2007JAN-3 AM II: 26 Delta Community Action Association, Inc. Tallulah, Louisiana Financial Statements As of and for the Years Ended June 30, 2006 and 2005 With Supplemental Information Schedules Under provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. Release Date /-_,
Transcript
2007JAN-3 AM II: 26
Delta Community Action Association, Inc.Tallulah, Louisiana
Financial Statements
As of and for the Years Ended June 30, 2006 and 2005With Supplemental Information Schedules
Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.
Release Date /-_,
Delta Community Action Association, inc.Tallulah, Louisiana
Table of Contents
Page No.
Independent Auditors' Report 1-2
Financial Statements:
Statements of Financial Position 3
Statements of Activities 4
Statements of Cash Flows 5
Notes to Financial Statements 6-10
Combining Schedules:
Combining Schedule of Financial Position 11
Combining Schedule of Activities 12
Supplemental Information Schedules Prepared For Grants and Contracts Analysis
Head Start Program Grant Award 06CH0393/15 14For the Contract Period: July 1, 2005 to June 30, 2006
Child and Adult Care Food Program 15For the Contract Period: October 1, 2004 to September 30, 2005
Family Day Care Home Program 16For the Contract Period: October 1, 2004 to September 30, 2005
Delta Recovery Center Contract DOA No. 351601647 17For the Contract Period: July 1, 2005 to June 30, 2006
Schedule of Expenditures of Federal Awards 18
Report on Internal Control Over Financial Reporting and on 19Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance With Government Auditing Standards
Report on Compliance with Requirements Applicable to Each Major Programand on Internal Control over Compliance in Accordance with OMB Circular A-133 20-21
Summary Schedule of Prior Audit Finding 22
Schedule of Findings and Questioned Costs 23
Schedule of Prior Audit Findings for Louisiana Legislative Auditor 24
Schedule of Current Audit Findings for Louisiana Legislative Auditor 25
TRAVIS H. MOREHART, CPA TELEPHONE (318) 222-5415 FAX (318) 222-5441 RAYEBURN G COOK (RET)A EDWARD BALL, CPAVICKIE D NOBLE, CPA
MEMBERAMERICAN INSTITUTE
C BRYAN COYLE, CPA CERTIFIED PUBLIC ACCOUNTANTS
SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
To the Board of DirectorsDelta Community Action Association, Inc.Tallulah, Louisiana
We have audited the accompanying statements of financial position of Delta Community Action Association,Inc. as of June 30, 2006 and 2005, and the related statements of activities and cash flows for the years thenended. These financial statements are the responsibility of Delta Community Action Association, Inc.'smanagement. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issuedby the Comptroller General of the United States. Those standards require that we plan and perform the auditsto obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of Delta Community Action Association, Inc. as of June 30, 2006 and 2005, and the changes in its netassets and its cash flows for the years then ended in conformity with accounting principles generally acceptedin the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated October 13, 2006on our consideration of Delta Community Action Association, Inc.'s internal control over financial reporting andon our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements andother matters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing and not to provide an opinion on the internalcontrol over financial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of DeltaCommunity Action Association, Inc. taken as a whole. The accompanying schedule of expenditures of federalawards is presented for purposes of additional analysis as required by U. S. Office of Management andBudget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not arequired part of the basic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in allmaterial respects, in relation to the basic financial statements taken as a whole.
The accompanying supplemental combining schedules on pages 11 and 12 are presented for the purpose ofadditional analysis and are not a required part of the financial statements of Delta Community ActionAssociation, Inc. Such information has been subjected to the auditing procedures applied in the audit of thefinancial statements and, in our opinion, is fairly stated in all material respects in relation to the financialstatements taken as a whole.
The accompanying supplemental schedules, listed as "Supplemental Information Schedules Prepared ForGrants and Contracts Analysis" in the table of contents, and shown on pages 14-17, are presented for thepurpose of providing various funding sources of Delta Community Action Association, Inc. additional individualgrant and contract analysis and are not a required part of the financial statements. The information isprepared on a prescribed basis of the various funding sources of Delta Community Action Association, Inc.,and certain schedules are for periods other than Delta's audit year. These schedules are not presented inaccordance with generally accepted accounting principles. Accordingly, these schedules are not intended topresent financial position and results of operations in conformity with generally accepted accounting principles.Such information has been subjected to the auditing procedures applied in the audit of the financial
statements and, in our opinion, they are fairly stated on the basis of accounting practices prescribed by thevarious funding sources.
Cook and MorehartCertified Public AccountantsOctober 13, 2006
Delta Community Action Association, Inc.Tailulah, Louisiana
Statements of Financial PositionJune 30, 2006 and 2005
Assets
Current assets:CashGrant receivablesDue from other funds
Total current assets
Property and Equipment:Property and equipmentAccumulated depreciation
Total property and equipment
Total Assets
Liabilities and Net Assets
Current liabilities:Accounts payableAccrued liabilitiesDue to other fundsRefundable advances
Total current liabilities
Net assets:Unrestricted:
OperatingDesignatedFixed assets
Total net assets
2006 2005
270,030134,62427,102
431,756
1,812,186(967,222)
844,964
142,58765,54927,102
21,059256,297
155,85119,608
844,964
1,020,423
295,192
168,70637,647
501,545
1,526,269(842,922)
683,347
$ 1,276,720 $ 1,184,892
178,08465,71437,64746,622
328,067
152,675
20,803683,347
856,825
Total Liabilities and Net Assets $ 1,276,720 $ 1,184,892
The accompanying notes are an integral part of this statement.
3
Delta Community Action Association, Inc.Tallulah, Louisiana
Statements of ActivitiesFor the Years Ended June 30, 2006 and 2005
Head Start programChild care food programCommunity services block grantHome energy assistanceFamily day care servicesDelta recovery programMigrant educationGeneral services
Total expenses
Changes in net assets
Net assets as of beginning of year
Net assets as of end of year
2,764,083
289,228
165,468
59,276
1,001,712
133,566
118,105
2,456
4,533,894
163,598
856,825
$ 1,020,423 $
2,482,052
223,707
158,254
13,259
947,540
124,938
100,133
9,450
4,059,333
48,915
807,910
856,825
The accompanying notes are an integral part of this statement.
4
Delta Community Action Association, inc.Talluiah, Louisiana
Statements of Cash FlowsFor the Years Ended June 30, 2006 and 2005
2006 2005
Operating activities
Changes in net assetsAdjustments to reconcile change in net assets to
net cash provided by operating activities:DepreciationLoss on disposal(Increase) decrease in operating assets:
Grant receivablesIncrease (decrease) in operating liabilities:
The accompanying notes are an integral part of this statement.
5
Delta Community Action Association, Inc.Tallulah, Louisiana
Notes to Financial StatementsJune 30, 2006 and 2005
(1) Summary of Significant Accounting Policies
A. Nature of Activities
Delta Community Action Association, Inc. (Delta) is a private non-profit corporation incorporatedunder the laws of the State of Louisiana. A Board of Directors composed of 15 members governsDelta. Delta operates as a community action agency administering various federal and statefunded programs designed to provide assistance to the poor and disadvantaged in variousparishes in Louisiana that Delta serves. The following programs, with their approximate percentageof total revenues indicated, are administered by Delta:
Head Start Program (62%) - Provides comprehensive early child development for disadvantagedand handicapped preschool children and their families. Funding is provided by federal funds fromthe U.S. Department of Health and Human Services.
Child Care Food Program (6%) - Provides a food service program in coordination with the HeadStart Program. Funding is provided by federal funds from USDA passed through the LouisianaDepartment of Education.
Community Services Block Grant (4%) - Administers programs designed to provide servicesand activities that will have a measurable impact on causes of poverty in the community. Fundingis provided by federal funds passed through the Louisiana Department of Labor.
Home Energy Assistance (1%) - Assists low income households to offset the burden of highenergy costs. Funding is provided by federal funds passed through Louisiana Housing FinanceAgency.
Family Day Care Services (21%) - Provides a food service program for children in privatenonprofit centers of approximately 140 homes. Financing is provided by federal funds passedthrough the Louisiana Department of Education.
Delta Recovery Program (3%) - Provides substance abuse treatment and education for eligibleparticipants. Funding is provided by federal funds passed through the Louisiana Department ofHealth and Hospitals, Division of Alcohol and Drug Abuse.
Migrant Education (3%) - Provides assistance, such as housing, to establish or improveprograms designed to meet the special educational needs of migratory children of migratoryagricultural workers or migratory fishers. Funding is provided by federal funds passed through theLouisiana Department of Education.
B. Basis of Accounting
The financial statements of Delta have been prepared on the accrual basis of accounting.
C. Basis of Presentation
Financial statement presentation follows the recommendations of the Financial AccountingStandards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, FinancialStatements of Not-for-Profit Organizations. Under SFAS No. 117, the Organization is required toreport information regarding its financial position and activities according to three classes of netassets: unrestricted net assets, temporarily restricted net assets, and permanently restricted netassets.
(Continued)
6
Delta Community Action Association, Inc.Tallulah, Louisiana
Notes to Financial StatementsJune 30, 2006 and 2005
(Continued)
D. Income Tax Status
Delta is a non-profit corporation and is exempt from state and federal income taxes under Section501 (c)(3) of the Internal Revenue Code. However, income from certain activities not directlyrelated to Delta's tax-exempt purpose would be subject to taxation as unrelated business income.There was no unrelated business income for the years ended June 30, 2006 and 2005.
E. Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimatesand assumptions affect the reported amounts of assets and liabilities, the disclosure of contingentassets and liabilities and the reported revenues and expenses. Actual results could differ fromthose estimates.
F. Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, Delta considers all unrestricted highly liquidinvestments with an initial maturity of three months or less to be cash equivalents.
G. Property and Equipment
Property and equipment are carried at cost or, if donated, at the approximate fair value at the dateof donation. Depreciation is computed using the straight-line method over the estimated useful lifeof each asset. The Federal Government has a reversionary interest in property purchased withfederal funds. Its disposition as well as the ownership of any proceeds there from is subject tofederal regulations.
H. Revenue and Support
Contributions received are recorded as unrestricted, temporarily restricted, or permanentlyrestricted support, depending on the existence and/or nature of any donor restrictions. Contractualgrant revenue is reported as unrestricted support due to the restrictions placed on those funds bythe funding sources being met in the same reporting period as the revenue is earned.
Support that is restricted by the donor is reported as an increase in unrestricted net assets if therestriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets,depending on the nature of the restriction. When a restriction expires (that is, when a stipulatedtime restriction ends or purpose restriction is accomplished), temporarily restricted net assets arereclassified to unrestricted net assets and reported in the Statement of Activities as net assetsreleased from restrictions.
(2) Concentrations of Credit Risk
Financial instruments that potentially subject Delta to concentrations of credit risk consist principally oftemporary cash investments and grant receivables.
Concentrations of credit risk with respect to grant receivables are limited due to these amounts beingdue from governmental agencies under contractual terms. As of June 30, 2006 and 2005, Delta hadno significant concentrations of credit risk in relation to grant receivables.
(Continued)
7
Delta Community Action Association, Inc.Tallulah, Louisiana
Notes to Financial StatementsJune 30, 2006 and 2005
(Continued)
Delta maintains cash balances at several financial institutions. Accounts at each institution are insuredby the Federal Deposit Insurance Corporation (FDIC) up to $100,000. At June 30, 2006 total cashbalances held at financial institutions was $671,431. Of this amount, $267,838 was secured by FDIC,$176,730 was collateralized by pledged securities, and the remaining $ 226,863 was unsecured. AtJune 30, 2005 total cash balances held at financial institutions was $539,199. Of this amount,$278,002 was secured by FDIC, $190,679 was collateralized by pledged securities and the remaining$70,518 was unsecured.
(3) Grant Receivables
Various funding sources provide reimbursement of allowable costs under contracts or agreements.These balances represent amounts due from funding sources at June 30,2006 and 2005, but receivedafter those dates.
(4) Due To and Due From Other Funds
The following schedule represents amounts due to and due from other funds at June 30, 2006:
Due From Due ToFund Other Funds Other Funds
General Services $ 25,631 $Family Day Care Home Program - 18,000Community Services Block Grant - 6,800Head Start Program - 1,471Program Administration 1,471LIHEAP - 831
S 27.102 S 27.102
The following schedule represents amounts due to and due from other funds at June 30, 2005:
Due From Due ToFund Other Funds Other Funds
General Services $ 22,000 $Head Start Program - due from Child Care
Food Program 15,647 -Child Care Food Program - 15,647Community Services Block Grant - 4,000Family Day Care Home Program - 18.000
S 37.647 S 37.647
(Continued)
Delta Community Action Association, Inc.Tallulah, Louisiana
Notes to Financial StatementsJune 30, 2006 and 2005
(Continued)
(5) Property and Equipment
Property and equipment consisted of the following at June 30, 2006:
BuildingsLeasehold improvementFurniture and equipmentVehiclesVehicles not in operationAccumulated depreciation
Net investment in property and equipment
EstimatedDepreciable
Life
7-20 years7-20 years5-10 years
5 years
pment
PurchasedWith Federal
Funds
$ 416,870137,097410,224814,108
33,138( 966,473)
$ 844.964
PurchasedWith
Non-FederalFunds
$-749--
( 749)
—
Total
$ 416,870137,097410,973814,10833,138
( 967,222)
$ 844.964
Depreciation expense for the year ended June 30, 2006 was $ 138,304.
Property and equipment consisted of the following at June 30, 2005:
BuildingsLeasehold improvementFurniture and equipmentVehiclesVehicles not in operationAccumulated depreciation
Net investment in property and equipment
EstimatedDepreciable
Life
7-20 years7-20 years5-10 years
5 years
pment
PurchasedWith Federal
Funds
$ 416,870125,317309,128641,06733,138
( 842,173)
S 683.347
PurchasedWith
Non-FederalFunds
-749--
( 749)
—
Total
$ 416,870125,317309,877641,06733,138
( 842,922)
S 683.347
Depreciation expense for the year ended June 30, 2005 was $117,641.
(6) Refundable Advances
Delta records federal funds received in excess of expenditures as a refundable advance until they areexpended for the purpose of the contract or until the funds are returned to the appropriate fundingsource.
(7) Contractual Revenue - Grants
During the years ended June 30, 2006 and 2005, Delta received contractual revenue from federal andstate grants in the amount of $4,691,732 and $4,107,720, respectively. The continued existence ofthese funds is based on annual contract renewals with various funding sources.
(Continued)
Delta Community Action Association, Inc.Tallulah, Louisiana
Notes to Financial StatementsJune 30, 2006 and 2005
(Continued)
(8) Retirement Plan
Delta participates in a tax deferred annuity plan whereby an amount equal to 5% of the salary of eligibleemployees is contributed to purchase annuity contracts with an insurance company. The annuities arein the employee's name upon funding. The amount contributed for the years ended June 30,2006 and2005 was $43,553 and $33,711, respectively.
(9) Accrued Liabilities
Accrued liabilities consisted of the following:2006 2005
Delta leases certain buildings and equipment under operating leases. Rental costs on those leases forthe years ended June 30, 2006 and 2005, were as follows:
Commitments under lease agreements having initial remaining terms in excess of one year are asfollows:
For the Year EndingJune 30.
2007 $ 18,3472008 9,8542009 2.057
Total minimum future rentals S 30.258
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13
Delta Community Action Association, Inc.Taliulah, Louisiana
Head Start Grant No. 06CH0393/15Schedule of Revenues, Expenditures and Changes in Fund Balance
For the Contract Period: July 1, 2005 to June 30, 2006
Revenues:
Amount awarded this budget periodGrantee's contribution
TRAVIS H. MOREHART, CPAA EDWARD BALL, CPAVICKIE D. NOBLE, CPA
TELEPHONE (318) 222-5415 FAX (318) 222-5441
C. BRYAN COYLE, CPA
MEMBERAMERICAN INSTITUTE
CERTIFIED PUBLIC ACCOUNTANTS
SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS
Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards
To the Board of DirectorsDelta Community Action Association, Inc.Tallulah, Louisiana
We have audited the financial statements of Delta Community Action Association, Inc. (a nonprofit organization) as ofand for the year ended June 30, 2006, and have issued our report thereon dated October 13,2006. We conducted ouraudit in accordance with auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of theUnited States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Delta Community Action Association, Inc.'s internal control overfinancial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on thefinancial statements and not to provide an opinion on the internal control over financial reporting. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might bematerial weaknesses. A material weakness is a reportabte condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud inamounts that would be material in relation to the financial statements being audited may occur and not be detected within atimely period by employees in the normal course of performing their assigned functions. We noted no matters involving theinternal control over financial reporting and its operation that we consider to be material weaknesses. However, we notedother matters involving the internal control over financial reporting which we have reported to management of DeltaCommunity Action Association, Inc.. in a separate management letter dated October 13, 2006.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Delta Community Action Association, Inc.'s financialstatements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts and grant agreements, noncompiiance with which could have a direct and material effect on thedetermination of financial statement amounts. However, providing an opinion on compliance with those provisions wasnot an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed noinstances of noncompiiance that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the Board of Directors and federal awardingagencies and pass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.
Cook & MorehartCertified Public AccountantsOctober 13, 2006
TRAVIS H. MOREHART, CPA TELEPHONE (318) 222-5415 FAX (318) 222-5441 RAYEBURN G COOK (RET.)A. EDWARD BALL, CPAVICKIE D NOBLE, CPA
MEMBERAMERICAN INSTITUTE
C. BRYAN COYLE, CPA CERTIFIED PUBLIC ACCOUNTANTS
SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS
Report on Compliance with Requirements Applicable to EachMajor Program and on Internal Control Over Compliance in
Accordance With OMB Circular A-133
To the Board of DirectorsDelta Community Action Association, Inc.Tallulah, Louisiana
ComplianceWe have audited the compliance of Delta Community Action Association, Inc. (a non-profit organization) with the typesof compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2006.Delta Community Action Association, Inc.'s major federal programs are identified in the summary of auditor's resultssection of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,regulations, contracts and grants applicable to each of its major federal programs is the responsibility of DeltaCommunity Action Association, Inc.'s management. Our responsibility is to express an opinion on Delta CommunityAction Association, Inc.'s compliance based on our audit
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the types of compliance requirements referred to above thatcould have a direct and material effect on a major federal program occurred. An audit includes examining, on a testbasis, evidence about Delta Community Action Association, Inc.'s compliance with those requirements and performingsuch other procedures as we considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion. Our audit does not provide a legal determination on Delta Community ActionAssociation, Inc.'s compliance with those requirements.
In our opinion, Delta Community Action Association, Inc. complied, in all material respects, with the requirementsreferred to above that are applicable to each of its major federal programs for the year ended June 30, 2006.
Internal Control Over ComplianceThe management of Delta Community Action Association, Inc. is responsible for establishing and maintaining effectiveinternal control over compliance with requirements of laws, regulations, contracts and grants applicable to federalprograms. In planning and performing our audit, we considered Delta Community Action Association, Inc.'s internalcontrol over compliance with requirements that could have a direct and material effect on a major federal program inorder to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test andreport on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal controlthat might be material weaknesses. A material weakness is a reportable condition in which the design or operation of oneor more of the internal control components does not reduce to a relatively low level the risk that noncompliance with theapplicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material inrelation to a major federal program being audited may occur and not be detected within a timely period by employees in the
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normal course of performing their assigned functions. We noted no matters involving the internal control over complianceand its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, the Board of Directors and federal awardingagencies and pass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.
Cook & MorehartCertified Public AccountantsOctober 13, 2006
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Delta Community Action Association, Inc.Tallulah, Louisiana
Summary Schedule of Prior Audit FindingsJune 30, 2006
2005-C1 REPORTABLE CONDITION
Statement of Condition: During our audit, we noted that the agency utilizes signature stamps and a check-signing machine for authorized signatures on checks. Individuals preparing the checks have access to thestamps and the check-signing machine.
Recommendation: We recommend that adequate internal controls be established concerning separation ofduties, and that individuals preparing checks not have access to signature stamps or the check-signingmachine.
Current Status: New procedures established by agency. No finding in current year audit.
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Delta Community Action Association, Inc.Tallulah, Louisiana
Schedule of Findings and Questioned CostsJune 30, 2006
A. Summary of Audit Results
1. The auditor's report expresses an unqualified opinion on the financial statements of Delta CommunityAction Association, Inc.
2. No reportable conditions are reported in the Report on Compliance and on Internal Control Over FinancialReporting Based on an Audit of Financial Statements Performed in Accordance with Government AuditingStandards.
3. No instances of noncompiiance material to the financial statements of Delta Community ActionAssociation, Inc. were disclosed during the audit.
4. No reportable conditions are reported in the Report on Compliance With Requirements Applicable to EachMajor Program and internal Control Over Compliance in Accordance With OMB Circular A-133.
5. The auditor's report on compliance for the major federal award programs for Delta Community ActionAssociation, Inc. expresses an unqualified opinion.
6. There are no audit findings relative to the major federal award program for Delta Community ActionAssociation, Inc.reported in Part C. of this Schedule.
7. The programs tested as major programs included: 1) Head Start Program CFDA#93.600, and 2) Childand Adult Care Food Program (FDCH and Head Start) CFDA #10.558.
8. The threshold for distinguishing Types A and B programs was $300,000.
9. Delta Community Action Association, Inc. does not qualify as a low-risk auditee.
B. Findings - Financial Statements Audit: None.
C. Findings and Questioned Costs - Major Federal Award Programs Audit: None.
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Delta Community Action Association, Inc.Tallulah, Louisiana
Schedule of Prior Audit Findings For Louisiana Legislative AuditorJune 30, 2006
There was one reportable condition related to federal awards programs for the prior year audit for the yearended June 30, 2005, as described in the accompanying Summary Schedule of Prior Audit Findings. Thewas one reportable condition related to the financial statements for the prior year audit for the year ended June30, 2005, as follows:
2005-B1 REPORTABLE CONDITION
Statement of Condition: During our audit, we noted that the agency utilizes signature stamps and a check-signing machine for authorized signatures on checks. Individuals preparing the checks have access to thestamps and the check-signing machine.
Recommendation: We recommend that adequate internal controls be established concerning separation ofduties, and that individuals preparing checks not have access to signature stamps or the check-signingmachine.
Current Status: New procedures established by agency. No finding in current year audit.
There were five management letter comments in the previous audit for the year ended June 30, 2005, asfollows:
Comment #1 - Payroll Transactions
Improvement noted. No comment in current year audit.
Comment #2 - Family Day Care Home Program File Exam
See comment in current year audit.
Comment #3 - Migrant Financial Reports
See comment in current year audit.
Comment #4 - Fixed Assets
Improvement noted. No comment in current year audit.
Comment #5 - Issuance of Checks
Improvement noted. No comment in current year audit.
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Delta Community Action Association, Inc.Tallulah, Louisiana
Schedule of Current Audit Findings For Louisiana Legislative AuditorJune 30, 2006
There are no findings or questioned costs for the current year audit period ended June 30, 2006.
There are three management letter comments for the current audit year ended June 30,2006. Management'sresponse to these is as follows:
Comment #1 - Family Day Care Home Program File Exam
In order to insure all FDCH program files contain required items and forms are complete, a list of requireditems will be attached to the inside cover of each file. In addition a person independent of the personresponsible for developing and maintaining the files will review the files periodically to ensure the variousforms that are required to be maintained are complete.
Comment #2 - Migrant Education Financial Reports
All Migrant Education program financial reports that are sent to the state will be reviewed and approved by theaccounting department prior to submission.
Comment #3 - Child and Adult Care Food Program - Head Start Applications
In order to ensure that each USDA Free/Reduced Meal applications is complete and accurate a personindependent of the person completing the application will review each application periodically.
TRAVIS H MOREHART, CPAA. EDWARD BALL, CPAVICKIE D. NOBLE, CPA
C BRYAN COYLE. CPA
TELEPHONE (318) 222-5415 FAX (318) 222-5441
MEMBERAMERICAN INSTITUTE
CERTIFIED PUBLIC ACCOUNTANTS
SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS
Octobei-13,2006
Management Letter
Board of DirectorsDelta Community Action Association, Inc.Tallulah, Louisiana
We have audited the financial statements of Delta Community Action Association, Inc. (Delta), for the yearended June 30, 2006, and have issued our report thereon dated October 13, 2006. In planning andperforming our audit of the financial statements of Delta Community Action Association, Inc., we considered itsinternal control over financial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide assurance on the internal control overfinancial reporting.
During our audit certain matters were noted involving internal controls over financial reporting and otheroperational matters which appear to merit your attention for consideration to improve the internal control oroperations of Delta. These comments have been discussed with the appropriate members of management.
(1) Family Day Care Home Program File Exam
During our testing of files for eligibility for the Family Day Care Home Program, we noted several instances ofinsignificant items which were not completed on the various forms that are required to be maintained in theprogram files.
We recommend that independent reviews be made of all files to ensure completeness and accuracy of allrequired forms.
(2) Migrant Education Financial Reports
During our audit, we noted that the Migrant Education program financial reports sent to the state were notbeing prepared from or reconciled to the agency's general ledger.
We recommend that financial reports be reviewed and approved by the accounting department prior tosubmission.
(3) Child and Adult Care Food Program - Head Start Applications
During our testing of applications for the Child and Adult Care Food Program - Head Start program, we notedseveral instances where the free / reduced section of the application was not completed or not completelyaccurately.
We recommend an independent review of all the applications for completeness and accuracy to ensure thatthe reimbursement reports are prepared correctly in regards to the free and reduced rates.
We express sincere thanks to Delta personnel for the cooperation and assistance provided us during ouraudit. We are available to provide you assistance and consultation in the implementation of the abovementioned items. This letter is furnished solely for the use of management and the Board of Directors and isnot intended to be used for any other purpose.
