Bridges of America - The Orlando Bridge, Inc. Orlando, Florida

Transcription

1 Bridges of America - The Orlando Bridge, Inc. Orlando, Florida Financial Statements and Supplemental Information Year Ended June 30, 2010

2 Contents Page Independent Auditor s Report 1 Financial Statements Statement of Financial Position 3 Statement of Activities 4 Statement of Functional Expenses 5 Statement of Cash Flows 6 Notes to Financial Statements 8 Supplemental Information Schedule of Expenditures of State Financial Assistance 14 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 and Chapter , Rules of the Auditor General, of the State of Florida Independent Auditor s Report on Compliance with Requirements Applicable to Contract #C2120, #C2242 and #C2489 and on Internal Control over Compliance in Accordance with Chapter Rules of the Auditor General Schedule of Findings and Questioned Costs State Financial Assistance

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5 Bridges of America -The Orlando Bridge, Inc. Statement of Financial Position June 30, 2010 Assets Current assets Cash and cash equivalents - unrestricted $ 322,276 Receivables from program contracts 595,445 Food stamps 17,858 Total current assets 935,579 Property and equipment Leasehold improvements 112,916 Equipment 326,768 Furniture & fixtures 352,153 Accumulated depreciation (542,478) Total Property and equipment 249,359 Other assets Due from affliates, net 242,655 Due from trust account 22,700 Total other assets 265,355 Total assets $ 1,450,293 Liabilities and Net Assets Current liabilities Accounts payable $ 10,647 Accrued payroll liability 110,098 Accrued compensated absences 37,362 Total Current liabilities 158,107 Net assets, unrestricted 1,292,186 Total liabilities and net assets $ 1,450,293 See notes to financial statements 3

6 Bridges of America -The Orlando Bridge, Inc. Statement of Activities Unrestricted revenues and other support Program contract revenues - non-secure program $ 1,152,450 Program contract revenues - residential work release program 873,228 Program contract revenues - therapeutic community program 1,820,846 Resident rent revenues - non-secure program 190,482 Resident rent revenues - residential work release program 580,329 Resident rent revenues - therapeutic community program 248,754 Other program income 103,195 Total unrestricted revenues 4,969,284 Expenses and losses Program contract expenses 3,582,131 Management and general 833,688 Total unrestricted expenses and losses 4,415,819 Increase in unrestricted net assets 553,465 Unrestricted net assets at beginning of year 738,721 Unrestricted net assets at end of year $ 1,292,186 See notes to financial statements 4

7 Bridges of America -The Orlando Bridge, Inc. Statement of Functional Expenses Program/Contract Therapeutic Management Non-Secure Work Release Community and General Total Salaries and wages $ 294,812 $ 439,643 $ 783,658 $ 183,107 $ 1,701,220 Facility rental 182, , , ,400 Administrative fee , ,400 Insurance 39,591 60, ,163 28, ,558 Utilities 50,012 35, , ,124 Food expense - 173,393 19, ,497 Payroll taxes 22,797 34,567 61,707 16, ,640 Accounting 14,820 27,000 27,000 41, ,220 Supplies 11,008 17,317 58,315 16, ,874 Consulting fees 9,120 36,000 36,000-81,120 Depreciation expense 23,430 17,963 36,707-78,100 Client welfare 11,270 11,248 51,335-73,853 Vehicle expense 18,655 23,908 17,650-60,213 Repairs and maintenance 20,795 16,219 22,640-59,654 Payroll fees 7,159 10,856 19,379 5,204 42,598 Chaplaincy services 9,120 12,000 15,000-36,120 Telephone 4,605 16,736 9,132-30,473 Equipment leasing and rental 10,746 5,600 9,240-25,586 Miscellaneous 5,367 7,948 5,978-19,293 Fire and safety 4,387 5,243 7,063-16,693 Employee education and awards 4,586 6,016 5,898-16,500 Inmate banking expense 3,634 4,012 3,267-10,913 Extermination and pest control 2,503 2,565 3,120-8,188 Taxes and licenses 1,532 2,248 1,933-5,713 Travel expenses 907 1, ,079 Printing and publications ,790 $ 754,106 $ 1,148,166 $ 1,679,859 $ 833,688 $ 4,415,819 See notes to financial statements 5

8 Bridges of America -The Orlando Bridge, Inc. Statement of Cash Flows Cash flows from operating activities Cash received from program contracts $ 3,546,230 Cash received from residents rent 1,019,565 Cash received from other program income 93,075 Cash paid to employees (1,679,551) Cash paid to suppliers (2,506,695) Cash paid for taxes (141,353) Net cash provided by operating activities 331,271 Cash flows from investing activities Purchases of equipment and leasehold improvements (16,977) Net cash used in investing activities (16,977) Cash flows from financing activities Net payments to affiliates (622,427) Net cash used in financing activities (622,427) Net decrease in cash and cash equivalents (308,133) Cash and cash equivalents at beginning of year 630,409 Cash and cash equivalents at end of year $ 322,276 See notes to financial statement 6

9 Bridges of America -The Orlando Bridge, Inc. Statement of Cash Flows-Continued Reconciliation of increase in net assets to net cash provided by operating activities Increase in net assets $ 553,465 Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation 78,100 Increase in: Receivables from program contracts (300,294) Food stamps (7,620) Due from trust account (2,500) Increase (decrease) in: Accrued compensated absences 5,438 Accounts payable (11,549) Accrued payroll liabilities 16,231 Net cash provided by operating activities $ 331,271 See notes to financial statements 7

10 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note A - General Information and Significant Accounting Policies General Information - Bridges of America - The Orlando Bridge, Inc. (The Orlando Bridge) is a not-for-profit corporation organized to provide a prison work release transitional program, a substance abuse transitional re-entry program, and a comprehensive drug and alcohol counseling and rehabilitation program for criminal offenders in Orange County, Florida. The Orlando Bridge is exempt from income tax under Internal Revenue Code Section 501(c)(3) as a public charity. Donated Services and Materials - The Board of Directors serves without compensation. These services are not recorded on the financial statements since they generally are not susceptible to objective measurement or valuation. Additionally, The Orlando Bridge occasionally receives donated goods for use in its operations. Management has determined that such amounts are not material to the financial statements of the organization. Basis of Presentation - Financial statement presentation follows the recommendations of the Financial Accounting Standards Board (FASB) in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations, which was superseded by FASB Accounting Standards Codification (ASC) Topic 958, effective September 15, The Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. The Organization does not have any temporarily or permanently restricted net assets. Program Contract Revenue and Receivable - Program Contract Revenue represents amounts received for providing program services under the terms of contracts with the State of Florida Department of Corrections. Receivables from these program contracts represent amounts due under the contracts and are considered fully collectible. Under the Department of Corrections program, The Orlando Bridge is authorized to charge those clients employed through the program a subsistence rental charge, which is 40% of the offender s gross income, not to exceed $25 per day. During the current year, The Orlando Bridge received rent of $190,482 from participants who were employed. Under the work release and therapeutic community contracts, The Orlando Bridge is authorized to charge those inmates employed through the program a subsistence rental charge, which is 55% of the inmate s net pay. During the current year, The Orlando Bridge received rent in the amount of $580,329 from work release program participants who were employed and $248,754 from therapeutic community program participants who were employed. 8

11 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note A - General Information and Significant Accounting Policies-continued Property and Equipment - Purchased assets costing in excess of $1,000 individually or in the aggregate are capitalized and recorded at cost. Improvements and betterments are capitalized, while repair and maintenance expenditures are expensed in the statement of activities. Property and equipment are being depreciated over their estimated useful lives of 5 and 7 years using the straight-line method of depreciation. Leasehold improvements are being depreciated over 39 years using the straight-line method of depreciation. Depreciation expense for the year ended June 30, 2010, was $78,100. Cash Equivalents - For purposes of the statement of cash flows, The Orlando Bridge considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interest Expense The Orlando Bridge, Inc. incurred no interest expense during the year ended June 30, Income Taxes - The Orlando Bridge is recognized as a 501(c)(3) not-for-profit organization, and as such, is exempt from income tax on activities relating to its exempt function. Further, The Orlando Bridge has not engaged in any activities that would result in unrelated business taxable income. Management has evaluated these tax positions and has determined that they are more likely than not to be upheld. Fair Value of Financial Instruments At June 30, 2010, the carrying values of cash, short term investments, accounts receivable and accounts payable approximate fair value because of the short maturity of these financial instruments. Note B - Related Party Transactions The Orlando Bridge shares a common Board of Directors and common management with Christian Prison Ministries, Inc., a not-for-profit corporation, and other Bridges of America entities, which provide similar services in other facilities throughout the State of Florida. 9

12 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note B - Related Party Transactions-continued Christian Prison Ministries, Inc. owns all of the facilities used by The Orlando Bridge in conducting its program activities. Under the terms of a month to month lease, The Orlando Bridge paid rental charges of $622,427 to Christian Prison Ministries, Inc. for the use of these facilities in the current year. In addition, The Orlando Bridge paid administrative fees of $542,400 to Bridges of America, Inc. for management services in the current year. Amounts due from affiliates represent funds The Orlando Bridge has loaned to affiliates to help fund operations and support common missions. During the year ended June 30, 2010, The Orlando Bridge made net payments of $622,427 to affiliates. At June 30, 2010, The Orlando Bridge had a receivable of $242,655 from its affiliates. This amount is not expected to be repaid within the next operating cycle. No interest is being charged on this loan. During the current year, The Orlando Bridge paid $36,120 to Society of St. Dismas, an affiliated entity for chaplaincy services. The Orlando Bridge also made vehicle lease payments of $38,060 to Bridges of America, Inc. This amount is included in vehicle expense. Bridges of America The Sanford Bridge, Inc. shares facilities and other resources with The Orlando Bridge. Expenses incurred for programs related to both entities are allocated between the two entities based on each entity s portion of total clients served. At June 30, 2010, The Orlando Bridge had a receivable balance of $11,848 due from Bridges of America - The Sanford Bridge related to these transactions. This balance is included in the balance of due from affiliates on the statement of financial position. Note C Commitments and Contingencies During the year ended June 30, 2006, Christian Prison Ministries, Inc., a related entity, issued Orange County Industrial Development Authority Variable Rate Demand Revenue Bonds, Series 2005, at a par value of $12,565,000. The proceeds from the bond issue went towards refinancing existing long-term debt and financing the expansion of operating facilities. The bonds are secured by an irrevocable standby letter of credit, which is guaranteed by Christian Prison Ministries, Inc. and various related entities, including The Orlando Bridge. During the year, Branch Banking and Trust Company granted an extended letter of credit through November 30, As of June 30, 2010, the outstanding indebtedness balance under guarantee is $10,425,000. In order to maintain compliance with the letter of credit agreement as amended during the year, Christian Prison Ministries, Inc. and the Guarantors must maintain, on a combined basis, certain financial covenants. 10

13 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note C Commitments and Contingencies-continued The requirements include maintaining a fixed charge coverage ratio of 1.20 to 1.00, as well as maintaining an unrestricted net asset balance of $11,162,300 as of June 30, 2010, plus 50% of the total positive increase in combined net assets for the fiscal year ending June 30, 2010 and in each fiscal year thereafter. The combined entity is also restricted to a limited amount of capital expenditures in the amount of $750,000 annually. For the year ended June 30, 2010, Christian Prison Ministries and its affiliates met these financial covenants. During the year, Christian Prison Ministries, Inc. was granted an extension of its revolving line of credit, increasing the amount of credit from $1,000,000 to $1,500,000 of which $1,100,000 was unused at June 30, Bank advances on the credit line mature and are due in full on January 14, Interest on the principal amount outstanding is paid monthly in arrears and carries an interest rate equal to the One Month LIBOR Rate plus 2.5% per annum. The credit line is secured by substantially all corporate assets, and is guaranteed by Christian Prison Ministries, Inc. and various related entities, including The Orlando Bridge. Note D - Major Sources of Support Non-Secure Program The Orlando Bridge has a contract with the Florida Department of Corrections to provide comprehensive drug and alcohol counseling and rehabilitation programs and employment programs for criminal offenders. The Orlando Bridge earned $1,152,450 under contract #C2120 during the current year. The contract which is terminable by the Florida Department of Corrections under certain conditions, is in its final renewal term. The current contract is effective through December 31, The Orlando Bridge provides services to clients and is compensated for the provision of these services by the Florida Department of Corrections on a monthly basis. As of June 30, 2010, outstanding receivables from the program contract were $93,240. Work Release Program The Orlando Bridge has a contract with the Florida Department of Corrections to provide a secure work release program for inmates. The Orlando Bridge earned $873,228 under contract #C2242 during the current year. The contract which is terminable by the Florida Department of Corrections under certain conditions, is renewable on a periodic basis. The current contract is effective through August 31, The Orlando Bridge provides services to clients and is compensated for the provision of these services by the Florida Department of Corrections on a monthly basis. As of June 30, 2010, outstanding receivables from the program contract were $185,

14 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note D - Major Sources of Support-continued Therapeutic Community Program The Orlando Bridge has a contract with the Florida Department of Corrections to provide a substance abuse treatment/work release program for inmates. The Orlando Bridge earned $1,820,846 under contract #C2489 during the current year. The contract which is terminable by the Florida Department of Corrections under certain conditions, is renewable on a periodic basis. The current contract is effective through March 31, The Orlando Bridge provides services to clients and is compensated for the provision of these services by the Florida Department of Corrections on a monthly basis. As of June 30, 2010, outstanding receivables from the program contract were $316,419. Note E - Operating Leases During the year ended June 30, 2010, The Orlando Bridge had several office equipment leases, which are accounted for as operating leases. The total rent expense for the current year was $25,586. Future minimum lease payments under terms of non-cancelable operating leases are not material. Note F Concentration of Credit Risk The Orlando Bridge maintains cash balances at several financial institutions which are insured by the Federal Deposit Insurance Corporation. At various times during the year ended June 30, 2010, the Orlando Bridge may have had balances in these accounts which exceeded insured amounts. Additionally, The Orlando Bridge has a concentration of credit risk for program contract revenues and receivables. If there were a significant decrease or termination of the contracts, there would be an adverse effect on The Orlando Bridge s program services and operations. These revenues and receivables represent amounts earned and collectible, respectively, for providing drug and alcohol counseling and rehabilitation programs for criminal offenders. All of the program contract revenue and receivables are received from the State of Florida Department of Corrections. Note G Subsequent Events In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through October 27, 2010, the date the financial statements were available to be issued. 12

15 Bridges of America -The Orlando Bridge, Inc. Notes to Financial Statements Note G Subsequent Events - continued Subsequent to year end, The Orlando Bridge and several of its affiliates were named as defendants in a lawsuit alleging breach of contract with a vendor. The alleged breach had not occurred as of the date of the financial statements. The parties to the lawsuit went through a mediation process that resulted in a mutually agreed-upon settlement of $300,000 to be paid to the plaintiff. The amount is expected to be paid during the fiscal year ended June 30,

16 Supplemental Information

17 Bridges of America - The Orlando Bridge, Inc. Schedule of Expenditures of State Financial Assistance Catalog State Federal of State Expenditures - State Through Agency and Contract Financial Grants/ Aids Expenditures - State Total Program Title Number Assistance Appropriations Other Funds Expenditures Expenditures Florida Department of Corrections: Nonsecure Drug Treatment Program C $ - $ 1,171,100 $ - $ 1,171,100 Work Release Program C , ,820 Therapeutic Community Program C ,627,310-1,627,310 $ - $ 3,546,230 $ - $ 3,546,230 (1) (1) State expenditures are reported on the cash basis of accounting. See notes to financial statements 14

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22 A. Summary of Auditor s Results Schedule of Findings and Questioned Costs- State Financial Assistance 1. The auditor s report expresses an unqualified opinion on the general purpose financial statements of Bridges of America The Orlando Bridge, Inc. 2. There were no significant deficiencies disclosed during the audit of the financial statements of Bridges of America The Orlando Bridge, Inc. 3. No instances of noncompliance material to the financial statements of Bridges of America The Orlando Bridge, Inc. were disclosed during the audit. 4. There were no significant deficiencies relating to the audit of the State financial assistance project. 5. The auditor s report on compliance for the State financial assistance projects for Bridges of America The Orlando Bridge, Inc. expresses an unqualified opinion. 6. Our audit disclosed no findings required to be reported related to the State financial assistance projects under Chapter The programs/projects tested as major programs/ projects included the following: State Project State CSFA No. Non-Secure Drug Treatment Program Contract #C2120 In Orange County, Florida Work Release Program Contract #C2242 In Orange County, Florida Therapeutic Community Program Contract #C2489 In Orange County, Florida 8. The threshold for distinguishing Type A and Type B programs was $100,000 for major State financial assistance projects. 9. No Summary of Schedule of Prior Audit Findings is required because there were no prior audit findings related to the State Project listed above. 10. No management letter is required because there were no findings required to be reported to management pursuant to Chapter