AMISTAD RESEARCH CENTER

FINANCIAL AND COMPLIANCE AUDITTOGETHER WITH

INDEPENDENT AUDITORS' REPORT

FOR THE YEARS ENDED DECEMBER 31,2006 AND 2005

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

Release Date

JBruno & TervalonLLPPublic Accountants

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITORS' REPORT 1

STATEMENTS OF FINANCIAL POSITION ATDECEMBER 31,2006 AND 2005 3

STATEMENTS OF ACTIVITIES - FOR THE YEARSENDED DECEMBER 31,2006 AND 2005 4

STATEMENTS OF FUNCTIONAL EXPENSES - FOR THE YEARSENDED DECEMBER 31,2006 AND 2005 6

STATEMENTS OF CASH FLOWS - FOR THE YEARSENDED DECEMBER 31,2006 AND 2005 8

NOTES TO THE FINANCIAL STATEMENTS 9

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHERMATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS 19

21

STATUS OF PRIOR YEAR AUDIT FINDINGS 23

EXIT CONFERENCE 24

AMISTAD RESEARCH CENTERSTATEMENTS OF FINANCIAL POSITION

DECEMBER 31,2006 AND 2005

ASSETS

2006 2005

Cash $ 89,248 $ 61,483Investments (NOTES 2 and 3) 1,148,716 1,102,023Accounts receivable 19,661 17,724Grants receivable 109,906 110,966Inventory 312,716 336,900Other assets 14,262 1,544Endowment investments (NOTES 2,3 and 12) 2,864,308 2,615,789Furniture and equipment, net (NOTES 2 and 4) 33,132 52,728Fine arts collection (NOTES 13) 3.692.200 • 3.692.200

Total assets $8.284.149

LIABILITIES AND NET ASSETS

Liabilities:Accounts payable and accrued expenses $ 50.296 $ 104.03%

Total liabilities 50.296 104.038

Net assets:Unrestricted 808,354 772,052Temporarily restricted (NOTES 2 and 5) 852,265 790,552Permanently restricted (NOTES 2 and 6) 6.573.234 6324.715

Total net assets 8.233.853 7.8873 Ig

Total liabilities and net assets S8.284.149 . $7,991.357

The accompanying notes are an integral part of these financial statements.

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AMISTAD RESEARCH CENTERSTATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,2006 AND 2005

CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets

Adjustments to reconcile change in net assetsto net cash (used in) provided by operating activities:

DepreciationNet unrealized (gains) and losses

(Increase) decrease in:Accounts receivablePledges receivableGrants receivableInventoryOther assets

Increase (decrease) in:Accounts payable and accrued expensesDeferred revenues

. Net cash (used in) provided by operating activities

2006

$346,534

2005

$ (124,323)

19,596(244,520)

(1,937)-0-

1,06024,184(12,718)

(53,742)-0-

21,348(47,477)

4,73719,9294,2518,5245,833

77,335(216.0051

78.457 (245.8481

CASH FLOWS FROM INVESTING ACTIVITIES

Disposition of equipmentPurchase of investmentsProceeds from sales of investments

-0-(50,692)

303(59,233)351.795

Net cash provided by (used in) investing activities

Net increase in cash

Cash at beginning of year

Cash at end of year

The accompanying notes are an integral part of these financial statements.

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - Organization and Nature of Activities:

Amistad Research Center (the Center) collects original source materials onAmerican ethnic history, race, relations and civil rights, and the Africandiaspora. The Center organizes and preserves these materials according toarchival standards and makes them accessible for research use. The Centeralso collects and makes accessible to research scholars, books, periodicals,photographs, microforms, film, and videotape to support its manuscriptcollections. The Center collects African art and works of art by AfricanAmerican artists for display at the Center and from which travelingexhibitions may be developed.

The Center, incorporated in the State of Louisiana on October 16, 1987, isa nonprofit organization as described in Section 501(c)(3) of the InternalRevenue Code and is exempt from federal and state income taxes.

NOTE 2 - Summary of Significant Accounting Policies:

Principles of Accounting

The Center's financial statements are prepared on the accrual basis and inaccordance with accounting principles generally accepted in the United Statesof America. The preparation of financial statements.in conformity withaccounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand liabilities at the date of the financial statements and the reported amountsof revenues and expenses during the reporting period. Actual results coulddiffer from those estimates.

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 - • Summary of Significant Accounting Policies. Continued:

Public Support and Revenue

Contributions are generally available for unrestricted use in the year receivedunless specifically restricted by the donor. Unconditional promises to give arerecorded as received. Unconditional promises to give due in the next year arereflected as current promises to give and are recorded at their net realizablevalue. Unconditional promises to give due in subsequent years are recordedat the present value of their net realizable value, using risk-free interest ratesapplicable to the years in which the promises are received to discount theamounts. An allowance for uncollectible promises is provided based onmanagement's evaluation of potential uncollectible promises receivable atyear end.

Grants and other contributions of cash and other assets are reported astemporarily restricted support if they are received with donor stipulations thatlimit the use of the donated assets. When a donor restrictions expires, that is,

. when a stipulated time restriction ends or purpose restriction is accomplished,temporarily restricted net assets are reclassified to unrestricted net assets andreported in the statement of activities as net assets released from restrictions.

Endowment contributions and investments are permanently restricted by thedonor. Investment earnings available for distribution are recorded inunrestricted net assets. Investments earnings with donor restrictions arerecorded in temporarily or permanently restricted net assets based on thenature of the restrictions.

Contributions of donated noncash assets are recorded at their fair values in theperiod received. Contributions of donated services that create or enhancenonfinancial assets or that require specialized skills are provided byindividuals possessing those skills, and would typically need to be purchasedif not provided by donation, are recorded at their fair values in the periodreceived.

10

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 - Summary of Significant Accounting Policies. Continued:

Investments

In accordance with Statement of Financial Accounting (SFAS) No. 124,Accounting for Certain Investments Held bv Not-for-Profit Organizations.investments in marketable securities with readily detenninable fair values andall investments in debt securities are valued at their fair values in the statementof financial position. The fair values of investments are based on quotedmarket prices for those or similar investments. Unrealized gains and lossesare included in the change in net assets. (See NOTE 3 and 12)

Cash and Cash Equivalents

The Center considers all highly liquid investments with a maturity of threemonths or less when purchased to be cash equivalents. Cash and cashequivalents for purposes of the statements of cash flows exclude permanentlyrestricted cash and cash equivalents.

Inventory

Inventories are stated at the lower of cost or market. Print inventories (works. of art available for sale) donated to the Center are recorded at their fair value

at the date of donation.

Furniture and Equipment

Furniture and equipment are capitalized at cost. Furniture and equipment arebeing depreciated over estimated useful lives of five to ten years using astraight-line method, with a half of a year's depreciation recognized in theyears of acquisition and disposal.

11

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 2 - Summary of Significant Accounting Policies. Continued:

Reclassifications

Certain amounts from 2005 have been reclassified to conform with the 2006presentation.

NOTE 3 - Investments:

Investments and investment return and its classification in the Statements ofActivities as of December 31, are summarized as follows:

Unrestricted:Government securitiesMoney accountsCertificate of Deposit

Permanently and temporarilyrestricted:

Common InvestmentFund

2006

Cost

$628,197339,064200,000

FairValue

$610,076339,064199,576

CarryingValue

$610,076339,064199,576

2,364.474 2.864.308 2.864.3Q8

$3.531,735 $4.013.024 $4.013.024

Temporarily Permanently^Unrestricted Restricted Restricted Total

Interest and dividendsUnrealized gains (losses)

$57,437 $51,723~Q- G.9101

$57.437 S47.813

$ 89 $109,249248.430 244,520

12

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 3 - Investments. Continued:

Unrestricted:Government securitiesMoney accounts

Permanently and temporarilyrestricted:

Common InvestmentFund

2005

Cost

$774,394342,262

FairValue

$759,761342,262

CarryingValue

$759,761342,262

2.364.332 2.615.789 2.615.789

S3.48Q.988 $3.717,812 $3.717.812

Interest and dividendsUnrealized gains (losses)

Temporarily PermanentlyUnrestricted Restricted Restricted ' Total

$55,130 $61,511it (24.285)

$55.130 $37.226

$ 54 $116,69571.762 47,477

S71.816 $164.172

13

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 4 - Furniture and Equipment:

At December 31, furniture and equipment consisted of the following:

Office furniture and equipmentAutomobile

Less accumulated depreciation

$ 159,30619.713

179,019(145.887)

S 33.132

2005

$ 159,30619.713

179,019(126291)

$ 52.728

NOTE 5 - Temporarily Restricted Net Assets:

Temporarily restricted net assets are available for the following purposes orperiods:

Capital campaignBuilding fundGrant fundTom Dent Fund

2006

$757,4838,085

11,69775.000

2005

$695,7708,085

11,69775.000

$790.552

14

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 6 - Permanently Restricted Net Assets:

Net assets were permanently restricted for the following purposes atDecember 31:

2006 2005

Capital campaignUnited Church Board for

Homeland Ministries:Endowment Fund

New Orleans Friends ofAmistad Fund

Fine arts

$ 16,726 $ 16,726

2,824,911

39,3973.692.200

2,579,812

35,9773.692.200

$6.573.234 $6.324.715

NOTE 7 - Lease:

Amistad Research Center entered into a leasing arrangement commencingJanuary 1,1987, with Tulane University whereby Amistad Research Centerwould move its operations to the Tulane Campus. The lease was for a periodoften (10) years, free of any rental assessment, and terminated on the 31st dayof December 1996. The lease is automatically renewable for eighteensuccessive five year terms. At the end of the original lease term, theorganization exercised the renewal option for an additional five years.

The in-kind rent contribution for the years ended December 31, 2006 and2005 was $63,945 and $44,100 respectively, which was based on comparablerental sites.

During the term of the lease, Tulane shall grant to Amistad Research Centerannually an unrestricted cash-operating subsidy. The amount contributed for2006 and 2005 was $111,191 and $109,572, respectively.

15

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTES- Retirement Plan:

After three years of employment, the Center allows all employees toparticipate in a pension plan for lay workers administered by the United StatesChurch of Christ. The Center contributes 11 % of an employee's salary intothe plan if the employee contributes 1% of his salary. An employee may payup to 4% of his salary into the pension plan. The Center contributed a totalof $21,505and $28,633 to the plan during the years endedDecember 31,2006and 2005, respectively.

NOTE 9 - Concentration of Credit Risk:

At the end of the year, the Center had no deposits of cash at banks in excessof FDIC insurance limits of $100,000.

NOTE 10 - Fair Values of Financial Instruments:

The following methods and assumptions were used by the Center inestimating its fair value disclosures for financial instruments:

Cash and short-term unconditional promises to give: The carryingamounts reported in the statements of financial position approximatefair values because of the short maturities of those instruments.

Short-term and endowment investments: The fair values ofinvestments are based on quoted market prices for those or similarinvestments. (See NOTE 12)

16

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 10 - Fair Values of Financial Instruments. Continued:

Long-term unconditional promises to give: The fair value of promisesto give that are due in more than one year is estimated by discountingthe future cash flows using a current risk free rate of return.

2006 2005Carrying Fair Carrying FairAmount Value Amount Value

Financial Assets:Cash $ 89,248 $ 89,248 $ 61,483 $ 61,483Investments 1,148,716 1,148,716 1,102,023 1,102,023Endowment

Investments 2,864,308 2,864,308 2,615,789 2,615,789Fine arts collection 3.692.2QO 3.692200 3,692.200 3.692.200

$ 7.794.472 $ 7.794.472 £7.471.495 $7.471.495

NOTE 11 - Functional Allocation of Expenses:

The costs of providing the various programs and activities have beensummarized on a functional basis in the statements of activities. Accordingly,certain costs have been allocated among the programs and supporting servicesbenefitted.

17

AMISTAD RESEARCH CENTERNOTES TO THE FINANCIAL STATEMENTS, CONTINUED

NOTE 12 - Endowment Investments:

In accordance with Statement of Financial Accounting Standards No. 124,Accounting for Certain Investments Held bv Not-for-Profit Organizations.investments in marketable securities with readily determinable fair values andall investments in debt securities are valued at their fair values in theStatements of Financial Position.

NOTE 13- Fine Arts Historical Collection:

The Center's collections are made up of artifacts of historical significanceand art objects that are held for .educational, research, scientific and curatorialpurposes. Each of the items are cataloged, preserved and cared for andactivities verifying their existence and assessing their condition are performedcontinuously. These items were appraised in 2003 at approximately$3,692,200.

18

Irunp & Tervalon^Certified Public Accountants

MemberAmerican Institute of Mirhani R Rn,™ PPACertified Public Accountants MlChaeI B' Bruno> CPA

Society of Louisiana Mc^6 J- Tervalon, Jr., CPACertified Public Accountants Waldo J. Moret, Jr., CPA

Paul K. Andoh, Sr., CPA

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of DirectorsAmistad Research Center

We have audited the financial statements of Amistad Research Center (the Center) as ofand for the year ended December 31,2006,and have issued our report thereon dated June 1,2007. We conducted our audit in accordance with auditing standards generally accepted inthe United States of America and the standards applicable to financial audits contained inGovernment Auditing Standards 9 issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Center's internal control overfinancial reporting as a basis for designing our auditing procedures for the purpose ofexpressing our opinion on the financial statements, but not for the purpose of expressing anopinion on the effectiveness of the Center's internal control over financial reporting.Accordingly, we do not express an opinion on the effectiveness of the Center's internal,control over financial reporting.

A control deficiency exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent or detect misstatements on a timely basis. A significant deficiency is a controldeficiency, or combination of control deficiencies, that adversely affects the Center's abilityto initiate, authorize, record, process, or report financial data reliably in accordance withgenerally accepted accounting principles, such that there is more than a remote likelihoodthat a misstatement of the Center's financial statements that is more than inconsequentialwill not be prevented or detected by the Center's internal control.

4298 ELYSIAN FIELDS AVENUE, NEW ORLEANS, LA 70122(504) 284-8733 FAX (504) 284-8296

E-MAIL brunterv@btcpas.com

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

(CONTINUED)

Internal Control Over Financial Reporting, Continued

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 financialstatements will not be prevented or detected by the Center's internal control.

Our consideration of internal control over financial reporting was for the limited purposedescribed in the first paragraph of this section and would not necessarily identify alldeficiencies in internal control that might be significant deficiencies or material weaknesses.We did not identify any deficiencies in internal control over financial reporting that weconsider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Center's financial statementsare free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grant agreements, noncompliance with whichcould 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 objectiveof our audit, and accordingly, we do not express such an opinion. The results of our testsdisclosed no instances of noncompliance that are required to be reported under GovernmentAuditing Standards. We noted certain other matters that we reported to management of theCenter in a separate letter dated June 1, 2007.

This report is intended solely for the information and use of the Board of Directors,management, and the Louisiana Legislative Auditor and is not intended to be and should notbe used by anyone other than these specified parties. Under Louisiana Revised Statute24:513, this report is distributed by the Legislative Auditor as a public document

BRUNO & TERVALON LLPCERTIFIED PUBLIC ACCOUNTANTS

June 1,2007

20

*runo & Tervalon LLPified Public Accountants

AMISTAD RESEARCH CENTERSCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED DECEMBER 31, 2006

Section I - Summary of Auditors' Results

1. Type of report issued on the financial statements: Unqualified .

2. Did the audit disclose any control deficiencies in internal control: No mattersreported

3. Were any of the control deficiencies significant or material weaknesses: Nomatters reported.

4. Did the audit disclose any noncompliance which is material to the financialstatements of the organization: No.

5. Did the audit disclose any reportable conditions in internal control over majorprograms: N/A .

6. Were any of the reportable conditions in internal control over major programsmaterial weaknesses: N/A .

7. Type of report issued on compliance for major programs: N/A .

8. Did the audit disclose any audit findings which the independent auditors arerequired to report under OMB Circular A-133, Section 510(a): N/A .

9. The following is an identification of major programs: N/A.

10. The dollar threshold used to distinguish between Type A and Type BPrograms, as described in OMB Circular A-133, Section 520(b) is as follows:N/A.

11. Did the auditee qualify as a low-risk auditee under OMB Circular A-133,Section 530: N/A.

12. Was a management letter issued: Yes.

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AMISTAD RESEARCH CENTERSCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED DECEMBER 31,2006

Section II - Financial Statement Findings

No Matters Reported

Section III - Federal Award Finding and Questioned Cost

N/A

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AMISTAD RESEARCH CENTERSTATUS OF PRIOR YEAR AUDIT FINDINGS

INTERNAL CONTROL AND COMPLIANCEMATERIAL TO THE FINANCIAL STATEMENTS

Resolved2005-01 Classification of Expenses X2005-02 Salaries and wages; payroll taxes and fringe benefits X

INTERNAL CONTROL AND COMPLIANCEMATERIAL TO FEDERAL AWARDS

No matters were reported.

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AMISTAD RESEARCH CENTER

EXIT CONFERENCE

During the course of the audit and at an exit conference, the report and its contents werediscussed. Involved in those discussions were:

AMISTAD RESEARCH CENTER

Mr. Lee Hampton ~ Executive Director

BRUNO & TERVALON LLP, CERTIFIED PUBLIC ACCOUNTANTS

Mr. Michael B. Bruno, CPA -- Managing PartnerMr. Armand E. PinJkney - Manager

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AMISTADRESEARCH CENTER

June 17,2007

Bruno & Tervalon LLPCertified Public Accountants4298 Elysian Fields AvenueNew Orleans, LA 70122

Gentlemen:

Please accept the following as our Corrective Action Plan to the Independent Auditors'Comments to Management contained in your audit of Amis tad Research Center for theyear ended December 3 1 , 2006.

2006-01 Classification of Net Assets

During the course of our audit we noted that a portion of the Center's net assets continues to beclassified as temporarily restricted.

Recommendation

We recommend that temporarily restricted net assets be reviewed for proper classificationand satisfaction of donor imposed restrictions.

CORRECTIVE ACTION PLAN

The Amistad Research Center will work with its bookkeepers to review temporarilyrestricted net assets for proper classification and to ensure satisfaction of donorimposed restrictions*

2006-02 Appraisal of Fine Arts Collection

During the audit we noted that the last appraisal of the Fine Arts Historical Collection wasconducted in 2003.

Recommendation

We recommend that the Collection be re-appraised and inventoried to ensure adequateinsurance coverage and that fair values are reflected in the financial statements.

Tilton Hall, Tulane UniversityNew Orleans, LA 70118-5698

(504) 865-5535 Fax (504) 865-5580www.amistadreBearobcemter.org