FLORIDA PREGNANCY CARE NETWORK, INC. Tallahassee, Florida

FLORIDA PREGNANCY CARE
NETWORK, INC.
Tallahassee, Florida
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
Years Ended December 31, 2009 and 2008
CONTENTS
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 - 7
SUPPLEMENTARY INFORMATION
Schedule of Functional Expenses ..................................................................................................8
ADDITIONAL ELEMENTS OF REPORTS PREPARED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS AND WITH
CHAPTER 10.650, RULES OF THE AUDITOR GENERAL
Schedule of Expenditure of State Financial Assistance.................................................................9
INDEPENDENT AUDITORS’ 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 ........................................................................ 10 - 11
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO EACH MAJOR STATE PROJECT
AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH CHAPTER 10.650, RULES OF THE AUDITOR GENERAL ................................ 12 - 13
Schedule of Findings and Questioned Costs.......................................................................... 14 - 15
INDEPENDENT AUDITORS' REPORT
Board of Directors
Florida Pregnancy Care Network, Inc.
Tallahassee, Florida
We have audited the accompanying statements of financial position of Florida Pregnancy Care
Network, Inc. (a nonprofit organization) as of December 31, 2009 and 2008, and the related
statements of activities and cash flows for the years then ended. These financial statements are the
responsibility of management of Florida Pregnancy Care Network, Inc. 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 of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller 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 of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. 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, the
financial position of Florida Pregnancy Care Network, Inc. as of December 31, 2009 and 2008, and
the changes in its net assets and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have issued our report dated July 29, 2010
on our consideration of Florida Pregnancy Care Network, Inc.’s internal control over financial
reporting and our tests of its compliance with certain provision of laws, regulations, contracts and
grant agreements and other matters. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the basic financial statements of
Florida Pregnancy Care Network, Inc. taken as a whole. The accompanying schedule of functional
expenses is presented for purposes of additional analysis and is not a required part of the basic
financial statements. The accompanying schedules of expenditures of state financial assistance and
findings and questioned costs are presented for purposes of additional analysis as required by Florida
Statute 215.97, Florida Single Audit Act, and are not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the
financial statements taken as a whole.
July 29, 2010
FLORIDA PREGNANCY CARE NETWORK, INC.
STATEMENTS OF FINANCIAL POSITION
December 31, 2009 and 2008
2009
2008
ASSETS
CURRENT ASSETS
Cash
Grants receivable
Prepaid insurance
Security deposit
$
TOTAL CURRENT ASSETS
462
150,255
1,547
825
$
13,623
172,215
2,519
825
153,089
189,182
3,340
4,475
$ 156,429
$ 193,657
$
$
PROPERTY AND EQUIPMENT, net
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable and accrued expenses
Service provider payables
TOTAL CURRENT LIABILITIES
NET ASSETS
Unrestricted
See accompanying notes.
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7,679
120,375
2,033
150,148
128,054
152,181
28,375
41,476
$ 156,429
$ 193,657
FLORIDA PREGNANCY CARE NETWORK, INC.
STATEMENTS OF ACTIVITIES
Years Ended December 31, 2009 and 2008
2009
UNRESTRICTED REVENUE AND SUPPORT
FPSSP Grant/Contract
Contributions
Other income
2008
$ 961,954
2,275
3
$ 913,663
2,100
303
964,232
916,066
951,317
26,016
891,931
26,343
977,333
918,273
TOTAL UNRESTRICTED REVENUE AND SUPPORT
EXPENSES
FPSS Program
General and administrative
TOTAL EXPENSES
CHANGE IN UNRESTRICTED NET ASSETS
(
NET ASSETS, BEGINNING OF YEAR
13,101)
(
41,476
NET ASSETS, END OF YEAR
See accompanying notes.
-4-
$
28,375
2,207)
43,683
$
41,476
FLORIDA PREGNANCY CARE NETWORK, INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2009 and 2008
2009
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile change in net assets
to net cash used in operating activities:
Depreciation expense
(Increase) decrease in:
Grants receivable
Prepaid expenses
Increase (decrease) in:
Accounts payable and accrued expenses
Service provider payables
2008
$ ( 13,101)
$(
1,135
NET CASH USED IN OPERATING ACTIVITIES
(
(
63,830)
171)
5,646
29,773)
(
(
635)
64,977
(
13,161)
(
974)
-
(
1,973)
-
(
1,973)
(
2,947)
NET CASH USED IN INVESTING ACTIVITIES
(
CASH, BEGINNING OF YEAR
892
21,960
972
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets
NET DECREASE IN CASH
13,161)
13,623
CASH, END OF YEAR
$
See accompanying notes.
-5-
2,207)
462
16,570
$
13,623
FLORIDA PREGNANCY CARE NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2009 and 2008
NOTE 1 – NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Activities Florida Pregnancy Care Network, Inc. (“the Network”) was incorporated as a
Florida nonprofit corporation on August 25, 2005, for the purpose of increasing the availability,
quality and awareness of pregnancy support services across the state of Florida. In 2006, the
Network began conducting its social service purpose with funding from a contract titled Florida
Pregnancy Support Services Program (“FPSSP”). The Network receives funding from Florida
Department of Health, Division of Family Health Services to provide deliverable services that
include the development and operation of a statewide toll-free hotline; the development of a plan to
identify, qualify and train local pregnancy service providers to participate in the program; and the
development of a quality assurance, monitoring and compliance plan to oversee that the providers
use the state financial assistance in accordance with applicable laws and regulations.
Basis of Accounting The Network’s financial statements have been prepared using the accrual basis
of accounting. Accordingly, revenue is recognized when earned and expenses when incurred.
Basis of Presentation Net assets and changes in net assets of the Network are classified and
reported as unrestricted when net assets are not subject to donor-imposed stipulations. Revenue is
reported as increases in unrestricted net assets unless use of the related assets is limited by donorimposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses
on assets or liabilities are reported as increases or decreases in unrestricted net assets unless their use
is restricted by explicit donor stipulation or by law. Temporarily restricted revenue in which the
restrictions lapse in the same period as the revenue is earned is reported as increases to unrestricted
net assets.
Cash and Cash Equivalents The Network considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
Allowance for Doubtful Accounts The Network’s records an allowance for doubtful accounts
when it considers the ability to collect a receivable is questionable.
Property and Equipment Property and equipment consists of office furniture and equipment. All
property acquired by the organization is capitalized. Purchased assets are recorded at cost or fair
value if contributed; depreciation is provided over the estimated useful lives of the respective assets
on a straight-line basis.
Income Tax Status The Network is a not-for-profit organization that has exempt status from
income taxes under Section 501(c)(3) of the Internal Revenue Code.
Contributions All contributions including unconditional promises to give, are recognized as
revenue in the period the contribution or promise is received. All contributions are available for
unrestricted use unless specifically restricted by the donor. All in-kind contributions are recorded at
fair value in the period donated.
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FLORIDA PREGNANCY CARE NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2009 and 2008
NOTE 1 – NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Donated Services Donated services are recognized as contributions in accordance with SFAS
No. 116, Accounting for Contributions Received and Contributions Made, if the services (a) create
or enhance nonfinancial assets or (b) require specialized skills, are performed by people with those
skills, and would otherwise be purchased by the Network.
Estimates The preparation of financial statements in accordance with generally accepted accounting
principles requires management to make estimates that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
Subsequent Events Management has performed an analysis of the activities and transactions
subsequent to December 31, 2009 to determine the need for any adjustments to and/or disclosures
within the audited financial statements for the year ended December 31, 2009. Management has
performed their analysis through the date of this report.
Reclassifications Functional account classifications in the prior-year financial statements have been
reclassified for comparative purposes to conform with the presentation in the current –year financial
statements.
NOTE 2 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
2009
$
6,138
(
2,798)
$
3,340
Office furniture and equipment
Less accumulated depreciation
$
(
$
2008
6,138
1,663)
4,475
Depreciation expense for the years ended December 31, 2009 and 2008 amounted to $1,135 and
$892 respectively.
NOTE 3 – CONCENTRATIONS
The Network’s main source of revenue is derived from funds received from the Florida Department
of Health Division of Family Health Services. For the years ended December 31, 2009 and 2008, the
Network received funds from one contract that comprised 99% of its total revenue for both years,
respectively.
NOTE 4 - FUNCTIONAL ALLOCATION OF EXPENSES
The costs of providing the various programs and activities have been summarized on a functional
basis in the statement of activities. Accordingly, certain costs have been allocated among the
programs and supporting services benefited.
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SUPPLEMENTARY INFORMATION
FLORIDA PREGNANCY CARE NETWORK, INC.
SCHEDULE OF FUNCTIONAL EXPENSES
Year Ended December 31, 2009 (With Comparative Totals for 2008)
FPSS
Program
Direct counseling
Salaries & wages
Call center
Yellow page advertising
Accounting & legal
Rent
Payroll taxes
Travel
Employee benefit
Supplies
Telephone & communications
Insurance
Depreciation
IT support
Printing
Postage & delivery
Equipment rental
Other expenses
$
$
790,956 $
84,498
21,918
16,262
9,749
5,258
6,526
6,180
3,058
2,849
1,078
1,055
640
619
566
105
951,317 $
See independent auditors' report.
-8-
General and
Administrative
- $
9,000
12,676
513
1,753
161
150
1,549
57
55
34
33
30
5
26,016 $
2009
Total
790,956 $
93,498
21,918
16,262
12,676
10,262
7,011
6,526
6,180
3,219
2,999
1,549
1,135
1,110
674
652
596
110
977,333 $
2008
Total
729,758
90,103
24,153
19,490
13,027
10,075
7,215
7,299
5,460
1,992
3,331
1,498
892
1,102
462
956
523
937
918,273
ADDITIONAL ELEMENTS OF REPORTS PREPARED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS AND WITH
CHAPTER 10.650, RULES OF THE AUDITOR GENERAL
FLORIDA PREGNANCY CARE NETWORK, INC.
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE
Year Ended December 31, 2009
Grantor/Program Title
CFSA
Number
Contract
Number
Transfers to
Expenditures Subrecipients
STATE
Florida Department of Health
Pregnancy Support Services Program
64.080
Total expenditures of state financial assistance
COSX2/COH5P
$
975,058
829,136
975,058 $
829,136
Notes to Schedule of Expenditures of State Financial Assistance
Basis of Presentation
The accompanying schedule of expenditures of state financial assistance includes the state
grant activity of Florida Pregnancy Care Network, Inc. and is presented on the accrual basis
of accounting. The information in this schedule is presented in accordance with the
requirements of Chapter 69I-5, Rules of the Florida Department of Financial Services,
Florida Administrative Code, Schedule of Expenditures of State Financial Assistance.
Therefore, some amounts presented in this schedule may differ from amounts presented in,
or used in the preparation of the financial statements.
See independent auditor's report.
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INDEPENDENT AUDITORS' 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
Board of Directors
Florida Pregnancy Care Network, Inc.
Tallahassee, Florida
We have audited the financial statements of Florida Pregnancy Care Network, Inc. (the Network) as
of and for the year ended December 31, 2009, and have issued our report thereon dated July 29,
2010. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Network's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the Network's internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the Network's internal control over financial reporting.
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.
Our consideration of internal control over financial reporting 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 financial reporting that might be deficiencies, significant deficiencies or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting that we
consider to be material weaknesses, as defined above.
13
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Network’s financial statements are free
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
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 that are
required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, Board of Directors and
State awarding agencies and is not intended to be and should not be used by anyone other than these
specified parties.
July 29, 2010
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO EACH MAJOR STATE PROJECT
AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH CHAPTER 10.650, RULES OF THE AUDITOR GENERAL
Board of Directors
Florida Pregnancy Care Network, Inc.
Tallahassee, Florida
Compliance
We have audited the compliance of Florida Pregnancy Care Network, Inc. (the Network) with the
types of compliance requirements described in the Department of Financial Services’ State Projects
Compliance Supplement, that are applicable to its major State project for the year ended
December 31, 2009. The Network’s major State project is identified in the summary of auditors’
results section of the accompanying schedule of findings and questioned costs. Compliance with the
requirements of laws, regulations, contracts and grants applicable to its major State project is the
responsibility of the Network’s management. Our responsibility is to express an opinion on the
Network’s compliance based on our audit.
We conducted our audit in accordance with standards generally accepted in the United States of
America; the standards applicable to financial statement audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and Chapter 10.650, Rules of the
Auditor General. Those standards and the Chapter 10.650, Rules of the Auditor General, 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 State project occurred. An audit includes examining, on a test basis, evidence about the
Network’s compliance with these requirements and performing such other procedures as we consider
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination of the Network’s compliance with those
requirements.
In our opinion, the Network complied, in all material respects, with the requirements referred to
above that are applicable to its major State project for the year ended December 31, 2009.
Internal Control Over Compliance
The management of the Network is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable
to State projects. In planning and performing our audit, we considered the Network’s internal
control over compliance with the requirements that could have a direct and material effect on a major
State project in order to determine our auditing procedures for the purpose of expressing our opinion
on compliance 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 the
Network’s internal control over compliance.
A control deficiency in an entity’s internal control over compliance 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 noncompliance with a type of compliance requirement
of a State project on a timely basis. A significant deficiency is a control deficiency, or combination
of control deficiencies, that adversely affects the entity’s ability to administer a State project such
that there is more than a remote likelihood that noncompliance with a type of compliance
requirement of a State project that is more than inconsequential will not be prevented or detected by
the entity’s internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material noncompliance with a type of compliance
requirement of a State project will not be prevented or detected by the entity’s internal control.
Our consideration of internal control over compliance was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control
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, as defined above.
This report is intended solely for the information and use of the Network’s management, State
awarding agencies and pass-through entities, and is not intended to be and should not be used by
anyone other than these specified parties.
July 29, 2010
FLORIDA PREGNANCY CARE NETWORK, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended December 31, 2009
Part A -
SUMMARY OF AUDIT RESULTS
1.
The independent auditors’ report expresses an unqualified opinion on the basic
financial statements of Florida Pregnancy Care Network, Inc.
2.
No control deficiencies were disclosed during the audit of the financial statements of
Florida Pregnancy Care Network, Inc.
3.
No instances of noncompliance material to the financial statements of Florida
Pregnancy Care Network, Inc. were disclosed during the audit.
4.
No control deficiencies relating to internal control and compliance over major State
project were disclosed.
5.
The independent auditors’ report on compliance with requirements applicable to
each state project for Florida Pregnancy Care Network, Inc. expresses an unqualified
opinion.
6.
Audit findings relative to the major State projects of Florida Pregnancy Care
Network, Inc. are reported on Part C and D of this Schedule.
7.
The State project tested as a major program included: Florida Department of Health,
CFSA Number 64.080.
8.
The threshold used to distinguish between Type A and B State projects was
$300,000.
See independent auditor’s report.
- 14 -
FLORIDA PREGNANCY CARE NETWORK, INC.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended December 31, 2009
Part B -
FINDINGS - FINANCIAL STATEMENTS AUDIT
1. No matters were reported.
Part C -
FINDINGS AND QUESTIONED COSTS – MAJOR STATE PROJECT
1. No matters were reported.
Part D - PRIOR YEAR FINDINGS AND QUESTIONED COSTS –
MAJOR STATE PROJECT
Finding Significant Deficiency Number
2008-1
1. Financial Reporting
Condition: A key aspect of effective internal control is the entity’s ability to prepare
financial statements in accordance with accounting principles generally accepted in
the United States of America, which includes the selection and application of
accounting policies affecting the financial statements. For the year ended 6/30/08,
management and the contracted accountant of the Organization did not possess the
qualifications and training to fulfill this function.
Auditors’ Recommendation: Due to the Network’s limited resources, we did not
recommend management acquire the necessary expertise to produce financial
statements in accordance with generally accepted accounting principles. However,
we did recommend the Board consider expanding its membership to include a
Certified Public Accountant who is familiar with nonprofit accounting
pronouncements and can advise management in the preparation and review of both
internally and externally prepared financial statements.
Current Status: The finding has been corrected by management with the successful
recruitment of a Certified Public Accountant to serve on its Board of Directors.
Part E - MANAGEMENT LETTER
1.
No matters were reported.
See independent auditor’s report.
- 15 -