samuel w. stevens , iii certified public accountant financial statements june 30, ... used and...

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SAMUEL W . STEVENS, III Certified Public Accountant

THE EXTRA MILE REGION VII, INC. SHREVEPORT, LOUISIANA

Audited Financial Statements June 30, 2008

Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court.

Release Date

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THE EXTRA MILE, REGION VH, INC. SHREVEPORT, LOUISLVNA

Financial Statements and Independent Accountant's Report

For the Year ended June 30, 2008

Table of Contents

Independent Auditor's Report

Statement of Financial Position

Statement of Activities

Statement of Functional Expenses

Statement of Cash Flows

Notes to Financial Statements

OTHER REPORTS

Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Schedule of Findings For the Year Ended June 30, 2008

Schedule of Prior Year Findings For the Year Ended June 30, 2007

Page(s)

1

2

3

4

5

6

10

12

15

Management's Corrective Action Plan 17

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SAMUEL W . STEVENS, III CPA P.O. Box 5263J • Shreveport, LA 7U35 • (318) 458-0930 Fax (866) 531-9558

INDEPENDENT AUDFIOR'S REPORT

Tlie Board of Directors The Extra Mile, Region Vn, Inc. Shreveport, Louisiana

I have audited the accompanying statements of fmancials positions of The Extra Mile Region VII, Inc. (The Extra Mile) of Shreveport, Louisiana (a nonprofit organization) as of June 30, 2008 and the related statement of activities, and cash flows for the year then ended. These financial statements are the responsibility of the Organizations' management. My Responsibility is to express an opinion on these financial statements based on my audit.

Except as discussed in the following paragraph, I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards required that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that may audit provide a reasonable basis for our opinion.

Supporting documentation was not available for a significant number of disbursements made subsequent to June 30, 2008. Accordingly, it was not practicable for me to extend my audit of accounts payable beyond the amounts recorded as of June 30, 2008.

In my opinion, except for the effects of such adjustment, if any, as might have been determined to be necessary had the supporting documentation referred to in the preceding paragraph been susceptible to satisfactory audit tests, the fmancial statements referred to above present fairly, in all material respects, the fmancial position of The Extra Mile as of June 30, 2008, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, I have also issued my report dated June 27, 2009, on my consideration of The Extra Mile's intemal control over fmancial reporting and on my tests of it's compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The puipose of that report is to describe the scope of my testing of intemal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the intemal control over fmancial reporting or on compliance. The report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audit

June 27, 2009

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The Extra Mile, Region VII, Inc. Shreveport, Louisiana

Statement of Financial Position June 30, 2008

Assets Current Assets

Cash Grant Receivable Prepaid expenses

Total Current Assets

Equipment — net

Total Assets

205 9,112 810

10,127

1,033

11,160

Liabilities and Net Assets

Current Liabilities Accounts payable & accrued expenses Accmed payroll and taxes Refundable advances Line of credit

Total Current Assets

23,126 10,634 10,829 28,803

73,392

Total Liabilities 73,392

Net Assets: Unrestricted Temporarily Restricted

Total Net Assets

Total Liabilities and Net Assets

(71,344) 9,112

(62,232)

11,160

See Accompanying Notes to Financial Statements Page 2

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Extra Mile, Region VII, Inc. Shreveport, Louisiana

Statement of Activates For the Year Ended June 30, 2008

Revenue and Support

Grant Revenue Contributions Other Revenue Total Revenue and Support

Net Assets Released From Restrictions

Unrestricted Temporarily Restricted Total

49,222 $ 491

2,149 51,862

12,581

353 J --

353

(12,581)

; 49,575 491

2,149 52,215

-

Total Revenue and Support 64,443 (12,228) 52,215

Expenses Program Services:

Tobacco Free Living Total Program Services

Supporting Services: Management And General

Total Support Services

Total Expenses

Change in Net Assets

Net Assets Beginning of Year

End of Year

9,652 9,652

68,671 68,671

78,323

(13,880)

(48,705)

$ (62,585) $

-

-

(12,228)

12,581

353

9,652 9,652

68,671 68,671

78,323

(26,108)

(36,124)

$ (62,232)


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The Extra Mile, Region VII, Inc. Slireveport, Louisiana

Statement of Functional Expenses For the Year Ended June 30, 2008

Salaries Payroll taxes and related benefits Travel Operating services Interest expense Internet expense Professional services Building rent Office supplies Utilities and telephone Printing and promotion Depreciation

Total Expenses

Tobacco Free Living

$ 1,655 $ -

1,043 ---

1,793

1,004 1,798 2,359

-

$ 9,652 $

Management & General

34,453 $ 3,166

795 10,020 4,885 1,365 8,036

780 709

2,834 -

1,628

68,671 $

Total Expenses

36,108 3,166

1,838 10,020 4,885 1,365 9,829

780 1,713 4,632 2,359 1,628

78,323


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Statement of Cash Flows June 30, 2008

Cash Flows from Operating Activities: Changes in Net Assets $ (26,108)

Adjustments to Reconcile Change in Net Assets to Net Cash Provided from Operations:

Depreciation (Increase)/Decrease in:

Grants Receivable Intermediary Receivable Prepaid expenses

Increase/(Decrease) in: Accounts Payable & Accmed Expenses Bank Overdraft Accrued payroll and taxes Refundable advances

Net Cash Provided ( Used) by Operating Activities

Hows from Financing Activities Net (Payments) to Revolving Line of Credit Cancellation of Debt Obligations

Net Cash Flows Provided Used by Financing Activities

Net Decrease in Cash

Cash, Beginning of Year

Cash, End of Year $

1,628

(1,102) 80,953

805

(16,271) (42,932)

6,473 2,435

6,473

(1,876) (6,371) (8,247)

(1,774)

1,979

205


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Notes to the Financial Statements June 30, 2008

Note 1 Organization and Significant Accounting Policies

The Extra Mile, Region, Vn, Inc (Extra Mile") is a not-for-profit corporation under the laws of the State of Louisiana. Extra Mile was established to provide volunteer coordination and support services for the Offices of Mental Health, Developmental Disabilities and Substance Abuse. Extra Mile serves the parishes of Caddo, Bossier, Webster, Claiborne, Bienville, Red River, Desoto, Sabine, Natchitoches, and Winn in Region VII.

The Extra Mile is comprised of the following two principal programs:

Youth Volunteer Corps The Youth Volunteer Corps of Shreveport Bossier (YVC) is a program sponsored under The Extra Mile, Regions VH, Inc. Youth Volunteer Corps is a national organization that mobilizes youth between the ages of 11 and 18 in community service projects that promote service, learning, citizenship, relationship building and leadership. YVC has several projects throughout the year such as the Martin Luther King Day service project, National Youth Service Day, Make a Difference Day and other national days of service. The program is funded primarily from the Department of Health and Hospitals office of Mental Heath, Hands On, and other miscellaneous contributions.

Big Brothers Big Sisters Big Brother Big Sisters of Caddo-Bossier (BBBS) is a program sponsored by Extra Mile, Region VH, Inc. Big Brother Big Sister of America is a national organization that targets youth between the ages of 6 and 15 who come primarily from single parent households, grandparent as primary-caregiver homes, low to moderate income households or children at risk of academic or behavior modification. The program's primary purpose is the creation of one-on-one relationships between adult volunteers and children through school-based and community based mentoring partnerships with faith based organizations. This program is fiinded primarily by the Department of Health and Hospitals Office of Mental Health, Hands On, grants, contributions, membership fees and fundraising efforts of Big Brother Big Sister of America. Funds also come from other miscellaneous contributions.

Extra Mile also acts as fiscal agent for the Office of Mental Health in administering its Consumer Care Resources and Systems of Care grants and for the Office for Citizens with Developmental Disabilities grant

Summary of Significant Accounting Policies Accounting policies of Extra Mile conform with accounting principles generally accepted in the United States of America and reflect practices appropriate to he industry in which it operates. The significant poHcies are summarized below.

Basis of Accounting: The agency prepares its financial statements of the accmal basis of accounting. Accordingly, revenue is recognized when eamed and expenses are recognized when incurred.

Functional Expenses: Expenses are charged to each program based upon direct expenditures incurred.

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Grants Receivable: Various funding sources provide reimbursement of allowable costs and payment on units of service in connection with providing services under contracts or agreements. This balance represents amounts due from funding sources at June 30, 2008, but received after that date.

Refundable Advances: Certain funds have been received by Extra Mile as agent for the resource provider, and may be transferred to third parties only upon the authority of he resource provider. Since Extra Mile has no discretion as to their use, they are accounted for as refundable advances as follows:

NWRMR-OADA $ 320 NWRMR-OCDD 1,294 NWRMH 456 Mental Health Coalition 1,980 Breakaway Natchitoches/Metamorphosis 2,389 Pines Treatment Center 2,652 Challenge 766 Minden Mental Health 211 LA State Association Treasurer/BBBS 509 Shreveport Mental Health Center 252

Totals $ 10,829

Grant Revenue: Extra Mile is dependent on federal and state grants. Its continued existence is based on annual contract renewals with various funding sources.

Net Assets: Under the provisions of Statement of Financial Accounting Standards No. 117, "Financial Statements for Not-For-Profit Organizations" net assets and revenues and contributions, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Extra Mile and changes therein are classified and reported as follows:

Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations. Support 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.

Temporarily restricted net assets - Net assets that are subject to donor-imposed stipulations which may or will be met either by actions of the Extra Mile and/or the passage of time. All 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 (i.e., 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.

Contribudons: All contributions are considered available for unrestricted use unless specifically restricted by the donor.

Federal Income Taxes: Extra Mile is a tax-exempt organization as described in Section 501(c) (3) of the Intemal Revenue Code and is classified by the Intemal Revenue Service as an organization other than a private foundation. Extra Mile therefore is not subject to income taxes. However, income from certain activities not directly related to Extra Mile's tax exempt purpose is subject to taxation as unrelated business income. Extra Mile had no such income for the year ended June 30, 2008. Extra Mile is also exempt from state income taxes.

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Equipment: is stated at cost Extra Mile follows the practice of capitalizing expenditures for equipment in excess of $500. Depreciation of equipment is computed on a straight-line basis over the estimated useful lives of the assets.

Equipment owned by Extra Mile while used in the program for which it was purchased or in other future authorized programs totaled SO for the year ended June 30, 2008. The funding sources, however, have a reversionary interest in the equipment purchased with grant funds; therefore, its disposition as well as the ownership of any sale proceeds therefore, is subject to funding source regulations.

Website Development: Costs are amortized on the straight-line basis over an estimated useful life of five years. Amortization expense for the year ended June 30, 2008, was $0.

Risks and Uncertainties: 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk: Financial instmments that potentially subject Extra Mile to concentrations of credit risk consist principally of temporary cash investments and grant receivables. Concentrations of credit risk with respect to grant receivables are limited due to these amounts being due from govemmental agencies under contractual terms.

Extra Mile maintains cash balances at a single financial institution. These accounts collectively are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At June 30, 2008, there were no uninsured balances at this institution.

Note 2 Equipment - net A summary of equipment at June 30, 2008 follows:

Computer Equipment $ 5,748 Accumulated Depreciation (4,715) Equipment, net $ 1,033

Total depreciation expense charged to operations was $1,628 for the year ended June 30, 2008.

Note 3 Notes Payable

The Extra Mile entered into the following debt agreements: Promissory note payable on demand under a $30,000 line of credit with a bank, bearing interest at prime plus 3%, adjusted monthly, unsecured. The interest rate at June 30, 2008, was 11.00%. $ 28,803

Less current portion 28,803 Long-term portion $

Interest expense for the year ended June 30, 2008, totaled $2,856.

Note 5 Temporarily Restricted Net Assets

Temporarily restricted net assets of $353 at June 30, 2008, was composed of unexpended grant funds.

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75 19

6

100%

% %

%

%

Note 6 Concentrations

The Extra Mile received grant revenue from the following sources in 2008:

State and local DHH - Office of Mental Health Louisiana Public Health Institute - Tobacco-Free Living

Other Miscellaneous

Totals

Note 7 Commitments and Contingencies

Grants require the fulfillment of certain conditions as set forth in grant contracts. Failure to fulfill the conditions as set forth in the grant contracts could result in the retum of grant funds to the grantor.

Note 8 Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Extra Mite. Region VII, Inc. will continue as a going concem. At June 30, 2008, total liabilities exceed total assets by $62,232. Additionally, the organization has sustained substantial decreases in net assets in recent years resulting in a deficit in net assets. Currently, the Extra Mile is experiencing cash flow problems. The checking account is being regularly overdrawn and the revolving line of credit that was being used for working capital has been depleted.

Management anticipates growth in both fundraised monies and community support in 2009. Although Extra Mile has experienced setbacks, the Board of Directors and staff are diligently working to strengthen the organization financially through strategic planning, fund development, board development, and by seeking technical assistance for financial planning, The ability of the organization to continue as a going concem is dependent upon the success of managements endeavors to increase revenues and to reduce expenses.

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SAMUEL W , STEVENS, III CPA P.O. Box 52631 • Shreveport, LA 71135 • (318) 458^0930 • Fax (866) 531-9558

REPORT ON INTERNAL CONTROL OVER FINANCUL REPORTING AND ON COMPLUNCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCLVL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


I have audited the financial statements of The Extra Mile, Region Vn, Inc., (The Extra Mile) (a not-for-profit organization) as of and for the year ended June 30, 2008 and have issued my report thereon dated June 27, 2009. I conducted my audit in accordance with auditing standards generally accepted In the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting In planning and performing my audit, I considered The Extra Mile's internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of The Extra Mile's intemal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Organization's intemal control over financial reporting.

My consideration of intemal control over fmancial reporting was for the limited puipose described in the preceding paragraph and would not necessarily identify all deficiencies in intemal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, I identified a deficiency in intemal control over financial reporting that I 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 the normal course of performing then- assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the organization's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles, such that there is more than a remote Ukelihood that a misstatement of the organization's financial statements that is more than inconsequential will not be prevented or detected by the organization's intemal control. I consider the deficiencies described in the accompanying schedule of findings and responses to be significant deficiencies in intemal control over financial reporting. The control deficiencies noted are described in the accompanying schedule of fmdings as items 2008-1, 2008-2, 2008-3, 2008-4, 2008-5, 2008-6, and 2008-7.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the organization's internal control.

My consideration of the intemal control over fmancial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the intemal control

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that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, of the control deficiencies described above, I consider items 2008-2, 2008-3, 2007-4, and 2008-5, to be material weaknesses.

Compliance and Other Matters As part of obtaining reasonable assurance about whether The Extra Mile's financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no Instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the board of directors, management, Louisiana Legislative Auditor and federal awarding agencies and pass- through entities and is not intended and should not be used by anyone other than these specified parties

, > z ? ^

June 27, 2009

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Schedule of Findings and Questioned Costs For the Year Ended June 30, 2008

I have audited the financial statements of The Extra Mile, Region VII, Inc, as of and for the year ended June 30, 2008 and have issued my report thereon dated June 27, 2009. I conducted my auditing standard 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. My audit of the fmancial statements as of June 30, 2008, resulted in an unqualified opinion.

Section 1 Summary of Auditor's Report

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

Intemal Control Material Weakness: Yes Control Deficiencies: Yes

Compliance

Compliance Material to Financial Statements: No

b. Federal Awards - Not Applicable

c. Identification of Major Programs - Not Applicable Section H Financial Statement Findings

Finding 2008-1: Bank reconciliation for Extra Mile's Special Account and Northwest Louisiana Coalition accounts were not prepared as of June 30, 2008. Old outstanding items on main operating account were not researched and resolved in a timely maimer.

Conditions: Bank reconciliations were not properly prepared for year-end reporting.

Criteria: Bank reconciliation should be prepared and reviewed on a monthly basis.

Effect: Cash as reported in the intemally prepared financial statements was misstated at June 30, 2008.

Cause: The Extra Mile experienced turnover in the Executive Director and bookkeeper positions during the year ended June 30, 2008. No one recognized the need to prepare monthly bank reconciliations on the special accounts.

Recommendations: All back accounts should be reconciled on a monthly basis. The reconciliation should be reviewed and signed or initialed by the Executive Director.

Finding 2008-2: The Extra Mile is not recording items on an accmal basis.

Condition: Prepaid expenses and accounts payable were not properly recorded.

Criteria; Income is reported in the fiscal period it is earned, regardless of when it is received, and expenses are deducted in the fiscal period they incurred, whether paid or not.

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Effect: Intemal financial statements were materially misstated at June 30, 2008. Audit adjustments were made to record prepaid expenses and accounts payable.

Cause: Staff did not comprehend the importance of year-end accmals. Staff did not examine supporting documentation to assure income, prepaid and accounts payable balances were properly recorded at June 30, 2008.

Recommendations: The Extra Mile should invest in formal training of staff responsible for the financial records. I recommend examination of documentation supporting disbursements made after year end to identify payables.

Finding 2007-3: Certain transaction could not be supported by documentation.

Condition: The Extra Mile could not locate two supporting documents during the audit. Missing items included cash disbursement for one vendor and credit card statements.

Criteria: All transactions should be supported by documentation. This documentation should be readily available in order o provide evidence that the transaction is valid.

Effects: Certain expenses and other transactions needed to be reclassed during the audit. Disbursements recorded as expense for the current period should have been recorded as payments on accounts payables. Accounts receivable amounts were not properly supported at year-end.

Cause: Prior to the change in key positions, the organization was relocated and documentation was lost or inadequately filed.

Recommendation: I recommend that the Extra Mile implement policies to retain and file supporting documentation.

Finding 2008-4: The Extra Mile is not complying with IRS and state payroll reporting requirements.

Conditions: I noted Federal Form 941 and state quarterly payroll reports for the quarter ended June 30, 2008 were prepared and mail out but were not paid.

Criteria: Payroll taxes should be paid timely.

Effect: Payroll taxes not paid timely resulting in expensive penalties and interest.

Cause: Loss of grant funding occurred during the transition of key personnel resulting in greater financial difficulties.

Recommendations: I recommend timely preparation of payroll taxes payments. The Executive Director should review tax payments monthly to assure Federal and State payroll taxes are adequately and timely remitted.

Finding 2008-5: Instances of improper recording.

Conditions: I noted the following items: • Income fi"om prior periods was recorded in current period. • Classification of expenses was not properly done throughout the fiscal year between grants and

not-grant expenses.

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• Was not consistent in the coding of expenses • Property that was no longer in the possession of Extra Mile remained on the books • Credit Card invoices were being improperly recorded. Fees and Interest was not being recorded

as expense and liability

Criteria: All transactions should be properly and timely recorded.

Effect: The intemally prepared fmancial statements were materially misstated at June 30, 2008.

Cause; Lack of technical training of staff responsible for maintaining the financial records.

Recommendations: The Extra Mile should expend the necessary funds to acquire technical training of staff responsible for maintaining fmancial records.

Finding 2008-6: The Extra Mile did not comply with Financial Reporting requirements of is Grantor agencies and the Louisiana Auditor.

Conditions: Financial Statements were not timely audited and submitted.

Criteria: The Extra Mile was required to provide audited financial statements to the Louisiana Legislative Auditor by December 31, 2008.

Effected: Financial support from grant agencies ceased funding.

Cause: Proper intemal fmancial statements were not prepared timely.

Recommendation: The Board of Directors should engage a Certified Public Accountant prior to year-end to ensure audit is prepared and submitted within the compliance requirements of the grantor and Louisiana Auditor.

Finding 2008-7: The Extra Mile serves as an agent for resource providers by receiving and holding funds until the providers authorize the funds to be transferred to third parties. I noted there is not enough cash to cover the undistributed funds that have been received by the resource provider.

Condition: There is no cash available to cover any requests for distribution by the resource providers.

Criteria: The Extra Mile is responsible for distributing funds for certain resource providers. The Extra Mile has no discretion as to their use. The funds are accounted for as refundable advances. A cash reserve should be set aside for these liabilities.

Effect: The Extra Mile currently has no cash available when providers request a distribution of their funds to a third party.

Cause: The Extra Mile currently has a cash flow problem and no policy to set aside funds for these refundable liability accounts.

Recommendations: The Board of Directors should create a pohcy regarding funds when the Extra Mile is acting as an agent for resource providers. Any funds received by a resource provider for future distribution to a third party should be reserved or board restricted. This will prevent those funds fi-om being used for the operations of The Extra Mile,

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Schedule of Prior Year Findings For the Year Ended June 30, 2007

Finding 2007-1: Bank reconciliation for Extra Mile's Special Account and Northwest Louisiana Coalition accounts were not prepared as of June 30, 2007. Old outstanding items on main operating account were not researched and resolved in a timely manner.

Status: Similar finding noted in 2008. The accounts were closed by the bank and all remaining funds were deposited to the operations account of The Extra Mile.

Finding 2007-2: The Extra Mile is not recording items on an accrual basis.

Status: This is a repeat finding in 2008.

Finding 2007-3: Certain transaction could not be supported by documentation.

Status: This is a repeat finding m 2008.

Finding 2007-4: I noted three instances where the signature poHcy was circumvented by splitdng the invoice and writing two or three checks.

Status: Corrective action taken. The Board changed checked signers which ensured two signatures were always available.

Finding 2007-5: The Extra Mile is not complying with IRS and state payroll reporting requirements.

Status: Similar finding noted in 2008. Funds are not sufficient.

Findings 2007-6: Instances of improper recording.

Status; This is a repeat finding in 2008.

Finding 2007-7: The Extra Mile did not comply with Financial Reporting requirements of is Grantor agencies and the Louisiana Auditor.

Status: This is a repeat finding in 2008.

Finding 2007-8: The Extra Mile serves as an agent for resource providers by receiving and holding fiinds until the providers authorize the funds to be transferred to third parties. I noted there is not enough cash to cover the undistributed funds that have been received by the resource provider.

Status: This is a repeat fmding in 2008.

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iEXTRA^I ! HaBfflprs The Extra Mile Region VfT, Fnc,

• = ^ f c ^ l ^ 9 ^̂ -̂̂ "̂ MJdwav Street • Slireveport. LA 71109

> - (318) 632-5880 • FAX: (318) 632-5886

3H1,

iDCTRA^I en

Email: infb(i^cxtrnmile7,org • www. 1-800-volunteer.org

June 11,2009 The Extra Mile Region VII, Inc. Management's Corrective Action Plan For The Year Ended June 30, 2008

Response 1: Procedures for reconciling statements will be incorporated and performed monthly to ensure that all bank accounts are reconciled, items are reviewed, researched and resolved monthly and approved by the Executive Director.

Response 2: January 2008 though June 2008, the Extra Mile contracted with an external accounting firm to ensure expenses and payables were recorded in the proper period. Due to fmancial difficulty, TEM was not able to continue with the external fmn. We will look at getting the necessary technical training for staff.

Response 3: Items noted as missing were before the current Executive Director. The Extra Mile has reestablished the filing system that was in place prior to the physical move of the operations. Files and supporting documentation are readily accessible.

Response 4: The organization has filed all past state and federal payroll tax reports; however, payment arrangements have been established for tlie payment of the past liabilities. The organization has implemented procedures to monitor the timely filing of payroll reports and future paying payroll taxes timely.

Response 5: January 2008 though June 2008, the Extra Mile contracted with an external accounting firm to ensure expenses and payables were recorded in the proper period. Due to financial difficulty, TEM was not able to continue with the external firm. We will look at getting the necessary technical training for staff

Response 6: Funding has been a barrier that has prevented compUance with the Financial Reporting requirements of its Grantor agencies and the Louisiana Legislative Auditor. TEM will look to engage a Certified Public Accountant prior to year-end.

Response 7: The Board is aware of the unavailable funds. The organization is in the process of extensive grant writing and search for funds. The Board has committed to replacing the funds for the Liability Accounts.

Sincerely,

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Kenya Scruggs Executive Director

samuel w. stevens , iii certified public accountant financial statements june 30, ... used and...

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