BEGINNER'S MINP. INC.d/b/a/ COMMUNITY RESOURCE

COORDINATORS

JUNE 30.2005

BATON ROUGE. LOUISIANA

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and olher 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

CONTENTS

Audited Financial Statements:

Independent Auditor's Report Page 1 - 2

Statements of Financial Position 3

Statements of Activities 4

Statements of Cash Flows 5

Statement of Functional Expenses 6-7

Notes to Financial Statements 8-10

Supplementary Information:

Independent Auditor's Report on Internal Control Over FinancialReporting and on Compliance and Other Matters Based on anAudit of Financial Statements Performed in Accordance withGovernment Auditing Standards 11-12

HmisI.Bourgcois,llPCertified Public Accountants

RundyJ. Bonnecaze, CPA* 2322 Tremoiit Drive Members American Institute ofJoseph D. Richard, Jn CPA' LA -JQ^ Certified Public AccountantsRonnie E. Stamper, CPA* B 'FemandP.Gcnrc.CPA- Phone: (225) 928-4770 ,nS .MC . * o . nStephen M.iiuggin>, CPA* Fax. (225) 926-0945 1175DclEsteAvcnue.Su.tcBfax , t^D; 720 u*43Monica L.2uni~ CPA* ' "' ^J' -— Denham Springs, LA 70726Ronald L. Gagnei, CPA* =Douglas J. Nelson, CPA* www.htbcpa.comCeleste D. Viator, CPA*Russell J. Rcswcbcr, CPA*Laura E. Monroe, CPA*R. David Wascom, CPA*

•AI^MA^KCCW*, August 5,2005

Independent Auditor's Report

To the Board of DirectorsBeginner's Mind, Inc.d/b/a Community Resource CoordinatorsBaton Rouge, Louisiana

We have audited the accompanying Statements of Financial Position of Beginner's Mind, Inc. (a nonprofitorganization) as of June 30, 2005 and 2004, and the related Statements of Activities, Cash Flows, andFunctional Expenses for the years then ended. These financial statements are the responsibility of theOrganization's management. Our responsibility is to express an opinion on these financial statements basedon 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 hi Government Auditing Standards.issued by the Comptroller General of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of Beginner's Mind, Inc. as of June 30,2005 and 2004, and the changes in its net assetsand its cash flows for the years then ended in conformity with accounting principles generally accepted inthe United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated August 5,2005on our consideration of Beginner's Mind, Inc. 's internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.The purpose of that report is to describe the scope of our testing of internal control over financial reportingand compliance and the results of that testing and not to provide an opinion on the internal control over

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financial reporting or on compliance. That report is an integral part of our audit performed in accordancewith Government Auditing Standards and should be considered in assessing the results of our audit.

Respectfully submitted,

BEGINNER'S MIND, INC.d/b/a COMMUNITY RESOURCES COORDINATORS

STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30,2005 AND 2004

ASSETS

Current Assets:CashAccounts ReceivableRetainage Receivable - Short-TeimOther AssetsPrepaid Insurance

Total Current Assets

Property, Plant and Equipment:Office Furniture and EquipmentAutomobilesLeasehold ImprovementsAccumulated Depreciation

Total Property, Plant and Equipment

Other Assets:Retainage Receivable - Long-Term

Total Assets

LIABILITIES AND NET ASSETSCurrent Liabilities:

Accounts PayableAccrued PayrollPayroll Taxes PayableCapital Lease Obligations - Short Term

Total Current Liabilities

Net Assets:Unrestricted

Total Net Assets

Total Liabilities and Net Assets

2005 2004

$ 183,465 $ 156,67779,297 69,856

57,60759,943275

9,312 14,707

332,292

37,978

1,500(20,967)

18,511

20.041

298,847

37,02410,4041,500

(20,276)

28,652

19,542

$ 370,844 $ 347,041

$ 3,750 $47,5636,037

42,4875,1736,929

57,350

313,494

313,494

54,589

292,452

292,452

$ 370,844 $ 347,041

The accompanying notes are an integral part of these financial statements.3

BEGINNER'S MIND, INC.d/b/a COMMUNTY RESOURCE COORDINATORS

STATEMENTS OF ACTIVITIES

FOR THE YEARS ENDED JUNE 30, 2005 AND 2004

2005 2004

Support and Revenue:Department of Health and Hospitals Contract RevenueCapital Area Human Services Contract RevenueEarly Steps Program RevenueMedicaid Fee for Service RevenueMiscellaneous IncomeInterest Income

Total Support and Revenue

Expenses and Losses:Program ServicesManagement and General

Total Expenses

Loss on Disposal of Fixed Assets

Total Expenses and Losses

Increase in Net Assets

Net Assets at Beginning of Year

Net Assets at End of Year

$ 604,29152,773163,033156,901

181459

977,638

883,85168,369

952,220

4,376

956,596

21,042

292,452

$ 313,494

$ 586,58352,038154,701106,074

803470

900,669

810,37162,000

872,371

-

872,371

28,298

264,154

$ 292,452

The accompanying notes are an integral part of these financial statements.4

BEGINNER'S MIND, INC.d/b/a COMMUNITY RESOURCE COORDINATORS

STATEMENTS OF CASH FLOW

FOR THE YEARS ENDED JUNE 30,2005 AND 2004

2005 2004

Cash Flows From Operating Activities:Increase in Net AssetsAdjustments To Reconcile Increase in Net Assets To Net Cash Provided

By Operating Activities:DepreciationLoss on Disposal of Fixed Assets

Changes in Assets and Liabilities:(Increase) Decrease in Accounts Receivable(Increase) Decrease in Prepaid Insurance(Increase) Decrease in Other Current Assets(Increase) Decrease in Contract ReceivableIncrease (Decrease) in Accounts PayableIncrease (Decrease) in Accrued PayrollIncrease (Decrease) in Payroll Taxes Payable

Net Cash Provided By Operating Activities

Cash Flows From Investing Activities:Principal Payments Under Capital Lease ObligationsPurchase of Equipment

Net Cash Used in Investing Activities

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year

Cash and Cash Equivalents at End of Year

Supplemental Disclosure of Cash Flow Information:Interest Expense

$ 21,042 $ 28,298

8,4774,376

(9,441)5,395(275)

(2,835)3,7505,076864

7,761-

(6,691)(4,735)526

(5,095)-4,221344

36,429

(6,929)(2,712)

24,629

(6,902)(8,169)

(9,641) (15,071)

26,788 9,558

156,677 147,119

$ 183,465 $ 156,677

285 $ 807

The accompanying notes are an integral part of these financial statements.5

BEGINNER'S MIND, INC.d/b/a COMMUNITY RESOURCE COORDINATORS

STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED JUNE 30,2005

Program Services

SalariesPayroll TaxesInsuranceEmployee BenefitsAdvertising & PromotionContract ServicesDepreciationDues & SubscriptionsInterestRentOffice ExpenseEquipment RentPostageLegal & ProfessionalLicensesMeetingTelephoneTrainingAuto ExpenseMiscellaneous

PersonalSupport

Coordination

$

$

33,4922,7521,957

6246

-394

6913

2,093780

263

-

76445

1,31345

44,088

CaseManagement

MR/DD

$ 415,30534,13024,266

769568990

4,888851164

25,9479,672

3,259

399

9,475556

16,279552

$ 548,070

CaseManagement

Infants & Toddlers

$ 127,27110,4597,436

236174300

1,49826150

7,9522,964

999

121

2,904170

4,989169

$ 167,953

Other

$ 93,7787,7075,479

173128210

1,10419138

5,8582,184

736

85

2,140126

3,676127

$ 123,740

The accompanying notes are an integral part of these financial statements.6

TotalProgramServices

$ 669,84655,04839,138

1,240916

1,5007,8841,372

26541,85015,600

5,257-605

-15,283

89726,257

893

Management& General

$ 46,1134,1432,946

9369

-59310320

3,1501,174

3967,697-588

1,15067

-67

2005Total Expenses

$ 715,95959,19142,084

1,333985

1,5008,4771,475

28545,00016,774

5,6537,697

605588

16,433964

26,257960

$883,851 $ 68,369 $ 952,220

BEGINNER'S MIND, INC.d/b/a COMMUNITY RESOURCE COORDINATORS

STATEMENT OF FUNCTIONAL EXPENSES

FOR THE YEAR ENDED JUNE 30,2004

Program Services

SalariesPayroll TaxesInsuranceEmployee BenefitsAdvertising & PromotionContract ServicesDepreciationDues & SubscriptionsInterestRentOffice ExpenseEquipment RentPostageLegal & ProfessionalLicensesMeetingTelephoneTrainingAuto ExpenseMiscellaneous

PersonalSupport

Coordination

$ 36,4002,9252,528

6242

-4337645

2,444544245263

-

94291

1,4542

$ 48,496

CaseManagement

MR/DD

$ 388,26631,20326,962

664451

1,0054,620

815481

26,0705,8002,6142,807

405

10,043967

15,50425

$ 518,702

CaseManagement

Infants & Toddlers

$ 109,2008,7767,583

187127300

1,299229135

7,3321,631

735789

121

2,825272

4,3617

$ 145,909

Other

$ 72,8005,8505,055

12484

19586615390

4,8881,088

490526

79

1,883181

2,9066

$ 97,264

The accompanying notes are an integral part of these financial statements.7

TotalProgramServices

$ 606,66648,75442,128

1,037704

1,5007,2181,273

75140,734

9,0634,0844,385-605

-15,6931,511

24,22540

$ 810,371

Management& General

$ 40,2423,6703,171

7853

-5439656

3,066682309331

7,934-472

1,180114

-3

$ 62,000

2004Total Expenses

$ 646,90852,42445,299

1,115757

1,5007,7611,369

80743,8009,7454,3934,7167,934

605472

16,8731,625

24,22543

$ 872,371

BEGINNER'S MIND, INC.d/b/a/ COMMUNITY RESOURCE COORDINATORS

NOTES TO FINANCIAL STATEMENTS

JUNE 30,2005 AND 2004

Note 1 - Summary of Significant Accounting Policies -

Nature of Activities

Beginner's Mind, Inc. (the Organization) is a nonprofit organization d/b/a Community ResourceCoordinators (CRC). The Organization provides case management services and personal supportcoordination services to the mentally retarded, developmentally disabled, at risk infants and toddlers,and high need elderly in the community. The Organization provides these services under contract withthe Department of Health and Hospitals and Capital Area Human Services. For qualifying participants,services are paid by Medicaid. The Organization is exempt from income taxes under Section 501(cX3)of the Internal Revenue Code.

Basis of Accounting

The Organization prepares its financial statements on the accrual basis of accounting. Accordingly,revenues are recognized when earned and expenses are recognized when incurred.

Basis of Presentation

Financial statement presentation follows the recommendations of the Financial Accounting StandardsBoard in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statement ofNot-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report informationregarding its financial position and activities according to three classes of net assets: unrestricted netassets, temporarily restricted net assets, and permanently restricted net assets, as applicable. TheOrganization does not have temporarily or permanently restricted net assets at June 30,2005 and 2004.

Estimates

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

Support and Revenue

All support and revenue are considered available for unrestricted use unless specifically restricted by thedonor. Amounts received that are designated for future periods or restricted by the donor for specificpurposes are reported as temporarily restricted or permanently restricted support that increases those netasset classes, depending on the nature of the restriction. When a restriction expires (that is, when astipulated time restriction ends or purpose of restriction is accomplished), temporarily restricted net

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assets are reclassified to unrestricted net assets and reported in the Statement of Activities as net assetsreleased from restrictions.

Functional Allocation of Expenses

The costs of providing the various programs have been summarized on a functional basis in theStatement of Functional Expenses. Accordingly, certain costs have been allocated among the programand supporting services benefitted based on the percentage of salaries in each category.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash equivalents include all highly liquid debt instruments andcertificates of deposit with maturities of three months or less when purchased.

Contributed Services

The Organization recognizes contribution revenue for certain goods and services received at the fairvalue of those goods and services provided those goods and services create or enhance nonfianncialassets or require specialized skills which are provided by individuals possessing those skills and wouldtypically need to be purchased if not provided by donation. During the years ended June 30,2005 and2004, the value of contributed goods and services meeting the requirements for recognition in thefinancial statements was not material and has not been recorded.

Property and Equipment

Property and equipment are recorded at cost Maintenance and repairs are charged to operations andadditions and improvements are capitalized. The cost of property sold or otherwise disposed of and theaccumulated depreciation thereon are eliminated from the property and related accumulated depreciationaccounts, and any gain or loss is credited or charged to income.

Depreciation is provided by the straight-line method over the estimated useful lives.

Concentration of Risk

During the year ended June 30,2005 and 2004, the Organization derived approximately 95% and 94%of its revenue from Medicaid of which 65% and 69% of this income was derived through contract withthe Department of Health and Hospitals.

At times during the year, the Company had cash deposits and outstanding checks in excess of federallyinsured limits.

Note 2 - Line of Credit -

At June 30,2005, the Organization has a line of credit available in the amount of $7,000 with HiberniaNational Bank at a Wall Street Journal Prime Rate + 4.50% floating rate of interest. The line matureson November 17,2005 and is secured by the personal guarantee of the Director. As of June 30,2005and 2004, there were no draws outstanding on this line of credit.

The Organization also has a line of credit in the amount of $50,000 with Regions Bank at a Wall Street

Journal Prime Rate + 2.00% floating rate of interest. The line matures on November 1,2005, and issecured by the personal guarantee of the Director. As of June 30,2005 and 2004, there were no drawsoutstanding on this line of credit.

Note 3 - Leases -

The Organization leases an office building under a noncancelable operating lease, which expired onFebruary 28,2005. As of June 30,2005, the Organization still occupies the office building on a monthto month basis with rent payable as set forth in the previously mentioned lease. Rental expense underthe operating lease was $45,000 in 2005 and $43,800 in 2004.

The Organization entered into agreements to lease certain equipment classified as operating leasesduring the year ended June 30, 2005. The lease expense for June 30, 2005 was $4,720. Thefollowing is a schedule by years of the future minimum lease payments as of June 30,2005:

June 30,2006 $11,880June 30,2007 11,880June 30, 2008 11,534June 30,2009 7,728June 30,2010 2.576

$ 45,598

Note 4 - Retirement Plan -

Employees of the Organization may participate in an Internal Revenue Code section 403(b)Retirement Savings Plan. The Plan is funded solely by employee contributions to the Plan, pursuantto a salary reduction agreement.

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SUPPLEMENTARY INFORMATION

INDEPENDENT AUDITOR'S REPORT ON INTERNALCONTROL OVER FINANCIAL REPORTING AND

ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS

HwnislBourgcoisJlPCertified Public Accountants

Randy J. Bonnecaze, CPA' 2322 Tremont Drive Members American Institute ofJoseph D. Richard, Jr., CPA' Baton Rouse LA 70809 Certified Public AccountantsRonnie E. Stamper, CPA* ° 'Fanand P. Genre, CPA* Phone: (225) 928-4770 i n « n i c . A c'» oc. t. \t it • r-DA« ^ ,^~,v rt-»x MAC 1175 Del EsteAvenue, Suite BS±uiSrSr Fax:(225)926-0945 Denhan, Springs, LA 70726Ronald L. Gagncl, CPA*Douglas J. Nelson, CPA* www.htbcpa.comCeleste D Viator. CPA*Russell J. Reswebcr, CPA*

• Laura E. Monroe, CPA*R. David Wascom, CPA*

*A Professional Atxamitinj> Corporation - f\f\r\fAugust 5,2005

To the Board of DirectorsBeginner's Mind, Inc.

d/b/a Community Resource CoordinatorsBaton Rouge, Louisiana

We have audited the financial statements of Beginner's Mind, Inc. (a nonprofit organization) as of and forthe year ended June 30,2005 and have issued our report thereon dated August 5,2005. We conducted ouraudit in accordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Beginner's Mind, Inc. 's internal control over financialreporting in order to determine our auditing procedures for the purpose of expressing our opinion on thefinancial statements and not to provide assurance on the internal control over financial reporting. Ourconsideration of the internal control over financial reporting would not necessarily disclose all matters inthe internal control that might be material weaknesses. A material weakness is a reportable condition inwhich the design or operation of one or more of the internal control components does not reduce to arel-ativelylow level the risk that misstatements caused by error or fraud in amounts that would be materialin relation to the financial statements being audited may occur and not be detected within a timely periodby employees in the normal course of performing their assigned functions. We noted no matters involvingthe internal control over financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Beginner's Mind, Inc. 's financial statements arefree of 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 materialeffect on the determination of financial statement amounts. However, providing an opinion on compliancewith those provisions was not an objective of our audit and, accordingly, we do not express such anopinion. The results of our tests disclosed no instances of noncompliance or other matters that are requiredto be reported under Government Auditing Standards.

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This report is intended solely for the information of Management, others within me organization, the Officeof the Legislative Auditor, and various cognizant agencies, and is not intended to be and should not be usedby anyone other than these specified parties. However, under the provisions of Louisiana Revised Statute24:513, this report is distributed by the legislative auditor as a public document and its distribution is notlimited.

Respectfully submitted,

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