name list” which encompasses their combined “scores” from a lethality risk assessment and the Vulnerability Index- Service Prioritization Assessment Tool (VI-SPDAT). Depending on their overall “score” clients are then prioritized accordingly for housing. Once added to the by-name list, clients are connected with an MMC Housing Locator that will prepare and support them in becoming “document ready.” Document ready means that clients have obtained the appropriate legal documents i.e. birth certificates, social security cards, legal identification, etc. necessary for obtaining housing and employment. Once a client is document ready, they are eligible to be “matched” with an identified housing project. The identified housing project can be an MMC internal connection, or an external connection through the overall “community” housing availability. On average, clients remain on the by-name list for 198 days before being connected to permanent housing. This time consuming process makes the need for emergency shelter and support services critical in reducing the risk of homelessness and in assisting clients with achieving independence and stability. d. Describe the marketing plan for the proposed activity and how the organization will ensure it reaches the target population.
In order to raise awareness of available services and market programs to the target population and the larger community, MMC works closely with a variety local partners to provide domestic violence awareness classes that teach first responders, social service providers and community organizations how to recognize abuse, provide intervention when abuse is present and how to directly link victims to MMC for immediate safe shelter and comprehensive supportive services when needed.
MMC also operates offices at 7 sites located strategically throughout Fresno County; these include two safe and confidential shelters, administrative offices and satellite locations in Reedley and Mendota which provide support for individuals located in rural communities. Additionally, MMC employs Community Navigators who are able to travel to victims and meet them in safe places within their communities rather than requiring them to travel to the crisis drop-in center to receive support. Further, MMC maintains partnerships with a wide variety of community agencies and providers to coordinate referrals for services including the Fresno Housing Authority, (they are a collaborative applicant for HUD grants), the County of Fresno, Exceptional Parents Unlimited (EPU), local law enforcement agencies throughout Fresno County (including MMC Advocates stationed at Fresno PD and Fresno Sheriff's Department), Fresno County District Attorney’s office, Department of Social Services, Behavioral Health and Public Health, Crime Victims Assistance Center (provide support to emergency shelter clients and assistance with relocation expenses and securing permanent housing), Meathead Movers and Wings (assist with moving and obtaining household items), local hospitals (CRMC, Kaiser Permanente, St. Agnes, Valley Children's Hospital, UCSF), Churches, Centro La Familia and Fresno Unified School District (assist children with school related needs PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
through Project First Step). MMC is also an active member and in good standing with the Fresno Madera Continuum of Care and staff routinely attend community events to facilitate outreach and education services in order to provide comprehensive information about MMC and how to access agency services. e. The City’s Analysis of Impediments to Fair Housing Choice recommends that the City prioritize investments in areas identified as Racially/Ethnically Concentrated Areas of Poverty (RECAPs – see NOFA Handbook). Will this program be:
Offered Citywide
Offered Citywide with an emphasis and affirmative marketing toward RECAPs
Offered exclusively to residents of RECAPs
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
f. Describe the service area:
Note: Strong applications will include specifically defined services areas such as ‘residents within ½ mile radius of [facility address]’ or ‘residents within the boundaries defined on the attached map.’
Marjaree Mason Center Administrative Offices and Crisis Drop-in Center:
1600 M Street, Fresno, 93721 (See Exhibit E)
Marjaree Mason Center Emergency Shelter:
Confidential domestic violence shetler located in Fresno, CA Service area map attached as exhibit E
g. Estimate the number of unduplicated persons expected to benefit from the project:
35 unduplicated persons will receive a direct benefit from this project.
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
h. Income Documentation
CDBG-eligible programs primarily benefit persons who earn less than 80% of the area median income. A chart containing the income limits effective as of July 1, 2022, is included as a reference below. Applicants must select one of the three options for documenting how their activity will satisfy the income eligibility requirement. Please note, these income limits are subject to change. For the most current income limits please reference the link below:
https://www.hudexchange.info/resource/5334/cdbg-income-limits/ Household Size 30% AMI 50% AMI 80% AMI
1 16,350 27,300 43,650
2 18,700 31,200 49,850
3 21,050 35,100 56,100
4 23,350 38,950 62,300
5 25,250 42,100 67,300
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
OPTION 1: Low-Income Clientele – Presumed Benefit
Select this option only if the program will exclusively serve one of the following clienteles (select all that apply)
Older Adults (62 and older)
Severely Disabled Adults
Abused Children
Illiterate Adults
Migrant Farm Workers
OPTION 2: Low-Income Clientele – Other
Select this option if the program will serve a specific clientele not listed under the first option. The organization must document income eligibility for each program participant. Indicate below the types of documentation the organization will collect to verify income eligibility (select all that apply):
Pay Stubs / Wage Statements
W-2s
Income Tax Returns
Social Security Documentation
Bank Statements
Signed Certifications from
Beneficiaries
Other: Self Report
Other: CalWORKS Statement
Other:
OPTION 3: Low-Income Area
Select this option if the program will benefit all residents within the defined service area described in 3.d.
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
i. Detailed Narrative Description of Project/Program
Describe the project/program in detail in the space below. Limit description to the space provided on this and the next page.
Marjaree Mason Center provides services to all individuals affected by domestic violence and advocates of the Center work hard to meet the individual needs of each client, this includes using trauma informed care methods that are client centered, patient and empowering. Our goal is to provide a safe, welcoming and confidential space that cultivates trust for those seeking refuge and working toward recovering from the trauma of abuse. Advocates, often spend hours listening, validating, and de-escalating clients in crisis, while doing their best to connect them services that will meet their specific needs (safety planning, counseling, legal advocacy, shelter, children’s services, etc.).
MMC operates using a “no wrong door” policy; this means that clients can access MMC services through linkages from a variety of community providers including law enforcement, emergency rooms, medical centers, schools and social service agencies. Once connected to the agency, clients undergo a risk assessment and work with MMC crisis staff to determine which services are appropriate or necessary for them. In addition to emergency shelter, MMC’s supportive services include 24/7 emergency hotline and crisis intervention, safety planning, risk assessment, food, clothing, case management, advocacy, individual and group counseling, legal advocacy, children’s services, long-term permanent housing assistance and referrals to community/social service programs.
Once assessments have been completed, clients can be enrolled in the Emergency Safe House Program and connected to an MMC Case Manager who remains their primary point of contact for the duration of their engagement in MMC services.
Maintaining a single point of contact is an important aspect of providing stability and building trust with the client. MMC believes that homelessness can be most efficiently ended by providing victims with access to safe, decent and affordable housing. Clients enrolled in the Safe House Program are each provided with their own private bedroom (families are housed together in larger or adjoining rooms depending on family size). Each bedroom is furnished with beds, a dresser, television and new bedding (blankets, sheets, pillows) that the clients can take with them when they exit the program. The safe house living room, kitchen and bathrooms are all shared spaces.
Residential advocates are stationed on-site in the Safe House and are available to provide direct assistance to clients 24/7. Residential Advocates interact daily with clients residing in the safe house and are responsible for shift specific tasks in the Emergency and/or Transitional living programs as well as the enrollment and orientation process for clients admitted into the Safe House. Residential staff have oversight of residential client/family activities during assigned shiftand can provide some Case Management support to residential clients. Additional, activities that PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
Residential staff support include: facilitating support groups, providing advocacy, facilitating client workshops and supporting daily activities, assisting with meal preparation and distribution and by promoting safe and healthy lifestyles.
Although all individuals impacted by domestic violence may benefit from supportive services such as mental health or substance abuse counseling, participation in these services is not a prerequisite to accessing safe housing or a condition of maintaining it. In fact, MMC believes that the provision of safe housing will improve a client's overall ability to effectively participate in supportive services. While the average length of stay in the emergency safe house is 32 days this can vary depending on the client’s individual needs and clients can be granted approval to stay for up to 90 days as needed. Access to safe, secure and stable housing is a critical first step in overcoming the lasting effects of traumatic abuse.
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
Detailed Narrative Description of Project/Program (Continued from previous page)
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
j. Collaboration
Briefly describe any collaboration efforts with other organizations for this project/program or related initiatives.
Collaborating Organization Description of Collaboration Fresno Police Department Fresno Police Department: MMC collaborates with the Fresno Police Department on a daily basis. We
have two MMC Victim Advocates stationed directly
within the Fresno Police Department office; who
support and respond to victims that unfortunately
have law enforcement involvement due to domestic
violence. MMC PD Advocates, collaboratively work
with detectives and officers, in responding,
supporting and navigating these survivors through
their available options for shelter and support
services
Fresno Unified School District Marjaree Mason Center collaborates with FUSD for all levels of support for those children impacted by
DV and residing in the MMC Emergency Safe
House. Through Project First Step, a FUSD Liasion,
collaborates with the MMC Children’s team for all
FUSD children residing in the safe house, and in
need of educational support. Often times, children of
victims are uprooted from their school, need to
remain out of school due to safety issues, and/or the
family lacks the educational resources needed.
FUSD and MMC staff work hand in hand to ensure
families and the children are supported.
The Poverello House Over the last 20 years the Marjaree Mason Center has collaborated with the Poverello house to provide
meals for clients receiving safe shelter. Through this
partnership, MMC purchases and distributes daily
meals for clients that have been prepared by the
Poverello House and delivered to the Center.
Fresno Housing Authority The Marjaree Mason Center has managed multiple HUD RRH grants in partnership with Fresno
Housing Authority over the past several years.
These HUD funded RRH housing projects focus on
providing support for survivors of Domestic Violence.
Additionally, through the support of these RRH
projects MMC is able to focus on the financial and
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
long term housing stability of each client served. The
long-term goals is to support clients/families in
regaining their self-sufficiently and above all a sense of safety.
Exceptional Parents Unlimited
(EPU)
MMC and EPU have partnered to expand services
for children residing in the Fresno safe house.
Through this parnership, Dr. Dana Riley, a child
psychologist, provides on-site direct support for
children ages 0-5 on Tuesdays and Thursdays. Dr.
Riley meets with parents and their children for
individual sessions, she has extensive training on
providing trauma informed care and child
development services. When Dr. Riley she does not
have appointments scheduled, she works in the
Children's Enrichment Center to support staff by
modeling and coaching social skills, emotional
regulation, and providing trauma informed care with
the children.
Fresno Rescue Mission The Fresno Rescue Mission is one of MMC's main local resources for supporting unsheltered/housing
insecure clients and families. MMC often referrs
clients/families seeking services but who are not
experiencing domestic violence to the Rescue
Mission for assistance. The Rescue Mission has
services that operate 24/7, which allow us to
connect a client quickly should they be in need of
shelter at the time of seeking services with us.
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
4. Project/Program Budget
a. The City is interested in applicants that can deploy activities in a timely manner (12 months) while balancing the need to maintain high standards of program delivery. Please propose how you will address this need.
The activities MMC intends to provide with funding throught the CDBG program are existing and therefore do not require any additional start-up time for implementation. MMC expects that we will be able to deliver high standards for program delivery and support services immediately upon notification of award.
b. List of Funding Sources
Provide all planned funding anticipated/ committed for this activity for PY 2023- 2024. If the organization has received funding commitment letters, please attach as an exhibit to this application.
Funding
Source (Name
of Funder)
Name of
Funding
Program (if
applicable)
Dollar
Amount
Commitment
Status
(Committed or
Pending)
If Pending,
Expected
Commitment
Date
California Office
of Emergency
Services
Domestic
Violence
Assistance
Program
324,650 COMMITTED
ARPA Domestic
Violence
Assistance
Program
941,920 COMMITTED
HUD Coordinated
Entry
160,000 COMMITTED
Private
Donations
Private
Donations
507,644 PENDING 7/1/2023
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
County of
Fresno
Marriage
License Fee
22,980 COMMITTED
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
c. Activity Budget Summary and Narrative
Please complete Exhibit A – Operating Budget Summary.
The above referenced Budget worksheet is available at www.fresno.gov/housing under the ‘Notices of Funding Available’ tab.
An Exhibit B – Budget Narrative must also be completed to provide a brief explanation of the expenses included in the budget.
Please note the following costs are not allowable for CDBG: bad debts; contingencies; contributions and donations; entertainment costs (including meals for social events and awards/graduation banquets); gifts or incentive awards to individuals; fines and penalties resulting from violations of or non-compliance with Federal, State, and Local laws; interest on borrowed capital; fundraising; investment management.
d. Prior-Year Financial Statement
Please attach a financial statement labeled as Exhibit B for the proposed program for the last full operating year. Failure to provide the financial statement will result in disqualification.
Attachments to Part B Application:
EXHIBIT A – OPERATING BUDGET SUMMARY
EXHIBIT B – BUDGET NARRATIVE
EXHIBIT C – PRIOR-YEAR AUDITED FINANCIAL STATEMENT INCLUDING
STATEMENT OF ACTIVITIES, STATEMENT OF FINANCIAL POSITION AND
STATEMENT OF CASH FLOWS (REQUIRED WHEN TOTAL FEDERAL GRANT AWARDS EQUALED OR EXCEEDED $750,000 DURING THE ANNUAL AUDIT PERIOD); OR
EXHIBIT D – PRIOR-YEAR UNAUDITED FINANCIAL STATEMENT WHEN TOTAL
FEDERAL GRANT AWARDS FOR THE ANNUAL AUDIT PERIOD WAS LESS THAN $750,000
Optional Additional Exhibits:
EXHIBIT – FUNDING COMMITMENT LETTERS (IF AVAILABLE)
EXHIBIT D – LETTERS OF SUPPORT (OPTIONAL-MAXIMUM 2)
EXHIBIT E – SERVICE AREA MAP (REQUIRED IF NOT DESCRIBED IN 3.d.) Salaries & Wages Fringe Benefits
Totals
(City of Fresno HUD
Funds)
Other Federal
Funds State Funds Local Govm't Funds Private / Donor Funds Other Funds (specify)
Salaries/Wages (Specify each position; add additional rows as needed) Direct Service Personnel:
Case Manager 41,600.00 83,520.00 125,120.00
Client Service Residential - 251,998.00 41,760.00 83,520.00 377,278.00 Residential Team Member 78,300.00 15,010.00 93,310.00 132,558.00 11,500.00 237,368.00 Family Skills Specialist - 15,000.00 15,000.00
Victim Advocate 52,648.00 52,648.00
Child Service Program
Manager - 22,000.00 22,000.00
Custodian - 5,000.00 5,000.00 9,940.00 19,940.00
Maintenance Tech 73,548.00 7,800.00 81,348.00
Administrative Personnel:
Director of Facilities 13,185.00 13,185.00
Housing Service Manager - 21,600.00 21,600.00
Deputy Director - 4,914.00 4,914.00 16,368.00 26,196.00 Independent Contractors / Consultants:
[enter position title] - -
[enter position title] - -
TOTAL PERSONNEL BUDGET $ 78,300.00 $ 15,010.00 $ 93,310.00 $ 583,866.00 $ 154,494.00 $ - $ 160,013.00 $ - $ 991,683.00 Other Direct Costs (Include only costs that are direct; indirect costs are covered under the Indirect Cost Rate) Client Support 1,000.00 10,000.00 11,000.00
Motel/Hotel Expense 292,000.00 292,000.00
Security/Alarm Expense 69,000.00 69,000.00
Food 48,000.00 122,000.00 170,000.00
Interpreter Services 1,000.00 3,000.00 4,000.00
Building Repair/Maint. 32,000.00 12,000.00 2,000.00 7,000.00 53,000.00 Equipment Rent/Lease 7,000.00 1,100.00 8,100.00
Equipment Repair/Maint. 5,000.00 5,000.00
Postage and Freight 200.00 200.00
Program Supplies 4,000.00 4,000.00 35,000.00 43,000.00
Office Supplies 150.00 150.00 500.00 800.00
Staff Travel 500.00 500.00 11,000.00 12,000.00
Telephone/Pagers/Fax 20,000.00 10,000.00 30,000.00
Utilities 18,040.00 18,040.00 36,080.00
Insurance 8,000.00 200.00 8,200.00
Minor Equipment 2,800.00 2,800.00
Licenses/Software 41,836.00 3,000.00 15,000.00 59,836.00 TOTAL OTHER DIRECT COSTS $ - $ 458,526.00 $ 44,690.00 $ 20,000.00 $ 281,800.00 $ - $ 805,016.00 INDIRECT COSTS* (Select 1 indirect rate Only)
Approved Indirect Cost Rate 9,331.00 155,316.41 29,678.42 2,980.00 65,830.14 - 263,135.96 De minimus 10 % Rate -
TOTAL INDIRECT COST
BUDGET $ 9,331.00 $ 155,316.41 $ 29,678.42 $ 2,980.00 $ 65,830.14 $ - $ 263,135.96 TOTAL PROJECT BUDGET $ 78,300.00 $ 15,010.00 $ 102,641.00 $ 1,197,708.41 $ 228,862.42 $ 22,980.00 $ 507,643.14 $ - $ 2,059,834.96 Please revise this form and annotate budget items as needed All applicants are required to submit a copy of their organization’s operating budget. *An approved indirect cost rate must be applied to the base identified in the agreement with the federal cognizant agency.
Per 2 CFR 200.414, any non-federal entity that does not have a current negotiated rate may elect to charge a de minimis rate of 10% of Modified Total Direct Costs (defined in 2 CFR 200.68).
CITY OF FRESNO
OPERATING BUDGET SUMMARY (non-capital projects)
Budgeted Position
(Personnel) or Category
(Operations)
City of Fresno HUD Funds Other Funds for Project
Project Totals (All Funds)
PY23-24 Consolidated NOFA Part B
Application – Public and Community Services
Exhibit B: Budget Narrative
Please provide a brief narrative describing the expenses included in each category of the budget summary.
Residential Team Member: 2 FTE: $93,310: Provide direct services to residential clients/families who have been affected by trauma due toDomestic Violence, out of the residential safe house. Responsible for the shift specific tasks in the Emergency and/or Transitional living programs; as well as the enrollment and orientation process of clientsadmitted into the Safe House. Ongoing oversight of residential client/family activities during assigned shiftand can provide some Case Management support to residential clients. The Residential Team Member has primary and direct client interaction daily; and will support any identification of immediate needs, issues orconcerns.
Indirect Costs: $9,331: 10% allocated to administrative costs supports MMC’s Reports of Independent Auditors and
Financial Statements with Supplementary Information
Marjaree Mason Center, Inc.
September 30, 2022 with
Summarized Comparative Information for the
Year Ended September 30, 2021
Table of Contents
REPORT OF INDEPENDENT AUDITORS................................................................................................................1
FINANCIAL STATEMENTS
Statements of Financial Position..........................................................................................................................5 Statement of Activities and Changes in Net Assets.............................................................................................6 Statement of Functional Expenses ......................................................................................................................7 Statements of Cash Flows ...................................................................................................................................8 Notes to Financial Statements .............................................................................................................................9
SUPPLEMENTARY INFORMATION
Schedule of Expenditures of Federal Awards....................................................................................................24 Notes to Schedule of Expenditures of Federal Awards .....................................................................................25
SINGLE AUDIT REPORTS
REPORT OF INDEPENDENT AUDITORS 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 ..................................................................................................................................27
REPORT OF INDEPENDENT AUDITORS ON COMPLIANCE FOR THE MAJOR FEDERAL
PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE..............................................................................................................................29 Schedule of Findings and Questioned Costs.....................................................................................................32
OTHER INFORMATION
Combining Schedule of Revenue, Support, and Expenses – Unaudited ..........................................................35 1 Report of Independent Auditors
The Board of Directors
Marjaree Mason Center, Inc.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Marjaree Mason Center, Inc. (the “Organization”), which comprise the statement of financial position as of September 30, 2022, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position Marjaree Mason Center, Inc. as of September 30, 2022, and the changes in its net assets and its cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (Government Auditing Standards), issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Organization and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
3 Supplementary 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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 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 GAAS. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.
Summarized Comparative Information
We have previously audited the Organization’s 2021 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated January 28, 2022.
In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2021, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Information
Management is responsible for the other information included in the report. The other information comprises the combining schedule of revenue, support and expenses but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 16, 2023 on our consideration of the Organization’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 solely 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 the effectiveness of the Organization’s 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 the Organization’s internal control over financial reporting and compliance.
Fresno, California
January 16, 2023
Financial Statements
Marjaree Mason Center, Inc.
5 See accompanying notes to financial statements.
Statements of Financial Position
September 30, 2022 and 2021
2022 2021
CURRENT ASSETS
Cash and cash equivalents $ 2,579,744 $ 2,856,348
Investments in marketable securities 2,882,821 1,660,013 Grants receivable 640,690 1,022,978
Other receivables 4,763 -
Pledges receivable, current portion 159,952 123,467
Prepaid expenses 149,969 97,803
Deposits 125,025 28,798
Total current assets 6,542,964 5,789,407
PROPERTY AND EQUIPMENT, net 2,582,410 2,755,981
PLEDGES RECEIVABLE, net of current portion 25,000 50,000 BENEFICIAL INTEREST IN PERPETUAL TRUSTS, net 184,500 821,719 Total assets $ 9,334,874 $ 9,417,107
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 247,737 $ 164,358 Accrued salaries and benefits 316,091 254,397
Deferred revenue 220,600 160,350
Refundable advances - 327,888
Total liabilities 784,428 906,993
NET ASSETS
Without donor restriction 6,430,976 6,192,673
With donor restriction 2,119,470 2,317,441
Total net assets 8,550,446 8,510,114
Total liabilities and net assets $ 9,334,874 $ 9,417,107 ASSETS
LIABILITIES AND NET ASSETS
Marjaree Mason Center, Inc.
See accompanying notes to financial statements. 6
Statement of Activities and Changes in Net Assets
Year Ended September 30, 2022
(with Summarized Comparative Information for Year Ended September 30, 2021) Without Donor With Donor Total
Restriction Restriction 2022 2021
REVENUES, GAINS, AND
OTHER SUPPORT
Grants and contracts $ 5,413,940 $ - $ 5,413,940 $ 5,153,180 Contributions 1,531,957 1,413,587 2,945,544 3,003,763
In-kind donations 101,521 - 101,521 123,274
Special events 521,886 - 521,886 303,701
Program fees 145,948 - 145,948 184,990
Other income 14,700 - 14,700 42,897
Legacies and bequests 100,000 - 100,000 109,777
Emergency Housing and Assistance grant - - - 1,210,000
Loss on disposal of assets - - - (7,118)
Net realized and unrealized (loss) gain in
fair value of perpetual trusts - (85,438) (85,438) 54,522 Interest and dividend income, net 53,739 - 53,739 25,457 Net realized and unrealized (loss) gain in
fair value of investments (555,060) - (555,060) 183,742 Total revenues, gains, and
other support 7,328,631 1,328,149 8,656,780 10,388,185
NET ASSETS RELEASED
FROM RESTRICTIONS
Restrictions satisfied by payment
of related expenses 1,526,120 (1,526,120) - -
Total revenues, gains, and
other support after net assets
released from restrictions 8,854,751 (197,971) 8,656,780 10,388,185
EXPENSES
Program services 6,592,236 - 6,592,236 6,078,802
Supporting services 1,222,750 - 1,222,750 924,362
Fundraising 768,309 - 768,309 575,795
Total expenses 8,583,295 - 8,583,295 7,578,959
CHANGES IN NET ASSETS 271,456 (197,971) 73,485 2,809,226 NET ASSETS, beginning of year 6,192,673 2,317,441 8,510,114 5,723,152
GRANT FUNDED ASSETS
Contributions 85,086 - 85,086 132,519
Depreciation (118,239) - (118,239) (131,321)
Disposals - - - (23,462)
Changes in grant funded assets (33,153) - (33,153) (22,264) NET ASSETS, end of year $ 6,430,976 $ 2,119,470 $ 8,550,446 $ 8,510,114 Marjaree Mason Center, Inc.
See accompanying notes to financial statements. 7
Statement of Functional Expenses
Year Ended September 30, 2022
(with Summarized Comparative Information for Year Ended September 30, 2021) Advocacy and Total
Emergency Rehousing Legal Other Program Supporting
Services Services Assistance Programs Services Services Fundraising 2022 2021 Accounting and legal $ 25,427 $ 13,663 $ 1,505 $ 4,098 $ 44,693 $ 31,242 $ 294 $ 76,229 $ 48,563 Advertising 149 399 - 3,661 4,209 3,872 9,060 17,141 12,489 Bad debt expense - - - - - - 2,500 2,500 -
Bank charges - - - - - 88 - 88 891
Computer services 24,484 4,537 1,808 2,219 33,048 3,908 1,507 38,463 42,423 Conferences, conventions,
and meetings 17,328 4,162 1,540 15,778 38,808 6,834 71,764 117,406 142,081 Depreciation 142,481 26,457 - - 168,938 14,119 - 183,057 180,824 Donated services and supplies 72,449 31,749 - - 104,198 3,864 - 108,062 123,086 Dues and subscriptions 10,776 600 1,273 902 13,551 7,678 6,163 27,392 20,752 Employee benefits 406,383 75,350 33,526 34,938 550,197 244,918 43,214 838,329 636,311 Equipment rental, repairs,
and maintenance 287,784 100,531 17,103 13,624 419,042 27,966 79,988 526,996 532,527 Food 120,940 462 65 - 121,467 207 - 121,674 152,892
Insurance 43,003 5,484 1,061 1,230 50,778 22,129 680 73,587 68,245 Interest - - - - - 316 - 316 30,000
Miscellaneous 484 50 - 10 544 3,505 87 4,136 1,390
Office expense 10,440 2,034 580 1,856 14,910 40,296 3,832 59,038 44,375 Printing 1,402 4,714 419 16,987 23,522 858 36,916 61,296 35,653 Professional fees 54,055 8,556 2,157 32,282 97,050 119,642 178,915 395,607 274,259 Program supplies 918,013 432,612 11 39,092 1,389,728 4,561 31,508 1,425,797 1,406,256 Rent 128,340 15,913 1,097 14,306 159,656 3 17,775 177,434 184,262 Salaries 2,202,662 386,418 227,840 187,556 3,004,476 657,471 279,905 3,941,852 3,357,482 Security 105,593 1,101 - - 106,694 - - 106,694 10,922
Taxes and licenses 93 6,759 - - 6,852 17,111 - 23,963 121 Utilities 207,392 24,185 4,337 3,961 239,875 12,162 4,201 256,238 273,155 $ 4,779,678 $ 1,145,736 $ 294,322 $ 372,500 $ 6,592,236 $ 1,222,750 $ 768,309 $ 8,583,295 $ 7,578,959 Total
Program Services
Marjaree Mason Center, Inc.
8 See accompanying notes to financial statements.
Statements of Cash Flows
Years Ended September 30, 2022 and 2021
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Changes in net assets $ 73,485 $ 2,809,226
Adjustment to reconcile changes in net assets to net cash from operating activities:
Depreciation 183,057 180,824
Bad debt expense 2,500 -
Loss on disposal of assets - 7,118
Contribution of beneficial interest in perpetual trust - (572,905) Net realized and unrealized loss (gain) on investments
and perpetual trusts 640,498 (238,264)
Dividend income, reinvested (12,850) (16,974)
Changes in operating assets and liabilities:
Grants receivable 379,788 (229,017)
Pledges receivable (11,485) 50,339
Other receivables (4,763) -
Prepaid expenses (52,166) (12,453)
Deposits (96,227) 13,527
Accounts payable and accrued expenses 83,379 (239,759)
Accrued salaries and benefits 61,694 (61,292)
Deferred revenue 60,250 71,450
Refundable advances (327,888) (672,112)
Net cash from operating activities 979,272 1,089,708
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for construction in progress - (20,071)
Purchase of property and equipment (42,639) (4,402)
Proceeds from disposal of assets - 14,500
Proceeds from distribution of beneficial interest in perpetual trust 551,781 - Purchases of investments (2,350,847) (238,300)
Proceeds from sale of investments 585,829 227,094
Net cash from investing activities (1,255,876) (21,179) NET CHANGES IN CASH AND CASH EQUIVALENTS (276,604) 1,068,529 CASH AND CASH EQUIVALENTS, beginning of year 2,856,348 1,787,819 CASH AND CASH EQUIVALENTS, end of year $ 2,579,744 $ 2,856,348
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
In-kind contributions $ 101,521 $ 123,274
Assets placed in service from construction in progress $ - $ 70,759 Marjaree Mason Center, Inc.
9 Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of activities – Marjaree Mason Center, Inc. (the “Organization”), a California nonprofit corporation, operates shelters for victims of domestic violence and their children, and provides counseling, education, and other related services in Fresno County and surrounding areas. The Organization receives funding for its programs and operations from a variety of governmental and community sources, including, but not limited to, the City of Fresno, the County of Fresno, U.S. Department of Housing & Urban Development, and the California Office of Emergency Services.
Method of accounting – The Organization uses the accrual basis method of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates – The preparation of financial statements in conformity with U.S. GAAP 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.
Recently implemented pronouncement – On October 1, 2021, the Organization adopted Accounting Standards Update (“ASU”) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. This standard is intended to improve U.S. GAAP by increasing the transparency of contributed nonfinancial assets for not-for-profit (“NFP”) entities through enhancements to presentation and disclosure. The amendments in this update address certain stakeholders’ concerns about the lack of transparency about the measurement of contributed nonfinancial assets recognized by NFP’s, as well as the amount of those contributions used in an NFP’s programs and other activities. The standard is effective for annual periods beginning after June 15, 2021, and as such, the Organization adopted the new standard effective October 1, 2021, under a retrospective basis. The adoption of this standard did not have a significant impact on the Organization’s financial position, activities and change in assets, or cash flows. No changes were recorded to previously reported transactions as a result of the adoption.
Revenue recognition – Contributions, legacies and bequests, and unconditional grants are recognized as support and revenues when they are received or unconditionally pledged. These contributions are shown as restricted support and revenues if they are subject to time or donor restrictions. Net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities and changes in net assets as net assets released from restrictions when a stipulated time restriction ends, purpose restriction is accomplished, or both; however, contributions and grants with donor restrictions are reported as support and revenues without donor restrictions if the restriction is met in the same year that the gift is received.
Conditional contributions are not recorded as support and revenues until the conditions are met. Payments classified as exchange transactions (reciprocal transfers between two entities in which goods and services of equal value is exchanged) are not recorded as other support and revenue until allowable expenditures are incurred.
Special events revenue is recognized at a point in time when the event takes place. Amounts collected in advance of the event are deferred until the event is conducted.
Marjaree Mason Center, Inc.
Notes to Financial Statements
10 Program fees revenue is recognized at a point in time when the service takes place and consists of amounts collected for education and training program services provided to program participants.
Grant arrangements have been evaluated and determined to be nonreciprocal, meaning the granting entity has not received a direct benefit in exchange for the resources provided. Instead, revenue is recognized as a conditional contribution—when the barrier to entitlement is overcome. The barrier to entitlement is considered overcome when expenditures associated with the grant are determined to be allowable and all other significant conditions of the grant are met. The largest of these grants supports the Organization’s emergency services and rehousing services programs to operate their shelters for victims of domestic violence and their children, and to provide counseling and educational services.
Conditional grant revenue recognition – In accordance with Accounting Standards Codification (“ASC”) 958- 605, Not-for-Profit Entities—Revenue Recognition (“ASC 958-605”), for conditional grants, the Organization accounts for these grants initially as refundable advances until the conditions of the grant are substantially met.
Classification of net assets – Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions as follows:
Without donor restriction – Net assets not subject to use or time restrictions. A portion of these net assets may be designated by the Board of Directors for specific purposes. At September 30, 2022 and 2021, there were no board-designated net assets.
With donor restriction – Defined as that portion of net assets that consist of a restriction on the specific use or the occurrence of a certain future event. Net assets with donor restriction represent amounts collected by the Organization to be spent on specific purposes or activities. Restrictions on net assets are usually met within a year of receiving the amount restricted.
Cash and cash equivalents – For purposes of reporting the statements of cash flows, the Organization considers cash accounts, money market accounts, and certificates of deposits with original maturities of three months or less to be cash equivalents. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2022 and 2021, the Organization had approximately $1,943,000 and $2,785,000 uninsured cash balances, respectively. The Organization has not experienced any losses on those deposits and believes it is not exposed to any significant credit risk.
Investments in marketable securities – Investments in marketable securities consist primarily of publicly traded mutual funds and common stock and are recorded at fair value. These investments are covered by the Securities Investor Protection Corporation up to $500,000 (including $250,000 of cash). Investment income and unrealized gains and losses, net of investment expenses, are reported in the statement of activities and changes in net assets.
Marjaree Mason Center, Inc.
Notes to Financial Statements
11 Grants receivable – The Organization utilizes the allowance of accounting for and reporting uncollectible or doubtful accounts. Management determines the allowance for doubtful accounts based on an analysis of specific customers, taking into consideration the age of the past due accounts and an assessment of the customer’s ability to pay. At September 30, 2022 and 2021, management considered all grants receivable balances to be fully collectible and, therefore, no allowance for doubtful accounts has been recorded. Grants receivable are written off when deemed uncollectible. Recoveries of grants receivable previously written off are recorded as income when received.
The Organization grants credit to its customers, substantially all of which are government agencies (federal, state, and local) and generally requires no collateral from its customers.
Contributions and pledges receivable – Unconditional contributions, including pledges to give at estimated net realizable value, are recognized as revenue in the period received. The Organization reports conditional contributions as with donor restriction support if they are received with donor stipulations that limit the use of the donated assets. Pledges receivable at September 30, 2022 and 2021, amounted to $184,952 and $173,467, respectively.
Property and equipment – According to the Organization’s policy, property and equipment acquisitions over $2,500 are capitalized. Purchased property and equipment is capitalized at cost, donated property and equipment is recorded at fair value. The Organization does not imply restrictions on the use of contributed property and equipment received without donor stipulations. Expenditures that increase the life of the related assets are capitalized. Repairs and maintenance, including planned major maintenance activities, are charged to operations when incurred. Leasehold improvements are depreciated over the lesser of the remaining lease agreement or the estimated useful life.
Depreciation is computed using the straight-line method over the following estimated useful lives:
Buildings and land improvements 5–40 years
Furnishings, equipment, and vehicles 5–10 years
Property and equipment purchased with federal funds is subject to various usage, maintenance, and disposition provisions of the Uniform Guidance, as well as any additional provisions established by the funding agency.
Deferred revenue – Deferred revenue represents special event revenues received by the Organization in advance of the event’s occurrence and grant monies billed but not yet received or earned.
In-kind contributions – Contributions of noncash assets are utilized by the Organization in providing services and are recorded at their fair values in the period received. Contributions of noncash assets received for fundraising events (such as catering, entertainment, etc.) are not recorded in the accompanying financial statements. In addition, contributions of noncash assets to be sold at fundraising events by the Organization are recorded at the time of sale. Contributions of donated services that create or enhance nonfinancial assets or require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received.
Marjaree Mason Center, Inc.
Notes to Financial Statements
12 A number of unpaid volunteers have made significant contributions of their time to the Organization. However, the value of these services is not reflected in the accompanying financial statements because U.S. GAAP do not allow for the recognition of nonspecialized services. The values of professional services provided by trained volunteers are recorded in the accompanying financial statements (see Note 12).
Advertising costs – Advertising costs, except for costs associated with direct-response advertising, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. For the years ended September 30, 2022 and 2021, advertising costs expensed amounted to $17,141 and $12,489, respectively; no costs were capitalized.
Allocation of expenses – The costs of providing various programs and activities have been summarized on a functional basis in the statements of activities and changes in net assets and functional expenses. During the year, such costs are accumulated into separate groupings as either “direct” or “indirect.” Indirect or shared costs are allocated among program and support services by a method that best measures the relative degree of benefit, such as square footage, hours worked, and employee headcount. Accordingly, certain costs have been allocated among the programs and supporting services benefited.
Fundraising expenses – Costs of acquiring or applying for a contract or grant are categorized as indirect expenses and not separately stated as fundraising expenses. Fundraising expenses are expensed as incurred.
Revenue from fundraising events is recognized in the period in which the event takes place.
Income taxes – The Organization is a tax-exempt corporation under Section 501(c)(3) of the Internal Revenue Code and section 23701(d) of the State of California Corporate Code. The Organization is subject to taxation on any unrelated business income.
Uncertain tax positions – The Organization recognizes the effect of income tax provisions only if those positions are more likely than not of being sustained. The Organization does not believe its financial statements include any uncertain tax positions.
Summarized comparative information – The accompanying financial statements include certain prior-year comparative information in summarized form without net asset class detail or functional expense allocation detail.
Such information does not include sufficient detail to constitute a presentation in conformity with U.S. GAAP.
Accordingly, such information should be read in conjunction with the Organization’s financial statements for the prior year ended September 30, 2021, from which the summarized information was derived.
Marjaree Mason Center, Inc.
Notes to Financial Statements
13 NOTE 2 – INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable securities consisted of the following at September 30:
2022 2021
Mutual funds:
Columbia Ultra Short Term Bond CLA $ 248,700 $ -
Pioneer Multi Asset Ultrashort Income CLA 247,538 -
Fidelity Advisor Short Term Bond CLA 237,168 -
CVCF Social Impact Pooled Investment 208,165 69,828
JP Morgan Equity Income CLI 165,952 120,697
Columbia Disciplined Cor Instl Cl 124,546 131,218
PGIM Floating Rate Income CL Z 120,284 -
MFS Total Return Bond CLI 117,483 96,157
Columbia Strategic Income CLZ 114,580 93,464
AB High Income Advisor CL 107,985 91,806
Fidelity Advisor Strategic Income CLI 104,686 84,265
Mainstay CBRE Global Infra CLI 98,696 47,597
Brandywineglobal Global Opptys Bond CL I 91,280 95,466
Janus Henderson High Yield CLI 85,366 72,590
BNY Mellon Global Real Return CLI 75,784 -
Blackstone Alt Multi Strategy CLI 75,766 -
Columbia Select Global Equity 74,734 70,657
Western Asset Core Plus Bond CLI 73,814 64,899
BNY Mellon International Bond CLI 58,639 -
Federated Hermes Strategic Value 52,439 -
Janus Henderson Global Real Estate CLI 52,335 47,704
Columbia Seligman Global Technology CLZ 42,715 37,942
Invesco Balanced Risk Alloc CLY 40,230 36,386
Delaware Small Cap Core CLI 40,210 -
Transamerica Intl Equity CLI 39,858 37,184
AB Sustainable Global Thematic Advisor CL 36,055 33,932 Janus Henderson Global Life Sciences CLI 27,385 21,839
Columbia Strategic Income CLZ 10,951 6,377
MFS Conservative ALLOC CLI - 99,622
Fidelity Advisor New Market Income CLI - 58,719
Matthews Asia Dividend Investor CL - 57,499
Dreyfus Intl bond CLI - 53,231
JPMorgan Core Bond CL I - 45,063
Total mutual funds 2,773,344 1,574,142
Exchange-traded funds:
SPDR S&P 500 ETF 102,133 82,943
Money market fund:
Ameriprise Insured Money Market 7,344 2,928
Total investments in marketable securities $ 2,882,821 $ 1,660,013 Marjaree Mason Center, Inc.
Notes to Financial Statements
14 During the years ended September 30, 2022 and 2021, dividend income reinvested into mutual funds was approximately $13,000 and $17,000, respectively. During the years ended September 30, 2022 and 2021, net realized and unrealized (loss) and gain was $(555,060) and $183,742, respectively. During the years ended September 30, 2022 and 2021, proceeds from the sales of investments were $585,829 and $227,094, respectively.
NOTE 3 – FAIR VALUE MEASUREMENTS
The Organization’s investments are reported at fair value in the accompanying statements of financial position.
The methods used to measure fair value may produce an amount that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Organization believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The fair value measurement accounting literature establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels. The Organization uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments.
When available, the Organization measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. The Organization had no assets or liabilities measured using Level 2 or Level 3 inputs. The three levels of the fair value of hierarchy are described below:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Organization has the ability to access.
Level 2 – Inputs to the valuation methodology include:
• Quoted market prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Level 1 fair value measurements – The fair value of mutual funds and exchange traded finds are based on quoted prices in active markets for identical assets.
Marjaree Mason Center, Inc.
Notes to Financial Statements
15 Investments held at net asset value – Beneficial interests in perpetual trusts are valued at the pro-rata ownership percentage of the net asset value (“NAV”) of the private investment. The NAV is based on the underlying assets in the trust, which consist of common stocks and mutual funds. The use of NAV as fair value is deemed appropriate as the private investments do not have finite lives, unfunded commitments relating to these types of investments, or significant restrictions on redemptions.
Accounting standards allow for the use of a practical expedient for the estimations of the fair value of investment companies or private investments for which the investment does not have a readily determinable fair value. The practical expedient used by the Organization to value these investments is the NAV. In some instances, the NAV may not equal the fair value that would be calculated under fair value accounting standards.
The following table sets forth by level, within the fair value hierarchy, the Organization’s assets measured at fair value on a recurring basis as of September 30, 2022:
Investments Held
Level 1 Level 2 Level 3 at NAV Total
Mutual funds:
Blended Bond $ 1,379,081 $ - $ - $ - $ 1,379,081
Domestic Stock 538,873 - - - 538,873
International Bond 225,684 - - - 225,684
Blended Asset 116,013 - - - 116,013
Blended Stock 388,162 - - - 388,162
Domestic Bond 125,531 - - - 125,531
Total mutual funds 2,773,344 - - - 2,773,344
Exchange-traded funds 102,133 - - - 102,133
Money market funds 7,344 - - - 7,344
Beneficial interest in perpetual trusts - - - 184,500 184,500 Total assets at fair value $ 2,882,821 $ - $ - $ 184,500 $ 3,067,321 Fair Value Measurements
The following table sets forth by level, within the fair value hierarchy, the Organization’s assets measured at fair value on a recurring basis as of September 30, 2021:
Investments Held
Level 1 Level 2 Level 3 at NAV Total
Mutual funds:
Blended Bond $ 488,712 $ - $ - $ - $ 488,712
Domestic Stock 328,120 - - - 328,120
International Bond 207,416 - - - 207,416
Blended Asset 136,008 - - - 136,008
Blended Stock 262,923 - - - 262,923
Domestic Bond 93,464 - - - 93,464
International Stock 57,499 - - - 57,499
Total mutual funds 1,574,142 - - - 1,574,142
Exchange-traded funds 82,943 - - - 82,943
Money market funds 2,928 - - - 2,928
Beneficial interest in perpetual trusts - - - 821,719 821,719 Total assets at fair value $ 1,660,013 $ - $ - $ 821,719 $ 2,481,732 Fair Value Measurements
The Organization’s policy is to recognize transfers into and out of Levels 2 and 3 inputs as of the date of the event or change in circumstances that caused the transfer. For the years ended September 30, 2022 and 2021, there were no significant transfers into or out of Level 2 or Level 3 inputs.
Marjaree Mason Center, Inc.
Notes to Financial Statements
16 NOTE 4 – GRANTS RECEIVABLE
Grants receivable consisted of the following at September 30:
2022 2021
California Office of Emergency Services $ 259,984 $ 203,714 County of Fresno 137,336 122,587
U.S. Department of Housing and Urban Development 129,623 513,142 FEMA 44,916 68,798
City of Fresno 38,237 64,209
Westcare 18,019 30,722
Fresno Unified 8,345 -
Madera County 4,230 3,231
Saint Agnes Hospital - 16,575
$ 640,690 $ 1,022,978
NOTE 5 – PLEDGES RECEIVABLE
Pledges receivable consisted of the following at September 30:
2022 2021
Pledges receivable in less than one year $ 159,952 $ 123,467 Pledges receivable in one to five years 25,000 50,000
$ 184,952 $ 173,467
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at September 30:
2022 2021
Building and land improvements $ 4,990,873 $ 4,928,826
Leasehold improvements 94,546 94,546
Equipment 93,946 65,258
Buildings 660,387 660,387
Furniture and fixtures 47,748 47,748
Vehicles 247,470 210,480
Land 29,064 29,064
6,164,034 6,036,309
Less: accumulated depreciation (3,581,624) (3,280,328)
$ 2,582,410 $ 2,755,981
The Organization incurred depreciation expense of $301,296 and $312,145 for the years ended September 30, 2022 and 2021, respectively.
Marjaree Mason Center, Inc.
Notes to Financial Statements
17 NOTE 7 – BENEFICIAL INTEREST IN PERPETUAL TRUSTS
Beneficial interest in perpetual trusts consisted of the Organization’s percentage interest in three separate perpetual trusts accounted for as split-interest agreements. The Organization values its interest in these trusts based on the fair value of each trust’s underlying assets. Balances consisted of the following at September 30:
2022 2021
Burks’ Trust (5% interest) $ 175,598 $ 207,186
Nine Trust (5% interest) 8,902 11,484
Rea's Trust (10% interest) 70,276 603,049
254,776 821,719
Less: allowance for beneficial interest in perpetual trusts (70,276) - $ 184,500 $ 821,719
During the years ended September 30, 2022 and 2021, the Organization’s portion of unrealized (loss) and gain were $(15,162) and $54,522, respectively. During the year ended September 30, 2022, the Organization received a distribution from the Rea’s Trust in the amount of $551,781. No distributions were received during the year ended September 30, 2021. At September 30, 2022, beneficial interest in perpetual trusts was shown net of an allowance of $70,276. No allowance was recorded at September 31, 2021.
NOTE 8 – REFUNDABLE ADVANCES
The Organization was awarded a grant from the Anthem Blue Cross Foundation, LLC in the amount of $200,000 to help fund routine prenatal care, maternal health education, and wellness checks during pregnancy for victims of domestic violence as part of the Maternal Health Program. In accordance with ASC 958-605 for conditional grants, the Organization is accounting for this grant as a refundable advance until the conditions of the grant are substantially met. At September 30, 2022, $- of the refundable advance was remaining, the Organization met the remaining requirements of the conditional grant.
The Organization was awarded a grant from the City of Fresno in the amount of $500,000 for emergency shelter needs for domestic survivors related to the novel coronavirus (“COVID-19”) pandemic. In accordance with ASC 958-605 for conditional grants, the Organization is accounting for this grant as a refundable advance until the conditions of the grant are substantially met. At September 30, 2021, $327,888 of the refundable advance was remaining. The Organization met the remaining requirements of the conditional grant during the year ended September 30, 2022.
Marjaree Mason Center, Inc.
Notes to Financial Statements
18 The Organization was awarded a grant from the State of California Emergency Housing and Assistance Program (“EHAP”) for renovation of an emergency shelter in Fresno in the amount of $1,000,000. In accordance with ASC 958-605 for conditional grants, the Organization accounted for this grant as a refundable advance until the conditions of the grant were substantially met. Repayment is deferred as long as the property was used as an emergency shelter or transitional housing for 7 years. If the condition is not met, the Organization must pay the amount back with a 3% rate of interest, per annum. Accrued interest totaled $210,000 at September 30, 2021. As the Organization substantially met the conditions, the amount is reported as grant revenue in the amount of $1,210,000 as of September 30, 2021.
NOTE 9 – OBLIGATIONS UNDER OPERATING LEASES
The Organization leases office equipment and property, which require certain minimum annual rental payments.
The leases vary in terms and expire between December 2022 and March 2066. For the year ended September 30, 2022, total office equipment and property lease expenses were $110,143 and $153,576, respectively. For the year ended September 30, 2021, total office equipment and property lease expenses were $50,571 and $148,922, respectively.
The future annual minimum lease payments under long-term contractual obligations at September 30, 2022, are as follows:
Years Ending September 30,
2023 $ 62,407
2024 32,632
2025 32,632
2026 16,169
2027 100
Thereafter 3,900
$ 147,840
Marjaree Mason Center, Inc.
Notes to Financial Statements
19 NOTE 10 – NET ASSETS WITH DONOR RESTRICTION
Amounts received from various donors for specific purposes are net assets with donor restriction that have been spent for their specified purposes. Net assets with donor restriction consisted of the following at September 30:
2022 2021
Bullard site $ 1,178,296 $ -
Shelter, food, and supplies for clients and children 493,801 598,186 Beneficial trusts 184,500 821,719
Clovis shelter 137,457 155,262
Programs and counseling 114,151 652,689
Auto and facilities maintenance 6,905 18,180
Education and outreach 4,360 70,528
Reedley facility - 877
$ 2,119,470 $ 2,317,441
Net assets released from restriction during the years ended September 30, 2022 and 2021, totaled $1,526,120 and $803,638, respectively.
NOTE 11 – RETIREMENT PLAN
The Organization established a 401(k) Retirement Plan covering all active, full-time employees aged 21 or older.
Matching contributions of $46,939 and $12,210 were made during the years ended September 30, 2022 and 2021, respectively.
NOTE 12 – IN-KIND DONATIONS
In-kind donations consisted of the following for the years ended September 30:
2022 2021
Trained volunteers $ 57,951 $ 75,112
Fresno, Clovis, and Reedley shelters 12,120 17,162
Meathead Movers 31,000 31,000
Donated meals 450 -
$ 101,521 $ 123,274
The Organization’s policy related to in-kind donations is to utilize the assets given to carry out the mission of the Organization. If an asset is provided that does not allow the Organization to utilize it in its normal course of business, the asset will be sold at its fair market value as determined by appraisal or specialist depending on the type of asset.
Marjaree Mason Center, Inc.
Notes to Financial Statements
20 The Organization was provided professional clinical services at no cost to service the individuals in their shelters and other programs. Based on current market rates for these services, the Organization would have paid $70,071 and $92,274 for the years ended September 30, 2022 and 2021, respectively.
The Organization was provided discretionary moving services from Meathead Movers to support victims of domestic violence in Fresno County. Based on current market rates for these services, the Organization would have paid $31,000 for each of the years ended September 30, 2022 and 2021.
All in-kind donations received by the Organization for the years ended September 30, 2022 and 2021, were considered without donor restrictions and able to be used by the Organization as determined by the board of directors and management.
NOTE 13 – CONTINGENCIES AND CONCENTRATIONS
Federal, state, and local grants – Amounts received from grant agencies are subject to audit and adjustment by grantor agencies, principally the state and federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the Organization. There are no pending audits or proposed adjustments currently.
Economic dependency – The Organization receives a majority of its funding through various programs and contracts with federal, state, local, and private agencies. Grants and contracts for the years ended September 30, 2022 and 2021, comprise approximately 76% and 62%, respectively, of total revenue without donor restriction.
The following is a summary of total grants and contracts received by granting and contracting agency for the year ended September 30, 2022:
Granting and Contracting Agency Amount Percentage
Department of Housing and Urban Development $ 1,625,075 30.02% California Office of Emergency Services 1,449,206 26.77% City of Fresno 959,955 17.73%
County of Fresno 821,887 15.18%
Other contracts 296,731 5.48%
Federal Emergency Management Agency 94,916 1.75%
Fresno Unified School District 85,345 1.58%
Madera District 28,908 0.53%
Westcare 27,062 0.50%
Saint Agnes Hospital 24,855 0.46%
$ 5,413,940 100.00
Marjaree Mason Center, Inc.
Notes to Financial Statements
21 The following is a summary of total grants and contracts received by granting and contracting agency for the year ended September 30, 2021:
Granting and Contracting Agency Amount Percentage
Department of Housing and Urban Development $ 1,423,373 27.62% California Office of Emergency Services 1,343,913 26.08% City of Fresno 970,792 18.84%
County of Fresno 951,690 18.47%
Other contracts 178,747 3.47%
Fresno Unified School District 77,000 1.49%
California Partnership to End Domestic Violence 71,250 1.38% Federal Emergency Management Agency 68,798 1.34%
Saint Agnes Hospital 33,145 0.64%
County of Madera 18,823 0.37%
Westcare 15,649 0.30%
$ 5,153,180 100.00
NOTE 14 – LIQUIDITY AND FUNDS AVAILABLE
Financial assets available to meet cash needs for general expenditures within one year as of September 30, 2022, are as follows:
Financial assets:
Cash and cash equivalents $ 2,579,744
Investments in marketable securities 2,882,821
Grants receivable 640,690
Other receivables 4,763
Pledges receivable 184,952
Financial assets at September 30, 2022 6,292,970
Less those unavailable for general expenditure within one year, due to:
Noncurrent portion of pledges receivable (25,000)
Financial assets available to meet cash needs for general expenditures within one year $ 6,267,970
The Organization’s spending policy is to structure its financial assets to be available for operations, capital assets, and opportunities to enhance the Organization’s mission. The Organization has certain donor-restricted net assets that are available for general expenditures within one year of September 30, 2022, because the restrictions on the net assets are expected to be met by conducting the normal activities of the programs in the coming year.
Marjaree Mason Center, Inc.
Notes to Financial Statements
22 NOTE 15 – SUBSEQUENT EVENTS
Subsequent events are events or transactions that occur after the statement of financial position date, but before financial statements are available to be issued. The Organization recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the statement of financial position, including the estimates inherent in the process of preparing the financial statements. The Organization’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the statement of financial position, but arose after the statement of financial position date and before financial statements are available to be issued.
The Organization has evaluated subsequent events through January 16, 2023, which is the date the financial statements were available to be issued, and determined the following event required disclosure:
On December 3, 2021, the Organization signed a purchase and sale agreement with an unrelated party to purchase a building to replace the Organization’s current administration building and Fresno shelter. The total purchase price of the building is $7,000,000. On December 6, 2021, escrow was opened, and due diligence was started. The purchase was delayed due to a City of Fresno zoning contract with limitations of the building purpose. The zoning contract was lifted during the summer 2022, which initiated the due diligence process again.
On December 13, 2022, the Organization closed on the purchase. The Organization obtained a promissory note payable to an unrelated party in the amount of $2,000,000, including interest at a rate of 4.10% per annum, with principal and accrued interest payable at maturity on December 13, 2023. The remaining balance on the purchase was made with $2,700,000 of cash and $2,300,000 of an in-kind donation.
Supplementary Information
Marjaree Mason Center, Inc.
24 See notes to schedule of expenditures of federal awards.
Schedule of Expenditures of Federal Awards
Year Ended September 30, 2022
Federal Grantor/Pass-through Grantor/Program Title
Federal Assistance Listing
Number
Pass-through Entity
Identifying Number Federal Expenditures
Community Development Block Grants - Entitlement Grants Cluster U.S. Department of Housing and Urban Development
Passed through the County of Fresno
Community Development Block Grant 14.218 A-21-313 $ 37,484 Passed through the City of Fresno
Community Development Block Grant 14.218 N/A 50,616
Total Community Development Block Grants - Entitlement Grants Cluster 88,100 Continuum of Care Program
U.S. Department of Housing and Urban Development
Direct award
HUD Clovis - Supportive Housing 14.267 CA0974L9T142007 154,272 HUD Clovis - Supportive Housing 14.267 CA0974L9T142108 75,555 HUD Welcome Home 14.267 CA1480L9T141904 7,251
HUD Welcome Home 14.267 CA1185L9T142108 66,529
HUD Welcome Home 2 14.267 CA1410L9T142005 129,184
HUD Welcome Home 2 14.267 CA1410L9T142106 21,205
HUD Welcome Home 3 14.267 CA1480L9T142005 138,027
HUD Welcome Home 3 14.267 CA1480L9T142106 38,293
HUD Coordinated Entry 14.267 CA1762D9T142002 350,270
HUD Coordinated Entry 14.267 CA1762D9T1142103 37,742
HUD Coordinated Entry 2 14.267 CA1854L9141900 65,446
HUD Coordinated Entry 2 14.267 CA1854L9T142102 395,214
HUD Safe and Sound 14.267 CA1764D9T142002 146,087
Total Continuum of Care Program 1,625,075
Emergency Solutions Grant
U.S. Department of Housing and Urban Development
Passed through the City of Fresno
Emergency Solutions Grant 14.231 N/A 95,473
Total U.S. Department of Housing and Urban Development 1,808,648 Crime Victim Assistance
U.S. Department of Justice
Passed through the California Office of Emergency Services Domestic Violence Assistance Program 16.575 DV20341257 65,000 Domestic Violence Assistance Program 16.575 DV20341257 118,513 Unserved/Underserved Victim Advocacy 16.575 UV20031257 8,597 Unserved/Underserved Victim Advocacy 16.575 UV21041257 41,802 Unserved/Underserved Victim Advocacy 16.575 UV21041257 78,040 Housing First 16.575 XD20031257 54,392
Housing First 16.575 XD2031257 238,387
Transitional Housing - FSP 16.575 XH20031257 46,900
Transitional Housing - FSP 16.575 XH21041257 147,876
Total Crime Victim Assistance 799,507
Violence Against Women Formula Grants
U.S. Department of Justice
Passed through the California Office of Emergency Services Teen Dating Violence 16.588 TV20051257 18,656
Total U.S. Department of Justice 818,163
Emergency Food and Shelter National Board
U.S. Department of Homeland Security
Direct Award
Emergency Food and Shelter National Board Program 97.024 21 94,916 Total U.S. Department of Homeland Security 94,916
Family Violence Prevention & Services
U.S. Department of Health and Human Services
Passed through the California Office of Emergency Services Domestic Violence Assistance Program 93.671 DV20341257 119,701 Total U.S. Department of Health and Human Services 119,701 Coronavirus Relief Fund
U.S. Department of Treasury
Passed through the City of Fresno
COVID-19 - City Cares 21.019 N/A 300,000
COVID-19 - City Cares 21.019 N/A 327,889
Total Coronavirus Relief Fund and U.S. Department of Treasury 627,889 Total Expenditures of Federal Awards $ 3,469,317
Marjaree Mason Center, Inc.
25 Notes to Schedule of Expenditures of Federal Awards
Year Ended September 30, 2022
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation – The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Marjaree Mason Center, Inc. (the “Organization”), under programs of the federal government for the year ended September 30, 2022. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Relationship to financial reports – Information included in the accompanying Schedule is in substantial agreement with the information reported in the related financial reports for major programs.
Program costs – Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Subrecipients – The Organization does not pass through funds to subrecipients.
NOTE 2 – INDIRECT COSTS
The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance as described in 2 CFR 200.414.
Single Audit Reports
27 Report of Independent Auditors 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
The Board of Directors
Marjaree Mason Center, Inc.
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 Marjaree Mason Center, Inc., which comprise the statement of financial position for the year ended September 30, 2022, the related statements of activities and changes in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated January 16, 2023.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Marjaree Mason Center, Inc.’s internal control over financial reporting (internal control) as a basis for designing 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 Marjaree Mason Center, Inc.’s internal control. Accordingly, we do not express an opinion on the effectiveness of Marjaree Mason Center, 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 Marjaree Mason Center, Inc.’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.
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 or significant deficiencies may exist that were not identified. 28 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Marjaree Mason Center, Inc.’s financial statements are free 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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such 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 Marjaree Mason Center, Inc.’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Marjaree Mason Center, Inc.’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Fresno, California
January 16, 2023
29 Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control over
Compliance Required by the Uniform Guidance
The Board of Directors
Marjaree Mason Center, Inc.
Report on Compliance for the Major Federal Program
Opinion on the Major Federal Program
We have audited Marjaree Mason Center, Inc.’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on Marjaree Mason Center Inc.’s major federal program for the year ended September 30, 2022.
Marjaree Mason Center, Inc.’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, Marjaree Mason Center, Inc. complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended September 30, 2022.
Basis for Opinion on the Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of Marjaree Mason Center, Inc. and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the major federal program. Our audit does not provide a legal determination of Marjaree Mason Center, Inc.’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to Marjaree Mason Center, Inc.’s federal programs.
30 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on Marjaree Mason Center, Inc.’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about Marjaree Mason Center, Inc.’s compliance with the requirements of the major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding Marjaree Mason Center, Inc.’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of Marjaree Mason Center, Inc.’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of Marjaree Mason Center, Inc.’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Other Matters
The results of our auditing procedures disclosed one instance of noncompliance which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as item 2022-001. Our opinion on the major federal program is not modified with respect to this matters.
Government Auditing Standards requires the auditor to perform limited procedures on Marjaree Mason Center, Inc.’s response to the noncompliance finding identified in our compliance audit described in the accompanying schedule of findings and questioned costs. Marjaree Mason Center, Inc.’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
31 Report on Internal Control over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, as discussed below, we did identify a deficiency in internal control over compliance that we consider to be a significant deficiency.
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 a 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 weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2022-001, to be a significant deficiency.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
Government Auditing Standards requires the auditor to perform limited procedures on Marjaree Mason Center, Inc.’s response to the internal control over compliance finding identified in our compliance audit described in the accompanying schedule of findings and questioned costs. Marjaree Mason Center, Inc.’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Fresno, California
January 16, 2023
Marjaree Mason Center, Inc.
32 Schedule of Findings and Questioned Costs
Year Ended September 30, 2022
FINANCIAL STATEMENTS
Type of auditor's report issued on whether the financial statements audited were prepared in accordance with GAAP:
Internal control over financial reporting:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None reported Noncompliance material to financial statements noted? Yes X No
FEDERAL AWARDS
Internal control over major federal programs:
Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? X Yes None reported Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a)? X Yes No
Identification of Major Federal Program and Type of Auditor's Report Issued on Compliance for the Major Federal Program
Name of Federal Program/Cluster
Continuum of Care Program Unmodified
Dollar threshold used to distinguish between Type A and Type B programs:
Auditee qualified as low-risk auditee? X Yes No
None reported.
Section I – Summary of Auditor's Results
Section II –– Financial Statement Findings
$750,000
Unmodified
Type of Auditor's Report
Issued on Compliance for
the Major Federal Program
14.267
Federal Assistance Listing
Number
Marjaree Mason Center, Inc.
Schedule of Findings and Questioned Costs (Continued)
Year Ended September 30, 2022
33 Section III – Federal Award Findings and Questioned Costs Finding 2022-001: Department of Housing and Urban Development - Continuum of Care Program - Assistance Listing No. 14.267; Grant period: Year Ended December 31, 2022.
Criteria – In accordance with 2 CFR 200.320(a)(2)(i), participants are required to perform an appropriate form of competition in their procurement process if purchases are within the small purchase threshold.
Condition – Management did not perform an appropriate form of competition for a purchase made within the small purchase threshold.
Questioned costs – There are known questioned costs of $36,990 representing the reimbursements claimed for the vendor during the audit period. No likely questioned costs are noted.
Context – Inspection of procurement documentation showed one out of two vendors subjected to sampling required an adequate number of price or rate quotations from qualified sources to be obtained and assessment to be performed in accordance with the small purchase threshold of 2 CFR 200.320(a)(2)(i).
Price or rate quotations were obtained, but not formally documented and a formal assessment was not performed. Of the $1,625,075 of total Continuum of Care reimbursements claimed during the year, $96,702 of reimbursements are subject to this procurement requirement, including the known questioned costs of $36,990.
Effect – By not obtaining price or rate quotations from qualified sources, this could result in the utilization of an unqualified vendor, an overspending of grant funding, and questioned costs.
Cause – Management obtained rate quotations from an adequate number of vendors, but did not retain sufficient documentation and did not perform a formal assessment to proceed with the purchase.
Repeat finding – N/A
Recommendation – We recommend management implement a control to ensure sufficient documentation is retained during the procurement of all vendors being reimbursed by federal awards and ensure compliance with the Uniform Guidance and other applicable procurement standards.
Management's response – Management will ensure to retain sufficient documentation when obtaining quotes from similar vendors and performing a documented analysis of services and corresponding costs for the fiscal year 2022–23 and every year going forward.
Other Information
Marjaree Mason Center, Inc.
35 Combining Schedule of Revenue, Support, and Expenses – Unaudited Year Ended September 30, 2022
(with Summarized Comparative Information for Year Ended September 30, 2021) California Contributions,
Housing and Office of County Program
County of Urban Emergency Marriage Family City of Fees, and Total Fresno Development Services License Fees Stabilization Fresno Other 2022 2021
REVENUES, GAINS, AND OTHER SUPPORT
Grants and contracts $ 69,431 $ 1,625,075 $ 1,449,206 $ 175,885 $ 690,245 $ 928,007 $ 476,091 $ 5,413,940 $ 5,153,180 Contributions - - - - - - 2,945,544 2,945,544 3,003,763 In-kind donations - - - - - - 101,521 101,521 123,274
Special events - - - - - - 521,886 521,886 303,701
Program fees - - - - - - 145,948 145,948 184,990
Other income - - - - - - 14,700 14,700 42,897
Legacies and bequests - - - - - - 100,000 100,000 109,777 Emergency Housing and Assistance grant - - - - - - - - 1,210,000 Loss on disposal of assets - - - - - - - - (7,118)
Net realized and unrealized loss (gain) in
fair value of perpetual trusts - - - - - - (85,438) (85,438) 54,522 Interest and dividend income - - - - - - 53,739 53,739 25,457 Net realized and unrealized (loss) gain in
fair value of investments - - - - - - (555,060) (555,060) 183,742 Total revenues, gains, and other support 69,431 1,625,075 1,449,206 175,885 690,245 928,007 3,718,931 8,656,780 10,388,185
EXPENSES
Accounting and legal - 4,093 4,940 12,548 - - 54,648 76,229 48,563 Advertising - - 149 - - - 16,992 17,141 12,489
Bad debt expense - - - - - - 2,500 2,500 -
Bank charges - - - - - - 88 88 891
Computer services - 4,430 1,893 11,364 745 - 20,031 38,463 42,423 Conferences, conventions, and meetings 1,323 9,430 1,985 17 1,513 - 103,138 117,406 142,081 Depreciation - - - - - - 183,057 183,057 180,824
Donated services and supplies - - - - - - 108,062 108,062 123,086 Dues and subscriptions - 656 1,294 - - - 25,442 27,392 20,752 Employee benefits 3,690 175,215 123,552 1,000 91,188 47,155 396,529 838,329 636,311 Equipment rental, repairs, and maintenance 2,217 135,567 64,342 37,597 20,462 23,860 242,951 526,996 532,527 Food 3,925 367 741 1,550 94 37,593 77,404 121,674 152,892 Insurance - 5,722 9,678 42,112 - - 16,075 73,587 68,245 Interest - - - - - - 316 316 30,000
Miscellaneous - - - - - - 4,136 4,136 1,390
Office expense 27 314 2,028 3,106 1,888 26 51,649 59,038 44,375 Printing - 6,222 419 247 130 - 54,278 61,296 35,653
Professional fees - 10,862 20,147 4,627 250 - 359,721 395,607 274,259 Program supplies 27,335 248,945 393,769 516 583 474,106 280,543 1,425,797 1,406,256 Rent 7,200 25,610 24,332 3,009 66,418 - 50,865 177,434 184,262 Salaries 23,552 956,950 690,727 - 479,869 269,884 1,520,870 3,941,852 3,357,482 Security - 1,101 12,929 87 564 51,413 40,600 106,694 10,922 Taxes and licenses - 6,759 - 93 - - 17,111 23,963 121
Utilities 162 32,832 96,281 2,346 26,541 23,970 74,106 256,238 273,155 Total expenses 69,431 1,625,075 1,449,206 120,219 690,245 928,007 3,701,112 8,583,295 7,578,959 CHANGES IN NET ASSETS $ - $ - $ - $ 55,666 $ - $ - $ 17,819 $ 73,485 $ 2,809,226
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Exhibit E
2/2/23, 10:12 AM Tax Exempt Organization Search Details | Internal Revenue Service https://apps.irs.gov/app/eos/details/ 1/2
Marjaree Mason Center Inc.
EIN: 94-1156639 | Fresno, California, United States
Other Names
MARJAREE MASON CENTER INC
Publication 78 Data
Organizations eligible to receive tax-deductible charitable contributions. Users may rely on this list in determining deductibility of their contributions.
On Publication 78 Data List: Yes
Deductibility Code: PC
Copies of Returns (990, 990-EZ, 990-PF, 990-
T)
Electronic copies (images) of Forms 990, 990-EZ, 990-PF or 990-T returns filed with the IRS by charities and non-profits.
Tax Year 2021 Form 990
Tax Year 2019 Form 990
Tax Year 2018 Form 990
Tax Year 2017 Form 990
Tax Year 2016 Form 990
2/2/23, 10:12 AM Tax Exempt Organization Search Details | Internal Revenue Service https://apps.irs.gov/app/eos/details/ 2/2
Tax Year 2015 Form 990
Poverello House
Part B - EXHIBIT D
Prior Year Audited Financial Statement
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30, 2021 AND 2020
POVERELLO HOUSE
FRESNO, CALIFORNIA
SEPTEMBER 30, 2021 AND 2020
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT ......................................................................................................... 1 FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION ......................................................................................... 3 STATEMENT OF ACTIVITIES ............................................................................................................. 4 STATEMENT OF FUNCTIONAL EXPENSES ..................................................................................... 5 STATEMENTS OF CASH FLOWS ...................................................................................................... 6 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 7 SUPPLEMENTARY INFORMATION:
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ............................................................. 18 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .......................................... 19 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................................................. 23 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE ................................................................................................................. 25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS ........................................................................... 28 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS ............................................................................... 29 1 INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Poverello House
Fresno, California
Report on the Financial Statements
We have audited the accompanying financial statements of Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, 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.
Auditor’s 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 auditor’s 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 entity’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 entity’s internal control. Accordingly, we express no 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 Poverello House as of September 30, 2021, 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.
2 Report on Summarized Comparative Information
We have previously audited Poverello House’s 2020 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 18, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.
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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 May 26, 2022, on our consideration of Poverello House’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 solely 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 the effectiveness of Poverello House’s 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 Poverello House’s internal control over financial reporting and compliance.
Clovis, California
May 26, 2022
See Independent Auditor’s Report and Notes to the Financial Statements. 3 POVERELLO HOUSE
STATEMENTS OF FINANCIAL POSITION
SEPTEMBER 30, 2021 AND 2020
2021 2020
Assets
Current assets:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Prepaid expenses - 7,050
Total current assets 3,832,268 2,360,836
Investments 4,469,559 1,903,268
Property and equipment, net 5,644,581 4,802,249
Rehabilitation resident deposits 13,680 59,845
Total assets $ 13,960,088 $ 9,126,198
Liabilities and Net Assets
Current liabilities:
Accounts payable $ 229,565 $ 35,037
Accrued expenses 12,638 18,471
Accrued payroll and related 209,418 144,536
Loan payable, current portion - 73,388
Total current liabilities 525,009 198,044
Long-term liabilities:
Rehabilitation resident deposits 13,680 59,845
Loan payable, net of current portion - 320,694
Total long-term liabilities 334,374 59,845
Total liabilities 859,383 257,889
Net assets:
Without donor restrictions 9,792,172 8,722,336
With donor restrictions 3,308,533 145,973
Total net assets 13,100,705 8,868,309
Total liabilities and net assets $ 13,960,088 $ 9,126,198 See Independent Auditor’s Report and Notes to the Financial Statements. 4 POVERELLO HOUSE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Without Donor With Donor 2021 2020
Restrictions Restrictions Total Total
Revenue and Support
Contributions:
General $ 2,018,830 $ 959,964 $ 2,978,794 $ 2,690,442
Memorials and bequests 74,862 - 74,862 79,334
Donated in-kind materials and services (Note 10) 2,134,357 2,134,357 - 1,161,351 Contracts and grants:
Emergency Food and Shelter Program 326,926 326,926 - 167,040 Community of Hope 622,032 622,032 - 207,718
City of Fresno Emergency Shelter Grant 483,969 483,969 - - Kaiser Grant 150,000 - 150,000 70,000
County of Fresno Recidivism Grant 50,000 - 50,000 50,000 Grant Village Cares 169,896 169,896 - -
County of Fresno MAP Point 434,129 434,129 - 371,630
Triage Center 367,022 367,022 - 179,991
Homeless Family Services 64,612 - 64,612 63,401
Kings View 27,623 - 27,623 34,560
Government grant - - 246,300 -
Meal Reimbursements 1,059,520 1,059,520 - 559,222
Grant - CRG 47,419 - 47,419 -
Amazon Day 1 Grant 2,501,995 - 2,501,995 -
Mental Health Services Revenue 14,967 - 14,967 -
Special events 31 - 31 146,381
Investment income (loss), net (Note 5) 560,307 3,123 563,430 184,640 Miscellaneous income - 58,964 58,964 35,287
Total revenues and support before
net assets released from restriction 8,515,466 3,615,082 12,130,548 6,247,297 Net assets released from restriction (Note 9) 452,522 - (452,522) - Total revenues and support after
reclassification of net assets
released from restrictions 8,967,988 3,162,560 12,130,548 6,247,297 Costs and expenses:
Program services 7,252,189 - 7,252,189 3,653,561
Management and general 603,511 603,511 - 1,049,538
Fundraising - 42,452 42,452 164,612
Total costs and expenses - 7,898,152 7,898,152 4,867,711 Changes in net assets 1,069,836 3,162,560 4,232,396 1,379,586 Net assets, beginning of year 8,722,336 145,973 8,868,309 7,488,723 Net assets, end of year $ 9,792,172 $ 3,308,533 $ 13,100,705 $ 8,868,309 See Independent Auditor’s Report and Notes to the Financial Statements. 5 POVERELLO HOUSE
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Program Management 2021 Total 2020 Total
Services and General Fundraising Expenses Expenses
Costs and expenses:
Personnel costs:
Salaries $ 2,448,509 $ 113,498 $ 10,317 $ 2,572,324 $ 1,768,335 Employee benefits 398,449 19,098 1,735 419,282 256,441
Payroll taxes 207,865 9,253 841 217,959 157,762
Total personnel costs 3,054,823 141,849 12,893 3,209,565 2,182,538 Other costs and expenses:
In-kind materials and services 2,134,357 - 2,134,357 - 1,112,980 Advertising and promotion 4,684 62,041 426 67,151 20,628 Bank fees 17,054 - 17,054 - 18,213
Cold storage- - - - 50
Communications 40,152 2,117 192 42,461 20,732
Depreciation 175,934 50,928 4,630 231,492 206,442
Equipment lease 6,882 225 20 7,127 6,707
Food/kitchen supplies 566,575 - 566,575 - 317,323
Furniture/small office equipment 21,332 13,216 34,548 - 10,473 Homeless/client services 426,538 - 426,538 - 65,101
Hygiene/laundry/clothing - 2,102 - 2,102 8,774
Insurance 3,632 60,463 64,095 - 51,938
Miscellaneous 58,555 9,766 765 69,086 81,838
Newsletter - 19,003 - 19,003 40,015
Office expenses 53,279 40,072 609 93,960 59,955
Professional fees 57,217 149,909 207,126 - 225,243
Rent 24,662 - 24,662 - 22,775
Repairs and maintenance 170,350 71,992 2,290 244,632 73,369 Staff training - 135 - 135 433
Stipends 29,420 - 29,420 - 22,954
Taxes and licenses 4,132 23,370 27,502 - 11,987
Testing/education/life skills 29,808 - 29,808 - 16,393
Travel 2,266 - 2,266 - 11,989
Utilities 224,834 17,866 1,624 244,324 217,885
Vehicle fuel and maintenance - 103,163 - 103,163 60,976 Total costs and expenses $ 7,252,189 $ 603,511 $ 42,452 $ 7,898,152 $ 4,867,711 Supporting Services
See Independent Auditor’s Report and Notes to the Financial Statements. 6 POVERELLO HOUSE
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
Cash flows from operating activities:
Change in net assets $ 4,232,396 $ 1,379,586
Adjustments to reconcile change in net assets to
net cash provided from operating activities:
Depreciation 231,492 206,442
Unrealized gain on sale of investments (263,926) (77,504) Changes in:
Grants receivable (613,707) (31,412)
Pledges receivable (572,000) 47,500
Contracts receivable 22,880 -
Prepaid expenses (7,050) 37,611
Accounts payable 194,528 (17,738)
Accrued expenses (5,833) 13,397
Accrued payroll and related - 64,882
Net cash provided by (used in) operating activities 3,283,662 1,557,882 Cash flows from investing activities:
Purchase of property and equipment (1,073,824) (550,029) Purchase of investments (2,775,359) (597,720)
Proceeds from sale of investments 472,994 566,414
Net cash provided by (used in) investing activities (3,376,189) (581,335) Cash flows from financing activities:
Proceeds from loans payable - 400,000
Principal payments on loans payable (5,918) -
Net cash provided by (used in) financing activities - 394,082 Net increase (decrease) in cash 301,555 976,547
Cash and cash equivalents, beginning of year 1,880,455 903,908 Cash and cash equivalents, end of year $ 2,182,010 $ 1,880,455
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
7 NOTE 1 – ORGANIZATION AND OPERATIONS
Poverello House (the “Organization”) is a not-for-profit public benefit corporation in Fresno, California, whose mission is to feed the hungry, offer focused rehabilitation programs, temporary shelter, medical, dental and other basic services to the poor, the homeless, and the disadvantaged, unconditionally, without regard to race, color, religion, national origin, age, sex or disability. Support is provided primarily by donor contributions.
Poverello House is also a safe haven through its Naomi’s House program for single, homeless women in Fresno County. Naomi’s House is a 24-bed overnight shelter located on the Poverello House campus. In addition to overnight shelter, the women also receive food, clothing, and medical and psychosocial assessment and care.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Organization have been prepared on the accrual basis of accounting and in accordance with U.S. generally accepted accounting principles (“US GAAP”), which require the Organization to report information regarding its financial position and activities according to the following net asset classifications:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the Organization. These net assets may be used at the discretion of the Organization’s management and the Board of Directors.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors.
Some donor restrictions are temporary in nature; those restrictions will be met by action of the Organization or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
The Statement of Activities and Functional Expenses include certain prior year summarized comparative information in total. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended September 30, 2020, from which the summarized information was derived.
Adoption of New Accounting Standard
In May 2014, the FASB issued guidance (Accounting Standards Codification [ASC] 606, Revenue from Contracts with Customers) which provides a five-step analysis of contracts to determine when and how revenue is recognized and replaces most existing revenue recognition guidance in U.S. generally accepted accounting principles. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASC 606 is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Organization adopted ASC 606 with a date of the initial application of October 1, 2020.
The Organization applied ASC 606 using the cumulative effect method, which resulted in recognizing the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of net assets at October 1, 2020. The details of the significant changes and quantitative impact of the changes are discussed below.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
8 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Adoption of New Accounting Standard (Continued)
As part of the adoption of ASC 606, the Organization elected to use the following transition practical expedients:
(1) all contract modifications that occurred prior to the date of initial application when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price have been reflected in the aggregate; and (2) ASC 606 is applied only to contracts that are not completed at the initial date of application. Because contract modifications are minimal, there is not a significant impact as a result of electing these practical expedients.
There were no significant changes that resulted from the adoption of ASC 606. The adoption of the new accounting policy did not have a significant impact on change in net assets, and therefore, there was no adjustment to the opening balance of net assets. The Organization does not expect the adoption of the new revenue standard to have a material impact on its change in net assets on an ongoing basis.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents.
Investments
Investments are stated at their estimated fair value based on quoted closing prices. Investments that are managed on a long-term basis or which are not expected to be used in the Organization’s operations within the year following the balance sheet date are classified as noncurrent.
Allowance for Doubtful Accounts
Receivables are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to receivable. At September 30, 2021 and 2020, the Organization considers all amounts to be fully collectible; therefore, no allowance for doubtful accounts is reflected.
Pledges Receivable
Unconditional pledges receivable from donors that are expected to be collected within one year are recorded at net realizable value. Long-term pledges receivable that are expected to be collected in a period beyond one year are recorded at a discount using the present value of their estimated future cash flows. The discounts on long-term pledges receivable are computed using risk-free interest rates applicable to the period in which the pledges are received.
Contracts Receivable
Contracts receivable consist of amounts owed by various organizations for prepared meals, as defined in the memorandums of understanding, that have not been received by the Organization. The carrying amount of contracts receivable approximates net present value.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value of Financial Instruments
The Organization considers its cash, grants and pledges receivable, prepaid expenses, accounts payable and accrued expenses to be short-term in nature, and therefore their fair values approximate their carrying values.
Property and Equipment
Property and equipment are stated at cost or, if donated and placed into service, at their estimated fair value at the date donated. The Organization’s policy is to capitalize assets with an individual value of $5,000 or greater.
Routine repairs and maintenance, including planned major maintenance activities are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
Donations of property and equipment are recorded without donor restriction unless the donor restricts the donated asset to a specific purpose. Assets donated with explicit restriction regarding their use, and contributions of cash that must be used to acquire property and equipment, are reported with donor restriction.
Rehabilitation Resident Deposits
The Organization at times holds outside cash deposits for residents in its Rehabilitation Program. This cash is maintained in a separate bank account until such time as the residents request withdrawal of their funds.
Revenue Recognition
The Organization recognizes revenue when services are rendered. A receivable is recorded to the extent the amount earned exceeds cash advances. Conversely, a liability is recorded when cash advances exceed amounts earned.
Funding sources may, at their discretion, request reimbursement for expenses or return of funds, or both, as a result of noncompliance by the Organization with the terms of the grants or contracts. Additionally, if the Organization terminates its activities, all unearned amounts are to be returned to the funding sources.
Contributions
All contributions received are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or are restricted by the donor for specific purposes are reported as increases in net assets with donor restriction. Unconditional promises to give that are silent as to the due date are presumed to be time restricted by the donor until received and are reported as net assets with donor restriction.
All donor-restricted support is reported as an increase in net assets with donor restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), net assets with donor restriction are reclassified to net assets without donor restriction and reported in the statement of activities as net assets released from restriction.
Donated In-Kind Materials and Services
The Organization receives various donated materials and services. The estimated fair value of the donation is recorded as support and expense in the period received.
Donated services are recognized as contributions if they significantly enhance non-financial assets or involve a professional service that would otherwise have been purchased and whose values can be objectively measured.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
10 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Advertising and Promotion
The Organization expenses all advertising and promotion costs as incurred. Total advertising and promotion expenses at September 30, 2021 and 2020 were $67,151 and $20,628, respectively.
Functional Allocation of Expenses
The costs of providing the Organization’s programs and supporting services have been summarized on a functional basis in the Statement of Functional Expenses. Certain overhead and indirect costs have been allocated to program services and fundraising based on management’s estimate of the actual personnel and facilities utilized in such activities. Management and general include those expenses that are not directly identifiable with any specific program but provide for the overall support and direction of the Organization.
The expenses allocated consist of the following:
Expense Method of Allocation
Salaries Time and effort
Payroll benefits Time and effort
Payroll taxes Time and effort
Communications Time and effort
Depreciation Time and effort
Equipment lease Time and effort
Miscellaneous Time and effort
Office expenses Time and effort
Repairs/maintenance Time and effort
Utilities Time and effort
Taxes
Poverello House has qualified as a not-for-profit organization and has been granted tax-exempt status pursuant to Internal Revenue Code Section 501(c)(3) and California Revenue and Taxation Code Section 23701(d) and is exempt from Federal and State of California income taxes.
Generally accepted accounting principles provide accounting and disclosures guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed. Unrelated business income tax, if any, is insignificant and no provision for income taxes has been made.
Use of Estimates
The preparation of financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net assets or cash flows at September 30, 2020.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
11 NOTE 3 – AVAILABILITY AND LIQUIDITY
The following represents the Organization’s financial assets at September 30:
2021 2020
Financial assets at year end:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Investments 4,469,559 1,903,268
Total financial assets 8,294,777 4,264,104
Less amounts not available to be used within one year:
Donor-restricted with liquidity horizons greater than one year (3,308,533) (145,973) Financial assets available to meet general expenditures over the next twelve months $ 4,986,244 $ 4,118,131
The Organization has not adopted an official liquidity management plan or cash maintenance policy. However, cash, cash equivalents, and short/long-term investments are reviewed regularly. These are adjusted, as needed, to account for immediate cash needs, assess risk, and maximize return. Consistent with previous years, the Organization conservatively maintains sufficient liquidity to meet its operating requirements and perform its mission. The Executive staff of the Organization and the Board of Directors may consider adopting formalized plans/policies as the need arises.
NOTE 4 – PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following at September 30:
2021 2020
Land and buildings $ 4,485,251 $ 4,463,636
Building improvements 656,457 302,447
Building expansion 1,357,688 1,357,688
Resident Housing 215,502 215,502
Furniture, fixtures and equipment 547,499 496,636
Vehicles 402,816 301,228
Construction in progress - 520,364
8,185,577 7,137,137
Accumulated depreciation (2,540,996) (2,334,888)
Property and equipment, net $ 5,644,581 $ 4,802,249
Total depreciation expense was $231,492 and $206,442 at September 30, 2021 and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
12 NOTE 5 – INVESTMENT SECURITIES
Investment securities consist of the following at September 30:
2021 2020
Fixed income $ 2,443,057 $ 342,858
Equity securities 2,026,502 1,560,410
Total investments $ 4,469,559 $ 1,903,268
Fair Value
2021 2020
Unrestricted investments $ 4,459,079 $ 1,884,004
Restricted investments 10,480 19,264
Total investments $ 4,469,559 $ 1,903,268
The following schedule summarizes the investment return in the statement of activities at September 30:
Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 60,786 $ 60,787 1 $
Realized gains (losses) 266,003 266,003 -
Unrealized gains (losses) 260,804 3,122 263,926
Investment fees - (27,286) (27,286)
Total investment income, net $ 560,307 $ 3,123 $ 563,430 Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 38,362 $ 119 $ 38,481
Realized gains (losses) 91,068 91,068 -
Unrealized gains (losses) 74,742 2,762 77,504
Investment fees - (22,413) (22,413)
Total investment income, net $ 181,759 $ 2,881 $ 184,640 2021
2020
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
13 NOTE 6 – FAIR VALUE MEASUREMENTS
In accordance with generally accepted accounting principles, fair value is defined as the price that the entity would receive upon selling an asset or pay to transfer a liability at the reporting date. Generally accepted accounting principles establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs, and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available.
The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly, and fair value is determined through the use of other valuation methodologies.
Level 3 – Valuations based on inputs that are not observable and significant to the overall fair value measurement, including the entity’s own assumptions in determining the fair value of assets or liabilities.
The table below presents the level within the fair value hierarchy at which investments are measured at September 30:
Total Level 1 Level 2 Level 3
Fixed income $ 2,443,057 $ 2,443,057 $ - $ -
Equity securities 2,026,502 - 2,026,502 -
Total investments at fair value $ 4,469,559 $ - 4,469,559 $ - $ Total Level 1 Level 2 Level 3
Fixed income $ 342,858 $ 342,858 $ - $ -
Equity securities 1,560,410 - 1,560,410 -
Total investments at fair value $ 1,903,268 $ - 1,903,268 $ - $ 2020
2021
Description
NOTE 7 – RETIREMENT PLAN
The Organization maintains a Simple IRA plan and provides a match of up to 3% of employee elective deferrals.
Amounts paid for retirement were $33,103 and $20,171 in the years ended September 30, 2021, and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
14 NOTE 8 – COMMITMENTS
The Organization leases various office equipment under operating lease agreements. The operating leases have term expiration dates through 2025.
The Organization’s future minimum lease commitments are as follows for September 30:
Year Ending:
2022 $ 22,958
2023 22,958
2024 22,958
2025 15,874
$ 84,748
Total rent expenses were $31,789 and $29,482 for the years ended September 30, 2021 and 2020, respectively. In the normal course of business, operating leases are generally renewed or replaced by other leases.
NOTE 9 – NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions consisted of the following at September 30:
2021 2020
Time restrictions:
Estate distributions receivable 16,323 $ $ 16,323
Charitable trust promise to give 600,000 19,000
Purpose restrictions:
McMurray Family Medical Fund 10,480 10,478
Seligman Fund 8,785 -
G.L. Bruno & Associates 10,000 -
Kaiser 19,760 -
Amazon Day 1 Family Fund 2,501,995 -
Other various 159,975 81,387
Total net assets with donor restrictions $ 3,308,533 $ 145,973 Net assets released from donor restriction by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors are as follows for the years ended September 30:
2021 2020
Time restriction expired:
Passage of specified time 32,123 $ $ -
Purpose restriction accomplished:
Capital projects 115,774 108,729
Program expenses 304,625 215,896
Total net assets released from restrictions $ 452,522 $ 324,625
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
15 NOTE 10 – DONATED MATERIALS AND SERVICES
Donated materials and services consist of the following for the years ended September 30:
2021 2020
Without donor restrictions:
Food $ 1,729,228 $ 904,583
Goods 401,216 253,768
Services and discounts 3,913 3,000
Total donated materials and services 2,134,357 $ $ 1,161,351 NOTE 11 – CREDIT RISK
The Organization maintains cash balances in bank accounts with financial institutions insured by the Federal Deposit Insurance Corporation. At September 30, 2021 and 2020, the Organization had uninsured cash balances of $1,332,745 and $1,575,693, respectively.
NOTE 12 – LOAN PAYABLE
On April 28, 2021, the Organization entered into a loan agreement with Central Valley Community Bank in the amount of $400,000 with an interest rate of 4.5%. The loan calls for four consecutive interest only monthly payments commencing May 27, 2021 and principal and interest monthly payments of $7,468 commencing September 27, 2021. The loan matures on August 27, 2026 and is secured by solar panels. The remaining balance on the loan at September 30, 2021 is $394,082.
The future minimum principal payments under the Organization’s loan payable for the years ending September 30 are as follows:
2022 $ 73,388
2023 76,759
2024 80,285
2025 83,974
2026 79,676
$ 394,082
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
16 NOTE 13 – CONTRACTS WITH CUSTOMERS
Revenue from performance obligations satisfied at a point in time consists of the following at September 30:
2021 2020
Meal reimbursements $ 1,059,520 $ 559,222
Contract assets include meals reimbursement from various organizations. Contract assets are as follows:
09/30/2021 09/30/2020 10/1/2019
Closing Balance Closing Balance Opening Balance
Contract assets:
Contracts receivable $ 158,290 $ 181,170 $ 44,100
NOTE 14 – UNCERTAINTY
On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus, COVID-19, a pandemic. Accordingly, some of the Organization’s operations were limited to protect the health and safety of its clients and employees. The financial impact on the Organization that could occur as a result of the pandemic is unknown at this time.
NOTE 15 – SUBSEQUENT EVENTS
On March 23, 2022, the Organization purchased a building for $1,100,000 using donor restricted funds. The intended use of the property will be to establish a family homeless shelter.
Management has evaluated and concluded that there are no other subsequent events that have occurred from September 30, 2021 through the date the financial statements were available to be issued on May 26, 2022, that would require additional disclosure or adjustment. 17 SUPPLEMENTARY INFORMATION
POVERELLO HOUSE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
18 U.S. Department of Housing and Urban Development
Pass-Through Programs from City of Fresno:
Emergency Solutions Grant 14.231 * $ 108,544
Emergency Solutions Grant 14.231 * 191,135
Emergency Solutions Grant 14.231 * 184,290
Total US Department of Housing and Urban Development 483,969 U.S. Department of Homeland Security
Emergency Food and Shelter National Board Program 97.024 326,926 Total US Department of Homeland Security 326,926
Other Programs
Pass-Through Programs from County of Fresno:
Community of Hope Unknown 169,896
Village of Hope, CARES Unknown 226,938
Total Other Programs 396,834
Total Expenditures of Federal Awards $ 1,207,729
*Denotes a major program per Uniform Guidance
Total
Expenditures
Federal Assistance
Federal Grantor/Program or Cluster Title Listing Number
POVERELLO HOUSE
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2021
19 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of Poverello House (the “Organization”). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule.
The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the accrual basis of accounting, which is described in Note 2 of the Organizations financial statements.
NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the Organization’s financial statements.
NOTE 4 – INDIRECT COST RATE
The Organization has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
20 THIS PAGE IS LEFT BLANK INTENTIONALLY.
21 OTHER INDEPENDENT AUDITOR’S REPORTS
22 THIS PAGE IS LEFT BLANK INTENTIONALLY
23 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors of
Poverello House
Fresno, California
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 Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated May 26, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Poverello House’s internal control over financial reporting (internal control) as a basis for designing 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 Poverello House’s internal control. Accordingly, we do not express an opinion on the effectiveness of Poverello House’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.
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 assurance about whether Poverello House’s financial statements are free 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 24 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such 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. Accordingly, this communication is not suitable for any other purpose.
Clovis, California
May 26, 2022
25 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the Board of Directors of
Poverello House
Fresno, California
Report on Compliance for Each Major Federal Program
We have audited Poverello House’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Poverello House’s major federal programs for the year ended September 30, 2021. Poverello House’s major federal programs are 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Poverello House’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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 Poverello House’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 Poverello House’s compliance.
Opinion on Each Major Federal Program
In our opinion, Poverello House complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2021.
26 Report on Internal Control Over Compliance
Management of Poverello House is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Poverello House’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 the Uniform Guidance, 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 Poverello House’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 a 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 weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Clovis, California
May 26, 2022
27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS
POVERELLO HOUSE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
28 SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Noncompliance material to financial
statement noted? Yes X No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance
for major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200, Section 200.516(a) Yes X No
Identification of Major Programs
Federal Assistance Listing Number Name of Federal Program or Cluster
14.231 Emergency Solutions Grant
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as a low-risk auditee? Yes X No
$750,000
SECTION II – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION III – FEDERAL AWARD FINDINGS
None reported.
POVERELLO HOUSE
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
29 SECTION I – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION II – FEDERAL AWARD FINDINGS
None reported.
Part B - EXHIBIT E
Funding Commitment Letters
Part B - EXHIBIT F
Service Area Map
Part B, Exhibit D
Audited Financial Statement
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30, 2021 AND 2020
POVERELLO HOUSE
FRESNO, CALIFORNIA
SEPTEMBER 30, 2021 AND 2020
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT ......................................................................................................... 1 FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION ......................................................................................... 3 STATEMENT OF ACTIVITIES ............................................................................................................. 4 STATEMENT OF FUNCTIONAL EXPENSES ..................................................................................... 5 STATEMENTS OF CASH FLOWS ...................................................................................................... 6 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 7 SUPPLEMENTARY INFORMATION:
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ............................................................. 18 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .......................................... 19 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................................................. 23 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE ................................................................................................................. 25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS ........................................................................... 28 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS ............................................................................... 29 1 INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Poverello House
Fresno, California
Report on the Financial Statements
We have audited the accompanying financial statements of Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, 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.
Auditor’s 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 auditor’s 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 entity’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 entity’s internal control. Accordingly, we express no 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 Poverello House as of September 30, 2021, 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.
2 Report on Summarized Comparative Information
We have previously audited Poverello House’s 2020 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 18, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.
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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 May 26, 2022, on our consideration of Poverello House’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 solely 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 the effectiveness of Poverello House’s 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 Poverello House’s internal control over financial reporting and compliance.
Clovis, California
May 26, 2022
See Independent Auditor’s Report and Notes to the Financial Statements. 3 POVERELLO HOUSE
STATEMENTS OF FINANCIAL POSITION
SEPTEMBER 30, 2021 AND 2020
2021 2020
Assets
Current assets:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Prepaid expenses - 7,050
Total current assets 3,832,268 2,360,836
Investments 4,469,559 1,903,268
Property and equipment, net 5,644,581 4,802,249
Rehabilitation resident deposits 13,680 59,845
Total assets $ 13,960,088 $ 9,126,198
Liabilities and Net Assets
Current liabilities:
Accounts payable $ 229,565 $ 35,037
Accrued expenses 12,638 18,471
Accrued payroll and related 209,418 144,536
Loan payable, current portion - 73,388
Total current liabilities 525,009 198,044
Long-term liabilities:
Rehabilitation resident deposits 13,680 59,845
Loan payable, net of current portion - 320,694
Total long-term liabilities 334,374 59,845
Total liabilities 859,383 257,889
Net assets:
Without donor restrictions 9,792,172 8,722,336
With donor restrictions 3,308,533 145,973
Total net assets 13,100,705 8,868,309
Total liabilities and net assets $ 13,960,088 $ 9,126,198 See Independent Auditor’s Report and Notes to the Financial Statements. 4 POVERELLO HOUSE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Without Donor With Donor 2021 2020
Restrictions Restrictions Total Total
Revenue and Support
Contributions:
General $ 2,018,830 $ 959,964 $ 2,978,794 $ 2,690,442
Memorials and bequests 74,862 - 74,862 79,334
Donated in-kind materials and services (Note 10) 2,134,357 2,134,357 - 1,161,351 Contracts and grants:
Emergency Food and Shelter Program 326,926 326,926 - 167,040 Community of Hope 622,032 622,032 - 207,718
City of Fresno Emergency Shelter Grant 483,969 483,969 - - Kaiser Grant 150,000 - 150,000 70,000
County of Fresno Recidivism Grant 50,000 - 50,000 50,000 Grant Village Cares 169,896 169,896 - -
County of Fresno MAP Point 434,129 434,129 - 371,630
Triage Center 367,022 367,022 - 179,991
Homeless Family Services 64,612 - 64,612 63,401
Kings View 27,623 - 27,623 34,560
Government grant - - 246,300 -
Meal Reimbursements 1,059,520 1,059,520 - 559,222
Grant - CRG 47,419 - 47,419 -
Amazon Day 1 Grant 2,501,995 - 2,501,995 -
Mental Health Services Revenue 14,967 - 14,967 -
Special events 31 - 31 146,381
Investment income (loss), net (Note 5) 560,307 3,123 563,430 184,640 Miscellaneous income - 58,964 58,964 35,287
Total revenues and support before
net assets released from restriction 8,515,466 3,615,082 12,130,548 6,247,297 Net assets released from restriction (Note 9) 452,522 - (452,522) - Total revenues and support after
reclassification of net assets
released from restrictions 8,967,988 3,162,560 12,130,548 6,247,297 Costs and expenses:
Program services 7,252,189 - 7,252,189 3,653,561
Management and general 603,511 603,511 - 1,049,538
Fundraising - 42,452 42,452 164,612
Total costs and expenses - 7,898,152 7,898,152 4,867,711 Changes in net assets 1,069,836 3,162,560 4,232,396 1,379,586 Net assets, beginning of year 8,722,336 145,973 8,868,309 7,488,723 Net assets, end of year $ 9,792,172 $ 3,308,533 $ 13,100,705 $ 8,868,309 See Independent Auditor’s Report and Notes to the Financial Statements. 5 POVERELLO HOUSE
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Program Management 2021 Total 2020 Total
Services and General Fundraising Expenses Expenses
Costs and expenses:
Personnel costs:
Salaries $ 2,448,509 $ 113,498 $ 10,317 $ 2,572,324 $ 1,768,335 Employee benefits 398,449 19,098 1,735 419,282 256,441
Payroll taxes 207,865 9,253 841 217,959 157,762
Total personnel costs 3,054,823 141,849 12,893 3,209,565 2,182,538 Other costs and expenses:
In-kind materials and services 2,134,357 - 2,134,357 - 1,112,980 Advertising and promotion 4,684 62,041 426 67,151 20,628 Bank fees 17,054 - 17,054 - 18,213
Cold storage- - - - 50
Communications 40,152 2,117 192 42,461 20,732
Depreciation 175,934 50,928 4,630 231,492 206,442
Equipment lease 6,882 225 20 7,127 6,707
Food/kitchen supplies 566,575 - 566,575 - 317,323
Furniture/small office equipment 21,332 13,216 34,548 - 10,473 Homeless/client services 426,538 - 426,538 - 65,101
Hygiene/laundry/clothing - 2,102 - 2,102 8,774
Insurance 3,632 60,463 64,095 - 51,938
Miscellaneous 58,555 9,766 765 69,086 81,838
Newsletter - 19,003 - 19,003 40,015
Office expenses 53,279 40,072 609 93,960 59,955
Professional fees 57,217 149,909 207,126 - 225,243
Rent 24,662 - 24,662 - 22,775
Repairs and maintenance 170,350 71,992 2,290 244,632 73,369 Staff training - 135 - 135 433
Stipends 29,420 - 29,420 - 22,954
Taxes and licenses 4,132 23,370 27,502 - 11,987
Testing/education/life skills 29,808 - 29,808 - 16,393
Travel 2,266 - 2,266 - 11,989
Utilities 224,834 17,866 1,624 244,324 217,885
Vehicle fuel and maintenance - 103,163 - 103,163 60,976 Total costs and expenses $ 7,252,189 $ 603,511 $ 42,452 $ 7,898,152 $ 4,867,711 Supporting Services
See Independent Auditor’s Report and Notes to the Financial Statements. 6 POVERELLO HOUSE
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
Cash flows from operating activities:
Change in net assets $ 4,232,396 $ 1,379,586
Adjustments to reconcile change in net assets to
net cash provided from operating activities:
Depreciation 231,492 206,442
Unrealized gain on sale of investments (263,926) (77,504) Changes in:
Grants receivable (613,707) (31,412)
Pledges receivable (572,000) 47,500
Contracts receivable 22,880 -
Prepaid expenses (7,050) 37,611
Accounts payable 194,528 (17,738)
Accrued expenses (5,833) 13,397
Accrued payroll and related - 64,882
Net cash provided by (used in) operating activities 3,283,662 1,557,882 Cash flows from investing activities:
Purchase of property and equipment (1,073,824) (550,029) Purchase of investments (2,775,359) (597,720)
Proceeds from sale of investments 472,994 566,414
Net cash provided by (used in) investing activities (3,376,189) (581,335) Cash flows from financing activities:
Proceeds from loans payable - 400,000
Principal payments on loans payable (5,918) -
Net cash provided by (used in) financing activities - 394,082 Net increase (decrease) in cash 301,555 976,547
Cash and cash equivalents, beginning of year 1,880,455 903,908 Cash and cash equivalents, end of year $ 2,182,010 $ 1,880,455
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
7 NOTE 1 – ORGANIZATION AND OPERATIONS
Poverello House (the “Organization”) is a not-for-profit public benefit corporation in Fresno, California, whose mission is to feed the hungry, offer focused rehabilitation programs, temporary shelter, medical, dental and other basic services to the poor, the homeless, and the disadvantaged, unconditionally, without regard to race, color, religion, national origin, age, sex or disability. Support is provided primarily by donor contributions.
Poverello House is also a safe haven through its Naomi’s House program for single, homeless women in Fresno County. Naomi’s House is a 24-bed overnight shelter located on the Poverello House campus. In addition to overnight shelter, the women also receive food, clothing, and medical and psychosocial assessment and care.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Organization have been prepared on the accrual basis of accounting and in accordance with U.S. generally accepted accounting principles (“US GAAP”), which require the Organization to report information regarding its financial position and activities according to the following net asset classifications:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the Organization. These net assets may be used at the discretion of the Organization’s management and the Board of Directors.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors.
Some donor restrictions are temporary in nature; those restrictions will be met by action of the Organization or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
The Statement of Activities and Functional Expenses include certain prior year summarized comparative information in total. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended September 30, 2020, from which the summarized information was derived.
Adoption of New Accounting Standard
In May 2014, the FASB issued guidance (Accounting Standards Codification [ASC] 606, Revenue from Contracts with Customers) which provides a five-step analysis of contracts to determine when and how revenue is recognized and replaces most existing revenue recognition guidance in U.S. generally accepted accounting principles. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASC 606 is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Organization adopted ASC 606 with a date of the initial application of October 1, 2020.
The Organization applied ASC 606 using the cumulative effect method, which resulted in recognizing the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of net assets at October 1, 2020. The details of the significant changes and quantitative impact of the changes are discussed below.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
8 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Adoption of New Accounting Standard (Continued)
As part of the adoption of ASC 606, the Organization elected to use the following transition practical expedients:
(1) all contract modifications that occurred prior to the date of initial application when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price have been reflected in the aggregate; and (2) ASC 606 is applied only to contracts that are not completed at the initial date of application. Because contract modifications are minimal, there is not a significant impact as a result of electing these practical expedients.
There were no significant changes that resulted from the adoption of ASC 606. The adoption of the new accounting policy did not have a significant impact on change in net assets, and therefore, there was no adjustment to the opening balance of net assets. The Organization does not expect the adoption of the new revenue standard to have a material impact on its change in net assets on an ongoing basis.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents.
Investments
Investments are stated at their estimated fair value based on quoted closing prices. Investments that are managed on a long-term basis or which are not expected to be used in the Organization’s operations within the year following the balance sheet date are classified as noncurrent.
Allowance for Doubtful Accounts
Receivables are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to receivable. At September 30, 2021 and 2020, the Organization considers all amounts to be fully collectible; therefore, no allowance for doubtful accounts is reflected.
Pledges Receivable
Unconditional pledges receivable from donors that are expected to be collected within one year are recorded at net realizable value. Long-term pledges receivable that are expected to be collected in a period beyond one year are recorded at a discount using the present value of their estimated future cash flows. The discounts on long-term pledges receivable are computed using risk-free interest rates applicable to the period in which the pledges are received.
Contracts Receivable
Contracts receivable consist of amounts owed by various organizations for prepared meals, as defined in the memorandums of understanding, that have not been received by the Organization. The carrying amount of contracts receivable approximates net present value.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value of Financial Instruments
The Organization considers its cash, grants and pledges receivable, prepaid expenses, accounts payable and accrued expenses to be short-term in nature, and therefore their fair values approximate their carrying values.
Property and Equipment
Property and equipment are stated at cost or, if donated and placed into service, at their estimated fair value at the date donated. The Organization’s policy is to capitalize assets with an individual value of $5,000 or greater.
Routine repairs and maintenance, including planned major maintenance activities are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
Donations of property and equipment are recorded without donor restriction unless the donor restricts the donated asset to a specific purpose. Assets donated with explicit restriction regarding their use, and contributions of cash that must be used to acquire property and equipment, are reported with donor restriction.
Rehabilitation Resident Deposits
The Organization at times holds outside cash deposits for residents in its Rehabilitation Program. This cash is maintained in a separate bank account until such time as the residents request withdrawal of their funds.
Revenue Recognition
The Organization recognizes revenue when services are rendered. A receivable is recorded to the extent the amount earned exceeds cash advances. Conversely, a liability is recorded when cash advances exceed amounts earned.
Funding sources may, at their discretion, request reimbursement for expenses or return of funds, or both, as a result of noncompliance by the Organization with the terms of the grants or contracts. Additionally, if the Organization terminates its activities, all unearned amounts are to be returned to the funding sources.
Contributions
All contributions received are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or are restricted by the donor for specific purposes are reported as increases in net assets with donor restriction. Unconditional promises to give that are silent as to the due date are presumed to be time restricted by the donor until received and are reported as net assets with donor restriction.
All donor-restricted support is reported as an increase in net assets with donor restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), net assets with donor restriction are reclassified to net assets without donor restriction and reported in the statement of activities as net assets released from restriction.
Donated In-Kind Materials and Services
The Organization receives various donated materials and services. The estimated fair value of the donation is recorded as support and expense in the period received.
Donated services are recognized as contributions if they significantly enhance non-financial assets or involve a professional service that would otherwise have been purchased and whose values can be objectively measured.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
10 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Advertising and Promotion
The Organization expenses all advertising and promotion costs as incurred. Total advertising and promotion expenses at September 30, 2021 and 2020 were $67,151 and $20,628, respectively.
Functional Allocation of Expenses
The costs of providing the Organization’s programs and supporting services have been summarized on a functional basis in the Statement of Functional Expenses. Certain overhead and indirect costs have been allocated to program services and fundraising based on management’s estimate of the actual personnel and facilities utilized in such activities. Management and general include those expenses that are not directly identifiable with any specific program but provide for the overall support and direction of the Organization.
The expenses allocated consist of the following:
Expense Method of Allocation
Salaries Time and effort
Payroll benefits Time and effort
Payroll taxes Time and effort
Communications Time and effort
Depreciation Time and effort
Equipment lease Time and effort
Miscellaneous Time and effort
Office expenses Time and effort
Repairs/maintenance Time and effort
Utilities Time and effort
Taxes
Poverello House has qualified as a not-for-profit organization and has been granted tax-exempt status pursuant to Internal Revenue Code Section 501(c)(3) and California Revenue and Taxation Code Section 23701(d) and is exempt from Federal and State of California income taxes.
Generally accepted accounting principles provide accounting and disclosures guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed. Unrelated business income tax, if any, is insignificant and no provision for income taxes has been made.
Use of Estimates
The preparation of financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net assets or cash flows at September 30, 2020.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
11 NOTE 3 – AVAILABILITY AND LIQUIDITY
The following represents the Organization’s financial assets at September 30:
2021 2020
Financial assets at year end:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Investments 4,469,559 1,903,268
Total financial assets 8,294,777 4,264,104
Less amounts not available to be used within one year:
Donor-restricted with liquidity horizons greater than one year (3,308,533) (145,973) Financial assets available to meet general expenditures over the next twelve months $ 4,986,244 $ 4,118,131
The Organization has not adopted an official liquidity management plan or cash maintenance policy. However, cash, cash equivalents, and short/long-term investments are reviewed regularly. These are adjusted, as needed, to account for immediate cash needs, assess risk, and maximize return. Consistent with previous years, the Organization conservatively maintains sufficient liquidity to meet its operating requirements and perform its mission. The Executive staff of the Organization and the Board of Directors may consider adopting formalized plans/policies as the need arises.
NOTE 4 – PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following at September 30:
2021 2020
Land and buildings $ 4,485,251 $ 4,463,636
Building improvements 656,457 302,447
Building expansion 1,357,688 1,357,688
Resident Housing 215,502 215,502
Furniture, fixtures and equipment 547,499 496,636
Vehicles 402,816 301,228
Construction in progress - 520,364
8,185,577 7,137,137
Accumulated depreciation (2,540,996) (2,334,888)
Property and equipment, net $ 5,644,581 $ 4,802,249
Total depreciation expense was $231,492 and $206,442 at September 30, 2021 and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
12 NOTE 5 – INVESTMENT SECURITIES
Investment securities consist of the following at September 30:
2021 2020
Fixed income $ 2,443,057 $ 342,858
Equity securities 2,026,502 1,560,410
Total investments $ 4,469,559 $ 1,903,268
Fair Value
2021 2020
Unrestricted investments $ 4,459,079 $ 1,884,004
Restricted investments 10,480 19,264
Total investments $ 4,469,559 $ 1,903,268
The following schedule summarizes the investment return in the statement of activities at September 30:
Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 60,786 $ 60,787 1 $
Realized gains (losses) 266,003 266,003 -
Unrealized gains (losses) 260,804 3,122 263,926
Investment fees - (27,286) (27,286)
Total investment income, net $ 560,307 $ 3,123 $ 563,430 Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 38,362 $ 119 $ 38,481
Realized gains (losses) 91,068 91,068 -
Unrealized gains (losses) 74,742 2,762 77,504
Investment fees - (22,413) (22,413)
Total investment income, net $ 181,759 $ 2,881 $ 184,640 2021
2020
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
13 NOTE 6 – FAIR VALUE MEASUREMENTS
In accordance with generally accepted accounting principles, fair value is defined as the price that the entity would receive upon selling an asset or pay to transfer a liability at the reporting date. Generally accepted accounting principles establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs, and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available.
The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly, and fair value is determined through the use of other valuation methodologies.
Level 3 – Valuations based on inputs that are not observable and significant to the overall fair value measurement, including the entity’s own assumptions in determining the fair value of assets or liabilities.
The table below presents the level within the fair value hierarchy at which investments are measured at September 30:
Total Level 1 Level 2 Level 3
Fixed income $ 2,443,057 $ 2,443,057 $ - $ -
Equity securities 2,026,502 - 2,026,502 -
Total investments at fair value $ 4,469,559 $ - 4,469,559 $ - $ Total Level 1 Level 2 Level 3
Fixed income $ 342,858 $ 342,858 $ - $ -
Equity securities 1,560,410 - 1,560,410 -
Total investments at fair value $ 1,903,268 $ - 1,903,268 $ - $ 2020
2021
Description
NOTE 7 – RETIREMENT PLAN
The Organization maintains a Simple IRA plan and provides a match of up to 3% of employee elective deferrals.
Amounts paid for retirement were $33,103 and $20,171 in the years ended September 30, 2021, and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
14 NOTE 8 – COMMITMENTS
The Organization leases various office equipment under operating lease agreements. The operating leases have term expiration dates through 2025.
The Organization’s future minimum lease commitments are as follows for September 30:
Year Ending:
2022 $ 22,958
2023 22,958
2024 22,958
2025 15,874
$ 84,748
Total rent expenses were $31,789 and $29,482 for the years ended September 30, 2021 and 2020, respectively. In the normal course of business, operating leases are generally renewed or replaced by other leases.
NOTE 9 – NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions consisted of the following at September 30:
2021 2020
Time restrictions:
Estate distributions receivable 16,323 $ $ 16,323
Charitable trust promise to give 600,000 19,000
Purpose restrictions:
McMurray Family Medical Fund 10,480 10,478
Seligman Fund 8,785 -
G.L. Bruno & Associates 10,000 -
Kaiser 19,760 -
Amazon Day 1 Family Fund 2,501,995 -
Other various 159,975 81,387
Total net assets with donor restrictions $ 3,308,533 $ 145,973 Net assets released from donor restriction by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors are as follows for the years ended September 30:
2021 2020
Time restriction expired:
Passage of specified time 32,123 $ $ -
Purpose restriction accomplished:
Capital projects 115,774 108,729
Program expenses 304,625 215,896
Total net assets released from restrictions $ 452,522 $ 324,625
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
15 NOTE 10 – DONATED MATERIALS AND SERVICES
Donated materials and services consist of the following for the years ended September 30:
2021 2020
Without donor restrictions:
Food $ 1,729,228 $ 904,583
Goods 401,216 253,768
Services and discounts 3,913 3,000
Total donated materials and services 2,134,357 $ $ 1,161,351 NOTE 11 – CREDIT RISK
The Organization maintains cash balances in bank accounts with financial institutions insured by the Federal Deposit Insurance Corporation. At September 30, 2021 and 2020, the Organization had uninsured cash balances of $1,332,745 and $1,575,693, respectively.
NOTE 12 – LOAN PAYABLE
On April 28, 2021, the Organization entered into a loan agreement with Central Valley Community Bank in the amount of $400,000 with an interest rate of 4.5%. The loan calls for four consecutive interest only monthly payments commencing May 27, 2021 and principal and interest monthly payments of $7,468 commencing September 27, 2021. The loan matures on August 27, 2026 and is secured by solar panels. The remaining balance on the loan at September 30, 2021 is $394,082.
The future minimum principal payments under the Organization’s loan payable for the years ending September 30 are as follows:
2022 $ 73,388
2023 76,759
2024 80,285
2025 83,974
2026 79,676
$ 394,082
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
16 NOTE 13 – CONTRACTS WITH CUSTOMERS
Revenue from performance obligations satisfied at a point in time consists of the following at September 30:
2021 2020
Meal reimbursements $ 1,059,520 $ 559,222
Contract assets include meals reimbursement from various organizations. Contract assets are as follows:
09/30/2021 09/30/2020 10/1/2019
Closing Balance Closing Balance Opening Balance
Contract assets:
Contracts receivable $ 158,290 $ 181,170 $ 44,100
NOTE 14 – UNCERTAINTY
On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus, COVID-19, a pandemic. Accordingly, some of the Organization’s operations were limited to protect the health and safety of its clients and employees. The financial impact on the Organization that could occur as a result of the pandemic is unknown at this time.
NOTE 15 – SUBSEQUENT EVENTS
On March 23, 2022, the Organization purchased a building for $1,100,000 using donor restricted funds. The intended use of the property will be to establish a family homeless shelter.
Management has evaluated and concluded that there are no other subsequent events that have occurred from September 30, 2021 through the date the financial statements were available to be issued on May 26, 2022, that would require additional disclosure or adjustment. 17 SUPPLEMENTARY INFORMATION
POVERELLO HOUSE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
18 U.S. Department of Housing and Urban Development
Pass-Through Programs from City of Fresno:
Emergency Solutions Grant 14.231 * $ 108,544
Emergency Solutions Grant 14.231 * 191,135
Emergency Solutions Grant 14.231 * 184,290
Total US Department of Housing and Urban Development 483,969 U.S. Department of Homeland Security
Emergency Food and Shelter National Board Program 97.024 326,926 Total US Department of Homeland Security 326,926
Other Programs
Pass-Through Programs from County of Fresno:
Community of Hope Unknown 169,896
Village of Hope, CARES Unknown 226,938
Total Other Programs 396,834
Total Expenditures of Federal Awards $ 1,207,729
*Denotes a major program per Uniform Guidance
Total
Expenditures
Federal Assistance
Federal Grantor/Program or Cluster Title Listing Number
POVERELLO HOUSE
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2021
19 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of Poverello House (the “Organization”). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule.
The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the accrual basis of accounting, which is described in Note 2 of the Organizations financial statements.
NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the Organization’s financial statements.
NOTE 4 – INDIRECT COST RATE
The Organization has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
20 THIS PAGE IS LEFT BLANK INTENTIONALLY.
21 OTHER INDEPENDENT AUDITOR’S REPORTS
22 THIS PAGE IS LEFT BLANK INTENTIONALLY
23 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors of
Poverello House
Fresno, California
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 Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated May 26, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Poverello House’s internal control over financial reporting (internal control) as a basis for designing 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 Poverello House’s internal control. Accordingly, we do not express an opinion on the effectiveness of Poverello House’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.
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 assurance about whether Poverello House’s financial statements are free 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 24 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such 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. Accordingly, this communication is not suitable for any other purpose.
Clovis, California
May 26, 2022
25 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the Board of Directors of
Poverello House
Fresno, California
Report on Compliance for Each Major Federal Program
We have audited Poverello House’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Poverello House’s major federal programs for the year ended September 30, 2021. Poverello House’s major federal programs are 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Poverello House’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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 Poverello House’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 Poverello House’s compliance.
Opinion on Each Major Federal Program
In our opinion, Poverello House complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2021.
26 Report on Internal Control Over Compliance
Management of Poverello House is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Poverello House’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 the Uniform Guidance, 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 Poverello House’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 a 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 weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Clovis, California
May 26, 2022
27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS
POVERELLO HOUSE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
28 SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Noncompliance material to financial
statement noted? Yes X No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance
for major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200, Section 200.516(a) Yes X No
Identification of Major Programs
Federal Assistance Listing Number Name of Federal Program or Cluster
14.231 Emergency Solutions Grant
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as a low-risk auditee? Yes X No
$750,000
SECTION II – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION III – FEDERAL AWARD FINDINGS
None reported.
POVERELLO HOUSE
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
29 SECTION I – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION II – FEDERAL AWARD FINDINGS
None reported.
Part B, Exhibit E
Funding Commitment Letters
Part B, Exhibit F
Service Area Map
Part A, Exhibit 1
Organizations U.S. Internal Revenue Service 501 ( C ) (3) Determination of Exemptions Letter
Part A, Exhibit 2
Organization’s Articles of Incorporation
Part A, Exhibit 3
Bylaws of the Organization
Part A, Exhibit 5
List of Directors and Officers
PRASHANT PATEL Board Chair [email protected]
C: 559‐281‐2577
4770 E Kings Cyn Rd Finance Committee
Fresno, CA 93702 Gala Committee
BANKING Special Projects
CHARLES FARNSWORTH 1st VP [email protected]
C: 559‐493‐0597
2819 E Magill Ave Finance Committee
Fresno, CA 93710 Nominating & Inclusions
C.P.A. Committee
DR. TUSHAR PATEL 2nd VP [email protected] C: 559‐349‐9092 9715 N Willey Court Finance Committee
Fresno, CA 93720 Gala Committee
MEDICAL
HANK BENNETT Treasurer [email protected] C: 559‐285‐1545 9778 N Yorkstown Dr Finance Committee
Fresno, CA 93270 Gala Committee
AGRICULTURE
PAULA CAPOZZI Secretary [email protected] C: 559‐307‐4749 3753 W Birch Ave Gala Committee
Fresno, CA 93711
PUBLIC RELATIONS
CURTIS DAVIES Past Chair [email protected] C: 559‐978‐2331 5755 E Kings Cyn Rd #110 Finance Committee
Fresno, CA 93727
GENERAL CONTRACTOR
ROBERT VENESKI Nominating & Inclusions [email protected] C: 559‐285‐7034 540 E Chesapeake Cir Committee
Fresno, CA 93730
MEDICAL ‐ PUBLIC RELATIONS
NICK AMENDOLA [email protected] C: 559‐240‐5302 7605 N Laguna Vista Ave
Fresno, CA 93711
BEVERAGE DISTRIBUTION
CONSTANCE JONES Nominating & Inclusions [email protected] C: 559‐477‐7814 1329 E Austin Way Committee
Fresno, CA 93704
PSYCHOLOGY & EDUCATION
BOARD MEMBERS
POVERELLO HOUSE BOARD MEMBERS 2023‐24
EXECUTIVE BOARD MEMBERS
ADAM MENDES [email protected] C: 559‐960‐6518
2182 W San Ramon
Fresno, CA 93711
AGRICULTURE
ANDREW SLATER [email protected] C: 559‐432‐4500
8080 N Palm Ave 3rd Floor
Fresno, CA 93711
LEGAL
KEN RAMOS Gala Committee [email protected] C: 559‐681‐7790 7450 N Gilroy Ave
Fresno, CA 93722
BANKING
BECKY NELSON Gala Committee rgln‐[email protected] C: 559‐355‐9663 5403 E Bellaire Way
Frenso, CA 93727
PSYCHOLOGY
MARC' BADY Finance Committee [email protected] C: 901‐569‐0703 336 N Amendo Ln
Clovis, CA 93611
DIVERSITY & INCLUSION
DR. MANAVJEET SIDHU [email protected] C: 818‐825‐0817 2615 E Clinton Ave
Fresno, CA 93703
MEDICAL
VICTOR THAO Gala Committee [email protected] C: 559‐355‐7294 1837 N Megan Ave
Clovis, CA 93619
BANKING
DR. MICKEY SACHDEVA [email protected] C: 559‐579‐9726 7300 N Fresno St
Fresno, CA 93701
MEDICAL
SHARIF ELKHALDY Finance Committee [email protected] C: 559‐261‐8650 423 E Balfour Ave
Fresno, CA 93702
BANKING
JOHN FRYE Finance Committee [email protected] C: 559‐974‐1530 Ex‐Board Member
RETIRED/HEALTH CARE
JIM DEVANY Finance Committee [email protected] C: 559‐351‐0121 Ex‐Board Member
REAL ESTATE/PROPERTY MGNT.
PAT BRADLEY Finance Committee [email protected] C: 559‐226‐4700 Ex‐Board Member
INSURANCE
POVERELLO HOUSE FINANCE COMMITTEE NON BOARD MEMBERS
Part A, Exhibit 6
Most Recent Audited Financial Statements
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30, 2021 AND 2020
POVERELLO HOUSE
FRESNO, CALIFORNIA
SEPTEMBER 30, 2021 AND 2020
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT ......................................................................................................... 1 FINANCIAL STATEMENTS:
STATEMENTS OF FINANCIAL POSITION ......................................................................................... 3 STATEMENT OF ACTIVITIES ............................................................................................................. 4 STATEMENT OF FUNCTIONAL EXPENSES ..................................................................................... 5 STATEMENTS OF CASH FLOWS ...................................................................................................... 6 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................... 7 SUPPLEMENTARY INFORMATION:
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ............................................................. 18 NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .......................................... 19 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................................................. 23 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE ................................................................................................................. 25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS ........................................................................... 28 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS ............................................................................... 29 1 INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Poverello House
Fresno, California
Report on the Financial Statements
We have audited the accompanying financial statements of Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, 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.
Auditor’s 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 auditor’s 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 entity’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 entity’s internal control. Accordingly, we express no 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 Poverello House as of September 30, 2021, 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.
2 Report on Summarized Comparative Information
We have previously audited Poverello House’s 2020 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 18, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.
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 Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 May 26, 2022, on our consideration of Poverello House’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 solely 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 the effectiveness of Poverello House’s 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 Poverello House’s internal control over financial reporting and compliance.
Clovis, California
May 26, 2022
See Independent Auditor’s Report and Notes to the Financial Statements. 3 POVERELLO HOUSE
STATEMENTS OF FINANCIAL POSITION
SEPTEMBER 30, 2021 AND 2020
2021 2020
Assets
Current assets:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Prepaid expenses - 7,050
Total current assets 3,832,268 2,360,836
Investments 4,469,559 1,903,268
Property and equipment, net 5,644,581 4,802,249
Rehabilitation resident deposits 13,680 59,845
Total assets $ 13,960,088 $ 9,126,198
Liabilities and Net Assets
Current liabilities:
Accounts payable $ 229,565 $ 35,037
Accrued expenses 12,638 18,471
Accrued payroll and related 209,418 144,536
Loan payable, current portion - 73,388
Total current liabilities 525,009 198,044
Long-term liabilities:
Rehabilitation resident deposits 13,680 59,845
Loan payable, net of current portion - 320,694
Total long-term liabilities 334,374 59,845
Total liabilities 859,383 257,889
Net assets:
Without donor restrictions 9,792,172 8,722,336
With donor restrictions 3,308,533 145,973
Total net assets 13,100,705 8,868,309
Total liabilities and net assets $ 13,960,088 $ 9,126,198 See Independent Auditor’s Report and Notes to the Financial Statements. 4 POVERELLO HOUSE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Without Donor With Donor 2021 2020
Restrictions Restrictions Total Total
Revenue and Support
Contributions:
General $ 2,018,830 $ 959,964 $ 2,978,794 $ 2,690,442
Memorials and bequests 74,862 - 74,862 79,334
Donated in-kind materials and services (Note 10) 2,134,357 2,134,357 - 1,161,351 Contracts and grants:
Emergency Food and Shelter Program 326,926 326,926 - 167,040 Community of Hope 622,032 622,032 - 207,718
City of Fresno Emergency Shelter Grant 483,969 483,969 - - Kaiser Grant 150,000 - 150,000 70,000
County of Fresno Recidivism Grant 50,000 - 50,000 50,000 Grant Village Cares 169,896 169,896 - -
County of Fresno MAP Point 434,129 434,129 - 371,630
Triage Center 367,022 367,022 - 179,991
Homeless Family Services 64,612 - 64,612 63,401
Kings View 27,623 - 27,623 34,560
Government grant - - 246,300 -
Meal Reimbursements 1,059,520 1,059,520 - 559,222
Grant - CRG 47,419 - 47,419 -
Amazon Day 1 Grant 2,501,995 - 2,501,995 -
Mental Health Services Revenue 14,967 - 14,967 -
Special events 31 - 31 146,381
Investment income (loss), net (Note 5) 560,307 3,123 563,430 184,640 Miscellaneous income - 58,964 58,964 35,287
Total revenues and support before
net assets released from restriction 8,515,466 3,615,082 12,130,548 6,247,297 Net assets released from restriction (Note 9) 452,522 - (452,522) - Total revenues and support after
reclassification of net assets
released from restrictions 8,967,988 3,162,560 12,130,548 6,247,297 Costs and expenses:
Program services 7,252,189 - 7,252,189 3,653,561
Management and general 603,511 603,511 - 1,049,538
Fundraising - 42,452 42,452 164,612
Total costs and expenses - 7,898,152 7,898,152 4,867,711 Changes in net assets 1,069,836 3,162,560 4,232,396 1,379,586 Net assets, beginning of year 8,722,336 145,973 8,868,309 7,488,723 Net assets, end of year $ 9,792,172 $ 3,308,533 $ 13,100,705 $ 8,868,309 See Independent Auditor’s Report and Notes to the Financial Statements. 5 POVERELLO HOUSE
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(With Summarized Financial Information for 2020)
Program Management 2021 Total 2020 Total
Services and General Fundraising Expenses Expenses
Costs and expenses:
Personnel costs:
Salaries $ 2,448,509 $ 113,498 $ 10,317 $ 2,572,324 $ 1,768,335 Employee benefits 398,449 19,098 1,735 419,282 256,441
Payroll taxes 207,865 9,253 841 217,959 157,762
Total personnel costs 3,054,823 141,849 12,893 3,209,565 2,182,538 Other costs and expenses:
In-kind materials and services 2,134,357 - 2,134,357 - 1,112,980 Advertising and promotion 4,684 62,041 426 67,151 20,628 Bank fees 17,054 - 17,054 - 18,213
Cold storage- - - - 50
Communications 40,152 2,117 192 42,461 20,732
Depreciation 175,934 50,928 4,630 231,492 206,442
Equipment lease 6,882 225 20 7,127 6,707
Food/kitchen supplies 566,575 - 566,575 - 317,323
Furniture/small office equipment 21,332 13,216 34,548 - 10,473 Homeless/client services 426,538 - 426,538 - 65,101
Hygiene/laundry/clothing - 2,102 - 2,102 8,774
Insurance 3,632 60,463 64,095 - 51,938
Miscellaneous 58,555 9,766 765 69,086 81,838
Newsletter - 19,003 - 19,003 40,015
Office expenses 53,279 40,072 609 93,960 59,955
Professional fees 57,217 149,909 207,126 - 225,243
Rent 24,662 - 24,662 - 22,775
Repairs and maintenance 170,350 71,992 2,290 244,632 73,369 Staff training - 135 - 135 433
Stipends 29,420 - 29,420 - 22,954
Taxes and licenses 4,132 23,370 27,502 - 11,987
Testing/education/life skills 29,808 - 29,808 - 16,393
Travel 2,266 - 2,266 - 11,989
Utilities 224,834 17,866 1,624 244,324 217,885
Vehicle fuel and maintenance - 103,163 - 103,163 60,976 Total costs and expenses $ 7,252,189 $ 603,511 $ 42,452 $ 7,898,152 $ 4,867,711 Supporting Services
See Independent Auditor’s Report and Notes to the Financial Statements. 6 POVERELLO HOUSE
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
Cash flows from operating activities:
Change in net assets $ 4,232,396 $ 1,379,586
Adjustments to reconcile change in net assets to
net cash provided from operating activities:
Depreciation 231,492 206,442
Unrealized gain on sale of investments (263,926) (77,504) Changes in:
Grants receivable (613,707) (31,412)
Pledges receivable (572,000) 47,500
Contracts receivable 22,880 -
Prepaid expenses (7,050) 37,611
Accounts payable 194,528 (17,738)
Accrued expenses (5,833) 13,397
Accrued payroll and related - 64,882
Net cash provided by (used in) operating activities 3,283,662 1,557,882 Cash flows from investing activities:
Purchase of property and equipment (1,073,824) (550,029) Purchase of investments (2,775,359) (597,720)
Proceeds from sale of investments 472,994 566,414
Net cash provided by (used in) investing activities (3,376,189) (581,335) Cash flows from financing activities:
Proceeds from loans payable - 400,000
Principal payments on loans payable (5,918) -
Net cash provided by (used in) financing activities - 394,082 Net increase (decrease) in cash 301,555 976,547
Cash and cash equivalents, beginning of year 1,880,455 903,908 Cash and cash equivalents, end of year $ 2,182,010 $ 1,880,455
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
7 NOTE 1 – ORGANIZATION AND OPERATIONS
Poverello House (the “Organization”) is a not-for-profit public benefit corporation in Fresno, California, whose mission is to feed the hungry, offer focused rehabilitation programs, temporary shelter, medical, dental and other basic services to the poor, the homeless, and the disadvantaged, unconditionally, without regard to race, color, religion, national origin, age, sex or disability. Support is provided primarily by donor contributions.
Poverello House is also a safe haven through its Naomi’s House program for single, homeless women in Fresno County. Naomi’s House is a 24-bed overnight shelter located on the Poverello House campus. In addition to overnight shelter, the women also receive food, clothing, and medical and psychosocial assessment and care.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Organization have been prepared on the accrual basis of accounting and in accordance with U.S. generally accepted accounting principles (“US GAAP”), which require the Organization to report information regarding its financial position and activities according to the following net asset classifications:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions and may be expended for any purpose in performing the primary objectives of the Organization. These net assets may be used at the discretion of the Organization’s management and the Board of Directors.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors.
Some donor restrictions are temporary in nature; those restrictions will be met by action of the Organization or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
The Statement of Activities and Functional Expenses include certain prior year summarized comparative information in total. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organization’s financial statements for the year ended September 30, 2020, from which the summarized information was derived.
Adoption of New Accounting Standard
In May 2014, the FASB issued guidance (Accounting Standards Codification [ASC] 606, Revenue from Contracts with Customers) which provides a five-step analysis of contracts to determine when and how revenue is recognized and replaces most existing revenue recognition guidance in U.S. generally accepted accounting principles. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. ASC 606 is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Organization adopted ASC 606 with a date of the initial application of October 1, 2020.
The Organization applied ASC 606 using the cumulative effect method, which resulted in recognizing the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of net assets at October 1, 2020. The details of the significant changes and quantitative impact of the changes are discussed below.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
8 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Adoption of New Accounting Standard (Continued)
As part of the adoption of ASC 606, the Organization elected to use the following transition practical expedients:
(1) all contract modifications that occurred prior to the date of initial application when identifying the satisfied and unsatisfied performance obligations, determining the transaction price, and allocating the transaction price have been reflected in the aggregate; and (2) ASC 606 is applied only to contracts that are not completed at the initial date of application. Because contract modifications are minimal, there is not a significant impact as a result of electing these practical expedients.
There were no significant changes that resulted from the adoption of ASC 606. The adoption of the new accounting policy did not have a significant impact on change in net assets, and therefore, there was no adjustment to the opening balance of net assets. The Organization does not expect the adoption of the new revenue standard to have a material impact on its change in net assets on an ongoing basis.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash equivalents.
Investments
Investments are stated at their estimated fair value based on quoted closing prices. Investments that are managed on a long-term basis or which are not expected to be used in the Organization’s operations within the year following the balance sheet date are classified as noncurrent.
Allowance for Doubtful Accounts
Receivables are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to receivable. At September 30, 2021 and 2020, the Organization considers all amounts to be fully collectible; therefore, no allowance for doubtful accounts is reflected.
Pledges Receivable
Unconditional pledges receivable from donors that are expected to be collected within one year are recorded at net realizable value. Long-term pledges receivable that are expected to be collected in a period beyond one year are recorded at a discount using the present value of their estimated future cash flows. The discounts on long-term pledges receivable are computed using risk-free interest rates applicable to the period in which the pledges are received.
Contracts Receivable
Contracts receivable consist of amounts owed by various organizations for prepared meals, as defined in the memorandums of understanding, that have not been received by the Organization. The carrying amount of contracts receivable approximates net present value.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fair Value of Financial Instruments
The Organization considers its cash, grants and pledges receivable, prepaid expenses, accounts payable and accrued expenses to be short-term in nature, and therefore their fair values approximate their carrying values.
Property and Equipment
Property and equipment are stated at cost or, if donated and placed into service, at their estimated fair value at the date donated. The Organization’s policy is to capitalize assets with an individual value of $5,000 or greater.
Routine repairs and maintenance, including planned major maintenance activities are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
Donations of property and equipment are recorded without donor restriction unless the donor restricts the donated asset to a specific purpose. Assets donated with explicit restriction regarding their use, and contributions of cash that must be used to acquire property and equipment, are reported with donor restriction.
Rehabilitation Resident Deposits
The Organization at times holds outside cash deposits for residents in its Rehabilitation Program. This cash is maintained in a separate bank account until such time as the residents request withdrawal of their funds.
Revenue Recognition
The Organization recognizes revenue when services are rendered. A receivable is recorded to the extent the amount earned exceeds cash advances. Conversely, a liability is recorded when cash advances exceed amounts earned.
Funding sources may, at their discretion, request reimbursement for expenses or return of funds, or both, as a result of noncompliance by the Organization with the terms of the grants or contracts. Additionally, if the Organization terminates its activities, all unearned amounts are to be returned to the funding sources.
Contributions
All contributions received are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or are restricted by the donor for specific purposes are reported as increases in net assets with donor restriction. Unconditional promises to give that are silent as to the due date are presumed to be time restricted by the donor until received and are reported as net assets with donor restriction.
All donor-restricted support is reported as an increase in net assets with donor restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), net assets with donor restriction are reclassified to net assets without donor restriction and reported in the statement of activities as net assets released from restriction.
Donated In-Kind Materials and Services
The Organization receives various donated materials and services. The estimated fair value of the donation is recorded as support and expense in the period received.
Donated services are recognized as contributions if they significantly enhance non-financial assets or involve a professional service that would otherwise have been purchased and whose values can be objectively measured.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
10 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Advertising and Promotion
The Organization expenses all advertising and promotion costs as incurred. Total advertising and promotion expenses at September 30, 2021 and 2020 were $67,151 and $20,628, respectively.
Functional Allocation of Expenses
The costs of providing the Organization’s programs and supporting services have been summarized on a functional basis in the Statement of Functional Expenses. Certain overhead and indirect costs have been allocated to program services and fundraising based on management’s estimate of the actual personnel and facilities utilized in such activities. Management and general include those expenses that are not directly identifiable with any specific program but provide for the overall support and direction of the Organization.
The expenses allocated consist of the following:
Expense Method of Allocation
Salaries Time and effort
Payroll benefits Time and effort
Payroll taxes Time and effort
Communications Time and effort
Depreciation Time and effort
Equipment lease Time and effort
Miscellaneous Time and effort
Office expenses Time and effort
Repairs/maintenance Time and effort
Utilities Time and effort
Taxes
Poverello House has qualified as a not-for-profit organization and has been granted tax-exempt status pursuant to Internal Revenue Code Section 501(c)(3) and California Revenue and Taxation Code Section 23701(d) and is exempt from Federal and State of California income taxes.
Generally accepted accounting principles provide accounting and disclosures guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed. Unrelated business income tax, if any, is insignificant and no provision for income taxes has been made.
Use of Estimates
The preparation of financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net assets or cash flows at September 30, 2020.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
11 NOTE 3 – AVAILABILITY AND LIQUIDITY
The following represents the Organization’s financial assets at September 30:
2021 2020
Financial assets at year end:
Cash and cash equivalents $ 2,182,010 $ 1,880,455
Grants receivable 868,599 254,892
Pledges receivable 616,319 44,319
Contracts receivable 158,290 181,170
Investments 4,469,559 1,903,268
Total financial assets 8,294,777 4,264,104
Less amounts not available to be used within one year:
Donor-restricted with liquidity horizons greater than one year (3,308,533) (145,973) Financial assets available to meet general expenditures over the next twelve months $ 4,986,244 $ 4,118,131
The Organization has not adopted an official liquidity management plan or cash maintenance policy. However, cash, cash equivalents, and short/long-term investments are reviewed regularly. These are adjusted, as needed, to account for immediate cash needs, assess risk, and maximize return. Consistent with previous years, the Organization conservatively maintains sufficient liquidity to meet its operating requirements and perform its mission. The Executive staff of the Organization and the Board of Directors may consider adopting formalized plans/policies as the need arises.
NOTE 4 – PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following at September 30:
2021 2020
Land and buildings $ 4,485,251 $ 4,463,636
Building improvements 656,457 302,447
Building expansion 1,357,688 1,357,688
Resident Housing 215,502 215,502
Furniture, fixtures and equipment 547,499 496,636
Vehicles 402,816 301,228
Construction in progress - 520,364
8,185,577 7,137,137
Accumulated depreciation (2,540,996) (2,334,888)
Property and equipment, net $ 5,644,581 $ 4,802,249
Total depreciation expense was $231,492 and $206,442 at September 30, 2021 and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
12 NOTE 5 – INVESTMENT SECURITIES
Investment securities consist of the following at September 30:
2021 2020
Fixed income $ 2,443,057 $ 342,858
Equity securities 2,026,502 1,560,410
Total investments $ 4,469,559 $ 1,903,268
Fair Value
2021 2020
Unrestricted investments $ 4,459,079 $ 1,884,004
Restricted investments 10,480 19,264
Total investments $ 4,469,559 $ 1,903,268
The following schedule summarizes the investment return in the statement of activities at September 30:
Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 60,786 $ 60,787 1 $
Realized gains (losses) 266,003 266,003 -
Unrealized gains (losses) 260,804 3,122 263,926
Investment fees - (27,286) (27,286)
Total investment income, net $ 560,307 $ 3,123 $ 563,430 Without Donor
Restrictions
With Donor
Restrictions Total
Interest and dividends $ 38,362 $ 119 $ 38,481
Realized gains (losses) 91,068 91,068 -
Unrealized gains (losses) 74,742 2,762 77,504
Investment fees - (22,413) (22,413)
Total investment income, net $ 181,759 $ 2,881 $ 184,640 2021
2020
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
13 NOTE 6 – FAIR VALUE MEASUREMENTS
In accordance with generally accepted accounting principles, fair value is defined as the price that the entity would receive upon selling an asset or pay to transfer a liability at the reporting date. Generally accepted accounting principles establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs, and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available.
The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly, and fair value is determined through the use of other valuation methodologies.
Level 3 – Valuations based on inputs that are not observable and significant to the overall fair value measurement, including the entity’s own assumptions in determining the fair value of assets or liabilities.
The table below presents the level within the fair value hierarchy at which investments are measured at September 30:
Total Level 1 Level 2 Level 3
Fixed income $ 2,443,057 $ 2,443,057 $ - $ -
Equity securities 2,026,502 - 2,026,502 -
Total investments at fair value $ 4,469,559 $ - 4,469,559 $ - $ Total Level 1 Level 2 Level 3
Fixed income $ 342,858 $ 342,858 $ - $ -
Equity securities 1,560,410 - 1,560,410 -
Total investments at fair value $ 1,903,268 $ - 1,903,268 $ - $ 2020
2021
Description
NOTE 7 – RETIREMENT PLAN
The Organization maintains a Simple IRA plan and provides a match of up to 3% of employee elective deferrals.
Amounts paid for retirement were $33,103 and $20,171 in the years ended September 30, 2021, and 2020, respectively.
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
14 NOTE 8 – COMMITMENTS
The Organization leases various office equipment under operating lease agreements. The operating leases have term expiration dates through 2025.
The Organization’s future minimum lease commitments are as follows for September 30:
Year Ending:
2022 $ 22,958
2023 22,958
2024 22,958
2025 15,874
$ 84,748
Total rent expenses were $31,789 and $29,482 for the years ended September 30, 2021 and 2020, respectively. In the normal course of business, operating leases are generally renewed or replaced by other leases.
NOTE 9 – NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions consisted of the following at September 30:
2021 2020
Time restrictions:
Estate distributions receivable 16,323 $ $ 16,323
Charitable trust promise to give 600,000 19,000
Purpose restrictions:
McMurray Family Medical Fund 10,480 10,478
Seligman Fund 8,785 -
G.L. Bruno & Associates 10,000 -
Kaiser 19,760 -
Amazon Day 1 Family Fund 2,501,995 -
Other various 159,975 81,387
Total net assets with donor restrictions $ 3,308,533 $ 145,973 Net assets released from donor restriction by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors are as follows for the years ended September 30:
2021 2020
Time restriction expired:
Passage of specified time 32,123 $ $ -
Purpose restriction accomplished:
Capital projects 115,774 108,729
Program expenses 304,625 215,896
Total net assets released from restrictions $ 452,522 $ 324,625
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
15 NOTE 10 – DONATED MATERIALS AND SERVICES
Donated materials and services consist of the following for the years ended September 30:
2021 2020
Without donor restrictions:
Food $ 1,729,228 $ 904,583
Goods 401,216 253,768
Services and discounts 3,913 3,000
Total donated materials and services 2,134,357 $ $ 1,161,351 NOTE 11 – CREDIT RISK
The Organization maintains cash balances in bank accounts with financial institutions insured by the Federal Deposit Insurance Corporation. At September 30, 2021 and 2020, the Organization had uninsured cash balances of $1,332,745 and $1,575,693, respectively.
NOTE 12 – LOAN PAYABLE
On April 28, 2021, the Organization entered into a loan agreement with Central Valley Community Bank in the amount of $400,000 with an interest rate of 4.5%. The loan calls for four consecutive interest only monthly payments commencing May 27, 2021 and principal and interest monthly payments of $7,468 commencing September 27, 2021. The loan matures on August 27, 2026 and is secured by solar panels. The remaining balance on the loan at September 30, 2021 is $394,082.
The future minimum principal payments under the Organization’s loan payable for the years ending September 30 are as follows:
2022 $ 73,388
2023 76,759
2024 80,285
2025 83,974
2026 79,676
$ 394,082
POVERELLO HOUSE
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2021 AND 2020
See Independent Auditor’s Report.
16 NOTE 13 – CONTRACTS WITH CUSTOMERS
Revenue from performance obligations satisfied at a point in time consists of the following at September 30:
2021 2020
Meal reimbursements $ 1,059,520 $ 559,222
Contract assets include meals reimbursement from various organizations. Contract assets are as follows:
09/30/2021 09/30/2020 10/1/2019
Closing Balance Closing Balance Opening Balance
Contract assets:
Contracts receivable $ 158,290 $ 181,170 $ 44,100
NOTE 14 – UNCERTAINTY
On March 11, 2020, the World Health Organization declared the outbreak of a coronavirus, COVID-19, a pandemic. Accordingly, some of the Organization’s operations were limited to protect the health and safety of its clients and employees. The financial impact on the Organization that could occur as a result of the pandemic is unknown at this time.
NOTE 15 – SUBSEQUENT EVENTS
On March 23, 2022, the Organization purchased a building for $1,100,000 using donor restricted funds. The intended use of the property will be to establish a family homeless shelter.
Management has evaluated and concluded that there are no other subsequent events that have occurred from September 30, 2021 through the date the financial statements were available to be issued on May 26, 2022, that would require additional disclosure or adjustment. 17 SUPPLEMENTARY INFORMATION
POVERELLO HOUSE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
18 U.S. Department of Housing and Urban Development
Pass-Through Programs from City of Fresno:
Emergency Solutions Grant 14.231 * $ 108,544
Emergency Solutions Grant 14.231 * 191,135
Emergency Solutions Grant 14.231 * 184,290
Total US Department of Housing and Urban Development 483,969 U.S. Department of Homeland Security
Emergency Food and Shelter National Board Program 97.024 326,926 Total US Department of Homeland Security 326,926
Other Programs
Pass-Through Programs from County of Fresno:
Community of Hope Unknown 169,896
Village of Hope, CARES Unknown 226,938
Total Other Programs 396,834
Total Expenditures of Federal Awards $ 1,207,729
*Denotes a major program per Uniform Guidance
Total
Expenditures
Federal Assistance
Federal Grantor/Program or Cluster Title Listing Number
POVERELLO HOUSE
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2021
19 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of Poverello House (the “Organization”). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule.
The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the accrual basis of accounting, which is described in Note 2 of the Organizations financial statements.
NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the Organization’s financial statements.
NOTE 4 – INDIRECT COST RATE
The Organization has elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
20 THIS PAGE IS LEFT BLANK INTENTIONALLY.
21 OTHER INDEPENDENT AUDITOR’S REPORTS
22 THIS PAGE IS LEFT BLANK INTENTIONALLY
23 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors of
Poverello House
Fresno, California
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 Poverello House (a nonprofit organization), which comprise the statement of financial position as of September 30, 2021, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated May 26, 2022.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Poverello House’s internal control over financial reporting (internal control) as a basis for designing 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 Poverello House’s internal control. Accordingly, we do not express an opinion on the effectiveness of Poverello House’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.
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 assurance about whether Poverello House’s financial statements are free 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 24 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such 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. Accordingly, this communication is not suitable for any other purpose.
Clovis, California
May 26, 2022
25 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the Board of Directors of
Poverello House
Fresno, California
Report on Compliance for Each Major Federal Program
We have audited Poverello House’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Poverello House’s major federal programs for the year ended September 30, 2021. Poverello House’s major federal programs are 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 federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Poverello House’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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 Poverello House’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 Poverello House’s compliance.
Opinion on Each Major Federal Program
In our opinion, Poverello House complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2021.
26 Report on Internal Control Over Compliance
Management of Poverello House is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Poverello House’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 the Uniform Guidance, 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 Poverello House’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 a 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 weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose 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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Clovis, California
May 26, 2022
27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS
POVERELLO HOUSE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
28 SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Noncompliance material to financial
statement noted? Yes X No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes X No
Significant deficiencies identified that are not
considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance
for major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200, Section 200.516(a) Yes X No
Identification of Major Programs
Federal Assistance Listing Number Name of Federal Program or Cluster
14.231 Emergency Solutions Grant
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as a low-risk auditee? Yes X No
$750,000
SECTION II – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION III – FEDERAL AWARD FINDINGS
None reported.
POVERELLO HOUSE
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
29 SECTION I – FINANCIAL STATEMENT FINDINGS
None reported.
SECTION II – FEDERAL AWARD FINDINGS
None reported.
Part A, Exhibit 8
Board Resolution
2/2/23, 2:17 PM Tax Exempt Organization Search Details | Internal Revenue Service https://apps.irs.gov/app/eos/details/ 1/2
Poverello House
EIN: 77-0007985 | Fresno, California, United States
Publication 78 Data
Organizations eligible to receive tax-deductible charitable contributions. Users may rely on this list in determining deductibility of their contributions.
On Publication 78 Data List: Yes
Deductibility Code: GROUP
Copies of Returns (990, 990-EZ, 990-PF, 990-
T)
Electronic copies (images) of Forms 990, 990-EZ, 990-PF or 990-T returns filed with the IRS by charities and non-profits.
Tax Year 2021 Form 990
Tax Year 2019 Form 990
Tax Year 2018 Form 990
Tax Year 2017 Form 990
Tax Year 2016 Form 990
Tax Year 2015 Form 990
2/2/23, 2:17 PM Tax Exempt Organization Search Details | Internal Revenue Service https://apps.irs.gov/app/eos/details/ 2/2
WestCare California
PY 2023-2024 CONSOLIDATED NOFA
PART A – COVER PAGE:
NON-PROFIT ORGANIZATION1
Part A, Section 1: General Information
Legal Name of the Organization: Fictitious Name (if applicable):
WestCare California, Inc. N/A
DUNS Number of Organization: Federal Tax ID Number:
054612767 23-7368450
Date of Incorporation: Date of 501(c)(3) Determination:
October 1973 November 1974
Mailing Address of Organization: Organization Website Address:
1900 N Gateway Blvd Ste 100 Fresno CA 93727 www.westcare.com/california Name of President (or Chair of the Board): E-mail Address:
(Dr.) Toussaint M. Streat ~ Chair [email protected] Name of Chief Executive or Executive Director: E-mail Address:
Richard (Dick) E. Steinberg [email protected]
Name of the Secretary: E-mail Address:
Ken Ortbals [email protected]
Name of Treasurer (or Chief Financial Officer): E-mail Address:
Ken Ortbals [email protected]
Principal Contact
Person: Principal Contact’s Title:
Principal Contact’s Physical
Address (Street Address, Suite,
City, State, ZIP):
Maryann Knoy Vice President
1900 N Gateway Blvd Ste 100
Fresno CA 93727-1625
Primary Phone #: Alternative Phone #: E-mail Address:
559-251-4800
ext. 21236 559-538-2084 [email protected]
Name of Authorized Signatory: Title of Authorized Signatory:
Shawn Jenkins Chief Operating Officer
Signature of Authorized Official: Date of Signature:
1/27/23
1 This document is for non-profit organizations. Units of local government, please complete Part A: Unit of Government Information
PY23-24 City of Fresno Consolidated NOFA Part A
Non-Profit Organization
Part A, Section 2: Mission Statement
Please provide the organization’s mission statement within the below space:
MISSION:WestCare empowers everyone with whom we come into contact to engage in a process of healing, growth, and change benefitting themselves, their families, coworkers, and communities.
VISION: WestCare devotes our best collective and individual efforts to "uplift the human spirit" by consistenly improving, expanding, and strengthening the quality, efficacy, and cost-effectiveness of everything we do in building for the future.
MOTTO: Uplifting the human spirit
Part A, Section 3: Organizational Capacity and Management Please provide key personnel information for HUD-funded projects:
Staff Name Title
Years of
Experience
1) Richard Steinberg President 40+
2) Ken Ortbals Chief Executive Officer 30+
3) Savannah Jones Chief Administrative Officer 20+
4) Shawn Jenkins Chief Operating Officer 30+
5) Maryann Knoy Vice President 20+
Board of Directors
How often does your Board of Directors regularly meet?
quarterly
List current Board of Directors below:
1) Dr. Toussaint M. Streat ~ Chair 6) Ramón (Ray) A. Abadin 2) James (Jim) L. Wadhams 7) Derrick T. Boazman
3) Thomas (Tom) J. Walsh, II 8)
Richard (Dick) E. Steinberg ~
President
4) Mary A.Y. Okada 9)
Ken Ortbals, Treasurer and
Secretary
5) William (Bill) J. Ekstrom, Jr. 10)
PY23-24 City of Fresno Consolidated NOFA Part A
Non-Profit Organization
Financial Management
1) Has an audit been performed on the proposing organization’s accounting procedures within the last two years?
Yes No If yes, name of
auditor: Roos & McNabb CPA's
2) Is the agency audited every year? Yes No
3) Were any management letters issued as a result of the last audit? If yes, explain.
No
4) Provide the name of staff responsible for your agency’s accounting system Name: Linda Erath
Title: Chief Financial Officer
Phone/Email: 702-610-2236
Authorized Signatories
If your organization is selected for funding, signatures from persons bearing titles from each of the two lines below will be required by your organization.
1. Board Chair, President, or Vice President
2. Treasurer, Secretary, or Assistant Secretary
If you will be unable to provide the two requested signatures or intend to otherwise deviate from the standard signature authority, please indicate the names and titles of the authorized signatories below and provide the names and titles of the person(s) authorized to execute agreements on behalf of your organization in your boardcertified resolution.
Authorized Signatory Name Authorized Signatory Title
1) Shawn Jenkins Chief Operating Officer
2)
Board Resolution providing for the signature authority of persons to sign agreements on behalf of the entity is attached (required before a subrecipient agreement will be executed).
To view the City’s policy regarding signature authority, including a sample signature page and sample certification, view Administrative Order 4-1 at:
https://www.fresno.gov/personnel/human-resources-support/#tab-2 PY23-24 City of Fresno Consolidated NOFA Part A
Non-Profit Organization
Part A, Section 4: Summary of Attached Applications:
Provide number and total dollar amount of applications by Application Type Homeless and Homelessness Prevention Programs
Number of Applications Total Dollar Amount Requested
2 $ 1,098,623.71
Owner-Occupied Home Repair
Number of Applications Total Dollar Amount Requested
0 $ 0.00
Public and Community Services
Number of Applications Total Dollar Amount Requested
0 $ 0.00
Fair Housing
Number of Applications Total Dollar Amount Requested
0 $ 0.00
=
GRAND TOTAL
Number of Applications Total Dollar Amount Requested
2 $1,098,623.71
PY23-24 City of Fresno Consolidated NOFA Part A
Non-Profit Organization
Required Attachments to Part A
Select all attachments included.
Part A, Exhibit 1 – Organization’s U.S. Internal Revenue Service 501(c)(3) Determination of Exemption Letter (Required)
Part A, Exhibit 2 – Organization’s Articles of Incorporation (Required) Part A, Exhibit 3 – Bylaws of the Organization (Required) Part A, Exhibit 4 – Statement and Designation by Foreign Corporation (when location of incorporation was outside of California) (Required of Out-of-State Corporations only)
Part A, Exhibit 5 – List of Directors and Officers by Corporate Title and Name (Required)
Part A, Exhibit 6 – Most Recent Audited Financial Statement (an IRS 990, Return of Organization Exempt from Income Tax, may be submitted in lieu of an audit whenever the organization lacks an audit due it not exceeding California and Federal audit thresholds).
Part A, Exhibit 7 – Indirect Cost Rate Agreement with Federal Cognizant Agency (Required if applicant seeks to charge an indirect cost rate greater than 10 percent of modified total direct costs)
Part A, Exhibit 8 – Resolution of the Board of the Directors Authorizing the Application and Naming the Persons Authorized to Sign the Application (Required; the Resolution must be submitted to the City by 4:00 PM, Friday, March 18, 2022)
WCCA Board of Directors List
January 24, 2022
WestCare California, Inc
2022 Board of Directors and Officers
At-Large Directors
(Dr.) Toussaint M. Streat ~ Chair
Kaiser Permanente
2071 Herndon Ave
Clovis, CA 93611
(559) 360-2181 Cell
(559) 974-5005 Work
[email protected]
Executive Committee Directors
James (Jim) L. Wadhams
Black & Wadhams Attorneys
10777 West Twain Ave.
Suite 300
Las Vegas, NV 89135
(702) 869-8801 Work
(702) 869-2669 Fax
[email protected]
Thomas (Tom) J. Walsh, II
180 28th Ave. North
St. Petersburg, FL 33704
(727) 552-1947 Work
(727) 823-0749 Home
(727) 552-1440 Fax
[email protected]
Mary A.Y. Okada
PO Box 3566
Hagatna, Guam 96932
(671) 735-5700 Work
(671) 734-1003 Fax
(671) 777-3216 Cell
[email protected]
Ramón (Ray) A. Abadin
2333 Ponce De Leon Blvd.
BAC Colonnade, Suite 314
Coral Gables, FL 33134
(305) 321-4496 Cell
[email protected]
Derrick T. Boazman
1860 Bond Drive
Atlanta, GA 30315
(404) 246-8001 Cell
[email protected]
William (Bill) J. Ekstrom, Jr.
1516 S. Paloma Blanca Pl.
Kingman, AZ 86401
(928) 308-7434 Cell
[email protected]
WCCA Board of Directors List
January 24, 2022
Executive Committee Directors
Richard (Dick) E. Steinberg ~
President
PO Box 94738
Las Vegas, NV 89193
(702) 385-2090 Work
(702) 448-8100 Fax
[email protected]
Non-Director Ex-Officio Officers
Ken Ortbals, Treasurer and Secretary
of WestCare California, Inc.
PO Box 94738
Las Vegas, NV 89193
(702) 385-2090
[email protected]
WESTCARE CALIFORNIA, INC.
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
JUNE 30, 2021
WESTCARE CALIFORNIA, INC.
REPORT ON FINANCIAL STATEMENTS
JUNE 30, 2021
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report 1-2
Financial Statements:
Statement of Financial Position 3
Statement of Activities 4
Statement of Cash Flows 5
Statement of Functional Expenses 6
Notes to the Financial Statements 7-13
Supplemental and Other Information:
Schedule of Expenditures of Federal Awards 14
Notes to Schedule of Expenditures of Federal Awards 15
Schedule of Findings and Questioned Costs 16
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 17-18
Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance 19-20
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 WestCare California, Inc. as of June 30, 2021 and the change 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
Supplemental and Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedules of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 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 15, 2021, on our consideration of WestCare California, 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 solely 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 the effectiveness of 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 WestCare California, Inc.’s internal control over financial reporting and compliance.
Fresno, California
December 15, 2021
2 WESTCARE CALIFORNIA, INC.
STATEMENT OF FINANCIAL POSITION
JUNE 30, 2021
ASSETS
Cash and Cash Equivalents $ 6,911
Grant Contracts Receivable 9,421,691
Prepaid Expenses 205,949
Cash Restricted for Client Funds 272,983
Cash Restricted for Program Funds 1,208,323
Due from Related Organization 2,504,457
Property and Equipment, Net 4,567,553
Total Assets $18,187,867
LIABILITIES
Accounts Payable and Accrued Expenses $ 4,429,244
Accrued Salaries and Related Expenses 1,458,502
Due to Clients (Contra) 247,089
Deferred Revenue 3,599,578
Total Liabilities $ 9,734,413
NET ASSETS
Without Donor Restrictions 8,453,454
Total Net Assets 8,453,454
Total Liabilities and Net Assets $18,187,867
See accompanying notes to financial statements
3 WESTCARE CALIFORNIA, INC.
STATEMENT OF ACTIVITIES
For the Year Ended June 30, 2021
Change in Net Assets Without Donor Restrictions
Revenues and Other Support
Federal Contract Revenue $ 8,754,067
State Contract Revenue 5,427,937
STOP Contract 9,451,423
STOP Aftercare 17,491,372
County Contract Revenue 11,005,789
City Contract Revenue 1,068,625
Other Contract Revenue 518,086
Client Fees 1,486,813
Donations and Gifts 12,392
Stimulus Funds 702,775
Other Revenue 18,098
Total Revenues and Other Support
Without Donor Restrictions $ 55,937,377
Expenses
Program Services
Grants and Program Support 47,163,977
Total Program Services 47,163,977
Supporting Services
General and Administrative 8,449,650
Total Supporting Services 8,449,650
Total Expenses 55,613,627
Change in Net Assets Without Donor Restrictions 323,750 Net Assets, Beginning of Year 8,129,704
Net Assets, End of Year $ 8,453,454
See accompanying notes to financial statements
4 WESTCARE CALIFORNIA, INC.
STATEMENT OF CASH FLOWS
JUNE 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Change in Net Assets Without Donor Restrictions $ 323,750 Adjustments to Reconcile Change in Net Assets
To Net Cash Provided by Operating Activities:
Depreciation 330,962
(Increase) or Decrease in:
Grants Receivable (2,727,082)
Prepaid Expenses 42,851
Increase or (Decrease) in:
Accounts Payable and Accrued Expenses 319,346
Accrued Salaries and Related Expenses 106,268
Clients Funds (Contra) 42,177
Deferred Revenue 2,850,404
Net Cash Provided/(Used) in Operating Activities $ 1,288,676 CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment (484,322)
Net Cash Provided/(Used) in Investing Activities (484,322) CASH FLOWS FROM FINANCING ACTIVITIES:
Advances to Related Organization (1,284,988)
Net Cash Provided/(Used) in Financing Activities ( 1,284,988) Net Increase (Decrease) in Cash, Cash Equivalents, and
Restricted Cash (480,634)
Beginning Cash, Cash Equivalents, and Restricted Cash 1,968,851 Ending Cash, Cash Equivalents, and Restricted Cash $ 1,488,217 Supplemental Disclosure:
Interest Paid $ --
See accompanying notes to financial statements
5 P R O G R A M S E R V I C E S
GENERAL
FEDERAL STATE LOCAL OTHER PROGRAM TOTAL AND TOTAL
GRANTS GRANTS GRANTS GRANTS SUPPORT PROGRAM FUNDRAISING ADMINISTRATIVE EXPENSES
SALARIES AND RELATED EXPENSES
Salaries $ 2,429,388 $ 6,046,349 $ 7,573,339 $ 193,608 $ 545,711 $ 16,788,395 $ - $ 642,652 $ 17,431,047 Payroll taxes and employee benefits 394,229 519,168 740,058 14,074 98,906 1,766,435 - 2,360,490 4,126,925 TOTAL SALARIES AND RELATED EXPENSES 2,823,617 6,565,517 8,313,397 207,682 644,617 18,554,830 - 3,003,142 21,557,972
OTHER EXPENSES
Building occupancy 216,944 719,527 692,580 10,716 28,342 1,668,109 58,915 1,727,024 Travel 9,778 42,881 43,290 211 1,219 97,379 13,180 110,559 Equipment costs 45,082 264,853 91,415 79,165 7,853 488,368 40,568 528,936 Repair and Maintenance 31,806 128,775 121,672 2,409 13,792 298,454 20,467 318,921 Vehicles 168,898 145,824 184,394 25,636 1,841 526,593 6,557 533,150 Food costs 19,845 467,317 325,640 14,958 5,689 833,449 188 833,637 Program Assistance and Supplies 3,906,011 722,151 1,129,558 90,924 34,465 5,883,109 20,412 5,903,521 Purchased Aftercare 17,491,372 17,491,372 - 17,491,372
Interest and Taxes 16,363 5,282 4,103 1,895 474 28,117 31,132 59,249 Operating supplies and expenses 121,647 269,211 236,522 9,960 33,894 671,234 673,024 1,344,258 Professional services 30,670 115,680 290,514 2,400 600 439,864 214,525 654,389 Management/Administration - - - - - - 4,219,677 4,219,677 TOTAL OTHER EXPENSES 4,567,044 20,372,873 3,119,688 238,274 128,169 28,426,048 - 5,298,645 33,724,693
TOTAL EXPENSES BEFORE DEPRECIATION
7,390,661 26,938,390 11,433,085 445,956 772,786 46,980,878 - 8,301,788 55,282,665 Depreciation 1,184 39,755 129,083 - 13,077 183,099 - 147,863 330,962 TOTAL EXPENSES $ 7,391,845 $ 26,978,145 $ 11,562,168 $ 445,956 $ 785,863 $ 47,163,977 $ - 8,449,650 $ 55,613,627 See accompanying notes to financial statements
WestCare California, Inc.
STATEMENT OF FUNCTIONAL EXPENSES
Year Ended June 30, 2021
6 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 – ORGANIZATION AND NATURE OF ACTIVITIES:
Organization and Nature of Activities: WestCare California, Inc. is a tax exempt, nonprofit corporation governed by a volunteer board of directors incorporated in 1999 whose purposes include, but are not limited to the following:
A. To promote public awareness about chemical dependency and related issues and problems; and,
B. To promote recovery from chemical dependency and or related illnesses, through developing, establishing and/or maintaining of centers for the rehabilitation of individuals and their families.
C. To promote the health and well being of all citizens.
The Organization provides residential and out-patient rehabilitation programs, criminal justice programs, health related and a variety of prevention programs and services all of which are related to the purposes for which it is established.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting: The accompanying financial statements of the Organization have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America.
Basis of Presentation: Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions.
Accordingly, net assets of the Organization and changes therein are classified as follows:
Net assets without donor restrictions: Net assets that are not subject to donorimposed restrictions and may be expended for any purpose in performing the primary objectives of the Organization. These net assets may be used at the discretion of Management and the Board of Directors.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors and grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Organization or by the passage of time.
Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
7 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
Measure of Operations: The statement of activities reports all changes in net assets, including changes in net assets from operating and non-operating activities. Operating activities consist of those items attributable to the Organization’s ongoing activities.
Non-operating activities are limited to resources that generate return from investments and other activities considered to be of a more unusual or nonrecurring nature.
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures contained in the financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents: For purposes of the statement of cash flows, the Organization considers investments available for current use with an initial maturity of three months or less to be cash equivalents.
Concentrations of Credit Risk: Financial instruments that potentially subject the Organization to concentration of credit risk are cash and receivables. Concentration of credit risk with respect to receivables is limited because a substantial portion of these balances are due from federal and state governmental agencies. Management believes the Organization is not exposed to any significant credit risk on cash. The Organization maintains its cash in various bank accounts that, at times, may exceed federally insured limits. These accounts have been placed with high credit quality financial institutions.
On June 30, 2021, the Organization had cash in excess of the FDIC insured limit in the amount of $497,533.
Receivables: Receivables are stated at the amount management expects to collect from balances outstanding at year end. The receivables are primarily contracts and/or grants from funding sources for services performed under cost reimbursement contracts. It is the practice of the Organization to record an allowance for doubtful accounts. Bad debts are charged to the allowance account as incurred. Based on management’s assessment of receivables it has concluded that an allowance is not necessary on June 30, 2021. Balances that are still outstanding after management has used reasonable collection efforts are written off to bad debt expense.
Revenue and Revenue Recognition: Revenue is recognized when earned. Program service fees and payments received in advance are deferred to the applicable period in which the related services are performed, or expenditures are incurred, respectively.
Contract Revenue: Revenue under some third-party payor agreements is subject to audit and retroactive adjustments. Provisions for estimated third-party payor settlements are provided in the period the related services are rendered, if determinable. 8 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
Contributions: Contributions are recorded as income at the estimated value at date of receipt as net assets without donor restrictions or net assets with donor restrictions, depending on the existence and/or nature of any donor-imposed restrictions. No donations with donor-imposed restrictions have been received.
Conditional Promises to Give: Conditional promises to give, that is, those with a measurable performance or other barrier, and a right of return, are not recognized until the conditions on which they depend have been substantially met. Conditional gifts received prior to the satisfaction of conditions are recorded as refundable advances.
Donated Services and In-Kind Contributions: Volunteers contribute significant amounts of time to our program services, administration, and fundraising and development activities; however, the financial statements do not reflect the value of these contributed services because they do not meet recognition criteria prescribed by generally accepted accounting principles. Donated goods are recorded at fair value at the date of donation.
Donated services are recorded at the respective fair values of the services received. No significant contributions of such goods or services were received during the year ended June 30, 2021.
Due to/from related parties: Amounts as due to/from related parties, included in the accompanying statements of financial position, arise principally from the collaborative activities between the affiliates to further the mission of the Organization.
Property and Equipment: The Organization capitalizes property and equipment over $5,000. Lesser amounts are expensed. Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated assets to a specific purpose. The cost of maintenance and repairs is charged to expense as incurred, significant renewals and betterments are capitalized. Property and equipment are depreciated using the straightline method over the estimated useful lives of the assets.
Compensated Absences: The Organization’s policy allows employees to accumulate vacation and sick leave based on the length of service, position, and other factors.
Accrual of vacation time is included in the accompanying financial statements. The total amount accrued for vacation on June 30, 2021 was $732,605.
Income Taxes: The Organization qualifies as a not-for-profit organization as described in Section 501 (c)(3) of the Internal Revenue Code and is tax exempt from federal and state income taxes, therefore no provisions for income taxes have been made.
Management is of the opinion that there is no unrelated business income subject to taxation. Management is also of the opinion that there are no material uncertain tax positions. All tax returns have been appropriately filed by the Organization. 9 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
Functional Expenses: The financial statements report certain categories of expenses that are attributable to more than one program or supporting function. Therefore, these expenses require allocation on a reasonable basis that is consistently applied. The costs of providing the various programs and supporting services have been summarized on a functional basis in the statement of activities. The statement of functional expenses presents the natural classification detail of expenses by function. Such expenses are charged to grant programs and supporting services on the basis of program costs.
General and administrative costs include those expenses that are not directly identifiable with any specific program but provide for the overall support of the Organization. Accordingly, certain costs have been allocated among program services and supporting services benefited. Such allocations are determined by management on an equitable basis.
Salaries and benefits are charged directly to the program for which work has been done based on time and effort. Other expenses and overhead costs are based on staff allocation to functional areas.
NOTE 3 – CASH AND CASH EQUIVALENTS:
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the amounts shown in the statement of cash flows:
Cash and Cash Equivalents $ 6,911
Cash Restricted for Client Funds 272,983
Cash Restricted for Program Funds 1,208,323
Total Cash, Cash Equivalents, and Restricted Cash
shown in the Statement of Cash Flows $1,488,217
NOTE 4 – RESTRICTIONS ON ASSETS:
Restrictions, if any, on assets as of June 30, 2021, are related to grant awards and/or lending agreements. Such assets must be used in accordance with the purposes established by laws and regulations of the grants or agreements in contrast with unrestricted funds over which the governing board remained full control to use in achieving any of its organizational purposes.
Separate cash accounts are maintained as required by grant and/or lending agreements. The Organization also holds cash in trust for participants in various programs.
10 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 5– LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS:
The following reflects the Organization’s financial assets available within one year of the statement of financial position date. There are no amounts reduced and not available for general use because of donor-imposed restrictions or long-term investments.
Cash and cash equivalents $ 6,911
Grant contracts receivable 9,421,691
Total available for general expenditures $9,428,602
As part of the Organization’s liquidity management, it utilizes a zero-balance account (zba) with WestCare Foundation, Inc., a checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented. This cash pooling system is designed to leave in the current accounts of the subsidiaries the minimum amounts to be able to deal with their debts contracted. The advantage of this system is to centralize the cash to be able to obtain better rates. In addition, the Organization transfers amounts as needed to meet cash flow needs through a related affiliate, WestCare Foundation, Inc.
NOTE 6 – PROPERTY AND EQUIPMENT, NET:
Property and equipment, net consisted of the following on June 30, 2021:
Land $ 391,095
Buildings and Improvements 5,914,618
Leasehold Improvements 1,261,595
Furniture and Fixtures 359,470
Computer Equipment 122,759
Vehicles 649,894
Construction in Progress 18,528
8,717,959
Less: Accumulated Depreciation (4,150,406)
Total Property and Equipment, Net $4,567,553
For the year ended June 30, 2021, depreciation expense totaled $330,962.
NOTE 7 – EMPLOYEE BENEFIT PLAN:
The Organization has a 401(k)-retirement plan covering eligible employees held with Voya Financial with a Safe Harbor Match. The Organization’s match is 3% of each qualified employee’s basic contribution plus an additional $.50 for each $1 contributed for the next 2% earnings. Plan contribution by the Organization for the year ended June 30, 2021 was $194,256.
11 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 8 – COMMITMENTS AND CONTINGENCIES:
Operating Leases:
As of June 30, 2021, the Organization had entered into various non-cancellable operating lease agreements for real property. The approximate minimum future commitments on an annual basis are as follows: 2021 $510,488, 2022 $350,533, 2023 $320,053, 2024 $280,484, 2025 $114,828 and thereafter $-0-.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize leases on the statement of financial position for most leases with a term longer than 12 months. The effective date for this standard has been delayed to reporting periods beginning after December 15, 2021.
Contingencies:
Federal Grants – The Organization receives financial assistance from the federal government in the form of grants and entitlements. Receipt of grants is generally conditioned upon compliance with terms and conditions of the grant agreements and applicable federal laws and regulations, including the expenditure of resources for eligible purposes. Accordingly, expenditures financed by these programs are subject to financial and compliance audits by the grantor agencies, which could result in request for reimbursement by the grantor agencies for expenditures, if disallowed by the granting agencies, cannot be determined at this time. Management believes that such disallowances, if any, will not have a material adverse effect on the financial position of the Organization.
NOTE 9 – DEFERRED REVENUE:
Deferred revenue consists of the following amounts as of June 30, 2021:
Donation from Bezos Day one Families for Homeless $2,501,254 Contra Costa – COVID Rate 317,854
Kaiser Madera Street2Home 150,000
BSCC 143,000
St. Agnes Medical Center 116,744
Sierra Health Foundation to Support Telehealth 102,044
Other 268,682
$3,599,578
NOTE 10 – ECONOMIC DEPENDENCY:
The Organization receives a significant portion of its support and revenues from contracts and/or agreements with agencies of the Government of the United States. The Organization’s ability to continue operating is predicated on the government’s continued support and funding of its programs. The continuation of program services in the subsequent year is expected based on contract renewals and continuations received to date. A significant reduction in the level of this funding, if this were to occur, could have an adverse effect on the programs and activities.
12 WESTCARE CALIFORNIA, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 – RELATED PARTY TRANSACTION:
WestCare Foundation, Inc. is a managing and governing oversight organization for WestCare California, Inc. During the year ending June 30, 2021, WestCare Foundation, Inc. received management fees for general and administrative expenses of $4,219,677 from WestCare California, Inc.
In addition, WestCare California, Inc. has advanced funds as of June 30, 2021 to WestCare Foundation, Inc. for $2,504,457.
NOTE 12 – COVID-19 PANDEMIC:
The COVID-19 pandemic, whose effects first became known in January 2020, is having a broad and negative impact on commerce and financial markets around the world. The United States and global markets experienced significant declines in value resulting from uncertainty caused by the pandemic. The Organization is closely monitoring its liquidity and is actively working to minimize the impact of these declines. The extent of the impact of COVID-19 on the Organization’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and its impacts on the Organization’s customers, employees, and vendors, all of which at present, cannot be determined. Accordingly, the extent to which COVID-19 may impact the Organization’s financial position and changes in net assets and cash flows is uncertain and the accompanying financial statements include no adjustments relating to the effects of this pandemic.
NOTE 13 – SUBSEQUENT EVENTS:
The Organization has evaluated subsequent events through December 15, 2021, the date which the financial statements were available to be issued and has determined that there were no events occurring during that period that required disclosure to the accompanying financial statements.
END OF NOTES TO THE FINANCIAL STATEMENTS
13 WESTCARE CALIFORNIA, INC.
SUPPLEMENTAL MATERIAL
Pass through Federal Federal Transfers to
Identifying # CFDA# Expenditures Subrecipients
US Department of Housing & Urban Development
Community Development Block Grants/Entitlement Grants
Pass Through Award(s):
City of Fresno - CDBG_Homeless Prevention 2019-096 14.218 18,156 Total Community Development Block Grants/Entitlement Grants 18,156 - Emergency Solutions Grant Program
Pass Through Award(s):
Fresno County - ESG Rapid-Rehousing A-18-542 14.231 57,753 - Fresno County - ESG MAP (CA) A-18-338 14.231 125,779 -
City of Fresno - ESG Project Unite (CA) 2019-096 14.231 221,515 Total Emergency Solutions Grant Program 405,047 -
Housing Opportunities for Persons with AIDS (HOPWA)
Pass Through Award(s):
City of Fresno (CA) 2019-096 14.241 516,657 90,000
City of Fresno (CA) - Cares Act 2019-096 14.241 87,020 - Housing Opportunities for Persons with AIDS (HOPWA) 603,677 90,000 Continuum of Care Program
Direct Award(s):
Continuum of Care Program (CA)-Project LiftOff 14.267 349,872 224,798 Continuum of Care Program (CA)-Coordinated Entry 14.267 397,554 - Total Continuum of Care Program 747,426 224,798
Department of Veterans Affairs
VA Homeless Providers Grant and Perdiem Program
Direct Award(s):
VA Capital Grant & Per Diem (CA) 64.024 632,228
Veterans Grant Program-Case Management 64.024 80,467 -
Total VA Homeless Providers Grant and Perdiem Program 712,695 - VA Supportive Services for Veteran Families Program
Direct Award(s):
VA Supportive Services for Veterans Families (CA) 64.033 1,492,901 - VA Supportive Services for Veterans Families (CA) - COVID 19 - CARES Act 1.0 64.033 1,017,230 - VA Supportive Services for Veterans Families (CA) - COVID 19 - CARES Act 2.0 64.033 3,745,596 - Total VA Supportive Services for Veteran Families Program 6,255,727 - US Department of Health & Human Services:
Substance Abuse and Mental Health Services Projects of Regional and National Significance Direct Award(s):
SAMHSA BEAT HIV/AIDS (CA) 93.243 538,864 -
SAMHSA Opening Doors to Housing and Wellness 93.243 315,730 - Total Substance Abuse and Mental Health Services Projects of Regional and National Significance 854,594 - Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Direct Award(s):
Ryan White Title III HIV Capacity Development and Planning Grant 93.918 17,535 - Total Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease 17,535 - Block Grants for the Prevention and Treatment of Substance Abuse Pass Through Award(s):
US Probation & PreTrial (CA) 0972-2016-19 93.959 152,695 - Total Block Grants for the prevention and Treatment of Substance Abuse 152,695 - Department of Homeland Security
Emergency Food and Shelter National Board Program
Pass Through Award(s):
United Way (CA) 97.024 12,427 -
Total Emergency Food and Shelter National Board Program 12,427 - Total Expenditures of Federal Awards $ 9,779,979 $ 314,798 WESTCARE CALIFORNIA, INC.
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
See accompanying notes to financial statements
14 WESTCARE CALIFORNIA, INC.
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
NOTE A - BASIS OF PRESENTATION:
The accompanying schedule of expenditures of federal awards include the federal award activity of WestCare California, Inc. under programs of the federal government for the year ended June 30, 2021. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of WestCare California, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of WestCare California, Inc.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Expenditures reported on the Schedule are reported on the accrual basis of accounting.
Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
NOTE C – INDIRECT COST RATE:
WestCare California, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. WestCare California, Inc. has a provisional indirect rate agreement for 26% for the year ended June 30, 2021. 15 WESTCARE CALIFORNIA, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FEDERAL PROGRAMS
FOR THE YEAR ENDED JUNE 30, 2021
Section I – Summary of Auditor’s Results
Financial Statements
Type of auditor’s report issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:
• Material weakness(es) idenitifed? No
• Significant deficiency(ies) identified? None reported Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:
• Material weakness(es) identified? No
• Significant deficiency(ies) identified? None reported Types of auditor’s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with CFR 200.516(a)? No
Identification of major programs:
Federal Program or Cluster Federal CFDA No.
Emergency Solutions Grant 14.231
Continuum of Care 14.267
Substance Abuse and Mental Health Services 93.243
Dollar threshold used to distinguish between type A & type B Programs:
Federal Programs: $750,000
Auditee qualified as low-risk auditee pursuant to Uniform Guidance: Yes
Section II – Financial Statement Findings
None reported
Section III – Federal Award Findings and Questioned Costs None reported
Section IV – Other Issues/Prior Year Audit Findings
No management letter is required because there were no findings required to be reported in the management letter.
No Summary Schedule of Prior Audit Findings is required because there were no prior audit findings.
No Corrective Action Plan is required because there were no findings required to be reported. 16 Compliance and Other Matters
As part of obtaining reasonable assurance about whether WestCare California, Inc.’s financial statements are free 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 compliance with those provisions was not an objective of our audit, and accordingly, we do not express such 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.
Accordingly, this communication is not suitable for any other purpose.
Fresno, California
December 15, 2021
18 Opinion on Each Major Federal Program
In our opinion, WestCare California, Inc. complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021.
Report on Internal Control over Compliance
Management of WestCare California, Inc. is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered WestCare California, 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 the Uniform Guidance, 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 WestCare California, 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 the type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses. 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 results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Fresno, California
December 15, 2021
20 PY23-24 Consolidated NOFA Part B
Application – Homeless and Homelessness Prevention