greater baton rouge food bank - app1.lla.state.la.usapp1.lla.state.la.us › publicreports.nsf ›...

THE GREATER BATON ROUGE FOOD BANK

FINANCIAL STATEMENTS

DECEMBER 31.2007

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection atthe BatonRouge office of the Legislative Auditor and, whereappropriate, atthe office of the parish clerk of court.

Release Date,. 4

P&N


FINANCIAL STATEMENTS

DECEMBER 31.2007

TABLE OF C O N T E N T S

Independent Auditors' Report 1

Financial Statements

Statements of Financial Position 2-3

Statements of Activities 4-5

Statements of Functional Expenses 6-7

Statements of Cash Flows 8

Notes to Financial Statements 9-14

Postlethwaite&Netterville

A Professional Accounting CorporationAssociated Offices In Principal Cities of the United Stales

www.pncpa.com

INDEPENDENT AUDITORS1 REPORT

The Board of DirectorsThe Greater Baton Rouge Food BankBaton Rouge, Louisiana

We have audited the accompanying statements of financial position of The Greater Baton Rouge Food Bank (anot-for-profit organization) as of December 31, 2007 and 2006, and the related statements of activities,functional expenses, and cash flows for the years then ended. These financial statements are the responsibilityof The Greater Baton Rouge Food Bank's management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

We conducted our audits hi accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issuedby the Comptroller General of the United States. Those standards require mat we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes consideration of internal control over financial reporting as a basis for designing audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofThe Greater Baton Rouge Food Bank's internal control over financial reporting. Accordingly, we express nosuch opinion. An audit also includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present fairly, in all material respects, the financialposition of The Greater Baton Rouge Food Bank as of December 31, 2007 and 2006, and the results of itsoperations and its cash flows for the years then ended in conformity with accounting principles generallyaccepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated June 5, 2008, on ourconsideration of The Greater Baton Rouge Food Bank's internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.Hie purpose of that report is to describe the scope of our testing of internal control over financial reporting andcompliance and the results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards and should be read in conjunction with this report in considering the results ofour audits.

'Jk.]/&to^Baton Rouge, LouisianaJune 5,2008

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8550 United Plaza Blvd, Suite 1001 • Baton Rouge, LA 70809 • Tel: 225.922.4600 • Fax: 225.922.4611

THE GREATER BATON ROUGE FOOD BANK(A NOT-FOR-PROFIT ORGANIZATION)

BATON ROUGE. LOUISIANA

STATEMENTS OF FINANCIAL POSITIONDECEMBER 31.2007 AND 2006

ASSETS

2007 2006

CURRENT ASSETSCash and cash equivalentsCash - restrictedCertificates of depositsAccounts receivablePromise to give - United WayPrepaid expensesFood inventory - donated and purchasedFood inventory - commodities

Total current assets

PROPERTY AND EQUIPMENTLandBuilding and building improvementsVehiclesFurniture, fixtures, and equipment

Less: Accumulated depreciation

OTHER ASSETSInvestments - restrictedCertificates of deposit - restricted

991,630 $

206,35552,93184,82429,723

2,788,19454,840

4,208,497

2,118,338(873,984)1,244,354

639,556

1,391,158152,189

43,711

14,6501,850,030103,081

3,554,819

60,0001,523,324207,397247,392

2,038,113(758,634)1,279,479

587,028204,911

639,556 791,939

Total assets $ 6,092,407 $ 5,626,237

The accompanying notes are an integral part of these statements.

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L I A B I L I T I E S A N D N E T ASSETS

2007

CURRENT LIABILITIESAccounts payableAccrued expenses and other liabilities

Total current liabilities

2006

$ - 27,814 $8,885

36,699

20,8688,848

29,716

MET ASSETSUnrestrictedTemporarily restrictedPermanently restricted

Total net assets

5,360,074288,362407,272

6,055,708

4,652,393556,744387,384

5,596,521

Total liabilities and net assets $ 6,092,407 $ 5,626,237

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REVENUES. A>cn OTHER SUPPORTContributionsCapital campaignUnited WaySpecial eventsFEMADonated services and materialsAmerica's Second HarvestGrant revenuesLocal government supportUSDA commodities reimbursementsInvestment incomeFood donations receivedCommodities receivedCluster transportationOther

Total revenues

Net assets released from restrictionsSatisfaction of purpose of restrictions

Total revenues

EXPENSESProgramAdministrationFundraising

Total expenses

CHANGE IN NET ASSETS

Net assets at beginning of year

Net assets, end of period

(A NOT-FOR-PROFIT OWRANTZATTOTOBATON ROUGE. LOUISIANA

STATEMENTS py ACTTvTTJfRSYEARS ENDED DECEMBER 31. 2007 AND 2006

S

$

Unrestricted

504,871

-179,658120,946

-36,22693,895

101,74832,150

140,03591,016

18,636,270582,322100,799

9,72920,629,665

780,07121,409,736

20,323,05152,557

326,44720,702,055

707,681

4,652,393

5,360,074

2007

Temporarily PermanentlyRestricted Restricted

$ 37,609 $ 19,888 S101,00084,824

-65,256

-.

223,000------

-511,689 19,888

(780,071)(268,382) 19.U&

---

(268,382) 19,888

556,744 387,384

$ 288,362 S 407.272 S

Total

562,368101,000264,482120,94665,25636,22693,895

324,74832,150

140.03591,016

18,636,270582^22100,799

9,72921,161,242

21,161,242

20,323,05152,557

326,44720,702,055

459,187

5,596,521

6,055,708


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2006

Unrestricted

$ 412,599-

159,658133,089

•44,988

-84,09525,670

345,062109,596

12,538,0781,274,765

115,2119,9X6

15,252,797

403,69515,656,492

14,498,48136,023

174,19914,708,703

947,789

3,704,604

$ 4,652,393

Temporarily PermanentlyRestricted Restricted

$ 38,468 $ 30,092 $18,250

--

51,758-

159,312314,600

----

.--

582,388 30,092

(403,695)178,693 30,092

---

178,693 30,092

- 378,051 357,292

S 556,744 $ 387,384 $

Total

481,15918,250

159,658133,08951,75844,988

159,312398,69525,670

345,062109,596

12,538,0781,274,765

115,2119,986

15,865,277

15,865,277

14,498,48136,023

174,19914,708,703

1,156,574

4,439,947

5,596,521

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Accounting and professional feesAdvertisingCapital campaignCluster transportationCold storageConferencesDepreciationDirect mail expenseDistribution of commoditiesDistribution of donated foodDuesFuel and mileageIn-Kind expenseInsuranceInvestment fees and expensesMiscellaneous expenseNew program opportunitiesPayroll taxes

PostagePrinting and publicationRepairs and maintenanceRetirementSalariesSpecial event expenseSuppliesTelephoneTransportation

UtilitiesVehicle leasesVolunteer programWaste disposal

<A NOT-FOR-PROFIT ORGANIZATION)BATON ROUGE. LOUISIANA

STATEMENTS OF FUNCTIONAL EXPENSESYEARS ENDED DECEMBER 31. 2007 AND 2006

Program

$44,656

100,7998,630

12,914150,601

-630,563

17,909,97714,36343,66115,600

174,4446,079

25,78180,00054,6267,110

15,340115,21911,154

669,692-

16,3827,412

56,57853,14655,5537,639

35,132

$ 20,323,051

2007

Administration Fundraising

$ 18,057 $-

--------

1,393-----

1,951---398

23,918-

4,0951,853

-537--355

$ 52,557 $

2£SO

----

109,010--917

1,393---

4,409-

8,45414,43522,074

-1,726

103,64354,046

-3,088

---402-

326,447

Total

$ 18,05747,506

100,7998,630

12,914150,601109,010630,563

17,909,97715,28046,44715,600

174,4446,079

30,19080,00065,03121,54537,414

115,21913,278

797,25354,04620,47712,35356,57853,68355,5538,041

35,487

$ 20,702,055


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2006

Program

$21,7967,633

115,2116,370

12,612136,534

1,219,38311,918,100

12,93625,03118,535

141,7395,420

30,9512,835

41,9717,356

18,08464,0205,338

508,439-

13,2326,016

62,97056,4807,0698,500

23,920

$ 14,498,481

Administration

$ 9,750------

---799-----

1,499---191

18,159-

3,3081,504

-571--242

$ 36,023

Fundraising

$1,391

-----

_

-826799---

1,411-

6,49514,93626,024

-826

78,68739,851

-2,507

---446.

$ 174,199

Total

$ 9,75023,1877,633

115,2116,370

12,612136,534

1,219,38311,918,100

13,76226,62918,535

141,7395,420

32,3622,835

49,96522,29244,10864,0206,355

605,28539,85116,54010,02762,97057,0517,0698,946

24,162

$ 14,708,703

-7-



STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31.2007 AND 2006

CASH FLOWS FROM OPERATING ACTIVITIESChange in net assetsAdjustments to reconcile change in net assets to net

cash (used in ) provided by operating activities:DepreciationUnrealized appreciation of investmentsDonated inventory and other assetsNet change in:

Accounts receivablePromise to give - United WayPrepaid expensesCommodities inventoryAccounts payableAccrued expenses and other liabilities

Net cash (used in) provided by operating activities

CASH FLOWS FROM INVESTING ACTIVTnESExpenditures for property and equipmentPurchase of investments

Net cash used in investing activities

CASH PLOWS FROM FINANCING ACnVTnESChange in permanently restricted investments

Net cash used in financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

2007

(30,070)(30,070)

(551,717)

1,543,347

2006

459,187 $ 1,156,574

150,601(22,458)(958,790)

(9,220)(84,824)(15,073)48,2416,94637

(425,353)

136,534(46,155)(712,429)

(30,648)-

5,901(55,382)(21,222)3,302

436,475

(94,850)(1,444)

(96,294)

(180,790)(3,075)

(183,865)

(38,311)(38,311)

214,299

1,329,048

991,630 $ 1,543,347


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BATON ROUGE, LOUISIANA

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities

The Greater Baton Rouge Food Bank (Food Bank) is a not-for-profit organization that gathers, stores, andredistributes food to charitable organizations and churches that serve the needy. Food sources include donationsfrom individuals, corporations, and organizations; purchased food; and the USDA Commodities program.

Basis of Presentation

Financial statement presentation follows the recommendations of the Financial Accounting Standards Board inits Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-profitOrganizations. Under SFAS No. 117, the Food Bank is required to report information regarding its financialposition and activities according to three classes of net assets: unrestricted net assets, temporarily restricted netassets, and permanently restricted net assets.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the UnitedStates of America requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period. Accordingly, actual results coulddiffer from those estimates. Significant estimates have been applied in the determination of donated food valuesand depreciation in preparation of the accompanying financial statements.

Property and Eonipment

Property and equipment are stated at cost Additions, renewals, and betterments that extend the useful life of theassets are capitalized. Maintenance and repair expenditures are expensed as incurred Provisions for depreciationand amortization are computed using the straight-line method over the assets* useful lives, which range from 3 to39 years.

Revenne Recognition and Promises to Give

Contributions are recognized when the donor makes a promise to give to the Food Bank that is, in substance,unconditional. All other donor-restricted contributions are reported as increases in temporarily or permanentlyrestricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restrictednet assets arc reclassified to unrestricted net assets.

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THE GREATER BATON ROUGE FOOD BANK(A NOT-FOR-PROFIT ORGANIZATIONS

BATON ROUGE, LOUISIANA

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued^

Revenue Recognition and Promises to Give (continued)

Grants for fee income are recorded as unrestricted net assets in the Statement of Activities. All grantee-restricted support is reported as an increase in temporarily restricted net assets in the Statement of Activities."When the restriction expires, temporarily restricted net assets are reclassifjed to unrestricted net assets andreported as net assets released on the Statement of Activities.

Income Taxes

The Food Bank is anot-for-profit organization as described in Section 501 (cX3) of the Internal Revenue Codeand is exempt from federal and state income taxes on related income pursuant to Section 501 (a) of the InternalRevenue Code.

Food Inventory - Donated and Purchased

Food inventory, predominately donated, is reported at fair value as determined by pricing guidelines producedby America's Second Harvest. Donated food inventory received is recorded as unrestricted revenue at anamount equal to the determined value in accordance with the aforementioned guidelines.

Food Inventory - Commodities

Commodities inventory is reported at fair value as determined by the commodities price listing produced by theLouisiana Department of Agriculture and Forestry. Commodities inventory received is recorded as unrestrictedrevenue at an amount equal to the determined value in accordance with the aforementioned guidelines.

Investments

Investments are carried at fair value. The change in fair value is recognized as a component of investmentincome. Accrued interest on investments is recognized as a component of accounts receivable.

Cash and Cash Equivalents

Cash and cash equivalents include all monies in banks and highly liquid investments with original maturities ofless than three months.

At various times during the fiscal year, the Food Bank's cash in bank balances exceeded the Federally insuredlimits. At December 31,2007, the Food Bank's uninsured cash balances totaled approximately $197,000.Additionally, $731,174 was held in a U.S. Treasury money market fund by a financial institution.

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THE GREATER BATON ROUGE FOOD BANK(A NOT-FOR-PROFIT ORGANIZATIONS



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable

The Food Bank determines past-due accounts based on contractual terms and does not charge interest on theaccounts. Receivables consist primarily of amounts due related to the Cluster Transportation and variousgrants. The Food Bank charges off receivables if management considers the collection of the outstandingbalance to be doubtful. Management believes that all existing receivables are collectible.

Donated Services

A significant portion of the Food Bank's functions are conducted by unpaid volunteers. The value of thecontributed time is not reflected in the financial statements since the services do not meet the criteria forrecognition under accounting principles generally accepted in the United States of America.

Donated Materials

Donated materials are reflected as contribution income and expense in the accompanying financial statementsat their estimated values at the date of receipt. Various materials were donated to the Food Bank to help aid intheir mission. These materials were valued at approximately $36,000 and $45,000 for the years endedDecember 31,2007and 2006, respectively.

Reclassification

Certain amounts in the prior year financial statements have been ^classified for comparative purposes toconfirm with current year presentation.

2. TEMPORARILY RESTRICTED NET ASSETS

Net assets were temporarily restricted for the following purposes at December 31:

2007 2006

Generators for agencies $ 19,880 $ 50,000Food purchases - 34,318Bucks for Trucks program 47,658Capital campaign 101,000Hurricane Katrina - 472,426United Way-2008 84,824Cooler/fieezer purchase 35,000 -

$ 388.362 S 556.744

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2. TEMPORARILY RESTRICTED NET ASSETS (continued^

Net assets were released from restrictions by incurring expenses satisfying the restricted purposes or byoccurrences of other events specified by the donors of the various programs.

3. PERMANENTLY RESTRICTED NET ASSETS

Net assets were permanently restricted for the following purposes at December 31:

2007 2006

Endowment Fund; (principal unexpendable; earningscan be used for general mission statement of Food Bank) $ 407.272 S 387.384

4. BOARD DESIGNATIONS FOR UNRESTRICTED NET ASSETS

The Board of Directors designated $0 and $112,762 as of December 31, 2007 and 2006, respectively, ofunrestricted net assets for its Capital Campaign.

5. DONATED FOOD AND SERVICES

The Food Bank's operations consist primarily of receiving, storing, and redistributing donated and purchasedfood to the needy through eligible organizations. Donated food is recorded in the accompanying financialstatements as unrestricted revenue at its estimated value. Also, volunteers assist in the operations of the FoodBank. The cost of volunteer services does not meet the criteria for recognition and is not reflected in theaccompanying financial statements.

Activity of donated food inventory is summarized as follows:

Food inventory, beginning of yearFood donations receivedFood purchasesDistributed, discarded, and adjustmentFood inventory, end of year

2007 2006

$ 1,850,030 $ 1,164,05418,636,270 12,538,078

211,871 65,998< 17.909.977> ( 11.918.1001$ 2.788.194- $ 1.850.030

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6. USDA COMMODITIES

The Food Bank participated in the USDA Commodities program during the years ended December 31,2007and 2006. The objective of the program is to provide U.S. Department of Agriculture (USDA) donatedcommodities to low-income households through eligible organizations for home consumption. Commoditiesreceived are recorded in the accompanying financial statements as unrestricted revenue at their estimated cost

The commodities were as follows:

Commodity inventory, beginning of yearFood commodities receivedDistributed, discarded, and adjustmentCommodity inventory, end of year

2007 2006

$($

103,081582,322630.563)54.840

$

($

47,6991,274,7651.219.383)103.081

7. CLUSTER TRANSPORTATION

During 2006, the Food Bank assumed the responsibility as the cluster head for the New Orleans cluster forAmerica's Second Harvest. As the head of the cluster of itself, the Food Bank of Central Louisiana, and theSecond Harvest Food Bank of Greater New Orleans and Acadiana, the Food Bank coordinates and pays for thecluster's transportation costs and is then reimbursed monthly by the two other food banks. Cluster transportationrevenue is recorded in the accompanying financial statements as unrestricted revenue. Amounts due from theagencies are recognized as a component of accounts receivable.

8. VEHICLE LEASES

Hie Food Bank began leasing delivery trucks for food distribution in December of 2006. An additional lease wasentered into in May of 2007. The terms of the lease require annual rental payments of approximately $62,000for the next five years and a final payment of $14,000 in 2013. Rental expense for the lease was $55,553 and$7,069 for the years ended December 31,2007 and 2006.

9. RETIREMENT PLAN

The Food Bank adopted a qualified Internal Revenue Code Section 403(b) annuity plan. The Plan covers all fulltime employees who have completed at least three months of service. The Food Bank is obligated to match up to50% of an employee's deferred amount, up to 10% of their pay. The Food Bank has the option to match up to100% in any one year. The Food Bank contributed $13,278 and $6,355 to this Plan during the years endedDecember 31,2007 and 2006, respectively.

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10. INVESTMENT INCOME

The Greater Baton Rouge Food Bank Endowment Fund (the Fund) was created as an inviolate endowment.Donations, to be used to meet the mission statement of the Food Bank, can be solicited for this fund. Interest,dividends, capital gains or other earnings of the Fund are to be utilized at the discretion of the Board of Directorsand in compliance with the policies and procedures of the Board designated holder of the endowment Thispolicy, with the exception of the inviolate nature of the endowment that may not be altered, may only be changedby a two-thirds majority vote of the elected, voting members of the Board of Directors. The corpus of the assetsof this fund is considered to be permanently restricted.

Investments of the Endowment Fund consist solely of amounts invested in the Baton Rouge Area FoundationInvestment Pool. The canying amount of the investments of $639,556 and $587,028 as of December 31,2007and 2006, respectively, is its fair value, based on quoted market prices.

The Food Bank has cash in money market accounts and certificates of deposit that pay interest.

Investment income on investments was comprised of the following:

2007 2006

Net unrealized gains on endowment fund $ 22,458 $ 46,155Dividend and interest (endowment fund) 2,269 14,547Interest (money market and certificates of deposit) 66.289 48.894

$ 91.016 $ 109.596

11. FUNCTIONAL ALLOCATION OF EXPENSES

The costs of providing the various programs and activities have been summarized on a functional basis in thestatements of activities. Accordingly, certain costs have been allocated by management among the programs andsupporting services benefited.

12. COMMITMENTS AND CONTINGENCIES

The Food Bank is, from time to time, involved in lawsuits arising in the ordinary course of its business that, inthe opinion of management, will not have a material effect on the Food Bank's results of operations.

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EEPORTS ON INTERNAL CONTROL AND ONCOMPLIANCE AND OTHER MATTERS

DECEMBER 31.2007

P&N

TABLE OF CONTENTS

Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial Statements Performedin Accordance With Government Auditing Standards Exhibit A

Report on Compliance with Requirements Applicable to Each MajorProgram and on Internal Control Over Compliance in Accordance withOMB Circular A-l 33 Exhibit B

Schedule of Expenditures of Federal Awards Exhibit C

Schedule of Findings and Questioned Costs Exhibit D

Summary Schedule of Prior Audit Findings Exhibit E

Postlethwaite& Netterville

A Professional Accounting Corporation

Associated Offices in Principal Citiei of the United States 1? YTTTRTT1 A

www.pncpa.com '

Report on Internal Control Over Financial Reporting and on Compliance andOther Matters Based on an Audit of Financial Statements Performed

In Accordance with Government Auditing Standards


We have audited the financial statements of The Greater Baton Rouge Food Bank (a not-for-profit organization) as of andfor the year ended December 31,2007, and have issued our report thereon dated June 5,2008. We conducted our audit inaccordance with auditing standards generally accepted in the United States of America and the standards applicable tofinancial 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 The Greater Baton Rouge Food Bank's internal control over financialreporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of The Greater Baton Rouge Food Bank'sinternal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of theOrganization's internal control over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in the precedingparagraph and would not necessarily identify all deficiencies in internal control over financial reporting that might besignificant deficiencies or material weaknesses. However, as discussed below, we identified a deficiency in internal controlover financial reporting that we consider to be a significant deficiency.

A control deficiency exists when the design or operation of a control does not allow management or employees, in thenormal course of perforating their assigned functions, to prevent or detect misstatements on a timely basis. A significantdeficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Organization's ability toinitiate, authorize, record or process, or report financial data reliably in accordance with generally accepted accountingprinciples such that there is more than a remote likelihood that a misstatement of the Organization's financial statementsthat is more than inconsequential will not be prevented or detected by the Organization's internal control. We consider thedeficiency described in the following paragraph to be a significant deficiency in internal control over financial reporting.


2007-1 As part of the audit process, we have always assisted management in drafting the financial statementsand related notes for the year-end audit procedures. The definition of internal control over financialreporting is that policies and procedures exist that pertain to an Organization's ability to initiate, record,process, and report financial data consistent with the assertion embodied in the annual financialstatements, which for the Organization, is that financial statements are prepared in accordance withgenerally accepted accounting principles (GAAP). Because our involvement is so key to that processthat is an indication that the internal control over financial reporting of the Organization meets thedefinition of a significant deficiency as defined above.

A material weakness is a significant deficiency, or combination of significant deficiencies, that result in more than a remotelikelihood that a material misstatement of the financial statements will not be prevented or detected by the Organization'sinternal control.

Our consideration of the internal control over financial reporting was for the limited purpose described in the firstparagraph of this section and would not necessarily identify all deficiencies in internal control that might be significantdeficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to bematerial weaknesses. However, we believe the significant deficiency described above is not a material weakness.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether The Greater Baton Food Bank's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts andgrant agreements, noncompliance with which could have a direct and material effect on the determination of financialstatement amounts. However, providing an opinion on compliance with those provisions wasnot an objective of our audit,and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance orother matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the management of The Greater Baton Rouge Food Bank andthe Legislative Auditor of the State of Louisiana and is not intended to be and should not be used by anyone other thanthese specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as apublic document.

Baton Rouge, LouisianaJune 5,2008

P&N


A Professional Accounting CorporationAssociated Offices In Principal Qties of ihe United Slates

www.pncpa.com

Report on Compliance with Requirements Applicable toEach Major Program and on Internal Control Over Compliance

In Accordance With OMB Circular A-133


Compliance

We have audited the compliance of the Greater Baton Rouge Food Bank with the types of compliance requirementsdescribed in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that areapplicable to its major federal program for the year ended December 31,2007. The Greater Baton Rouge Food Bank'smajor federal program is identified in the summary of auditors' results section of the accompanying schedule of findingsand questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its majorfederal program is the responsibility of the Greater Baton Rouge Food Bank's management Our responsibility is toexpress an opinion on the Greater Baton Rouge Food Bank's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained hi Government Auditing Standards, issued by theComptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, andNon-ProfitOrganizations. Those standards and OMB Circular A-l 33 require that we plan and perform the audit to obtain reasonableassurance about whether noncornpliance with the types of compliance requirements referred to above that could have adirect and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidenceabout the Greater Baton Rouge Food Bank's compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Ouraudit does not provide a legal determination on the Greater Baton Rouge Food Bank's compliance with those requirements.

In our opinion, the Greater Baton Rouge Food Bank complied, in all material respects, with the requirements referred toabove that are applicable to its major federal program for the year ended December 31,2007.

8550 United Plaza Blvd, Suite 1001 • Baton Rouge, LA 70809 • Tel: 225.922.4600 - Fax: 225.922.4611

Internal Control Over Compliance

The management of the Greater Baton Rouge Food Bank is responsible for establishing and maintaining effective internalcontrol over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. Inplanning and performing our audit, we considered the Greater Baton Rouge Food Bank's internal control over compliancewith requirements that could have a direct and material effect on a major federal program in order to determine ourauditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing anopinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on theeffectiveness of The Greater Baton Rouge Food Bank's internal control over compliance.

A control deficiency in an Organization's internal control over compliance exists when the design or operation of a controldoes not allow management or employees, in the normal course of performing their assigned functions, to prevent or detectnoncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is acontrol deficiency, or combination of control deficiencies, that adversely affects the Organization's ability to administer afederal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirementof a federal program that is more than inconsequential will not be prevented or detected by the Organization's internalcontrol.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than aremote likelihood that material noncompliance with a type of compliance requirement of a federal program will not beprevented or detected by the Organization's internal control.

Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph andwould not necessarily identify all deficiencies in internal control that might be significant deficiencies or materialweaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be materialweaknesses, as defined above. We noted another matter involving the internal control over compliance that we havereported to management of The Greater Baton Rouge Food Bank in a separate letter dated June 5,2008.

Schedule of Expenditures of Federal Awards

We have audited the financial statements of the Greater Baton Rouge Food Bank as of and for the year ended December31,2007, and have issued our report thereon dated June 5,2008. Our audit was performed for the purpose of forming anopinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards ispresented for purposes of additional analysis as required by OMB Circular A-133andis not arequired part of the financialstatements. Such information has been subjected to the auditing procedures applied in the audit of the financial statementsand, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole.

This report is intended solely for the information and use of the board of directors, management of the Greater BatonRouge Food Bank, the Legislative Auditor of the State of Louisiana, and federal awarding agencies and pass-throughentities and is not intended to be and should not be used by anyone other than these specified parties. Under revised statute24:513, this report is distributed by the Legislative Auditor as a public document.


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EXHIBIT C

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR FISCAL YEAR ENDED DECEMBER 31.2007

U.S. DEPARTMENT OF AGRICULTURE

FEDERALCFDA

PROGRAM NAME NUMBER EXPENDITURES

FEDERAL AGENCY FOOD AND NUTRITION SERVICE, PASSED THROUGH GRANTNUMBERS 6LA810812 AND 6LA400812

EMERGENCY FOOD ASSISTANCE PROGRAM 10.568 and 10.569 S 770,598

TOTAL DEPARTMENT OF AGRICULTURE

DEPARTMENT OF HOMELAND SECURITY

FEDERALCFDA

PROGRAM NAME NUMBER

EMERGENCY FOOD AND SHELTER PROGRAM 97.024

TOTAL HOMELAND SECURITY

EXPENDITURES

$ 65,256

$ <KT25fi

TOTAL EXPENDITURES OF FEDERAL AWARDS S 835.854

See the accompanying notes to the schedule of expenditures of federal awards.


NOTE A - BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Greater BatonRouge Food Bank (Food Bank) and is presented on the accrual basis of accounting. The information in this schedule ispresented in accordance with the requirements of OMB Circular A-l 33, Audits of States, Local Governments, andNon-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or usedin the preparation of, the basic financial statements.

NOTE B - FOOD DISTRIBUTION

Nonmonetary assistance is reported in the schedule at the estimated cost of the commodities disbursed. At December 31,2007, the organization had USDA commodities valued at $54,840 in inventory.

NOTE C - SUB-RECIPIENTS

All of the commodities distributed were done so to eligible recipient agencies considered to be sub-recipients of the FoodBank.

NOTE D - NON CASH DONATION

During the year, the Food Bank received a non-cash donation of commodities from FEMA. They received approximately87,000 cases of Meals Ready to Eat (MRE's). Approximately 51,000 cases were distributed during Ihe year to various othermembers of America's Second Harvest Management estimated the value of each case at $65 based on current market price.There were approximately 37,000 cases remaining at year end with an estimated value of $2,405,000. There were no donorrestrictions related to the donation. Due to non-cash activity, the donation is not included in the Schedule of Expenditures ofFederal Awards for the fiscal year ended December 31,2007.

EXHIBIT DPage 1 of 2

THE GREATER BATON ROUGE FOOD BANKSCHEDULE OF FINDINGS AND QUESTIONED COSTS

YEAR ENDED DECEMBER 31.2007

A. Summary of Auditors9 Results

Financial Statements

Type of auditor's report issued: Unqualified

• Material weaknesses) identified?• Significant deficiencies identified that are

not considered to be material weaknesses?

Noncompliance material to financialstatements noted?

Federal Awards

Internal control over major programs:

• Material weakness(es) identified?• Significant deficiencies identified that are

not considered to be material weaknesses?

X

yes

yes

yes

X

X

.yes

.yes

no

none reported

no

no

x none reported

Type of auditor's report issued on compliance for major programs: Unqualified

Any audit findings disclosed that are requiredto be reported in accordance with section 510(a)of Circular A-133? .yes .no

EXHIBIT PPage 2 of 2

THE GREATER BATON ROUGE FOOD BANKSCHEDULE OF FINDINGS AND QUESTIONED COSTS


Identification of major programs;

CFDA Numbers Name of Federal Program or Cluster

10.568 and 10.569 Emergency Food Assistance Program

» The threshold for distinguishing types A and B programs was $300,000.

e The Greater Baton Rouge Food Bank does qualify as being a low-risk auditee.

Findings and Questioned Costs - Major Federal Awards Programs

• None

EXHIBIT E

THE GREATER BATON ROUGE FOOD BANKSUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


Findings and Questioned Costs - Major Federal Awards Programs

• None

DWILLIAM H. WRIGHT, JR.

BUILDING5546 Choctaw Drive

QPost Office Box 2996Baton Rouge, LA 70821-2996(225) 359-9940(225) 355-1445 (FAX)

QEXECUTIVE COMMITTEEThomas Brown

Chairman of the BoardMark Grant

Vice ChairmanMichael A. Tham

TreasurerMargaret Tyler

SecretaryThomas Savoie

Member at LargeDaniel K. Rester

Member at Large

BOARD OF DIRECTORSMatthew H. BluntKimberly ChopinJason DeCuirLouis R. "Randy" FletcherRick HoffmanValerie A. JudiceLee C. "Buster" KantrowFrederic "Ric" KeamyJefFKleinpeterSr. Adele LambertBrad A. LambertDaniel L. LastrapesSharon W. LeeRobert LevyLeslie Jennings MageeRichard O. MohringRussell Long MoselyJohn NelsonCheryl A. OlindeBill O'QuinCharles ShropshireJames E. Stalls, Jr.Peggy StuartChristopher C. ValluzzoRobert Whittington

PRESIDENT/CEOMichael G. Manning

June 23,2008

Postlethwaite & NettervilleCertified Public Accountants8550 United Plaza Blvd., Suite 1001Baton Rouge, LA 70809

We are providing this letter in response to the significant deficiencies identified inyour Report on Internal Control over Financial Reporting dated June 5,2008.

Condition:

2007-1 As part of the audit process, we have always assisted management indrafting the financial statements and related notes for the year-end auditprocedures. The definition of internal control over financial reporting isthat policies and procedures exist that pertain to an Organization's abilityto initiate, record, process, and report financial data consistent with theassertion embodied in the annual financial statements, which for theOrganization, is that financial statements are prepared in accordance withgenerally accepted accounting principles (GAAP). Because ourinvolvement is so key to that process that-is an indication that the internalcontrol over financial reporting of the Organization meets the definition ofa significant deficiency as defined above

Management's Response: :

Management will assume the full responsibility for the preparation of thefinancial statements and notes. This will 1& done independently or with theassistance of another accounting firm.

Sincerely,

QTAX ID #72-1065318

[email protected] Mike Manning.President and CEO

A Partner of

"Open your hand to the needy" — DEUT. 15:11America's Second Harms


A Professional Accounting Corporation

Associated Offices in Principal Cities of the United States

www.pncpa.com

To the Board of DirectorsThe Greater Baton Rouge Food BankBaton Rouge, LA

We have audited the financial statements of The Greater Baton Rouge Food Bank, for the year ended December31, 2007 and have issued our report thereon. As part of our examination, we made a study and evaluation ofinternal accounting control to the extent we considered necessary to evaluate the system as required by auditingstandards generally accepted in the United States of America. Under these standards, the purposes of suchevaluation are to establish a basis for reliance on the system of internal accounting control in determining thenature, tuning, and extent of other auditing procedures that are necessary for expressing an opinion on thefinancial statements and to assist the auditor in planning and performing his audit of the financial statements.

The objective of internal control is to provide reasonable, but not absolute, assurance as to the safeguarding ofassets against loss from unauthorized use or disposition, and the reliability of the financial records for preparingfinancial statements and maintaining accountability for assets. The concept of reasonable assurance recognizesthat the cost of a system of internal accounting control should not exceed the benefits derived and also recognizesthat the evaluation of these factors necessarily requires estimates and judgments by management.

No matter how good a system, there are inherent limitations that should be recognized in considering the potentialeffectiveness of internal accounting. In the performance of most control procedures, errors can result frommisunderstanding of instructions, mistakes of judgment, carelessness, or other personal factors. Controlprocedures whose effectiveness depends upon segregation of duties can be circumvented by collusion. Similarly,control procedures can be circumvented intentionally by management either with respect to the execution andrecording of transactions or with respect to the estimates and judgments required in the preparation of financialstatements. Further, projection of any evaluation of internal accounting control to future periods is subject to therisk that the degree of compliance with the procedures may deteriorate. We say this simply to suggest that anysystem needs to be constantly reviewed and improved where necessary.


-2-

During the course of our audit, we made the following observations which we feel should be brought to yourattention. Concerning these matters, we offer the following comments and recommendations:

1) Review of Claim

During our audit, we noted that the monthly commodity claim reimbursements are not reviewed by someoneother than the preparer. To ensure accuracy, we recommend that someone review the calculations and relatedinformation before the reimbursement is submitted. This will also provide an opportunity for cross-traininganother employee regarding completion of the reimbursement request.

Management's response:

Management agrees with the recommendation and is currently developing a plan to implement the reviewprocess.


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