include highly liquid financial instruments with original maturities of three months or less. U. S. Treasury securities are recorded at fair value. Investment return includes interest and realized and unrealized gains and losses. Investment return is reported in the statement of activities as an increase in unrestricted net assets unless the use of the income is limited by donor-imposed restrictions. Investment return whose use is restricted by the donor is reported as an increase in temporarily restricted net assets.
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Pledges receivable that are expected to be collected within one year are recorded at net realizable value. Amounts expected to be collected in future years are discounted to the present value of their estimated future cash flows. Discounts are computed using risk-free interest rates applicable to the years in which the promises are received. Amortization of discounts is included in contribution revenue. Property is recorded at cost if purchased or at fair value at the date of gift if donated. Depreciation is calculated using the straight-line method over estimated useful lives of 5 years. Additions and improvements that have a cost of more than $500 are capitalized. Government grants and program service fees are recognized when the related services are provided. Amounts billed or received but unearned are included in the statement of financial position as deferred revenue. Contributions are recorded as revenue at fair value when an unconditional commitment is received from the donor. Contributions received with donor stipulations that limit their use are recorded as restricted support. Conditional contributions are recognized in the same manner when the conditions are substantially met. In-kind contributions – Donated materials and services are recorded at fair value as contributions when an unconditional commitment is received from the donor. The related expense is recorded as the item is used. Contributions of services are recognized when services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Grants made – Equipment and incentive grants are awarded to child care providers for equipment and facilities renovation and expansion. Grants awarded are recorded as expense at their fair value when a commitment is made to a recipient. Reclassifications – Certain reclassifications have been made to the prior year financial statements to conform with the current presentation.
NOTE 2 – CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of the following: 2006
2007 Demand deposits Money market funds
$
48,195 753,532
$
410,491 295,790
Total cash and cash equivalents
$
801,727
$
706,281
CC maintains cash for daily operations at several banking institutions. At times, bank deposits exceeded the federally insured limit of $100,000 per depositor per institution. CC has entered into a collateral agreement with one of its depository institutions to collateralize deposits in excess of the federally insured limit with U. S. government debt securities with a fair value of $590,047.
NOTE 3 – PLEDGES RECEIVABLE Pledges receivable at December 31, 2007 are expected to be collected as follows: Receivable in 2008 Receivable in 2009
$
Total pledges receivable Discount to present value at 3%
378,163 328,000 706,163 (18,829)
Pledges receivable, net
$
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687,334
NOTE 4 – PROPERTY Property consists of the following: 2006
2007 Furniture and equipment Lease hold improvements
$
Total property, at cost Accumulated depreciation
178,232 24,984
$
203,216 (61,786)
Property, net
$
141,430
258,219 258,219 (226,679)
$
31,540
Property with a cost of $47,681 is used in operations but not included in the statement of financial position at December 31, 2007 because title is held by grantors.
NOTE 5 – LINE OF CREDIT CC has a $200,000 revolving line of credit with a bank that is collateralized by U. S. Treasury securities having a face value of $206,000. The line expires in May 2009. Draws on the line bear interest at the bank’s prime lending rate, which was 7.25% at December 31, 2007. The $39,855 balance at December 31, 2007 was repaid in 2008.
NOTE 6 – TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes: 2006
2007 Use in future periods Neighborhood Initiative Corporate H. A. N. D. S. projects Community Engagement Baby Basics Inclusive Care Parents as Partners in Preschool Educational Video
$
525,163 338,338 81,913
Total temporarily restricted net assets
$ 1,082,838
$
355,000 176,573 160,073 122,998 116,052 25,000 20,000
62,814 34,610 20,000 20,000 $
975,696
NOTE 7 – GOVERNMENT GRANTS Sources of government grants are as follows: 2006
2007 U. S. Department of Health and Human Services: Child Care Training and Quality Improvement Early Learning U. S. Department of Education: Quality Rating System Coaching Program Corporation for National and Community Service Other
$
887,326 380,898 69,330
$
956,617 471,874 66,429 20,651
31,416 9,158
Total
$ 1,378,128
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$ 1,515,571
NOTE 8 – EMPLOYEE BENEFIT PLAN CC participates in a §403(b) tax deferred annuity plan. Employees may elect to participate upon employment by contributing up to 15% of their salary. After three months of employment, the employee is eligible to receive an employer matching contribution, which is determined annually as a percentage of the employee’s base salary. CC’s contribution to this plan totaled approximately $29,000 during 2007 and $27,000 during 2006.
NOTE 9 – COMMITMENTS CC leases office space and office equipment under noncancelable operating leases. Future minimum lease payments are payable as follows: 2008 2009 2010 2011 2012 Thereafter
$
262,879 262,879 262,879 262,361 225,616 569,216
Total
$ 1,845,830
Lease expense for office space and equipment was approximately $334,000 in 2007 and $395,000 in 2006. In December 2007, CC incurred costs of $166,215 to release office space held under long-term operating leases. The costs are payable to the office management company over a six-month period through May 2008. At December 31, 2007, the balance due on this liability is $149,337.
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Collaborative For Children Schedule of Expenditures of Federal Awards for the year ended December 31, 2007
FEDERAL GRANTOR Pass-through Grantor Program Title & Period
CFDA Number
Pass-through Contract Number
Award Amount
None
$198,400
Revenue
Expenditures
U. S. DEPARTMENT OF EDUCATION Passed through The Center for Houston’s Future: Quality Rating System: #1 09/30/05 – 03/31/08 84.215K
$
69,330
$
69,330
U. S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Early Learning Opportunity Act: #2 09/30/05 – 08/31/07 93.577
90LO0185
$965,512
380,898
380,898
Passed through the Houston-Galveston Area Council: Child Care Mandatory and Matching Funds of the Child Care and Development Fund: #3 11/01/06 – 09/30/07 93.596 301-07 $965,959 743,340 #4 11/01/07 – 09/30/08 93.596 301-08 $775,000 143,986
743,340 143,986
Total U.S. Department of Health and Human Services
1,268,224
1,268,224
31,416
31,416
$ 1,368,970
$ 1,368,970
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE Passed through the OneStar National Service Commission: Americorps Early Education Assessment Program: #5 01/01/07 – 01/31/08 94.006 15.0607.080
$49,282
TOTAL FEDERAL AWARDS
See accompanying note to schedule of expenditures of federal awards.
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Collaborative For Children Note to Schedule of Expenditures of Federal Awards for the year ended December 31, 2007
SIGNIFICANT ACCOUNTING POLICIES Basis of presentation – The schedule of expenditures of federal awards includes the government grant activity of CC and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Allowable expenses are determined according to the standards of OMB circular A-122, Cost Principles for NonProfit Organizations and are expensed in the statement of activities in conformity with generally accepted accounting principles.
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B lazek & Vetterling LLP C
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C C O U N T A N T S
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
To the Board of Directors of Collaborative For Children: We have audited the financial statements of Collaborative For Children (CC) for the year ended December 31, 2007, and have issued our report thereon dated June 13, 2008. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting – In planning and performing our audit, we considered CC’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of CC’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of CC’s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’s financial statements that is more than inconsequential will not be prevented or detected by the entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity’s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters – As part of obtaining reasonable assurance about whether CC’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, the board of directors, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
June 13, 2008 2900 Weslayan, Suite 200
Houston, Texas 77027-5132
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(713) 439-5757
Fax (713) 439-5758
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Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133
To the Board of Directors of Collaborative For Children: Compliance – We have audited the compliance of Collaborative For Children (CC) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2007. The CC’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of CC’s management. Our responsibility is to express an opinion on CC’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about CC’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of CC’s compliance with those requirements. In our opinion, CC complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2007. Internal Control Over Compliance – The management of CC is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered CC’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of CC’s internal control over compliance. A control deficiency in an entity’s internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects an entity’s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by an entity’s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by an entity’s internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant
2900 Weslayan, Suite 200
Houston, Texas 77027-5132
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(713) 439-5757
Fax (713) 439-5758
deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the board of directors, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
June 13, 2008
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Collaborative For Children Schedule of Findings and Questioned Costs for the year ended December 31, 2007
Section I – Summary of Auditor’s Results Financial Statements Type of auditor’s report issued:
unqualified
qualified
Internal control over financial reporting: • Material weakness(es) identified? • Significant deficiencies identified that are not considered to be material weakness(es)? Noncompliance material to the financial statements noted?
adverse
disclaimer
yes
no
yes
none reported
yes
no
yes
no
yes
none reported
adverse
disclaimer
yes
no
Federal Awards Internal control over major programs: • Material weakness(es) identified? • Significant deficiencies identified that are not considered to be material weakness(es)? Type of auditor’s report issued on compliance for major programs:
unqualified
qualified
Any audit findings disclosed that are required to be reported in accordance with §510(a) of Circular A-133? Identification of major programs: CFDA Number(s)
Name of Federal Program or Cluster
93.577
Early Learning Opportunity Act
Dollar threshold used to distinguish between Type A and Type B programs:
$300,000 yes
Auditee qualified as a low-risk auditee?
no
Section II – Financial Statement Findings There were no findings related to the financial statements which are required to be reported in accordance with section .510(a) of Circular A-133.
Section III – Federal Award Findings and Questioned Costs There were no findings for federal awards required to be reported in accordance with section .510(a) of Circular A133.
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