JUSTICEWORKS YOUTHCARE, INC. AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION
Years ended June 30, 2018 and 2017
JUSTICEWORKS YOUTHCARE, INC INDEX Page number Independent Auditor’s Report................................................................................................
2-3
Audited Financial Statements as of and for the Years Ended June 30, 2018 and 2017 Balance Sheets ................................................................................................................... Statements of Operations and Comprehensive Income ..................................................... Statements of Changes in Stockholder’s Equity ................................................................ Statements of Cash Flows .................................................................................................. Notes to Financial Statements ............................................................................................
4-5 6 7 8-9 10-18
Supplemental Information Required in Accordance with Uniform Guidance for the Year Ended June 30, 2018 Schedule of Expenditures of Federal Awards .................................................................... Notes to Schedule of Expenditures of Federal Awards ..................................................... Independent Auditor'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..................................... Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance .......................... Schedule of Findings and Questioned Costs……………………………………………..
20 21
22-23 24-25 26
JUSTICEWORKS YOUTHCARE, INC. BALANCE SHEETS
2018
June 30,
2017
ASSETS Current assets Cash Accounts receivable, net of allowance for doubtful accounts of $185,245 and $5,234, respectively Current portion of due from related parties (Note 5) Other receivables Prepaid expenses
$
Total current assets Property, equipment, and improvements, net (Note 3) Interest rate swap asset (Note 4) Security deposits Other assets Due from related parties, net of current portion (Note 5) $
439,314
539,047
3,727,888 410,240 32,594 47,141
2,555,527 -10,289 33,774
4,657,177
3,138,637
279,362 42,649 67,260 73,904 1,640,959
239,456 -53,270 69,339 2,067,882
6,761,311
The accompanying notes are an integral part of these financial statements. -4-
$
$
5,568,584
JUSTICEWORKS YOUTHCARE, INC. BALANCE SHEETS (continued) 2018
June 30,
2017
LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities Revolving line of credit (Note 4) Accounts payable Accrued payroll and employee benefits Current portion of due to related parties (Note 5) Current portion of long-term debt (Note 4)
$
Total current liabilities Due to related parties, net of current portion (Note 5) Long-term debt, net of current portion (Note 4) Total liabilities Stockholder's equity Common stock, $1 par value, 1,000 authorized, issued, and outstanding Additional paid-in capital Accumulated other comprehensive income Retained earnings Total stockholder's equity $
1,124,306 245,258 790,755 143,850 361,336
2,741,987 144,713 409,500 -166,137
2,665,505
3,462,337
575,401 2,169,480
-485,420
5,410,386
3,947,757
1,000 84,560 42,649 1,222,716
1,000 84,560 -1,535,267
1,350,925
1,620,827
6,761,311
The accompanying notes are an integral part of these financial statements. -5-
$
$
5,568,584
JUSTICEWORKS YOUTHCARE, INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Year ended June 30, 2018 2017 Revenue
$ 19,282,516
$ 16,385,025
17,235,044
14,834,208
2,047,472
1,550,817
Other income (expense) Management fee expense (Note 5) Interest expense (Note 4) Other income Debt forgiveness by related party (Note 5) Loss on disposal of property, equipment, and improvements Related party bad debt expense (Note 5)
(1,376,800) (160,911) 13,396 -(788) --
(1,340,868) (100,461) 36,972 1,656,648 (5,978) (300,000)
Total other income (expense)
(1,525,103)
(53,687)
Operating expenses Net income from operations
Net income Other comprehensive income - change in settlement value of interest rate swap agreement (Note 4) Comprehensive income
$
522,369
1,497,130
42,649
--
565,018
The accompanying notes are an integral part of these financial statements. -6-
$
1,497,130
JUSTICEWORKS YOUTHCARE, INC. STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
Common stock Balance, July 1, 2016
$
Net income Distributions to stockholder Balance, June 30, 2017 Net income Distributions to stockholder Other comprehensive income (Note 4) Balance, June 30, 2018
$
Accumulated other comprehensive income
Additional paid-in capital
1,000
Retained earnings
84,560 $
--
---
---
---
1,497,130 (678,051)
1,497,130 (678,051)
1,000
84,560
--
1,535,267
1,620,827
----
----
--42,649
1,000
$
Total stockholder's equity
$
84,560
$
42,649
The accompanying notes are an integral part of these financial statements. -7-
$
716,188
$
522,369 (834,920) -$
1,222,716
801,748
522,369 (834,920) 42,649 $
1,350,925
JUSTICEWORKS YOUTHCARE, INC. STATEMENTS OF CASH FLOWS Year ended June 30, 2018 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation Loss on disposal of property, equipment, and improvements Debt forgiveness by related party Related party bad debt expense Increase (decrease) in cash from changes in Accounts receivable Other receivables Prepaid expenses Security deposits Other assets Accounts payable Accrued payroll and employee benefits
$
522,369
$
77,709 788 ---
77,369 5,978 (1,656,648) 300,000
(1,172,361) (22,305) (13,367) (13,990) (4,565) 100,545 381,255
Net cash provided by (used in) operating activities
1,497,130
(97,951) 1,937 -(7,184) (62,844) 38,641 (40,614)
(143,922)
55,814
-6,000 735,934
(13,956) -(368,397)
Net cash provided by (used in) investing activities
741,934
(382,353)
Cash flows from financing activities Net increase (decrease) in revolving line of credit, net of change due to subsequent refinancing Payments on long-term debt, net of change due to subsequent refinancing Distributions to stockholder
350,000 (212,825) (834,920)
1,186,987 (197,168) (678,051)
Net cash provided by (used in) financing activities
(697,745)
311,768
(99,733)
(14,771)
539,047
553,818
Cash flows from investing activities Purchases of property, equipment, and improvements Proceeds from disposal of property, equipment, and improvements Net advances (to) from related parties
Net decrease in cash Cash, beginning of year Cash, end of year
$
439,314
The accompanying notes are an integral part of these financial statements. -8-
$
539,047
JUSTICEWORKS YOUTHCARE, INC. STATEMENTS OF CASH FLOWS (continued) Year ended June 30, 2018 2017 Supplemental disclosure of cash flow information Cash paid for interest
$
160,911
$
100,461
Schedule of noncash investing and financing activities Notes payable issued in connection with purchase of vehicles
$
124,403
$
122,185
The accompanying notes are an integral part of these financial statements. -9-
JUSTICEWORKS YOUTHCARE, INC NOTES TO FINANCIAL STATEMENTS (continued) NOTE 1 -
ORGANIZATION JusticeWorks YouthCare, Inc. (“Company”) provides innovative solutions for juvenile courts and child welfare agencies to improve outcomes for troubled youth and their families, thereby maximizing public resources and improving communities' quality of life. These services are provided through contracts primarily with Children and Youth Services and Juvenile Probation in various counties in Pennsylvania, and on a limited basis, Adult Probation and Agency for the Aging. The counties choose from a menu of evidence-based and promising practices programs offered, including JustCare,® STOPP®, VIP®/Reintegration, Family Group Decision Making, WhyTry Truancy Remediation, Nurturing Parenting, Anger Management and Thinking for a Change (T4C). Other ancillary services provided are: Community Service Program, Custody Exchange & Observation, Intensive Case Management, Visitation Services, Supervised Visitation and Community Transportation. The Alternative Education Division provides alternative schools, behavioral support, classroom education and day treatment for behaviorally challenged youth who cannot succeed in public schools. The financial statements are presented for the Company only and do not consolidate the balance sheets and related statements of operations and comprehensive income and cash flows, and the related notes to the financial statements for any affiliated entities that are related through common ownership and management (See Note 5). Prior to 2018, due to a clerical error, the Company was listed as the sole owner of JusticeWorks BehavioralCare (“JWBC”) on JWBC’s incorporation documents. During 2018, JWBC’s incorporation documents were amended to correct this clerical error. The Company has no ownership interest in JWBC.
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting The financial statements of JWYC have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accounts receivable and revenue recognition All revenue is derived from contracts with various state and local government agencies, which pay either per diem rates based on the number of occupant days or hours served for the period. Revenue is recognized as services are provided. Accounts receivable are presented on the balance sheets net of estimated uncollectible amounts. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Past due amounts are written off when management determines that they are uncollectible.
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JUSTICEWORKS YOUTHCARE, INC NOTES TO FINANCIAL STATEMENTS (continued) NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash The Company places its cash with a financial institution in amounts which at times exceed the FDIC insurance limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. Property, equipment, and improvements The Company carries its property, equipment, and improvements at cost. Management calculates depreciation using the straight-line method over the estimated useful lives of assets ranging from three to ten years. Leasehold improvements are amortized over the term of the corresponding lease. Repairs and maintenance that do not extend the lives of the applicable assets are charged to expense as incurred. Gain or loss resulting from retirement or other disposition of assets is included in income. Advertising costs Advertising and marketing costs are expensed as incurred. Advertising expense for the years ended June 30, 2018 and 2017 was $39,581 and $35,314, respectively. Income taxes The Company has elected by consent of its stockholder to be taxed under the provisions of Subchapter S of the Internal Revenue Code and applicable state statutes. Under those provisions, the income and expenses of the Company are passed through and reported on the stockholder’s individual income tax returns. Accordingly, no income taxes are provided in these financial statements. As of June 30, 2018 and June 30, 2017, the Company is unaware of any unrecognized tax benefits or uncertain tax positions; however, were such matters to arise, they would be evaluated in accordance with existing accounting principles and accruals and disclosures would be made as required. The Company’s tax returns for tax years 2015 and beyond remain subject to examination by the respective taxing authorities. Self-insurance The Company is partially self-insured as it relates to medical coverage up to a stop-loss limit of $50,000 per participant. Provisions for losses expected under the Company's insurance programs are recorded based on independent actuarial estimates of the aggregate liabilities for claims incurred and an estimate for claims incurred but not reported. -11-
JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Subsequent events The Company evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition or disclosure in the financial statements. The accompanying financial statements consider events through February 12, 2019, the date on which the financial statements were available to be issued. Reclassifications Certain items in the 2017 financial statements have been reclassified to conform to the current year presentation.
NOTE 3 -
PROPERTY, EQUIPMENT, AND IMPROVEMENTS The Company’s property, equipment, and improvements consisted of the following as of June 30: 2018 Office equipment Vehicles Furniture and fixtures Leasehold improvements
$
Less: accumulated depreciation and amortization $
-12-
283,277 337,299 157,702 11,390
2017 $
275,777 271,962 165,202 11,390
789,668
724,331
510,306
484,875
279,362
$
239,456
JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 4 -
DEBT Revolving line of credit The Company had a revolving line of credit agreement with a bank that provided for maximum borrowings of $3,250,000. Certain related parties of the Company, including JWBC, Alexander Morgan, LLC (d/b/a Catalyst RTW), JusticeWorks TX, LLC and JusticeWorks FL, Inc., were included as co-borrowers under the line of credit agreement. The line of credit was collateralized by the assets of the Company and the assets of all related parties under control of the Company’s stockholder. The line of credit was personally guaranteed by the Company’s stockholder. The line of credit was due upon demand and was set to expire on May 3, 2022. The agreement also called for interest-only payments at the London InterBank Offered Rate (2.09% as of June 30, 2018) for the interest period plus 2.50%. The agreement contained various financial covenants. Compliance with certain terms and provisions of the agreement were waived for the year ending June 30, 2017. During November 2018, this line of credit was refinanced with another bank (see Note 8). Interest rate swap agreement The Company and its bank were parties to an interest rate swap agreement. The effect of this agreement allowed the Company to hedge its effective borrowing rate on the line of credit. The notational amount of the interest rate swap was $2,000,000 as of June 30, 2018. Under the agreement, the Company paid interest based on the notational amount at a fixed rate and the bank paid based on the notational amount at a variable rate equal to the current rate on the line of credit. The swap agreement represented a cash flow hedging instrument. Cumulative changes in the settlement value of the swap were classified as an asset and in accumulated other comprehensive income on the Company’s 2018 balance sheet. Settlement value represents the amount the Company would receive (or pay) were it to terminate the agreement as of the reporting date and approximates the fair value of the swap agreement. Since the critical terms of the swap and the note were the same, the swap was assumed to be completely effective as a hedge, and none of the change in its settlement value was included in net income. Accordingly, any adjustments to the swap agreement’s carrying amount was reported as other comprehensive income. During November 2018, in connection with the refinancing of the Company’s bank debt (see Note 8), the swap agreement was terminated and the Company received the current settlement value from the bank in cash.
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JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 4 -
DEBT (continued) Long-term debt Long-term debt consisted of the following as of June 30: 2018 Installment note to a bank with monthly payments of $12,500, including interest at 4.12% with a maturity date of October 2020; secured by the Company's and related-parties' assets and the stockholder's personal guarantee. Refinanced during November 2018 (see Note 8).
$
Installment notes to financial services companies ranging from at $377 to $1,197 monthly, including interest ranging from 1.90% to 10.99%, final payments ranging from July 2019 to April 2023, secured by the respective vehicles.
Less: current portion of long-term debt Plus: amount reclassified as long-term due to subsequent refinancing (see Note 8) $
2017
332,319
$
482,319
230,816
169,238
563,135
651,557
361,336
166,137
1,808,144
--
2,169,480
$
485,420
Subsequent to the refinancing (see Note 8), scheduled maturities of long-term debt are as follows for the years ending June 30: 2019 2020 2021 2022 2023
$
361,336 364,276 363,800 376,086 1,065,318
Interest expense totaled $160,991 and $100,461 for the years ended June 30, 2018 and 2017, respectively.
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JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 5 -
RELATED PARTY TRANSACTIONS A portion of the Company’s business arises from transactions with its sole stockholder and related entities owned by the stockholder. The accompanying financial statements include the balances and transactions with this stockholder and related entities (See Note 1). Management fees The Company has a Management Services Agreement with Merlin Fiorano, LLC effective January 1, 2016. Under the agreement, the Company pays a management fee to Merlin Fiorano, LLC up to 20% of annual gross revenue. Amounts up to 20% of revenue that are not charged may be recovered at a later time when the Company's cash position is such that payment would not exceed cash availability. Management fee expense was $1,376,800 and $1,340,868 for the years ended June 30, 2018 and 2017, respectively, which is less than the allowable amount per each agreement. Beginning January 1, 2015, JWYC entered into a Management Services Agreement with Heit Holdings, LLC. Under the agreement, a fee of up to 20% of Heit Holdings' annual gross revenues is paid to JWYC. Amounts up to 20% of revenues that are not charged may be recovered at a later time when Heit Holdings cash position is such that payment would not exceed cash availability. No management fees associated with this agreement were earned during the years ended June 30, 2018 and 2017. Amounts due from (to) related parties As of June 30, JWYC had the following amounts due from (to) various related parties, net: 2018 JWBC JusticeWorks TX, LLC JusticeWorks FL, Inc. JusticeWorks Ohio Heit Holdings, LLC Alexander Morgan, LLC Merlin Fiorano, LLC
-15-
2017
$
1,484,904 264,813 120,435 5,401 127,575 48,071 (719,251)
$
1,343,325 262,593 74,182 --8,895 378,887
$
1,331,948
$
2,067,882
JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 5 -
RELATED PARTY TRANSACTIONS (continued) Amounts due from (to) related parties (continued) These amounts are presented as follows on the Company’s balance sheets as of June 30: 2018 Due from related parties Due to related parties
2017
$
2,051,199 (719,251)
$
2,067,882 --
$
1,331,948
$
2,067,882
All of the above-related party transactions were made in the ordinary course of business and did not include extraordinary or unfavorable features. JWBC’s related entities and owner have made the commitment to make advances to JWBC for any future periods in which JWBC would require additional funds to sustain operations. Facility leases The Company leases five of its facilities from Heit Holdings, LLC. The facilities are located in Dauphin, Washington, York, Northumberland and Adams Counties, Pennsylvania. JWYC has security deposits of $20,000 outstanding related to these leases as of both June 30, 2018 and 2017. The current terms of the leases include monthly lease payments ranging from $4,350 to $6,400. The leases expire at various expiration dates through January 31, 2024. For the years ended June 30, 2018 and 2017, the rental expense for these five facilities was $289,260 and $278,300, respectively. Future minimum lease payments under these leases are as follows for the years ending June 30: 2019 2020 2021 2022 2023 Thereafter
-16-
$
258,900 306,500 245,675 205,400 195,200 106,850
$
1,318,525
JUSTICEWORKS YOUTHCARE, INC. NOTES TO FINANCIAL STATEMENTS (continued) NOTE 5 -
RELATED PARTY TRANSACTIONS (continued) Miscellaneous During the year ended June 30, 2017, an amount due to a related entity of $1,656,648 was forgiven and is included as debt forgiveness by related party on the 2017 statement of operations and comprehensive income. During the year ended June 30, 2017, $300,000 of the management fee from JWBC was forgiven and is included as related party bad debt expense on the 2017 statement of operations and comprehensive income. The Company also provides and receives services from other related entities on an as needed basis.
NOTE 6 -
COMMITMENTS The Company leases offices and parking, in various Pennsylvania counties under cancelable operating leases with various expiration dates through June 30, 2028. The original terms of the leases include monthly lease payments ranging from $600 to $4,425. For the years ended June 30, 2018 and 2017, the rental expense for these leases totaled $496,315 and $330,981, respectively. The following is a schedule by years of minimum lease rental payments required under the leases for the years ending June 30: 2019 2020 2021 2022 2023 Thereafter
NOTE 7 -
$
493,973 404,998 301,364 117,650 105,150 100,275
$
1,523,410
RETIREMENT PLAN The Company sponsors a 401(k) retirement savings plan (“Plan”) for all eligible employees as defined by the Plan. The employees may contribute a percentage of their salary, not to exceed 401(k) limits of the Internal Revenue Code. The Company matches 100% on the first 3% of employee contributions and then 50% on each additional percentage contributed up to 5%. For the years ended June 30, 2018 and 2017, the total matching contributions to the Plan by the Company were $95,064 and $82,204, respectively. During October 2018, the Company changed 401(k) service providers. The change is not expected to have a material impact on the Company’s financial statements. -17-
JUSTICEWORKS YOUTHCARE, INC NOTES TO FINANCIAL STATEMENTS (continued) NOTE 8 -
SUBSEQUENT EVENTS On November 19, 2018, the Company refinanced its existing bank debt by entering into a credit agreement with another bank. The new credit facility includes a revolving line of credit and two term loans. The Company and several related party organizations are all co-borrowers on the new credit facility. The new credit facility is collateralized by all assets of the Company and co-borrowers. The line of credit and term loans are cross defaulted and cross collateralized. The new credit facility is personally guaranteed by the Company’s sole stockholder. The new credit facility is subject to a minimum debt service coverage ratio covenant commencing on June 30, 2019 and each fiscal year end date thereafter on a trailing twelve month basis. The revolving line of credit under the new credit facility has a borrowing limit of $6,000,000, subject to a borrowing base calculation, and is due on demand. This line of credit is subject to interest of the one month libor rate plus 250 basis points. Term Loan A is in the amount of $1,500,000 and requires principal and interest payments, with interest at 5.50%, commencing on January 1, 2019 in amounts sufficient to amortize the loan over a ten year period. The maturity date of the loan is November 19, 2023 with a balloon payment of all remaining principal and interest due on that date. Term Loan B is in the amount of $800,000 and requires principal and interest payments, with interest at 5.50% commencing on January 1, 2019 in amounts sufficient to amortize the loan over a five year period. The maturity date of the loan is November 19, 2023.
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SUPPLEMENTAL INFORMATION REQUIRED IN ACCORDANCE WITH UNIFORM GUIDANCE
JUSTICEWORKS YOUTHCARE, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the year ended June 30, 2018
Federal grantor/pass-through grantor/program or cluster title
Federal CFDA number
Pass-through Entity Identifying Number
Department of Health and Human Services Temporary Assistance for Needy Families passed-through the following: Armstrong County Cambria County Dauphin County Franklin County Lancaster County Lehigh County Lycoming County Montgomery County Northampton County Philadelphia Pike County Snyder County Somerset County Union County Washington County Wayne County Westmoreland County York County
93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558 93.558
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total Federal Expenditures
$
Total Temporary Assistance for Needy Families
23,767 55,476 515,639 30,547 67,762 231,897 139,644 216,741 135,562 117,185 85,661 36,191 23,372 25,182 14,121 24,904 27,389 250,756 2,021,796
Foster Care Title IV-E passed through the following: Berks County Chester County
93.658 93.658
N/A N/A
256,804 68,095
Total Foster Care Title IV-E
324,899
Chafee Foster Care Independence Program passed through the following: Butler County Indiana County
93.674 93.674
N/A N/A
67,442 18,159
Total Chafee Foster Care Independence Program
85,601
Total Department of Health and Human Services
2,432,296
Total Expenditures of Federal Awards
$
The accompanying notes are an integral part of this schedule. -20-
2,432,296
JUSTICEWORKS YOUTHCARE, INC. NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying schedule of expenditures of federal awards includes the federal award activity of JusticeWorks YouthCare, Inc. for the year ended June 30, 2018. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements of Federal Awards "Uniform Guidance". Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in preparation of, the basic financial statements. Cost principles Expenditures reported on the schedule of expenditures of federal awards are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect costs JusticeWorks YouthCare, Inc. did not elect to use the 10% de minimis indirect cost rate as permitted under the Uniform Guidance. Subrecipients There were no amounts passed through to subrecipients for the year ended June 30, 2018.
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JUSTICEWORKS YOUTHCARE, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended June 30, 2018 Summary of Auditor’s Results 1. The independent auditor’s report expresses an unmodified opinion on the financial statements of JusticeWorks YouthCare, Inc. 2. No significant deficiencies in internal control were disclosed during the audit of the financial statements of JusticeWorks YouthCare, Inc. 3. No instances of noncompliance material to the financial statements of JusticeWorks YouthCare, Inc., which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. No significant deficiencies in internal control over major federal award programs were disclosed during the audit of JusticeWorks YouthCare, Inc. 5. The Independent Auditor's Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance for JusticeWorks YouthCare, Inc. expresses an unmodified opinion on the major federal program. 6. Audit findings, if any, that are required to be reported in accordance with 2 CFR section 200.516(a) are reported in this Schedule. 7. The program tested as a major program was: 8.
CFDA #93.558, Temporary Assistance for Needy Families, Department of Health and Human Services
The threshold used for distinguishing between Type A and Type B programs was $750,000.
9. JusticeWorks YouthCare, Inc. qualified as a low-risk auditee. Findings - Financial Statement Audit None noted. Findings and Questioned Costs - Major Federal Award Programs Audit None noted.
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