lafayette habitat for humanity,...

LAFAYETTE HABITAT FOR HUMANITY, INC.

FINANCIAL STATEMENTS

YEAR ENDED JUNE 30,2014


CONTENTS

INDEPENDENT AUDITORS' REPORT 2-3

FINANCIAL STATEMENTS Statement of Financial Position 4 Statement of Activities 5 Statement of Cash Flows 6 Notes to Financial Statements 7-13

ADDITIONAL INFORMATION Schedule of Functional Expenses 14 Schedule of Expenditures of Federal Awards 15 Independent Auditors' Report on Internal Control Over

Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Prepared in Accordance with Government Auditing Standards 16-17

Report on Compliance with Requirements Applicable To Each Major Program and on Internal Control Over Compliance in Accordance with 0MB Circular 133 18-19

Schedule of Findings and Questioned Costs 20 Summary Schedule of Prior Year Findings 21

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C. Certified Public Accountants

100 Petroleum Drive, 70508 P.O. Box 80569 • Lafayette, Louisiana 70598-0569

(337) 232-3637. Fax (337) 235-8557 www.wmddh.com

JOHN W. WRIGHT, CPA *

JAMES H. DUPUIS, CPA, CFP *

JAN H. COWEN, CPA *

LANCE E. CRAPPELL, CPA, CGMA *

MICAH R. VIDRINE, CPA *

TRAVIS M. BRINSKO, CPA '

RICK L. STUTES, CPA, CVA/ABV, APA*

CHRISTINE R. DUNN, CPA**

DAMIAN H. SPIESS, CPA, CFP **

JOAN MARTIN, CPA, CVA, CFF, DABFA**

BRIDGET B. TILLEY, CPA, MT**

INDEPENDENT AUDITORS' REPORT

* A PROFESSIONAL CORPORATION A LIMITED LIABILITY COMPANY

M. TROY MOORE, CPA'^ MICHAEL G. DEHART, CPA * + JOE D. HUTCHINSON, CPA * +

+RETIRED '^DECEASED

STEPHANIE A. BLANK. CPA

ANDRE* D. BROUSSARD, CPA

ROBERT T. DUCHARME, H, CPA

STEFAN HAWKINS, CPA

KAYLEEN HOWARD, CPA

MARY PATRICIA KEELEY, CPA

ROBIN T. LeBLANC, CPA

WENDY ORTEGO, CPA, CVA

ROBIN G. STOCKTON, CPA

TINA B. VUTOR, CPA

To the Board of Directors of Lafayette Habitat for Humanity, Inc. Lafayette, Louisiana

We have audited the accompanying financial statements of Lafayette Habitat for Humanity, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2014, and the related statements of activities, functional expense, and cash flows for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the organization's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization's internal control. Accordingly, we express no

Unless otherwise expressly indicated any tax advice contained in this communication, or attachments are not intended for use and cannot be used: (i) to avoid any penaities under the Internal Revenue Code; or (ii) to promote, market or recommend to another party the tax consequences of any matter addressed therein. This communication (and/or the documents accompanying it) may contain ronfidentiai information belonging to the sender which is protected by the Accountant-Client privilege. The information is indeed only for the use of the individual or entity named above. If you are not the intended recipient, you we hereby notih^ that any use,'disclosure, copying, distribution, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this communication in error, please notify us by telephone immediately.

such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lafayette Habitat for Humanity, Inc. as of June 30, 2014, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 29, 2014, on our consideration of Lafayette Habitat for Humanity, Inc.'s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Lafayette Habitat for Humanity, Inc.'s internal control over financial reporting and compliance.

'Wright, Moore, <DelKart, (Dupuis dOHutchinson, LLC

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

Certified Public Accountants

December 29,2014 Lafayette, Louisiana


STATEMENT OF FINANCIAL POSITION JUNE 30,2014

ASSETS CURRENT ASSETS

Cash Escrow Deposits Non-Interest Bearing Mortgages Receivable Less: Discount for Interest Rates Grant Receivable Prepaid Insurance Inventories Other Current Assets

Total Current Assets

PROPERTY AND EQUIPMENT (NET)

OTHER ASSETS Non-Interest Bearing Mortgages Receivable - Long-Term Less: Discount for Interest Rates

Total Other Assets

TOTAL ASSETS

LIABILITIES AND NET ASSETS CURRENT LIABILITIES

Technical Overdraft Accounts Payable Accrued Payroll and Related Liabilities Current Maturities of Long-Term Debt Other Current Liabilities

Total Current Liabilities

LONG-TERM LIABILITIES Long-Term Debt (Less Current Maturities)

Total Long-Term Liabilities

TOTAL LIABILITIES

NET ASSETS Unrestricted Temporarily Restricted

Total Net Assets

$ 108,726 1,520

364,824 (134,677) 128,077 10,662

886,337 1,921

1,367,390

20,851

3,047,103 (1,344,776) 1,702,327

$ 3.090.568

$ 4,625 28,656 7,981

48,401 8,859

98,522

460,711 460,711

559,233

2,521,335 10,000

2,531,335

TOTAL LIABILITIES AND NET ASSETS $ 3,090,568

The Accompanying Notes are an Integral Part of These Statements. -4-


STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2014

Temporarily PUBLIC SUPPORT Unrestricted Restricted Total

Contributions and Grants Cash Services and Materials

$ 773,133 21,429

$ 10,000 $ 783,133 21,429

Total Public Support 794,562 10,000 804,562

REVENUES Sales to Homeowners Amortization of Mortgage Discounts Restore Revenues

Other Income

365,606 128,168 282,211

7,232

- 365,606 128,168 282,211

7,232

Total Revenues 783,217 - 783,217

NET ASSETS RELEASED FROM RESTRICTIONS Restrictions Satisfied by Payments

TOTAL PUBLIC SUPPORT, REVENUES AND NET ASSETS RELEASED FROM RESTRICTIONS

15,000 (15,000) NET ASSETS RELEASED FROM RESTRICTIONS

Restrictions Satisfied by Payments

TOTAL PUBLIC SUPPORT, REVENUES AND NET ASSETS RELEASED FROM RESTRICTIONS 1,592,779 (5,000) 1,587,779

EXPENSES AND LOSSES Program Services

Construction Restore

Supporting Services Management and General

Total Expenses

INCREASE (DECREASE) IN NET ASSETS

653,200 197,387

489,856

- 653,200 197,387

489,856




Total Expenses

INCREASE (DECREASE) IN NET ASSETS

1,340,443 - 1,340,443




Total Expenses

INCREASE (DECREASE) IN NET ASSETS 252,336 (5,000) 247,336

NET ASSETS AT BEGINNING OF YEAR 2,268,999 15,000 2,283,999

NET ASSETS AT END OF YEAR $ 2,521,335 $ 10,000 $2,531,335



STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2014

CASH FLOWS FROM OPERATING ACTIVITIES Increase in Net Assets Adjustments to Reconcile Change in Net Assets to Net Cash Flows From Operating Activities:

247,336

Depreciation 6,509 Transfers to Homeowners Net of Discounts (218,760) Amortization of Mortgage Discounts (128,168) Changes in Assets and Liabilities:

Escrow Deposits 15,301 Grants and Contributions Receivable (21,196) Prepaid Insurance 4,117 Inventories (141,118) Other Current Assets (1,921) Technical Overdraft in Cash Account 4,625 Accounts Payable (24,556) Accrued Payroll and Related Liabilities (386) Other Current Liabilities 6,303 Escrow Deposits Payable (15,417) Rent Payable (4,331)

Net Cash Used In Operating Activities (271,662)

CASH FLOWS FROM INVESTING ACTIVITIES Collections on Mortgage Receivables 195,872 Purchase of Fixed Assets (8,900)

Net Cash Provided By Investing Activities 186,972

CASH FLOWS FROM FINANCING ACTIVITIES Repayment of Long-Term Debt (37,253)

Net Cash Used In Financing Activities (37,253)

NET DECREASE IN CASH AND EQUIVALENTS (121,943)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 230,669

CASH AND CASH EQUIVALENTS, END OF YEAR $ 108,726



NOTES TO FINANCIAL STATEMENTS JUNE 30,2014

(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Form of Operations - Lafayette Habitat for Humanity, Inc. (Habitat) (a non-profit organization) was incorporated in 1992, with offices in Lafayette, Louisiana. Habitat is an affiliate of Habitat for Humanity International, Inc. (Habitat International), a non denominational. Christian, nonprofit organization whose purpose is to create decent, affordable housing for those in need. Although Habitat International assists with information resources, training, publications, prayer support and in other ways. Habitat is primarily and directly responsible for its own operations.

As an extension of its primary purpose. Habitat operates a ReStore in Lafayette, Louisiana. The Restore obtains donated materials, and sells the materials at a significant discount from retail prices. Proceeds from the sales of donated items are used to support the programs which carry out the primary purpose of the organization.

Revenue Recognition - Contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to umestricted net assets.

Transfers to homeowners are recorded when a home is occupied and title is transferred. The transfer is recorded at the gross amount of payments to be received over the lives of the mortgages. Non-interest bearing mortgages have been discounted, ranging from 7.39% to 8.78%, based upon prevailing market rates at the inception of the mortgages.

Habitat also executes a second or third mortgage, depending on the applicability of existing programs, with homeovmers upon transfer of the home. The amount of these mortgages is approximately equal to the difference between the sales price and the fair market value of the home. These mortgages bear no interest, and the homeowner is discharged from his/her annual payment so long as he/she is not in default on the first mortgage. No amovmt is included in the financial statements for these mortgages as collection is contingent upon future events and is generally unexpected and unintended.

Income Taxes - The Organization is exempt from federal income tax as an organization described in Section 501(c)(3) of the Intemal Revenue Code. Income determined to be unrelated business income is taxable.

Escrow Deposits - Habitat currently services the mortgages on the homes it sells. Payments received from families for their closing costs or escrow items are segregated into a non-interest bearing cash account. Escrow balances are maintained for funds paid to satisfy future insurance and property tax obligations. The current balance in the escrow accoimt is $1,520, with related escrow liabilities totaling $0.

-7-



(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Inventories - Inventories consist of occupied homes not closed and homes under construction valued at costs incurred, exclusive of contributed labor. The following is a summary of home building activity for the year ended June 30,2014:

Number Costs Occupied homes not closed and homes under

construction, June 30, 2013 14 709,571 New homes started 5 237,809 Homes transferred (5) (296,280) Work done to existing homes 157,035

Repossessions/Dations 2 78,374 Other (1) (172) Occupied homes not closed and homes under

construction, June 30, 2014 15 $ 886.337

Restore inventory mostly consists of donated building materials available for sale. The value of the items received for resale is not accurately known, thus Habitat recognizes the value of the item when it is sold, and chooses not to carry the inventory of donated items in the financial statements. The value of the donated items is recognized at the time of sale, with no corresponding cost of sale recognized.

Property and Equipment - Property and equipment are valued at historical cost for assets purchased and at fair market value at the time of donation for donated assets. Habitat capitalizes additions of property and equipment that exceed $2,500. The equipment is depreciated on a straight-line basis over the assets useful lives. Depreciation expense was $6,509 for the year ended June 30,2014.

Contributions - Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and nature of any donor restrictions. Support that is not restricted by the donor is reported as an increase in unrestricted net assets. All other donor restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assets released from restrictions. Restricted contributions whose restrictions are met in the same reporting period are recorded as unrestricted contributions.

Contributed Services - Volunteers provide substantial services to Habitat. Services provided by volunteers building homes are measured either by the fair value of the services received, or the increase in value of the home, whichever is more objectively determinable. During the year ended June 30,2014, $21,429 in services and donated materials were recognized on homes transferred.

-8-



(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the Organization considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Reserved Cash - The Organization services the mortgages on homes it sells. Included in cash and cash equivalents are amounts received from homeowners for insurance and property taxes. Reserved cash for escrow deposits as of Jime 30, 2014 was $1,520.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amoimts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising - The cost of advertising is expensed as incurred. Advertising expense for the year ended June 30,2014 was $5,833.

(B) MORTGAGES RECEIVABLE

At June 30, 2014, there were 74 1st mortgages outstanding totaling $3,411,927. Mortgage payments are due on the first of each month and considered late if not received by the 16"^ of the month. All reasonable efforts are made by Habitat to bring a mortgage back into good standing if it becomes delinquent. If those efforts are unsuccessful. Habitat may initiate foreclosure proceedings to be handled by an attorney. Habitat allows the homeowner to relinquish the home back to Habitat with a deed in lieu of foreclosure. Since the fair market value of the houses exceeds the related mortgage balance, no allowance for uncollectible loans has been recorded.

The following schedule summarized the payment status of the mortgage loans at June 30, 2014:

Number Of Loans T.oan Amount

Current 38 $ 2,021,603 30 days past due 0 31 -60 days past due 1 19,701 More than 60 days past due 35 1,370.623

Total 24 $ 3.411.927

-9-



(B) MORTGAGES RECEIVABLE - continued

Maturities of mortgages receivable are as follows:

Years Ended June 30, 2015 $ 364,824 2016 197,206 2017 197,121 2018 197,121 2019 194,347 Thereafter 2.261.308

Total $3.411.927

(C) PROPERTY AND EQUIPMENT

A summary of property and equipment is as follows:

Trucks $ 76,500 Tractor 24.295

100,795 Less: Accumulated Depreciation 179.9441 Net Property and Equipment $ 20.851

(D) LONG-TERM DEBT

Long-term debt consisted of the following as of June 30, 2014:

Note payable to bank due October 18, 2023, payable in montMy installments of $5,245 bearing interest at 3.75 % secured by deposit accounts. $ 493,594

Note payable to bank due November 1, 2018, payable in monthly installments of $67 bearing no interest, and secured by the pledge mortgage receivable. 3,453

Note payable to bank due December 1, 2019, payable in monthly installments of $67, bearing no interest, and secured by the pledge mortgage receivable. 4,466

Note payable to bank due December 1, 2018, payable in monthly installments of $67 bearing no interest, and secured by the pledge mortgage receivable. 3,466

-10-



(D) LONG-TERM DEBT

Note payable to bank due August 1,2019, payable in monthly installments of $67 bearing no interest, and secured by the pledge mortgage receivable. 4.133

509,112 Less: Current Maturities ('48.401^ Total Long-Term Debt $ 460.711

Maturities of long-term debt are as follows:

Years Ended June 30, 2015 $ 48,401 2016 50,126 2017 51,916 2018 53,775 2019 55,221 Thereafter 249.673

Total $ 509.112

(E) CASH FLOW DISCLOSURES

Interest paid for the year ended June 30, 2014 totaled $19,422.

Non-cash investing and financing transactions for the year ended June 30, 2014 consisted of the following:

Repossession of two homes totaling $78,374.

Issuance of non-interest bearing mortgage loans on home sales as follows:

Non-interest bearing mortgage loans issued $ 365,606 Discount of non-interest bearing mortgage loans (146.845)

Transfers to homeowners subject to non-interest mortgage loans, net of discount $ 218.761

-11 -



(F) CONCENTRATION OF CREDIT RISK

Habitat builds and rehabilitates houses in the Lafayette and surrounding areas. As a result, all of the mortgages receivable from homeowners are concentrated as to geographic risk. Also, all houses built are transferred to low-income families, which can represent a credit risk.

Habitat maintains checking and savings accounts with four institutions in Lafayette, Louisiana. The accounts were insured by Federal Deposit Insurance Corporation (FDIC) up to $250,000. At Jime 30,2014, Habitat had no uninsured cash balances.

(G) OPERATING LEASE

In December 2012, the Organization entered into a month operating lease for office space in Lafayette, Louisiana. Fee for the use of this space is $500 monthly.

In April 2014, the Organization renewed its operating lease for retail space in Lafayette, Louisiana. The renewed agreement commenced on April 1, 2014 and shall terminate March 31, 2015. Fee for the use of this space is $2,166 per month.

Future Lease Obligation:

2015 $6.470

Rent expense related to this lease for the year ended June 30, 2014 was $27,656.

The Organization has month to month lease agreements to rent the homes at 708 Louisiana Avenue and 107 Peppermill.

Rent income related to these leases for the year ended June 30, 2014 was $3,250.

(H) FINANCIAL INSTRUMENTS

The fair values of Habitat's financial instruments are as follows:

Cash and short-term investments - The carrying amoxmt approximates fair value because of the short maturities of those investments.

Bank loans payable - Fair value approximates carrying value since stated rates are similar to rates currently available to the Organization for debt with similar terms and remaining maturities.

-12-



(I) NON COMPLIANCE WITH GRANTOR RESTRICTIONS

Financial awards from federal governmental entities in the form of grants are subject to a fifteen year recapture period if the Organization is not in compliance with grant terms. Such violations could result in claims against the Organization for noncompliance with grantor restrictions. No provision has been made for any liabilities that may arise from such violations since the occurrence is not probable.

(J) SUBSEQUENT EVENTS

The Organization has evaluated subsequent events through December 29, 2014, the date which the financial statements were available to be issued.

-13 -


SCHEDULE OF FUNCTIONAL EXPENSES YEAR ENDED JUNE 30, 2014

PROGRAM SERVICES SUPPORTING SERVICES

CONSTRUCTION RESTORE MANAGEMENT AND GENERAL TOTAL

Compensation and Related Expenses Salaries $ 147,987 $ 90,617 $ 170,499 $ 409,103 Employee Benefits

Medical 20,036 13,376 23,337 56,749 Payroll Taxes 11,486 6,755 13,028 31,269

179,509 110,748 206,864 497,121

Building Materials and Supplies 358,865 - - 358,865 Administrative Cost - 5,325 988 6,313 Advertising Cost - 5,833 - 5,833 Contract Labor 14,511 21,250 18,605 54,366 Depreciation 2,879 3,630 - 6,509 Food and Lodging 15 39 3,859 3,913 Fuel 7,148 4,053 - 11,201 Insurance 47,618 3,054 2,578 53,250 Interest Expense - - 19,422 19,422 Membership Fees 686 3,506 10,764 14,956 Miscellaneous 163 6,927 1,869 8,959 Mortgage Discount - - 146,845 146,845 Office Expense 25,500 4,566 13,249 43,315 Postage and Printing 51 984 647 1,682

Professional Services 1,200 - 23,960 25,160 Rent - 21,656 6,000 27,656

Repairs and Maintenance 9,862 959 2,840 13,661

Sales Tax - - - -Supplies and Tools 232 - - 232

Taxes - - 3,117 3,117

Technology 244 400 7,012 7,656

Telephone 838 3,430 11,199 15,467

Training 2,364 136 1,156 3,656

Travel 412 584 85 1,081

Utilities 1,103 307 8,797 10,207 Kx vm vA WW

TOTAL $ 653,200 $ 197,387 $ 489,856 $ 1,340,443

See Independent Auditors' Report. - 14-


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2014

Federal Grantor Program Title

Federal CFDA Grant Federal Amounts to

Number Number Expenditures Subrecipients

U.S. Department of Housing and Urban Development

Passed through Lafayette City-Parish Consolidated Government:

HOME Program Income HOME Program Income HOME Program Income

14.239 14.239 14.239 672117

$ 91,434 133,088 340,971

Total Expenditures $ 565,493 $

* - denotes a major program

NOTE: The accompanying Schedule of Expenditures of Federal Awards is prepared on the accrual basis of accounting.

- 15 -


100 Petroleum Drive, 70508 P.O. Box 80569 • Lafayette, Louisiana 70598-0569

(337) 232-3637. Fax (337) 235-8557 www.wmddh.com

JOHN W. WMGHT, CPA *


JAN H. COWEN, CPA *

LANCE E. CRAPPELL, CPA, CGMA »

MICAH R. VIDRINE, CPA »

TRAVIS M. BRINSKO, CPA »





BRIDGET B. TILLEV, CPA, MT**

* A PROFESSIONAL CORPORATION ** A LIMITED LIABILITY COMPANY

M. TROY MOORE, CPA" MICHAEL G. DEHART, CPA * + JOE D. HUTCHINSON, CPA • +

+RETIRED "DECEASED

STEPHANIE A. BLANK, CPA

ANDRE' D. BROUSSARD, CPA


STEFAN HAWKINS, CPA

KAYLEEN HOWARD, CPA

MARY PATRICIA KEELEY, CPA




TINA B. VIATOR, CPA

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

To the Board of Directors Lafayette Habitat for Humanity, Inc. Lafayette, Louisiana

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Lafayette Habitat for Humanity, Inc. (a nonprofit organization), which comprise the statement of financial position as of June 30, 2014, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated December 29, 2014.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered Lafayette Habitat for Humanity, Inc.'s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Lafayette Habitat for Humanity, Inc.'s internal control. Accordingly, we do not express an opinion on the effectiveness of Lafayette Habitat for Humanity, Inc.'s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Unless otherwise expressly indicated, any tax advice contained in this communication, or attachments are not intended for use and cannot be used: (i) to avoid any penalties under the Internal Revenue Code; or (ii) to promote, market or recommend to another party the tax consequences of any matter addressed therein. This communication (and/or the documents accompanying it) may contain confidential information belonging to the sender, which is protected by the Accountant-Client privilege. The information is indeed only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any use, disclosure, copying, distribution, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this communication in error, please notify us by telephone immediately.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assuranee about whether Lafayette Habitat for Humanity, Inc. financial statements are firee from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on complianee with those provisions was not an objective of our audit, and accordingly, we do not express sueh an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization's internal control and compliance. Aecordingly, this communication is not suitable for any other purpose.

Moore, (Delffart, <Dupuis ^Jfutcfiinson, LLC


Certified Public Accountants

December 29,2014 Lafayette, Louisiana


too Petroleum Drive, 70508 P.O. Box 80569. Lafayette, Louisiana 70598-0569

(337)232-3637 . Fax (337)235-8557 www.wmddh.com

JOHN W. WRIGHT, CPA *


JANH.COWEN,CPA*

LANCE E. CRAPPELL, CPA, COMA »

MICAH R. VIDRINE, CPA *

TRAVIS M. BRINSKO, CPA *





BRIDGET B. TILLEY, CPA, MT**

* A PROFESSIONAL CORPORATION ** A LIMITED LUBILITY COMPANY

M. TROY MOORE, CPA* MICHAEL G. DEHART, CPA * + JOE D. HUTCHINSON, CPA * +

+RETIRED ^DECEASED

STEPHANIE A. BLANK, CPA

ANDRE' D. BROUSSARD, CPA


STEFAN HAWKINS, CPA

KAYLEEN HOWARD, CPA

MARY PATRICU KEELEY, CPA




TINA B. VIATOR, CPA

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER

COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

To the Board of Directors Lafayette Habitat for Humanity, Inc. Lafayette, Louisiana

Report on Compliance for Each Major Federal Program

We have audited Lafayette Habitat for Humanity, Inc.'s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on Lafayette Habitat for Humanity, Inc.'s major federal program for the year ended June 30, 2014. Lafayette Habitat for Humanity, Inc.'s major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditors' Responsibility

Our responsibility is to express an opinion on compliance for each of Lafayette Habitat for Humanity, Inc.'s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Lafayette Habitat for Humanity, Inc.'s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Lafayette Habitat for Humanity, Inc.'s compliance.

Unless otherwise expressly indicated, any tax advice contained in this communication, or attachments are not intended for use and cannot be used; (i) to avoid any penalties under the Internal Revenue Code; or (ii) to promote, market or recommend to another party the tax consequences of any matter addressed therein. This communication (and/or the documents accompanying it) may contain confidential information belonging to the sender, which is protected by the Accountant-Client privilege. The information is indeed only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any use, disclosure, copying, distribution, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this communication in error, please notify us by telephone immediately.

Opinion on Each Major Federal Program

In our opinion, Lafayette Habitat for Humanity, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30,2014.

Report on Internal Control Over Compliance

Management of Lafayette Habitat for Humanity, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In plarming and performing our audit of compliance, we considered Lafayette Habitat for Humanity, Inc.'s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with 0MB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Lafayette Habitat for Humanity, Inc.'s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material wea^ess in internal control over compliance, yet important enough to merit attention by those charged with govemance.

Our consideration of internal control over compliance was for the limited pxupose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of 0MB Circular A-133. Accordingly, this report is not suitable for any other purpose.

Moore, (DeOtart, (Dupuis ̂ Hutcfiinson, LLC


Certified Public Accoimtants

December 29, 2014 Lafayette, Louisiana


SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30,2014

We have audited the financial statements of Lafayette Habitat for Humanity, Inc. as of and for the year ended June 30, 2014, and have issue our report thereon dated December 29, 2014. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by Comptroller General of the United States. Our audit of the financial statements of June 30, 2014 resulted in an unqualified opinion.

Section I - Summary of Auditors' Reports

a. Report on Internal Control and Compliance Material to the Financial Statements

Internal Control Significant Deficiencies Yes X No Material Weaknesses Yes X No

Compliance

Noncompliance Material to Financial Statements Yes X No

b. Federal Awards

Major Programs Identification

Lafayette Habitat for Humanity, Inc. at June 30, 2014, had one major program cluster:

• US Department of Housing and Urban Development - Passed through Lafayette City-Parish Consolidated Government - CFDA No. 14.239

Low-Risk Auditee

Lafayette Habitat for Humanity, Inc. is not considered a low-risk auditee for the year ended June 30, 2014.

Maior Program - Threshold

The dollar threshold to distinguish Type A and Type B programs is $300,000 for the year ended June 30,2014.

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SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS FOR THE YEAR ENDED JUNE 30,2014

ML2013 -1

Finding: Significant number of adjusting journal entries which had a material effect on the financial statements.

Folio w-up: Resolved.

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