Independent Auditors' Report
and Related Financial Statements
For the Year Ended August 31, 2008
COUNCIL OF THE SOUTHERN MOUNTAINS
Teed & Associates, PLLC
3624 MacCorkle Avenue SE
Charleston, West Virginia 25304
304-925-8752
COUNCIL OF THE SOUTHERN MOUNTAINS
Table of Contents
For the Year Ended August 31, 2008
Page
Independent Auditor's Report 1
Statement of Financial Position 3
Statement of Activities and Changes in Net Assets 4
Statement of Cash Flows 5
Notes to the Financial Statements 6
Supplementary Information 13
Budgetary Comparison Schedule 14
Schedule of Program Revenues and Expenditures 15
Schedule Breakout of Programs with Fiscal Years other than August 31 18
Schedule of Expenditures of Federal Awards 21
Notes to Schedule of Expenditures of Federal Awards 22
Reports on Internal Control and on Compliance 23
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 24
Report on Compliance with Requirements
Applicable to Each Major Program
and Internal Control over Compliance in Accordance
with OMB Circular A-133 26
Schedule of Findings or Questioned Costs 28
Independent Auditors' Report
To the Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
We have audited the accompanying statement of financial position of the Council of the
Southern Mountains (the Organization) as of August 31, 2008, and the related
statement of activities and changes in net assets and cash flows for the year then
ended. These financial statements are the responsibility of the Organization's
management. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United
States of America. 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 audit
provides 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 the Organization as of August 31, 2008, and the
changes in financial position and cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated
November 24, 2008, on our consideration of the Organization's internal control over
financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, grant agreements and other matters. The purpose of that report
is to describe the scope of our testing of internal control over financial reporting and
1
To The Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
Page 2
compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
Our audit was performed for the purpose of forming an opinion on the basic financial
statements taken as whole. The supplementary information on pages 14 through 20 is
presented for purpose of additional analysis and is not a required part of the basic
financial statements. The accompanying Schedule of Expenditures of Federal Awards
on page 21 is presented for the purpose of additional analysis as required by OMB
Circular A-133, and also is not a required part of the basic financial statements. The
supplementary information and the Schedule of Expenditures of Federal Awards have
been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Charleston, West Virginia
November 24, 2008
2
COUNCIL OF THE SOUTHERN MOUNTAINS
Statement of Financial Position
August 31, 2008
ASSETS:
Cash and cash equivalents $ 1 7,570
Grants receivable 4 1,020
Property and equipment, net 43,050
Total assets $ 101,640
LIABILITIES AND NET ASSETS:
Liabilities:
Accounts payable $ 1 30,032
Payroll payables 1 5,145
Loan 1,617
Total liabilities 146,794
Net assets:
Investment in property and equipment 4 3,050
Unrestricted (deficient) ( 88,204)
Total net assets ( 45,154)
Total liabilities and net assets $ 101,640
The accompanying notes are an integral part of these financial statements.
3
COUNCIL OF THE SOUTHERN MOUNTAINS
Statement of Activities and Changes in Net Assets
For the Year Ended August 31, 2008
Total
REVENUES:
Federal $ 1,121,674
State 481,911
Local 154,457
In-kind revenue 193,124
Miscellaneous revenue 1,963
Total revenues 1,953,129
EXPENDITURES:
Advertising and marketing 4,304
Contract services 23,416
Depreciation 2,792
Dues, fees and memberships 5,269
Enrollees - personnel 76,246
Equipment rental and repair 15,838
Indirect costs 122,996
Insurance 14,506
Office space 39,788
Consumables and printing 108,929
Other and in-kind 212,271
Personnel 874,249
Personnel benefits 128,413
Bad debts 37,324
Postage 2,524
Stipends 175,551
Telephone 20,523
Training, conference, and workshops 1,885
Travel 106,127
Total expenditures 1,972,951
Changes in net assets (19,822)
Net assets at beginning of year as restated (25,332)
Net assets at end of year $ (45,154)
The accompanying notes are an integral part of these financial statements.
4
COUNCIL OF THE SOUTHERN MOUNTAINS
Statement of Cash Flows
For the Year Ended August 31, 2008
Cash flows from operating activities:
Cash received from customers and users $ 1,956,505
Cash paid to employees (1,002,662)
Cash paid to suppliers (886,151)
Net cash provided by operating activities 67,692
Cash flows from investing activities:
Purchase of equipment (45,842)
Net cash (used) by investing activities (45,842)
Cash flows from noncapital financing activities:
Principal paid on notes payable (14,874)
Net cash (used) by financing activities (14,874)
Decrease in cash and cash equivalents 6,976
Cash and cash equivalents, beginning of year 10,594
Cash and cash equivalents, end of year $ 17,570
Reconciliation of operating income to net cash
provided by operating activities:
Change in net assets $ (19,822)
Depreciation and amortization 2,792
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivables 4,558
(Increase) decrease in grant receivables (3,508)
(Increase) decrease in prepaid expenses 6,884
Increase (decrease) in payables and other 68,913
Increase (decrease) in payroll liabilities 7,875
Net cash provided by operating activities $ 67,692
The accompanying notes are an integral part of these financial statements.
5
COUNCIL OF THE SOUTHERN MOUNTAINS
Notes to the Financial Statements
For the Year Ended August 31, 2008
NOTE 1. DESCRIPTION OF ORGANIZATION
The Council of the Southern Mountains (the Organization) is a private, not-forprofit
organization dedicated to helping individuals and families reach their
highest levels of social and economic independence, while assisting the
communities served to become involved in the activities of the Organization. The
Organization collaborates with local, state, and national agencies to provide a
broad range of direct, anti-poverty services for low-income families and their
communities. The Organization's headquarters is located in Northfork, West
Virginia. The Organization is funded primarily though grants and other
agreements with the federal and state government.
The Organization provides services to residents and communities of Southern West
Virginia with an emphasis in McDowell County. Programs include the following:
CSBG Programs
The Community Services Block Grant (CSBG) is a federal, anti-poverty block
grant that funds the operation of a state-administrated network of local agencies.
The purpose of the Community Service Block Grant is to provide assistance to
states and local communities, working through a network of community action
agencies and other neighbor-based organizations, for the reduction of poverty.
Weatherization Program
The mission of the Weatherization Assistance Program is to reduce the heating and
cooling costs for low income families – particularly for the elderly, people with
disabilities, and children – by improving the energy efficiency of their homes and,
thereby, insuring their health and safety. Clients meeting 150 percent of the poverty
guideline are eligible to receive services.
Retired Seniors Volunteer Program
The Retired Seniors Volunteer Program (RSVP) is a program to recruit and support
volunteers age 55 and over for various community endeavors.
6
Foster Grandparent Program
The Foster Grandparent Program allows participants to serve as mentors, tutors, and
caregivers for children and the youth with special and exceptional needs. Foster
Grandparents serve in community organizations, such as schools and youth centers.
Family Day Care Feeding Program
The purpose of this program is to ensure that children between the ages of birth to 13
eat a nutritious well balanced diet while in the care of an in-home Childcare Provider.
The program provides reimbursement to Certified Family Daycare providers for the
meals that they serve to children in their care. The program serves all children
regardless of income. The Family Daycare Food Program provides training for the
providers on how to prepare meals that meet the USDA guidelines.
Mentoring Child of Promise
The Mentoring Child of Promise Program provides community based one-on-one
mentoring to children with at least one parent incarcerated in the state or federal
correctional system residing in the State of West Virginia. The children, ages 4 through
17, enrolled in the program will be matched with a mentor who will spend quality time
with them. The mentors will be volunteers who have passed a CIB background check
and will have attended the program's orientation and training session before being
matched with a child. The mentor will strive to involve the child in community activities
which provide opportunities for social interaction, while providing healthy messages
about life and social behavior.
Title XIX
The Title XIX program provides leadership in seeking increased levels of service for
individuals with behavioral health needs. These individuals need skills and training that
would lead to full participation within their communities through development of their
abilities. Individuals with developmental disabilities require specialized interventions to
be utilized for treatment, training, social interaction, meaningful employment, and pursuit
of their own life goals.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Financial Reporting
The financial statements have been prepared on the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of
America, whereby revenues are recognized when earned and expenses are
recognized when incurred.
7
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
Cash and Cash Equivalents
Cash and cash equivalents include cash accounts not subject to withdrawal restrictions
and highly liquid instruments with an initial maturity of three months or less.
Inventory
In accordance with grant award budgets approved by funding sources, inventory is
expensed in the period purchased instead of being capitalized and expensed when
consumed.
Accounts Receivable and Grants Receivable
Management considers accounts receivable and grants receivable fully collectible at
August 31, 2008.
Capital Assets
The Organization purchases the majority of its property and equipment with funds
provided by restrictive grants. Property and equipment purchased with funds from
such grants are subject to restrictions regarding use and disposition. Property and
equipment are recorded at cost. Depreciation is computed using the straight-line
method over the estimated useful life of the respective assets.
Items of property and equipment acquired with grant funds are subject to various
restrictions regarding their use by the Organization.
Additionally, under certain circumstances, the grantor agency may request return of
the property and equipment or, if sold, the proceeds from the sale of the property
and equipment.
Items of property and equipment purchased with grant funds are not reported as
contributions as grantors expect to receive commensurate value from the Organization.
8
Net Asset Classification
Net assets of the Organization and changes therein are classified and reported as
follows:
Unrestricted Net Assets – Unrestricted net assets that are not subject to donorimposed
stipulations.
Temporarily and Permanently Restricted Net Assets – Net assets subject to
donor-imposed stipulations that will be met either by actions of Council of
the Southern Mountains and/or the passage of time.
Donor Restrictions
The Organization reports gifts of cash and other assets as restricted support if they are
received with donor stipulations that limit the use of the donated assets. When a donor
restriction expires, that is, when a stipulated time restriction ends or purpose restriction
is accomplished, temporarily restricted net assets are reclassified as unrestricted
net assets and reported in the Statement of Activities as net assets released from
restrictions. When capital assets are placed in service, thus satisfying purpose
restrictions, the amount is included as a change in net assets, restricted and
unrestricted. Donor-restricted contributions, whose restrictions are met within the same
year as received, are reflected as unrestricted contributions in the accompanying
financial statements.
Unconditional promises to give cash and other assets are reported at fair value at
the date the promise is received. Conditional promises to give and indications of
intentions to give are reported at fair value at the date the gift is received.
The Organization reports gifts of equipment or other capital assets as unrestricted
support unless donor stipulations specify how the donated assets must be used. Gifts
of capital assets with explicit restrictions that specify how the assets are to be used and
gifts of cash or other assets that must be used to acquire capital assets are reported as
restricted support.
For absent explicit donor restrictions about how long the capital assets must be
maintained, the Organization reports expiration of donor restrictions when the
donated or acquired capital assets are placed in service.
Grant Revenues
Grant revenues related to the provision of services and/or the incurrence of qualified
expenses are reported as unrestricted revenues if they are based on the premise
that the grantor, generally governmental agencies, provided the funding or transferred
assets in exchange transactions whereby the grantor expects to receive commensurate
value.
9
Capital assets provided by the grantor and cash provided explicitly for the purpose of
acquiring capital assets are capitalized.
The Organization has received substantial grant funding for capital assets. Certain
obligations relating to the use of the assets exist, including potential return of the
assets to the grantor agency or proceeds received from the sale of the assets.
Cost Allocation
The Organization has adopted a cost allocation plan whereby each program is charged
its fair share of the Organization's indirect costs. Indirect costs are those costs incurred
for a common purpose benefiting or supporting all the Organization's programs and
activities and can not be identified as benefiting a specific program or activity. Indirect
costs are accumulated in an indirect cost pool and are allocated to the various programs
in proportion to the program's direct salaries and benefits to total direct salaries and
benefits.
Interest
All interest costs incurred during the year ended August 31, 2008, have been
expensed and are included in the other operating expenses in the Statement of
Activities.
Advertising Costs
All advertising costs have been expensed and are included in other operating
expenses in the Statement of Activities.
Income Taxes
The Council of the Southern Mountains is a not-for-profit organization and has been
recognized as tax exempt pursuant to Section 501(c)(3) of the Internal Revenue Code.
Donated Services, Space and Other
Donated (in-kind) matching is required by certain funding sources. Donated space is
valued at the estimated fair rental value. Donated other is valued at the estimated
fair market value at the date of receipt.
10
NOTE 3. CASH AND CASH EQUIVALENTS
At August 31, 2008, cash and cash equivalents for the Organization totaled $17,570.
NOTE 4. GRANTS RECEIVABLE
The Organization had the following grants receivable at August 31, 2008:
Program Receivable
CSBG $ 15,124
CSBG 2,676
Weatherization 23,220
$ 41,020
NOTE 5. CAPITAL ASSETS
As described in Note 2, significant items of property and equipment have been funded
from governmental and other grant proceeds. These grantors have residual interests in
the property.
Capital asset activity for the year ended August 31, 2008, follows:
Totals Totals
August 31, 2007 Additions Deletions August 31, 2008
Capital assets being depreciated:
Vehicles $ 34,999 $ 29,545 $ - $ 64,544
Equipment 201,831 16,297 - 218,128
Total capital assets
being depreciated 236,830 45,842 - 282,672
Less accumulated depreciation for:
Vehicles 34,999 1,477 36,476
Equipment 201,831 1,315 - 203,146
Total accumulated depreciation 236,830 2,792 - 239,622
Total capital assets being
depreciated, net - 43,050 - 43,050
Capital assets, net $ - $ 43,050 $ - $ 43,050
11
NOTE 6. DONATED SERVICES, SPACE AND OTHER
The Council of the Southern Mountains received donated services from unpaid
volunteers, the use of various facilities without charge, and other donated items
during the year ended August 31, 2008. The following summarizes the fair value
of donated services, space, and other resources as determined by the
Organization:
Foster
Account MCP Grandparents RSVP
REVENUES
In-kind $ 33,862 $ 93,279 $ 64,044
Excess In-kind - 1,939 -
Total In-kind revenues $ 33,862 $ 95,218 $ 64,044
EXPENSES:
Supplies / In-kind 2 ,161 - 1 ,000
Printing / In-kind 2 52 - -
Communication / In-kind - - 60,943
Advertising / In-kind 2 3,697 - -
Recognition / In-kind 1 8 375 9 0
Space / In-kind 5 ,110 3,800 9 00
Meals / In-kind - 8,548 6 4
Meals excess / In-kind - 1,939 -
In service travel area / In-kind 9 00 1,152 -
Indirect costs / In-kind - - 2
Physical Examinations / In-kind - 1,022 -
Meeting space / In-kind - 1,650 -
Volunteer hours / In-kind 1 95 - 6 13
Public Service Announcements / In-kind - 76,732 -
Transportation / In-kind - - 4 33
Quarterly meetings / In-kind 1 ,529 - -
Total In-kind expenses $ 33,862 $ 95,218 $ 64,044
NOTE 7. PRIOR PERIOD ADJUSTMENT
The Organization restated the beginning net assets at September 1, 2007, as
follows:
Net assets as reported at July 1, 2007 $ 1 75,882
Adjustment to capital assets net of accumulated depreciation ( 201,214)
Net assets as restated at July 1, 2007 $ ( 25,332)
12
SUPPLEMENTARY INFORMATION
13
COUNCIL OF THE SOUTHERN MOUNTAINS
Budgetary Comparison Schedule
August 31, 2008
Original Final
Budget Budget Actual
Revenues:
Federal $ 1,585,132 $ 1,558,037 $ 1,121,674
State 343,184 378,286 481,911
Local 558,497 466,012 154,457
In-kind revenue 62,150 62,150 193,124
Miscellaneous revenue 199,595 199,595 1,963
Total revenues 2,748,558 2,664,080 1,953,129
Expenditures:
Personnel 849,559 910,763 874,249
Personnel benefits 276,822 220,265 128,413
Travel 191,088 196,838 106,127
Depreciation - - 2,792
Consumable and printing expense 72,132 72,681 108,930
Equipment rental and repair 300 300 15,838
Postage 2,700 3,118 2,524
Telephone 10,268 10,425 20,523
Marketing and advertising - 2,971 4,304
Insurance 9,913 9,913 14,506
Indirect costs 258,831 258,689 122,996
Other and in-kind 345,478 225,221 212,270
Contract services 92,597 92,597 23,416
Training 475 1,869 1,885
Enrollees: personnel and fringes 252,842 272,877 76,246
Dues, fees and memberships 2,828 2,828 5,269
Bad debt - - 37,324
Office space 12,000 12,000 39,788
Stipends 370,725 370,725 175,551
Total expenditures 2,748,558 2,664,080 1,972,951
Excess of expenditures over revenues - - (19,822)
Net assets at beginning of year as restated - - (25,332)
Net assets at end of year $ - $ - $ (45,154)
The accompanying notes are an integral part of these financial statements.
14
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Program Revenues and Expenditures
August 31, 2008
Operating CSBG
Family Day
Care FEMA
REVENUES:
Federal $ - $ 2 40,376 $ 9 7,948 $ 4 ,191
State - - - -
Local 1 33,374 5 60 - -
In-kind - - - -
Miscellaneous revenue 5 47 3 2 - -
Total revenues 1 33,921 2 40,968 9 7,948 4 ,191
EXPENDITURES:
Advertising and marketing 1 ,278 - - -
Contract services 2 ,000 - - -
Depreciation 1 ,000 - - -
Dues, fees and memberships 1 ,475 3 2 - -
Enrollees: personnel - - 7 5,941 -
Equipment rental and repair 9 83 1 ,265 - -
Indirect costs 2 ,014 2 7,216 2 ,834 -
Insurance 2 ,254 3 ,876 1 82 -
Office space 5 ,706 5 ,322 8 48 -
Consumables and printing 3 ,118 6 ,848 1 ,258 1 ,234
Other and in-kind 6 ,222 - - -
Personnel 6 7,275 2 03,054 1 4,090 -
Personnel benefits 2 7,818 - 7 ,436 -
Bad debts 3 7,324 - - -
Postage 3 6 - - -
Stipends - - - -
Telephone 2 ,481 9 ,608 4 82 -
Training, conferences and workshops - 1 ,092 2 43 -
Travel 2 ,635 3 ,555 1 ,480 -
Total expenditures 1 63,619 2 61,868 1 04,794 1 ,234
Excess (deficiency) of revenues over
(under) expenditures (29,698) (20,900) (6,846) 2 ,957
Program net assets at beginning
of year, as restated (9,728) 2 ,785 (4,106) -
Program net assets at end of year $ (39,426) $ (18,115) $ (10,952) $ 2 ,957
The accompanying notes are an integral part of these financial statements
15
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Program Revenues and Expenditures – Continued
August 31, 2008
Weatherization Title XIX
Foster
Grandparents
REVENUES:
Federal $ 221,612 $ - $ 3 14,291
State - 4 81,911 -
Local 11,219 - -
In-kind - - 9 5,218
Miscellaneous revenue 1,232 7 8 4 5
Total revenues 234,063 4 81,989 4 09,554
EXPENDITURES:
Advertising and marketing - - -
Contract services - 1 8,845 1 ,855
Depreciation 1,792 - -
Dues, fees and memberships 2,233 9 8 -
Enrollees: personnel - - -
Equipment rental and repair 8,230 5 3 -
Indirect costs 11,985 4 4,982 1 0,526
Insurance 5,933 2 61 3 91
Office space 6,120 1 0,091 5 ,184
Consumables and printing 78,295 7 ,979 2 ,765
Other and in-kind - 6 92 1 06,585
Personnel 73,859 2 94,064 8 0,081
Personnel benefits 15,611 4 2,107 -
Bad debts - - -
Postage - - 1 ,414
Stipends - - 1 75,551
Telephone 3,972 2 ,804 -
Training, conferences and workshops - - -
Travel 1,678 4 8,692 2 9,137
Total expenditures 209,708 4 70,668 4 13,489
Excess (deficiency) of revenues over
(under) expenditures 24,355 1 1,321 (3,935)
Program net assets at beginning
of year, as restated - (14,705) 4 22
Program net assets at end of year $ 24,355 $ (3,384) $ (3,513)
The accompanying notes are an integral part of these financial statements.
16
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Program Revenues and Expenditures – Continued
August 31, 2008
Retired
Senior
Volunteer
Program
Mentoring
Child of
Promise
Combined
Total
REVENUES:
Federal $ 1 03,665 $ 1 39,591 $ 1 ,121,674
State - - 4 81,911
Local 9 ,304 - 1 54,457
In-kind 6 4,044 3 3,862 1 93,124
Miscellaneous revenue 2 9 - 1 ,963
Total revenues 1 77,042 1 73,453 1 ,953,129
EXPENDITURES:
Advertising and marketing 2 ,876 1 50 4 ,304
Contract services 7 16 - 2 3,416
Depreciation - - 2 ,792
Dues, fees and memberships 1 ,431 - 5 ,269
Enrollees: personnel 1 10 1 95 7 6,246
Equipment rental and repair - 5 ,307 1 5,838
Indirect costs 1 0,812 1 2,627 1 22,996
Insurance 1 ,609 - 1 4,506
Office space 4 ,787 1 ,730 3 9,788
Consumables and printing 1 ,083 6 ,350 1 08,930
Other and in-kind 6 3,953 3 4,818 2 12,270
Personnel 6 2,606 7 9,220 8 74,249
Personnel benefits 1 9,011 1 6,430 1 28,413
Bad debts - - 3 7,324
Postage 8 28 2 46 2 ,524
Stipends - - 1 75,551
Telephone - 1 ,176 2 0,523
Training, conferences and workshops - 5 50 1 ,885
Travel 4 ,796 1 4,154 1 06,127
Total expenditures 1 74,618 1 72,953 1 ,972,951
Excess (deficiency) of revenues over
(under) expenditures 2 ,424 5 00 (19,822)
Program net assets at beginning
of year, as restated - - (25,332)
Program net assets at end of year $ 2 ,424 $ 5 00 $ (45,154)
The accompanying notes are an integral part of these financial statements.
17
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule Breakout of Programs with Fiscal Years other
than August 31
August 31, 2008
Four Months
Ended
12/31/07
Eight Months
Ended 8/31/08
One Month
Ended 9/30/07
Eleven Months
Ended 8/31/08
REVENUES:
Federal $ 81,200 $ 159,176 $ 9,489 $ 88,459
State - - - -
Local 404 156 - -
In-kind - - - -
Miscellaneous revenue 8 24 - -
Total 81,612 159,356 9,489 88,459
EXPENDITURES:
Advertising and marketing - - - -
Allocation to Component Unit - - - -
Contract services - - - -
Dues, fees and memberships 24 8 - -
Depreciation - - - -
Enrollees: personnel - - 6,475 69,466
Equipment rental and repair 74 1,191 - -
Indirect costs 8,030 19,187 246 2,587
Insurance 1,252 2,623 - 182
Office space 1,670 3,652 107 742
Consumables and printing 2,705 4,143 13 1,244
Other and in-kind - - - -
Personnel 66,641 136,413 1,728 12,362
Personnel benefits - - 908 6,528
Postage - - - -
Stipends - - - - -
Telephone 460 9,148 37 445
Training 344 748 - 244
Travel 412 3,143 34 1,446
Total 81,612 180,256 9,548 95,246
Excess (deficiency) of revenues
over (under) expenditures $ - $ (20,900) $ (59) $ (6,787)
CSBG Family Day Care
The accompanying notes are an integral part of these financial statements.
18
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule Breakout of Programs with Fiscal Years other
than August 31 – Continued
August 31, 2008
Seven Months
Ended 3/31/08
Five Months
Ended 8/31/08
Ten Months
Ended 6/30/08
Two Months
Ended 8/31/08
REVENUES:
Federal $ 129,102 $ 92,510 $ 285,993 $ 28,297
State - - - -
Local 7,212 4,007 - -
In-kind - - 63,257 31,961
Miscellaneous revenue (21) 1,253 41 5
Total 136,293 97,770 349,291 60,263
EXPENDITURES:
Advertising and marketing - - - -
Allocation to Component Unit - - - -
Contract services - - 1,436 419
Dues, fees and memberships 40 2,193 - -
Depreciation - 1,793 - -
Enrollees: personnel - - - -
Equipment rental and repair 31,713 (23,483) - -
Indirect costs 5,427 6,557 7,702 2,824
Insurance 3,765 2,168 - 390
Office space 3,060 3,060 4,355 829
Consumables and printing 43,738 34,557 2,482 790
Other and in-kind - - 63,436 31,782
Personnel 40,436 33,422 67,033 13,048
Personnel benefits 7,426 8,185 - -
Postage - - 994 420
Stipends - - 165,094 21,316
Telephone 2,290 1,683 - -
Training - - - -
Travel 741 937 25,899 3,240
Total 138,636 71,072 338,431 75,058
Excess (deficiency) of revenues
over (under) expenditures $ (2,343) $ 26,698 $ 10,860 $ (14,795)
Weatherization Foster Grand Parents
The accompanying notes are an integral part of these financial statements.
19
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule Breakout of Programs with Fiscal Years other
than August 31 – Continued
August 31, 2008
Retired Senior
Eight Months
Ended 4/30/08
Four Months
Ended 8/31/08
Ten Months
Ended 6/30/08
Two Months
Ended 8/31/08
REVENUES:
Federal $ - $ - $ 88,246 $ 15,419
State 307,068 174,843 - -
Local - - 2,798 6,507
In-kind - - 63,146 898
Miscellaneous revenue 36 42 26 3
Total 307,104 174,885 154,216 22,827
EXPENDITURES:
Advertising and marketing - - 2,567 309
Allocation to Component Unit - - - -
Contract services 204 18,641 300 325
Dues, fees and memberships 83 15 1,431 -
Depreciation - - - -
Enrollees: personnel - - 110 -
Equipment rental and repair 53 - - -
Indirect costs 22,273 14,420 7,900 2,912
Insurance - 261 - 1,609
Office space 7,698 2,392 4,480 307
Consumables and printing 5,351 3,320 998 84
Other and in-kind - - 64,044 -
Personnel 198,571 95,494 52,083 10,523
Personnel benefits 20,873 21,234 16,063 2,948
Postage - - 576 252
Stipends - - - -
Telephone 1,822 982 - -
Training - - - -
Travel 30,557 18,135 3,664 1,134
Total 287,485 174,894 154,216 20,403
Excess (deficiency) of revenues
over (under) expenditures $ 19,619 $ (9) $ - $ 2,424
Title XIX Volunteer Program
The accompanying notes are an integral part of these financial statements.
20
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Expenditures of Federal Awards
For the Year Ended August 31, 2008
Federal
Grantor / Program CFDA# Expenditures
Corporation for National and Community Services
Foster Grandparent Program 94.011 $ 317,968
Retired and Senior Volunteer Program 94.002 108,339
426,307
U.S. Department of Health and Human Services
Community Services Block Grant 93.569 251,673
Mentoring Children of Promise 93.616 139,091
Weatherization DHHR 93.568 69,639
460,403
U.S. Department of Agriculture
Passed through the West Virginia Department of
Health and Education
Family Day Care Center 10.556 104,794
U.S. Department of Energy
Weatherization DOE 81.042 46,704
Total expenditures of federal awards $ 1,038,208
The accompanying notes are an integral part of these financial statements.
21
COUNCIL OF THE SOUTHERN MOUNTAINS
Notes to Schedule of Expenditures of Federal Awards
For the Year Ended August 31, 2008
Basis of Presentation
This Schedule of Expenditures of Federal Awards includes the grant activity of the
Council of the Southern Mountains and is presented on the basis of accounting of the
various funding sources. The information in this schedule is presented in accordance
with the requirements of OMB Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. Therefore, some amounts presented in the schedule
may differ from amounts presented in, or used in, the preparation of the basic financial
statements.
22
REPORTS ON INTERNAL CONTROL AND ON COMPLIANCE
23
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To The Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
We have audited the financial statements of Council of the Southern Mountains (the
Organization) as of and for the year ended August 31, 2008, and have issued our report
thereon dated November 24, 2008. 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 Organization's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose
of expressing our opinions on the financial statements but not for the purpose of
expressing an opinion on the effectiveness of the Organization's internal control over
financial reporting. Accordingly, we do not express an opinion on the effectiveness of
the Organization's internal control over financial reporting.
A control deficiency 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 misstatements on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that adversely affects the
Organization's ability to initiate, authorize, record, process, or report financial data
reliably in accordance with generally accepted accounting principles such that there is
more than a remote likelihood that a misstatement of the Organization's financial
statements that is more than inconsequential will not be prevented or detected by the
Organization's internal control.
24
To the Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
Page 2
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material misstatement
of the financial statements will not be prevented or detected by the Organization's
internal control.
Our consideration of internal control over financial reporting 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 and, accordingly,
would not necessarily disclose all significant deficiencies that are also considered to be
material weaknesses. We noted no matters involving the internal control over financial
reporting and its operations that we consider to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Organization'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 or other
matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the Board of Directors of the
Organization, the West Virginia State Auditor's Office and other federal and state
agencies and is not intended to be used and should not be used by anyone other than
these specified parties. However in accordance with West Virginia Code 6-9-9a, this
report is a matter of public record and its distribution is not limited.
Charleston, West Virginia
November 24, 2008
25
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133
To The Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
Compliance
We have audited the compliance of the Council of the Southern Mountains (the
Organization) with the types of compliance requirements described in the U.S. Office of
Management and Budget (OMB) Circular A-133 Compliance Supplement that are
applicable to each of its major federal programs for the year ended August 31, 2008.
The Organization's major federal programs are identified in the accompanying Schedule
of Findings or Questioned Costs. Compliance with the requirements of laws,
regulations, contracts and grants applicable to each of the major federal programs is the
responsibility of the Organization's management. Our responsibility is to express an
opinion on the Organization's compliance based on our audit.
We conducted our audit of compliance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United
States; and 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 obtain reasonable assurance about whether noncompliance with
the types of compliance requirements referred to above that could have a direct and
material effect on a major federal program occurred. An audit includes examining, on a
test basis, evidence about the Organization's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Our audit does not provide a legal determination of the Organization's compliance with
those requirements. In our opinion, the Organization complied, in all material respects,
with the requirements referred to above that are applicable to each of its major federal
programs for the year ended August 31, 2008.
26
To the Board of Directors
Council of the Southern Mountains
Northfork, West Virginia
Page 2
Internal Control Over Compliance
The management of the Organization is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations,
contracts and grants applicable to federal programs. In planning and performing our
audit, we considered the Organization's internal control over compliance with
requirements that could have a direct and material effect on a major federal program 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 Organization's internal control over compliance.
A control deficiency 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 federal
program 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 federal program such that there is more than a remote likelihood that a
noncompliance with a type of compliance requirement of a federal program 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
requirement of a federal program 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 and, accordingly,
would not necessarily disclose all significant deficiencies that are also considered to be
material weaknesses. We did not identify any deficiencies in internal control over
compliance that we consider to be a material weakness.
This report is intended solely for the information and use of management, the Board of
Directors, federal awarding agencies, and pass-through entities and is not intended to
be, and should not be, used by anyone other than these specified parties.
Charleston, West Virginia
November 24, 2008
27
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Findings or Questioned Costs
For the Year Ended August 31, 2008
Section I – Summary of Auditors' Results
Financial Statements
Type of auditors' report issued; Unqualified
Internal control over financial reporting:
• Material weakness(es) identified? Yes x No
• Reportable condition(s) identified that is/are
not considered to be material weakness(es)? Yes x None
Reported
Noncompliance material to the financial statements noted? Yes x No
Federal Awards
Internal control over major programs:
• Material weakness(es) identified? Yes x No
• Reportable condition(s) identified that is/are
not considered to be material weakness(es)? Yes x None
Reported
Type of auditor's report issued on compliance for major programs; Unqualified
Any audit findings disclosed that are required to be
reported in accordance with section 510(a) of Circular A-133 Yes x No
Identification of major programs:
Name of Federal Program or Cluster CFDA Number(s)
Foster Grandparent Program 94.011
Community Services Block Grant 93.569
Dollar threshold used to distinguish between
Type A and Type B Programs: $ 300,000
Auditee qualified as a low-risk auditee? Yes x No
28
COUNCIL OF THE SOUTHERN MOUNTAINS
Schedule of Findings or Questioned (Continued)
For the Year Ended August 31, 2008
Section II – Financial Statement Findings
There are no findings reported.
Section III – Federal Award Findings and Questioned Costs
There are no findings or questioned costs reported.
Section IV – Corrective Action Plan
A corrective action plan is not required since there are no findings of questioned costs.
Section V – Summary Schedule of Prior Audit Findings
There were no findings or questioned costs reported.
29
