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Chicago House and Social Service Agency and Fred Woods Home, Inc. Consolidated Financial Statements and Supplementary Information (including OMB A-133 reports) For the Year Ended June 30, 2013


Chicago House and Social Service Agency and Fred Woods Home, Inc. Annual Financial Report Table of Contents SECTION I Independent Auditor’s Report........................................................................................................................ 1 - 2 Consolidated Financial Statements Statement of Financial Position.....................................................................................................................3 Statement of Activities ..................................................................................................................................4 Statement of Functional Expenses.................................................................................................................5 Statement of Cash Flows ...............................................................................................................................6 Notes to Consolidated Financial Statements................................................................................................ 7 - 19 Supplementary Information Consolidating Statement of Financial Position............................................................................................20 Consolidating Statement of Activities.........................................................................................................21 Consolidating Schedule of Expenses by Program .......................................................................................22 Consolidating Schedule of Expenses by Residential Housing Projects ......................................................23 SECTION II Reports required by OMB A-133 Consolidated Schedule of Expenditures of Federal Awards. ............................................................. 24 - 25 Notes to the Consolidated Schedule of Expenditures of Federal Awards ......................................... 26 - 27 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. .................................................... 28 - 29 Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by OMB Circular A-133............................. 30 - 31 Consolidated Schedule of Findings and Questioned Costs ................................................................. 32 - 33


Desmond &Ahern, Ltd. CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

Independent Auditor’s Report To the Board of Trustees of Chicago House and Social Service Agency and Fred Woods Home, Inc. Chicago, IL We have audited the accompanying consolidated financial statements of Chicago House and Social Service Agency and Fred Woods Home, Inc. (nonprofit organizations), which comprise the consolidated statement of financial position as of June 30, 2013, and the related consolidated statements of activities, functional expenses and cash flows for the year then ended, and the relates notes to the consolidated financial statements. The prior-year summarized comparative information has been derived from the Organization’s 2012 consolidated financial statements, and, in our report dated at October 12, 2012 we expressed an unmodified opinion on those consolidated financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated 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 Governmental Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

10827 S. WESTERN AVENUE, CHICAGO, IL 60643-3206 • PHONE 773-779-4720 • FAX 773-779-8310 www.desmondcpa.com


Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chicago House and Social Service Agency and Fred Woods Home, Inc. as of June 30, 2013, and the changes in their net assets and their cash flow for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Our audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements as a whole. The accompanying supplementary information, as listed in the accompanying table of contents is presented for the purpose of additional analysis and is not a required part of the basic consolidated financial statements. In addition, the accompanying Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, is presented for purposes of additional analysis and is also not a required part of the basic consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. This information has been subjected to the auditing procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated October 25, 2013 our consideration of Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control over financial reporting and our tests of its compliance 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 reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control over financial reporting and compliance.

October 25, 2013 Chicago, IL

-2-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED STATEMENT OF FINANCIAL POSITION As of June 30, 2013 (with comparative totals for 2012)

2013 Assets Current Assets Cash and cash equivalents Cash - restricted

$

Investments - certificates of deposit Government contributions receivable Non-governmental contributions due within one year Other accounts receivable Prepaid expenses Total current assets Property and equipment, net Security deposits Total Assets Liabilities and Net Assets Current Liabilities Accounts payable Accrued expenses Payroll and related Other Refundable advance Total current liabilities

1,256,041 226,051 1,482,092

2012

$

1,624,612 259,189 1,883,801

210,232 1,259,480 119,248 89,060 119,534 3,279,646

208,358 672,890 117,350 55,049 59,512 2,996,960

5,029,565 15,398

4,927,714 15,398

$

8,324,609

$

7,940,072

$

201,585

$

135,072

384,306 32,935 63,631 682,457

267,996 21,245 157,224 581,537

241,828 10,321 934,606

241,828 10,698 834,063

Net Assets Unrestricted General and operational designated Net investment in property and equipment Total unrestricted net assets

1,167,420 2,743,865 3,911,285

1,245,644 2,642,014 3,887,658

Temporarily restricted net assets Total net assets

3,478,718 7,390,003

3,218,351 7,106,009

Refundable advance Tenant security deposits Total liabilities

Total Liabilities and Net Assets

$

8,324,609

See independent auditor's report and notes to financial statements. -3-

$

7,940,072


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED STATEMENT OF ACTIVITIES For the Year Ending June 30, 2013 (with comparative totals for 2012)

Unrestricted Public Support and Revenue Chicago Department of Public Health Chicago Department of Family and Support Services U.S. Department of Housing and Urban Development U.S. Department of Labor U.S. Department of Education State of Illinois - Office of Rehabilitation Services (passed through AFC) HIV Relief Grant - Title I and II (passed through AFC) U.S. Department of Health and Human Services Illinois Department of Commerce and Economic Opportunity

$

-

Temporarily Restricted $

858,445 139,647 662,601 194,179

2013 Total $

858,445 139,647 662,601 194,179

2012 Total $

744,545 142,512 479,744 129,523 122,667

-

96,701 678,644 548,940 218,593

96,701 678,644 548,940 218,593

95,353 568,043 417,280 165,951

Illinois Department of Human Services

-

338,114

338,114

195,922

Illinois Department of Public Health Federal Home Loan Bank United Way

-

73,336 72,000 40,000

73,336 72,000 40,000

40,000

435,128 87,526 138,125 660,779

395,436 5,000 677,980 1,078,416

830,564 92,526 816,105 1,739,195

786,748 55,084 731,850 1,573,682

Contributions Individuals Corporations Foundations Total contributions Special Events Contributions and collaborative events Corporate sponsorships Special events revenue Donated services In-kind contributions In-kind direct benefit Less cost of direct benefits to donors, including $36,829 of in-kind Net revenues from special events

226,742 223,550 189,803 59,679 36,829 (235,440) 501,163

16,500 26,250 42,750

243,242 249,800 189,803 59,679 36,829 (235,440) 543,913

184,429 271,250 218,372 15,340 6,484 39,789 (282,153) 453,511

176,025 4,575 -

9,612 201 44,905

176,025 9,612 4,776 44,905

183,690 7,049 34,400 37,401

Client fees Donated services - capital Interest and dividend income Miscellaneous rents Miscellaneous income Net assets released from restrictions satisfaction of program restrictions Total Public Support and Revenue

4,836,717 6,179,259

(4,836,717) 260,367

6,439,626

5,391,273

Expenses Program Services Residential Housing Scattered Site Housing Prevention Community Case Management Employment Other program services Total Program Services

1,848,207 1,124,604 696,365 346,660 823,168 4,839,004

-

1,848,207 1,124,604 696,365 346,660 823,168 4,839,004

1,402,537 765,332 459,680 374,368 1,064,535 119,143 4,185,595

Management and general Fundraising expense Total Expenses

638,542 678,086 6,155,632

-

638,542 678,086 6,155,632

492,728 560,392 5,238,715

Change in Net Assets from operations, before discontinuation of bakery Discontinuation of bakery (Note 12) Change in net assets Net Assets, Beginning of Year

23,627 23,627 3,887,658

260,367 260,367 3,218,351

283,994 283,994 7,106,009

152,558 (591,542) (438,984) 7,544,993

3,911,285

$ 3,478,718

Net Assets, End of Year

$

$

7,390,003

See independent auditor's report and notes to financial statements. -4-

$

7,106,009


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For the Year Ending June 30, 2013 (with comparative totals for 2012)

Program Services Personnel Expenses Salaries and wages Fringe benefits and related taxes

$

Total personnel expenses Other Expenses Subcontracting Grants to others Professional and consulting fees Donated professional services Rent Telephone Utilities Supplies Printing Postage Repairs and maintenance Insurance Travel Employment search and public relations Staff development Special events Client assistance Membership dues Bank and credit card fees Loss on disposal of property Miscellaneous Bad debt expense In-kind contribution Total other expenses Total expenses before depreciation Depreciation expense Total Expenses

$

2,199,100 689,948

Management and General $

278,450 87,362

2013 Total

Fundraising $

307,346 96,427

$

2,784,896 873,737

2012 Total $

2,367,846 695,408

2,889,048

365,812

403,773

3,658,633

3,063,254

177,643 44,500 87,827 180,314 57,627 86,906 91,582 6,820 4,469 118,208 77,794 49,592 165 8,449 588,361 12,627 515 105,906 3,537 5,802 -

124,409 29,901 3,372 2,483 19,416 151 2,338 12,963 5,513 7,123 6,540 7,793 17,457 8,054 6,386 3,437 -

18,981 59,679 22,434 4,153 2,557 9,090 12,375 6,810 10,542 604 2,128 3,752 3,179 105,584 6,047 188 1,150 -

177,643 44,500 231,217 59,679 232,649 65,152 91,946 120,088 19,346 13,617 141,713 83,911 58,843 10,457 19,421 105,584 588,361 36,131 8,757 105,906 11,073 9,239 -

51,039 174,628 241,118 15,340 199,770 75,419 81,165 88,480 17,055 13,947 146,155 90,930 40,316 12,993 23,541 73,292 488,881 11,067 7,716 8,822 4,406 7,219 6,484

1,708,644

257,336

269,253

2,235,233

1,879,783

4,597,692

623,148

673,026

5,893,866

4,943,037

241,312

15,394

5,060

261,766

295,678

4,839,004

$

638,542

$

678,086

See independent auditor's report and notes to financial statements. -5-

$

6,155,632

$

5,238,715


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ending June 30, 2013 (with comparative totals for 2012 2013 Cash Flows from Operating Activities Cash received - funding organizations Cash received - contributions Cash received - special events Cash received - client fees Cash received - rental income Cash received - interest income Cash received - miscellaneous income Payments for interest Payments for wages and other operating activities Net cash provided by operating activities

$

Cash Flows from Investing Activities Purchase of property and equipment Proceeds from sale of property and equipment Loan to Sweet Misgivings, LLC Re-investment of dividends earned on certificate of deposits Net cash used by investing activities

Reconciliation of Change in Net Assets to Net Cash Provided by Operating Activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation Loss on disposal of assets Bad debt expense Donated services capitalized Discontinuation of bakery Change in assets - (increase) decrease Government contributions receivable Non governmental contributions receivable Other receivables Prepaid expenses and other current assets Change in liabilities - increase (decrease) Accounts payable Accrued expenses Tenant security deposits Refundable advance Net cash provided by operating activities

$

(459,911) (1,874) (461,785)

Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year

3,191,778 1,777,297 484,234 176,025 4,776 44,905 (5,618,939) 60,076

2012

(119,219) 23,330 (30,000) (2,711) (128,600)

(401,709) 1,883,801

92,329 1,791,472

$

1,482,092

$

$

283,994

$

$

2,806,864 1,531,892 431,687 183,690 34,400 7,049 37,401 (120) (4,811,934) 220,929

1,883,801

(438,984)

261,766 105,906 9,239 (9,612) -

295,678 8,822 7,219 591,542

(595,829) (1,898) (34,011) (60,022)

(360,823) (81,790) (48,352) 49,405

66,513 128,000 (377) (93,593)

75,478 13,986 2,601 106,147

60,076

See independent auditor's report and notes to financial statements. -6-

$

220,929


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies The accompanying financial statements reflect the consolidated operations of Chicago House and Social Service Agency and Fred Woods Home, Inc. (collectively referred to as the Organizations). Chicago House and Social Service Agency (Chicago House) was formed in 1985 to provide housing and supportive services to HIV-affected and HIV-at risk families and individuals, who may also be impacted by poverty, homelessness, substance abuse, and mental illness. All Chicago House services are provided without discrimination and are explicitly designed to guide people towards wholeness and selfsufficiency. Fred Woods Home, Inc. (Fred Woods Home) was formed in 1994 for the development and operation of multi-family housing projects for low income families comprised of at least one adult infected with HIV/AIDS. The Projects are operated under Section 811 of the National Housing Act and regulated by the U.S. Department of Housing and Urban Development (HUD) with respect to rental charges and operating methods. The Organizations provide invaluable resources and support for their clients through various programs, including: Residential Housing In 1985 Chicago House became the first provider of housing for people with AIDS in the Midwest. Initially, the Organization rented apartments in a single facility to accommodate the first residents. As the Organization grew with the corresponding need, Chicago House purchased and renovated facilities to meet the needs of men and women fighting HIV. Chicago House and Fred Woods Home currently operate and manage several facilities that serve the following programs: The Family Support Program offers housing, case management, and other supportive services to 15 HIV/AIDS affected families that include over 40 dependent children. Designed for families facing homelessness and poverty in addition to HIV/AIDS, the program works intensively with both the parents and the children. The Supportive Living Program is a 16-unit group living facility in Chicago’s West Town neighborhood, which provides the “first step” of housing and supportive services to adults living with HIV/AIDS who come directly from the streets or the shelter system. This facility is staffed 24 hours. The Independent Living Program is a 24-unit apartment building in Uptown, providing permanent housing to adults living with HIV/AIDS in need of affordable housing with supportive services available to meet intermittent needs. The TransLife Center (TLC) Program is primarily located at Chicago House’s 9-unit housing facility in Edgewater and encompasses transgender-specific housing, employment services, legal services, linkage to medical care, case management, and emergency drop-in support. The TLC currently offers the nation’s most comprehensive services to transgender individuals. In addition to serving individuals, TLC programming includes the provision of cultural competency training to medical, legal, and social service providers in the Chicago area. -7-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies (cont.) Scattered Site Housing The Scattered Site Housing Program assists homeless individuals with HIV/AIDS who struggle with substance abuse and/or challenges to find stable housing. Clients receive supportive services that focus on harm reduction to enable clients to live independently. The Scattered Site Housing Program has several sub-programs focusing on specific populations or providing different combinations of services. The Gaining Ground Program links housing services with the iFour Employment Program. Clients in Gaining Ground develop the skills necessary to return to work and increase their income level, moving them to greater self-sufficiency and ultimately allowing the housing subsidies to pass to others beginning the employment process. The Hospital to Housing Program (HHP) and the Samaritan Program are scattered site housing projects which provide stable, safe housing for individuals with a chronic medical illness, such as HIV/AIDS, who are homeless or lack permanent housing. Under these programs, case managers find attainable housing for the chronically ill and homeless by locating interim housing until permanent housing becomes available or by placing clients directly into permanent housing. The Housing Advocacy Program assists low-income individuals and families living with HIV/AIDS in obtaining and maintaining appropriate and affordable housing. Prevention Be Aware, Be Alive (BABA) Traditionally, AIDS prevention has focused on those who are HIV negative, helping them to not become positive. Since 2002, Chicago House has pioneered the Prevention with Positives Initiative with one underlying principle: every new infection is contracted from someone that is already HIV impacted. If “safe” practices can be encouraged among those who are HIV positive, it can help stem the tide of AIDS while keeping those already impacted from contracting a drug resistant strain of HIV. BABA is an HIV prevention program involving two interventions: HIV prevention counseling, and HIV testing. Counseling is provided for persons living with HIV who are having difficulty maintaining safer sex or needle sharing behaviors. Factors that may impact a client’s ability to maintain safer behaviors include: mental illness, homelessness or risk of homelessness, domestic violence, and substance abuse. The HIV prevention counselor works one-on-one with clients to assist them with achieving risk reduction goals. HIV rapid testing is also provided. This program seeks to help identify some of the estimated 25% of individuals in the United States living with HIV who are unaware of their HIV status. Connect to Care Chicago House has partnered with the AIDS Foundation of Chicago to be the regional social service provider on the north and west sides of the city to address the needs of out-of-care people living with HIV/AIDS and offer retention-in-care activities. Connect to Care provides client level outreach, linkage, and education activities to help individuals with diagnosed HIV/AIDS connect or reconnect to continuous HIV medical care and other essential services. The program recruits case managed clients to conduct outreach to out-of-care people living with HIV in their social networks and facilitates efforts to (re)connect them to HIV care services. In addition, the program provides newly connected clients educational and peer-based services and addresses clients’ individual-level barriers, such as fear, stigma, or lack of knowledge about treatment in order to support care retention. -8-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies (cont.) Community Case Management Community Case Management Program The most cost efficient way to deal with the issue of homelessness is to keep people out of the system from the start. As early as 1992, Chicago House began doing Community Case Management with people who were becoming increasingly ill with AIDS, helping them to get the support (legal, food, utility assistance) and benefits (Medicare, Medicaid, Disability) they needed to remain in their own homes and not become homeless. Today Chicago House serves over 150 men, women and children a year by providing them these needed support services in the comfort of their own home. Employment iFour (Increase Individual Income and Independence) In 2005, Chicago House began Chicago’s first city-wide employment program for people with HIV/AIDS. The program is designed to help unemployed adults with HIV secure and retain productive employment to ensure that they do not need to rely solely on subsidized medical care, housing, and supportive services. A four-week training workshop, career counseling, mentorship and internship opportunities are the services provided to help clients achieve greater self-sufficiency and productivity, ultimately leading to successful employment. Consolidated Financial Statements The accompanying financial statements reflect the consolidation of the financial statements of Chicago House and Fred Woods Home, Inc. All material inter-organization accounts and transactions have been eliminated in consolidation. Basis of Accounting The accounts and consolidated financial statements are maintained on the accrual basis of accounting and accordingly, reflect all significant accounts receivable, payable, and other liabilities in conformity with accounting principles applicable to non-profit organizations. Basis of Presentation The Organizations report information regarding their consolidated financial position and activities according to three classes of net assets: unrestricted, temporarily restricted, and permanently restricted net assets (if applicable), as required by Generally Accepted Accounting Principles (GAAP). 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of the revenues, expenses, gains, losses and other changes in net assets during the reporting period. The fair value of investments is particularly subject to change in the near term. Accordingly, actual results could differ from those estimates.

-9-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies (cont.) Comparative Information The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Organizations’ audited financial statements for the year ended June 30, 2012, from which the summarized information was derived. Income Taxes Chicago House and Social Service Agency and Fred Woods Home, Inc. were granted exemptions from federal income taxes by the Internal Revenue Service pursuant to the provisions of Internal Revenue Code Section 501 (c)(3). The Organizations’ qualify for the charitable contribution deduction and have been classified as Organizations’ that are not private foundations under Section 509 (a)(1). The tax exempt purpose of the Organizations’ and the nature in which they operate are described above. The Organizations’ continue to operate in compliance with their tax exempt purpose. The Organizations’ annual informational returns filed with the federal and state governments are subject to examination for the statutory period. Cash and Cash Equivalents Cash and cash equivalents consist of bank deposits in federally insured accounts. At June 30, 2013, the Organizations’ cash accounts exceeded federally insured limits by approximately $685,000. For purposes of the Statement of Cash Flows, the Organizations consider all U.S. Treasury bills and certificates of deposits with an original maturity of one year or less to be cash equivalents. Cash - Restricted Restricted cash consists of $204,614 of HUD restricted deposits and $21,437 is restricted per the agreement with the U.S. Department of Health and Human Services (DHHS) for Employment Program initiatives. This amount is also included in the $241,828 refundable advance to DHHS (see Note 5). The Cash – Restricted accounts are held in separate interest-bearing FDIC insured accounts and are not generally available for operating purposes. Property and Equipment Expenditures for property and equipment and items which substantially increase the useful lives of existing assets are capitalized at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets as follows: Building and improvements Leasehold improvements Furniture and equipment Office equipment Vehicles

5 - 30 years 3 - 15 years 3 - 10 years 3 - 5 years 3 - 5 years

-10-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies (cont.) Support and Revenue The Organizations report 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 to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restrictions. The Organizations report gifts of land, buildings, and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived 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 longlived assets are reported as restricted support. Absent explicit donor stipulations regarding how long those long-lived assets must be maintained, the Organizations report expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. Government Contributions Support funded by government contracts, which qualify as conditional promises to give, are recognized when the condition of performing the contracted services is met. Revenue is therefore recognized as earned as the condition of eligible expenses are incurred. These expenditures are subject to audit and acceptance by the granting Agency and, as a result of such audit, adjustments could be required. Donated Services Contributions of services are required to be recognized if the services received (a) create or enhance nonfinancial assets or (b) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. For the year ended June 30, 2013, the Organizations received $59,679 of donated video productions, advertising, designs and $9,612 of construction labor services meeting these criteria. The $9,612 of construction labor services was capitalized and restricted to the TransLife Center Program. There were also a substantial number of volunteers who donated a significant amount of their time towards the activities of the Organizations, the value of which has not been recognized in the financial statements due to not meeting the donated services recognition requirements. The total hours donated for the year ended June 30, 2013 is estimated at 12,430. In-Kind Contributions In addition to receiving cash contributions, the Organizations receive in-kind contributions from various donors. In accordance with generally accepted accounting principles, the Organizations record the estimated fair value of certain in-kind donations as an expense in its consolidated financial statements, and similarly records a corresponding donation by a like amount. For the year ended June 30, 2013, the Organizations received in-kind contributions valued at $36,829, which is included in direct benefit items for special events. Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the Statement of Activities and the Statement of Functional Expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. -11-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 1 – Nature of Operation and Summary of Significant Accounting Policies (cont.) Concentration of Risk During the fiscal year ending June 30, 2013, the Organizations received approximately 43% of its funding from the U.S. Department of Health and Human Services, HIV Relief Grants Part A and Part B (Passed through AFC), U.S. Department of Housing and Urban Development, and Chicago Department of Public Health. These sources of revenue also represents 82% of the government contributions receivable at June 30, 2013. These sources of revenue are contingent upon continued funding approval from the respective government units. Any negative change in the economy could have an impact on contributions, fundraising efforts, as well as government grants. Note 2 – Conditional Promises to Give The Organizations have received the following conditional promises to give that are not recognized as assets in the Consolidated Statement of Financial Position as of June 30, 2013:

Conditional Promise Grant Term Amount Conditional Promises to Give Upon Expenditure of Funds or Days Served:

Conditions met as of 6/30/2013

Conditional Promises Available

Chicago Department of Public Health - CDBG Grant

1/1/13 to 12/31/13

Chicago Department of Public Health - HOPWA

1/1/13 to 12/31/13

492,684

223,665

269,019

Chicago Department of Public Health - HIV Prevention

1/1/12 to 12/31/13

100,000

47,622

52,378

Chicago Department of Public Health - Ryan White

3/1/13 to 2/28/14

60,183

15,797

44,386

Chicago Department of Public Health - Prevention for Adults

1/1/13 to 12/31/13

67,500

27,499

40,001

Chicago Department of Public Health - Prevention (Trilogy)

9/30/12 to 9/29/13

44,993

33,438

11,555

AIDS Foundation of Chicago Ryan White Part A

3/1/13 to 2/28/2014

156,733

51,687

105,046

AIDS Foundation of Chicago Ryan White Part B

4/1/13 to 3/31/14

176,173

63,957

112,216

AIDS Foundation of Chicago Family Ties Scattered Sites & Trans Life Center

3/1/13 to 2/28/14

130,472

17,031

113,441

-12-

$

72,694

$

36,347

$

36,347


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 2 – Conditional Promises to Give (cont.)

Conditional Promise Grant Term Amount Conditional Promises to Give Upon Expenditure of Funds or Days Served:

Conditions met as of 6/30/2013

Conditional Promises Available

AIDS Foundation of Chicago Housing Advocacy

1/1/13 to 12/31/13

AIDS Foundation of Chicago HUD HHP

5/1/13 to 4/30/2014

55,890

10,325

45,565

AIDS Foundation of Chicago Samaritan Project

1/1/13 to 12/31/13

60,870

29,939

30,931

AIDS Foundation of Chicago Connect to Care

3/1/13 to 2/28/14

102,309

40,530

61,779

U.S. Department of Housing and Urban Development - SHP Housing First

1/1/13 to 12/31/13

243,653

58,869

184,784

U.S. Department of Housing and Urban Development - HOPWA

2/1/13 to 1/31/16

1,285,370

223,285

1,062,085

U.S. Department of Health and Human Services - CDC

7/1/13 to 6/30/2015

514,582

-

514,582

Chicago Department of Family and Supportive Services - Shelter Plus Care Grant

1/1/13 to 12/31/13

47,266

17,675

29,591

Chicago Department of Family and Supportive Services - Workforce Development

1/1/13 to 12/31/13

60,000

36,134

23,866

Chicago Department of Family and Supportive Services - Bridges

1/1/13 to 12/31/13

35,000

17,500

17,500

U.S. Department of Health and Human Services - Youth Center on Halsted

9/30/12 to 9/30/13

65,103

47,916

17,187

U.S. Department of Health and Human Services - HRSA

9/30/12 to 8/31/17

298,848

185,498

113,350

The CORE Foundation Linkage to Life

9/1/12 to 8/31/13

55,378

42,173

13,205

U.S. Department of Education

10/1/11 to 9/30/14

398,758 $ 4,658,082

145,452 $ 1,443,977

253,306 $ 3,214,105

Total -13-

$

133,623

$

71,638

$

61,985


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 2 – Conditional Promises to Give (cont.) Conditional promise to give upon the recognition of specific program expenditures and/or submission of reports through 2014

$

160,000

Note 3 – Property and Equipment At June 30, 2013, property and equipment was comprised of the following:

Land Buildings and improvements Leashold improvements Construction in progress Furniture and fixtures Equipment Vehicles Total property and equipment Less accumulated depreciation Net property and equipment

$

910,021 5,550,072 25,078 336,314 157,539 361,245 60,489 7,400,758 (2,371,193)

$

5,029,565

Depreciation expense amounted to $261,766 for the year ended June 30, 2013. Note 4 – Lines of Credit The Organizations are obligated for credit cards issued in their name. At June 30, 2013, the Organizations’ total line of credit available related to these credit cards was $60,000, of which $17,745 was outstanding. Note 5 – Refundable Advances Refundable advances as of June 30, 2013 consist of the following advances from government and nongovernmental sources:

Current Illinois Department of Commerce and Economic Opportunity JTED - June 1, 2011 to May 31, 2013 Training for Tomorrow - January 1, 2011 to June 30, 2013 Capital - June 1, 2012 to May 31, 2014 Total current refundable advance Long-Term Department of Health and Human Services (DHHS) Passed through Administration for Children and Families Community Economic Development loan to Sweet Miss Givings, LLC (Chicago House has requested DHHS forgive this loan as Sweet Miss Givings, LLC closed during April 2012 - See Note 12) -14-

$

2,000 27,947 33,684

$

63,631

$

241,828


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 6 – Temporarily Restricted Net Assets Temporarily restricted net assets are comprised of the following:

Chicago House - Program Restricted Speaker series Prevention program Trans Life Center Family support program Mission Strategy

$

Fred Woods - Restricted Advances and Deposits HUD Project No. 071-HD024/IL06-Q931-001 HUD capital advance Federal Home Loan Bank Grant Hazard insurance deposit Replacement reserve deposit Residual receipts deposits Sub-total

26,250 27,500 102,464 838,140 4,900 999,254

1,119,900 50,000 12,212 102,911 23,080 1,308,103

HUD Project No. 071-HD152/IL06-Q051-005 HUD capital advance Federal Home Loan Bank Grant Construction cash Minimum capital investment Hazard insurance deposit Replacement reserve deposit

975,800 140,000 11,179 4,879 8,132 31,371

Sub-total Total temporarily restricted net assets

$

1,171,361 3,478,718

HUD Project No. 071-HD024/IL06-Q931-001 This Project received a capital advance of $1,119,900 for the construction of its 9 unit facility from HUD during 1997. This capital advance need not be repaid as long as the project owner continues to make the housing available for the disabled for at least forty years, or until September 1, 2037. If repayment is necessary, the entire principal sum plus interest at a rate of 7.25% annum becomes due immediately. Management has determined that the use of the facility for another purpose is remote. As such, the funds from the capital advance were recognized as a contribution in a prior year and maintained as temporarily restricted net assets, until the release of the restriction on September 1, 2037. The $50,000 grant from the Federal Home Loan Bank is to be used to manage and operate the property as rental housing for low-income individuals for forty years, or until November 2036.

-15-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 6 – Temporarily Restricted Net Assets (cont.) The $12,212 hazard insurance deposit and the $102,911 replacement reserve deposit are required under the HUD regulatory agreement. The $23,080 residual receipts deposit is for the 2004 surplus cash that is required to be maintained in a restricted cash account. These HUD-restricted deposits are held in separate interestbearing FDIC insured accounts and are not generally available for operating purposes. HUD Project No. 071-HD152/IL06-Q051-005 This Project received a capital advance of $975,800 for the construction of its 6 unit facility from HUD during fiscal year 2009. This capital advance need not be repaid as long as the project owner continues to make the housing available for the disabled for at least forty years, or until September 1, 2048. If repayment is necessary, the entire principal sum plus interest at a rate of 5.25% per annum becomes due immediately. Management has determined that the use of the facility for another purpose is remote. As such, the funds from the capital advance were recognized as a contribution in a fiscal year 2009 and maintained as temporarily restricted net assets, until the release of the restriction on September 1, 2048. The $140,000 grant from the Federal Home Loan Bank is to be used to manage and operate the property as rental housing for low-income individuals for a fifteen year retention period. At June 30, 2013, the Project had an $11,179 residual balance with the Title Company for remaining construction costs. According to HUD Regulations, the project was required to establish a minimum capital investment deposit in the amount of $4,879, which represents one-half of one percent of the HUD-approved capital advance. The $8,132 hazard insurance deposit and the $31,371 replacement reserve deposit are required under the HUD regulatory agreement. These HUD-restricted deposits are held in separate interest-bearing FDIC insured accounts and are not generally available for operating purposes. Note 7 – Leases The Organizations lease office space, certain operating facilities, and equipment under non-cancellable operating arrangements. These leases expire at various dates through July 2017. The minimum future annual rental payments required under these operating leases are as follows: June 30,

Amount

2014 2015 2016 2017

$

221,728 151,598 8,208 8,208

Total

$

389,742

Rental expense for these leases included in the consolidated statement of activities for the year ended June 30, 2013 was $228,098.

-16-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 7 – Leases (cont.) The Organizations are also responsible for lease agreements for their scattered site and family support clients. These lease terms are in increments of one year or less. Client rental assistance for the year ended June 30, 2013 was $477,112. Note 8 – HUD Rental Subsidy Pursuant to Section 8 of the U.S. Housing Act of 1937, the Organization executed Housing Assistance Payment Contracts with HUD, providing for rental subsidy payments for units leased to eligible lower income persons. These amounts are included in rental income in the accompanying financial statements. The rental subsidy payments are designed to provide for the difference between the cash needs of the respective Project and the cash generated by the tenants’ rental payments. Note 9 – Occupancy HUD Project No. 071-HD024/IL06-Q931-001 At full occupancy, gross annualized rentals, including HUD rental subsidies, would be approximately $61,020. Actual rentals are generally less than gross annualized rentals due to vacancies, which periodically occur throughout the year. Leases are generally one year in duration and expire at October 31, 2013. HUD Project No. 071-HD152/IL06-Q051-005 At full occupancy, gross annualized rentals, including HUD rental subsidies, would be approximately $24,000 Actual rentals are generally less than gross annualized rentals due to vacancies, which periodically occur throughout the year. Leases are generally one year in duration and expire at October 31, 2013. Note 10 – Regulatory Agreement HUD Project No. 071-HD024/IL06-Q931-001 The Project has an agreement with HUD, which provides for the regulation of rental charges and restrictions on disposition of the property. Under the regulatory agreement, the Project may not increase rents charged to tenants without prior HUD approval. The regulatory agreement also requires the Project, as the mortgagor, to deposit a minimum of $421.58 per month in the replacement reserve. This fund is to be used to finance the replacement of structural elements and mechanical equipment as approved by HUD. As of June 30, 2013, the balance of the reserve for replacements was $102,911, which is reported as a component of temporarily restricted net assets. HUD Project No. 071-HD152/IL06-Q051-005 The Project has an agreement with HUD, which provides for the regulation of rental charges and restrictions on disposition of the property. Under the regulatory agreement, the Project may not increase rents charged to tenants without prior HUD approval. The regulatory agreement also requires the Project, as the mortgagor, to deposit a minimum of $559.84 per month in the replacement reserve. This fund is to be used to finance the replacement of structural elements and mechanical equipment as approved by HUD. As of June 30, 2013, the balance of the reserve for replacements was $31,371 which is reported as a component of temporarily restricted net assets.

-17-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 11 – Employee Benefit Plan The Organizations have an optional tax deferred annuity retirement plan for all of its qualifying employees. At the Board’s discretion, the Organizations may match a portion of the participating employee’s compensation. For the year ending June 30, 2013, the Organizations contributed $56,888 to the pension plan. Note 12 – Related Party Transactions and Discontinuation of Bakery Discontinuation of Bakery Reverend Stan Sloan is the CEO of Chicago House and the CEO of Sweet Miss Giving’s, NFP. Effective December 31, 2010, Sweet Miss Givings, NFP was the sole member of Sweet Miss Givings, LLC (the Bakery). Prior to December 31, 2010, Sweet Miss Giving’s, NFP held a 51% partnership interest. The Bakery was closed in April 2012. A licensing agreement was reached with a national wholesale baker who will continue to market products and provide royalty income on certain products based on profitability of the Sweet Miss Giving’s product lines. In 2011, Chicago House had received a grant from the U.S. Department of Health and Human Services (DHHS) for a loan to be issued directly to the Bakery in the amount of $241,828. The purpose of the loan was to provide the Bakery with additional working capital that would allow business expansion and development necessary for the Bakery to contribute and achieve the goals and outcomes related to the Community Economic Development Project of Chicago House. Of these funds, $21,437 remains as restricted cash for Chicago House, $175,273 was directly loaned to the Sweet Miss Giving’s Bakery, and $44,500 was issued during the year ended June 30, 2013 as a programmatic grant to the national wholesale bakery who continues to market products under the name of Sweet Miss Giving’s. The national wholesale bakery also works with Chicago House’s job training program when possible employing interns and graduates of the job training program. Sweet Miss Giving’s Bakery was to make monthly principal and interest loan payments, none of which were ever made. At June 30, 2012, Chicago House recognized that the $175,273 loan issued directly to Sweet Miss Giving’s Bakery was uncollectible and included it with other costs related to the discontinuation of the bakery in the Statement of Activities. The $241,828 grant amount received from the U.S. Department of Health and Human Services is recorded as a refundable advance until the grant terms expire. Note 13 – Sub-Recipient Awards During the year ended June 30, 2013, Chicago House entered into agreements to pass – through conditional funding to other entities to provide the required program services as noted in the grantor agreements. These grant awards are recognized as an expense at the time conditions are met. Listed below are the sub-recipient awards that carry over to future periods:

Sub-Receipient

Contract Term

Ann & Robert H. Lurie Children's Hospital 9/1/12 to 8/31/13 Center on Halsted 9/1/12 to 8/31/13 Heartland Health Outreach 9/1/12 to 8/31/13 University of Illinois 10/1/11 to 9/30/14

Contract Amount $

$ -18-

57,741 15,000 10,000 313,653 396,394

Expended $

$

36,503 12,500 5,000 146,680 200,683

Future Commitments $

$

21,238 2,500 5,000 166,973 195,711


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Note 14 – Subsequent Events For the year ended, June 30, 2013, the Organizations’ management has evaluated subsequent events through October 25, 2013, which is the date the financial statements were available to be issued. No subsequent events have been identified that are required to be disclosed at that date.

-19-


SUPPLEMENTARY INFORMATION


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATING STATEMENT OF FINANCIAL POSITION As of June 30, 2013

Chicago House Assets Current Assets Cash and cash equivalents Cash - restricted Investments - certificates of deposit Government contributions receivable Non-governmental contributions due within one year Other accounts receivable Prepaid expenses

$

1,246,596 21,437 210,232 1,253,280 119,248 84,248 119,534

Fred Woods Home, Inc.

$

Eliminations

9,445 204,614 6,200 4,812 -

$

-

Total

$

Total current assets

3,054,575

225,071

Property and equipment, net Related party receivable Security deposits

2,010,678 1,458,518 15,398

3,018,887 -

(1,458,518) $ (1,458,518)

$

8,324,609

$

$

201,585

Total Assets Liabilities and Net Assets Current Liabilities Accounts payable Accrued expenses Payroll and related Other Refundable advance

$

6,539,169

$

3,243,958

$

184,292

$

17,293

-

1,256,041 226,051 210,232 1,259,480 119,248 89,060 119,534

-

3,279,646 5,029,565 15,398

384,306 32,935 63,631

-

-

384,306 32,935 63,631

665,164

17,293

-

682,457

Related party payable Refundable advance Tenant security deposits

241,828 7,411

1,458,518 2,910

(1,458,518) -

241,828 10,321

Total liabilities

914,403

1,478,721

(1,458,518)

934,606

Total current liabilities

Net Assets Unrestricted General and operational designated Net investment in property and equipment Total unrestricted net assets Temporarily restricted Total net assets Total Liabilities and Net Assets

$

2,614,834 2,010,678

(1,447,414) 733,187

-

1,167,420 2,743,865

4,625,512 999,254

(714,227) 2,479,464

-

3,911,285 3,478,718

5,624,766

1,765,237

-

7,390,003

6,539,169

See independent auditor's report. -20-

$

3,243,958

$ (1,458,518)

$

8,324,609


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATING STATEMENT OF ACTIVITIES For the Year Ending June 30, 2013

CHICAGO HOUSE Temporarily Unrestricted Restricted Public Support and Revenue Chicago Department of Public Health Chicago Department of Family and Support Services U.S. Department of Housing and Urban Development U.S. Department of Education State of Illinois - Office of Rehabilitation Services (passed through AFC) HIV Relief Grant - Title I and II (passed through AFC) U.S. Department of Health and Human Services (including pass-through funds) Illinois Department of Commerce and Economic Opportunity Illinois Department of Human Services Illinois Department of Public Health Federal Home Loan Bank United Way

$

Contributions Individuals Corporations Foundations Total contributions Special Events Contributions and collaborative events Corporate sponsorships Special events revenue Donated services In-kind direct benefit Less cost of direct benefits to donors, including $36,829 of in-kind

$

Client fees Donated services - capital Interest and dividend income Miscellaneous income Net assets released from restrictions satisfaction of program restrictions

Expenses Program Services Residential Housing Scattered Site Housing Prevention Community Case Management Employment Total program services Management and general Fundraising expense Total Expenses Change in net assets Net assets (deficit), beginning of year $

$

-

$

Unrestricted

45,810 -

$

-

$

858,445 139,647 662,601 194,179

Consolidated Total $

858,445 139,647 662,601 194,179

96,701 678,644

-

-

-

96,701 678,644

96,701 678,644

-

548,940

-

-

-

548,940

548,940

-

218,593 338,114 73,336 72,000 40,000

-

-

-

218,593 338,114 73,336 72,000 40,000

218,593 338,114 73,336 72,000 40,000

435,128 87,526 138,125 660,779

395,436 5,000 677,980 1,078,416

-

-

435,128 87,526 138,125 660,779

395,436 5,000 677,980 1,078,416

830,564 92,526 816,105 1,739,195

226,742 223,550 189,803 59,679 36,829

16,500 26,250 -

-

-

226,742 223,550 189,803 59,679 36,829

16,500 26,250 -

243,242 249,800 189,803 59,679 36,829

-

-

-

(235,440)

501,163

42,750

-

-

501,163

42,750

543,913

137,093 4,574 -

9,612 44,905

38,932 1 -

201 -

176,025 4,575 -

9,612 201 44,905

176,025 9,612 4,776 44,905

4,802,684

Total Public Support and Revenue

858,445 139,647 616,791 194,179

Consolidated Totals Temporarily Restricted

-

(235,440)

Net revenues from special events

Net assets (deficit), end of year

-

FRED WOODS HOME Temporarily Unrestricted Restricted

(4,802,684)

-

(235,440)

34,033

(34,033)

4,836,717

6,106,293

248,389

72,966

11,978

6,179,259

(4,836,717) 260,367

6,439,626

-

1,550,985 1,124,604 696,365 346,660 823,168 4,541,782

-

297,222 297,222

-

1,848,207 1,124,604 696,365 346,660 823,168 4,839,004

-

1,848,207 1,124,604 696,365 346,660 823,168 4,839,004

618,503 678,086

-

20,039 -

-

638,542 678,086

-

638,542 678,086

5,838,371

-

317,261

-

6,155,632

-

6,155,632

267,922

248,389

(244,295)

11,978

23,627

260,367

283,994

4,357,590

750,865

(469,932)

2,467,486

3,887,658

3,218,351

7,106,009

4,625,512

$

999,254

$

(714,227)

See independent auditor's report. -21-

$

2,479,464

$

3,911,285

$

3,478,718

$

7,390,003


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATING STATEMENT OF EXPENSES BY PROGRAM For the Year Ending June 30, 2013

Consolidated Residential Housing Functional Expenses Salaries and wages Fringe benefits and related taxes Subcontracting Grant to others Professional and consulting fees Donated professional services Rent Telephone Utilities Supplies Printing and publications Postage Repairs and maintenance Insurance Travel Employment search and public relations Staff development Special events Client assistance Membership dues Bank and credit card fees Loss on disposal of property Miscellaneous Bad debt expense Depreciation expense Total Expenses

$

752,231 236,004 64,003 41,365 15,247 33,792 77,046 42,257 329 624 98,725 73,393 15,745 15 2,604 55,833 102 515 105,906 2,116 230,355

$

1,848,207

Chicago House Community Case Prevention Management

Scattered Site Housing $

Employment

Total Consolidated Program Expenses

Chicago House Management and General

Fred Woods Home Management and General

Total Consolidated Management and General

Chicago House Fundraising

Consolidated Total

403,209 126,504 15,881 40,673 5,525 3,290 9,948 699 975 4,696 1,140 10,316 1,420 490,978 1,953 583 4,602 2,212

$

421,635 132,285 9,000 9,473 43,154 9,832 1,853 25,835 4,446 1,228 4,268 1,561 16,136 1,894 6,768 4,581 473 1,943

$

237,118 74,394 1,717 20,762 1,950 583 1,501 552 892 491 3,156 521 1,957 204 41 821

$

384,907 120,761 104,640 44,500 19,391 60,478 6,528 4,134 12,041 1,346 1,090 9,627 1,209 4,239 150 2,010 32,825 5,787 324 1,200 5,981

$ 2,199,100 689,948 177,643 44,500 87,827 180,314 57,627 86,906 91,582 6,820 4,469 118,208 77,794 49,592 165 8,449 588,361 12,627 515 105,906 3,537 5,802 241,312

$

278,450 87,362 108,074 29,901 3,372 2,483 19,416 151 2,338 12,963 5,513 7,123 6,540 7,793 17,457 8,022 4,773 1,378 15,394

$

16,335 32 1,613 2,059 -

$

278,450 87,362 124,409 29,901 3,372 2,483 19,416 151 2,338 12,963 5,513 7,123 6,540 7,793 17,457 8,054 6,386 3,437 15,394

$

307,346 96,427 18,981 59,679 22,434 4,153 2,557 9,090 12,375 6,810 10,542 604 2,128 3,752 3,179 105,584 6,047 188 1,150 5,060

$

2,784,896 873,737 177,643 44,500 231,217 59,679 232,649 65,152 91,946 120,088 19,346 13,617 141,713 83,911 58,843 10,457 19,421 105,584 588,361 36,131 8,757 105,906 11,073 9,239 261,766

$ 1,124,604

$

696,365

$

346,660

$

823,168

$ 4,839,004

$

618,503

$

20,039

$

638,542

$

678,086

$

6,155,632

See independent auditor's report. -22-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATING SCHEDULE OF EXPENSES BY RESIDENTIAL HOUSING PROJECTS For the Year Ending June 30, 2013

Fred Woods Home Family Support Functional Expenses Salaries and wages $ Fringe benefits and related taxes Subcontracting Professional and consulting fees Rent Telephone Utilities Supplies Printing and publication Postage Repairs and maintenance Insurance Travel Employment search and public relations Staff development Client assistance Membership dues Bank and credit card fees Loss on disposal of property Miscellaneous Depreciation expense Total Expenses

$

Chicago House Family Support

Chicago House

Consolidated Total Family Support

Supportive Living

TransLife Center

Independent Living

Total Residential Housing

66,255 20,785 35,052 10,745 31,864 23,698 10,433 526 97,864

$

183,772 57,657 30,345 1,053 3,550 96 8,212 183 64 12,145 5,625 2,329 1,169 14,209 12 6,555

$

250,027 78,442 30,345 1,053 3,550 35,148 18,957 183 64 44,009 29,323 2,329 1,169 14,209 10,433 538 104,419

$

204,996 64,316 1,783 356 13,822 12,698 11,347 18 19,662 15,697 1,135 541 32,488 140 44,220

$

156,964 49,246 64,003 8,440 12,956 2,509 3,287 6,817 146 457 5,014 7,383 10,674 15 572 5,531 515 94,904 1,438 23,646

$

140,244 44,000 797 882 13,911 25,913 5,136 85 30,040 20,990 1,607 322 3,605 102 569 58,070

$

297,222

$

326,976

$

624,198

$

423,219

$

454,517

$

346,273

$ 1,848,207

See independent auditor's report. -23-

752,231 236,004 64,003 41,365 15,247 33,792 77,046 42,257 329 624 98,725 73,393 15,745 15 2,604 55,833 102 515 105,906 2,116 230,355


REPORTS REQUIRED BY OMB A-133


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2013

Federal Grantor/Pass-Through Grantor/Program Title U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities under Section 811 of the National Affordable Housing Act Capital advance - (1997) 071-HD024/IL06-Q931-001 Capital advance - (2008 - 2009) 071-HD152/IL06-Q051-005 Rental assistance payments

Federal CFDA Number

Pass-through Contract Number

14.181 14.181 14.181

N/A N/A N/A

Disbursements or Expenditures

$

(1)

1,119,900 975,800 45,810 2,141,510

Supportive Housing Program - January 1, 2013 to December 31, 2013 Supportive Housing Program - July 1, 2013 to June 30, 2013

14.235 14.235

IL0494B5T101100 IL0215B5T101104

58,869 40,639

Passed through the AIDS Foundation of Chicago Supportive Housing Program March 1, 2013 to February 28, 2014 May 1, 2013 to April 30, 2014 May 1, 2012 to April 30, 2013

14.235 14.235 14.235

N/A N/A N/A

17,031 8,325 50,736 175,600

Passed through the AIDS Foundation of Chicago Housing Opportunities for Persons With AIDS (HOPWA) January 1, 2012 to December 31, 2012 January 1, 2013 to December 31, 2013 January 1, 2013 to December 31, 2013

14.241 14.241 14.241

N/A N/A N/A

29,653 29,939 71,638

Housing Opportunities for Persons With AIDS (HOPWA) February 1, 2010 to January 31, 2013 February 1, 2013 to January 31, 2016

14.241 14.241

IL-H090015 IL-H120011

293,998 223,285

Passed through the City of Chicago Department of Public Health January 1, 2010 to December 31, 2012 January 1, 2013 to December 31, 2013 January 1, 2012 to December 31, 2012

14.241 14.241 14.241

PO 21113 / R1 PO 27880 / R1 PO 21113 / R4

30,000 223,665 285,119 1,187,297

(1) Community Development Block Grant Program (CDBG)/Entitlement Grants Passed through the City of Chicago Department of Public Health January 1, 2013 to December 31, 2013 January 1, 2013 to December 31, 2013 January 1, 2012 to December 31, 2012

14.218 14.218 14.218

PO 27618 / R1 PO 27629 / R1 PO 25343 / R1

36,347 27,499 53,698

Passed through the City of Chicago Department of Family and Support Services January 1, 2012 to December 31, 2012 January 1, 2012 to December 31, 2012 January 1, 2013 to December 31, 2013

14.218 14.218 14.218

PO 25520 / R1 PO 25520 / R2 PO 27249 / R1

33,033 17,500 53,634 221,711

Shelter Plus Care Passed through the City of Chicago Department of Family and Support Services January 1, 2013 to December 31, 2013 January 1, 2012 to December 31, 2012

14.238 14.238

PO 24421 / R3 PO 24421 / R2

17,675 17,276 34,951 3,761,069

Total U.S. Department of Housing and Urban Development

See accompanying notes to schedule of federal awards. -24-

$


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONT.) For the Year Ended June 30, 2013

Federal CFDA Number

Pass-through Contract Number

93.939

5U65PS002629-03

93.939 93.939

1U65P5003526-01 1U65P5003526-01

18,387 42,916 299,399

Administration for Children and Families Community Services Block Grant - Discretionary Awards September 30, 2009 to September 30, 2013

93.570

90EE0905/01

12,334

Community Programs to Improve Minority Health Grant Program Passed through the CORE Foundation September 1, 2012 to August 31, 2013 September 1, 2011 to August 31, 2012

93.137 93.137

N/A N/A

42,173 9,534 51,707

Federal Grantor/Pass-Through Grantor/Program Title U.S. Department of Health and Human Services Centers for Disease Control HIV Preventions Activities - Non Governmental Organization Based July 1, 2012 to June 30, 2013 Passed through the Center on Halsted September 30, 2012 to September 29, 2013 September 30, 2011 to September 29, 2012

Disbursements or Expenditures

$

238,096

Ryan White Part A - HIV Emergency Relief Project Grants Passed through the AIDS Foundation of Chicago March 1, 2013 to February 29, 2014 March 1, 2012 to February 28, 2013 Ryan White Program - HIV Emergency Relief Project Grants Passed through the City of Chicago Department of Public Health March 1, 2013 to February 28, 2014 March 1, 2012 to February 28, 2013

93.914 93.914

N/A N/A

51,687 97,511

93.914 93.914

PO 23734 / R3 PO 23734 / R2

15,797 39,494 204,489

Ryan White Part B - HIV Care Formula Grants Passed through the AIDS Foundation of Chicago April 1, 2013 to March 31, 2014 April 1, 2012 to March 31, 2013

93.917 93.917

N/A N/A

63,957 152,829 216,786

93.243 93.243

PO 26543 / R1 PO 26543 / R2

7,291 33,438

93.243

N/A

5,000 45,729

93.928

H97HA24965

94.019 94.019

N/A N/A

40,530 57,806 98,336

84.133G 84.133G

H133G110108 H133G110108

145,452 48,727 194,179

Substance Abuse and Mental Health Services - Projects of Regional and National Significance Passed through Trilogy, Inc. October 1, 2011 to September 30, 2012 October 1, 2012 to September 30, 2013 Pass through the AIDS Foundation of Chicago May 1, 3012 to April 30, 2013 Special Projects of National Significance Pass through Health Resources and Services Administration September 1, 2012 to August 31, 2017 Total U.S. Department of Health and Human Services Corporation for National and Community Service Social Innovation Fund Pass through the AIDS Foundation of Chicago March 1, 2013 - February 28, 2014 March 1, 2012 - February 28, 2013 Total Corporation for National and Community Service U.S. Department of Education National Institute on Disability and Rehabilitation Research October 1, 2012 to September 30, 2013 October 1, 2011 to September 30, 2012 Total U.S. Department of Education Total Expenditures of Federal Awards (1) Major Program

See accompanying notes to schedule of federal awards. -25-

185,498 1,015,942

$

5,069,526


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO THE CONSOLIDATED SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2013 Note 1 – Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the Federal grant activity of Chicago House and Social Service Agency and Fred Woods Home, Inc. under programs of the federal government for the year ended June 30, 2013. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of State, Local Governments, and Non-Profit Organizations. Because the schedule presents only a selected portion of the operations of Chicago House and Social Service Agency and Fred Woods Home, Inc., it is not intended to and does not present the consolidated financial position, changes in net assets or cash flows of Chicago House and Social Service Agency and Fred Woods Home, Inc. Note 2 – Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Note 3 – Capital Advance Fred Woods Home, Inc. had the following capital advances at June 30, 2013. These capital advances outstanding are also included in the Federal expenditures presented in the schedule.

Project Number

Cluster/ Program Title

Federal CFDA Number

071-HD024 071-HD152

Section 811 Section 811

14.181 14.181

Amount Outstanding $

1,119,900 975,800

Note 4 – Sub-Recipients Of the federal expenditures presented in the schedule, Chicago House and Social Service Agency, Inc. provided federal awards to sub-recipients during the year ended June 30, 2013 as follows:

Federal CFDA Number

Program Title

Federal Amount Provided to Sub-Recipients

HRSA - Special Projects of National Significance

93.928

$

64,003

Centers for Disease Control - HIV Prevention Activities

93.939

$

9,000

Department of Education National Institute of Disability and Rehabilitation Research

84.133

$

104,641

-26-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. NOTES TO THE CONSOLIDATED SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Year Ended June 30, 2013 Note 5 – Non-Cash Awards Chicago House and Social Service Agency and Fred Woods Home, Inc. did not have any outstanding Federal loans or loan guarantees at June 30, 2013, and did not receive any Federal non-cash awards or insurance assistance for reimbursement losses during the year ended June 30, 2013.

-27-


Desmond &Ahern, Ltd. CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Board of Trustees of Chicago House and Social Service Agency and Fred Woods Home, Inc. Chicago, IL We have audited in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained Government Auditing Standards, issued by the Comptroller General of the United States, the consolidated financial statements of Chicago House and Social Service Agency and Fred Woods Home, Inc., which comprise the consolidated statement of financial position as of June 30, 2013, and the related consolidated statements of activities, functional expenses and cash flows for the year then ended and the related notes to the financial statements, and have issued our report thereon dated October 25, 2013. Internal Control over Financial Reporting In planning and performing our audit of the consolidated financial statements, we considered Chicago House and Social Service Agency and Fred Woods Home, Inc’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Chicago House and Social Service Agency and Fred Woods Home, Inc’s internal control. Accordingly, we do not express such an opinion on the effectiveness of Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control. 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 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control 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 material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. -2810827 S. WESTERN AVENUE, CHICAGO, IL 60643-3206 • PHONE 773-779-4720 • FAX 773-779-8310 www.desmondcpa.com


Compliance and Other Matters As part of obtaining reasonable assurance about whether Chicago House and Social Service Agency and Fred Woods Home, Inc.’s consolidated 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. Purpose of the Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

October 25, 2013 Chicago, IL

-29-


Desmond &Ahern, Ltd. CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS

Independent Auditor’s Report on Compliance For Each Major Federal Program and Report on Internal Control over Compliance Required by OMB Circular A-133 To the Board of Trustees Chicago House and Social Service Agency and Fred Woods Home, Inc. Chicago, Illinois Report on Compliance for Each Major Federal Program We have audited Chicago House and Social Service Agency and Fred Woods Home, Inc.’s compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of Chicago House and Social Service Agency and Fred Woods Home Inc.’s major federal programs for the year ended June 30, 2013. Chicago House and Social Service Agency and Fred Woods Home, Inc.’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our Responsibility is to express an opinion on compliance for each of Chicago House and Social Service Agency and Fred Woods Home Inc.’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance 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 Chicago House and Social Service Agency and Fred Woods Home, Inc.’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 on compliance for each major federal program. However, our audit does not provide a legal determination of Chicago House and Social Service Agency and Fred Woods Home, Inc.’s compliance.

-3010827 S. WESTERN AVENUE, CHICAGO, IL 60643-3206 • PHONE 773-779-4720 • FAX 773-779-8310 www.desmondcpa.com


Unmodified Opinion on Each of the Major Federal Programs In our opinion, Chicago House and Social Service Agency and Fred Woods Home, Inc. has complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2013. Report on Internal Control over Compliance Management of Chicago House and Social Service Agency and Fred Woods Home, Inc.’s is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control over compliance with the type requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 Chicago House and Social Service Agency and Fred Woods Home, Inc.’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance 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 compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A133. Accordingly, this report is not suitable for any other purpose.

October 25, 2013 Chicago, IL

-31-


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2013 Section I - Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting: • Material weaknesses identified?

yes

X

no

• Significant control deficiencies identified that are not considered to be material weaknesses?

yes

X

no

Noncompliance material to financial statements noted?

yes

X

no

• Material weaknesses identified?

yes

X

no

• Significant control deficiencies identified that are not considered to be material weaknesses?

yes

X

no

yes

X

no

Federal Awards Internal control over major programs:

Type of auditor’s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 501(a) of Circular A-133? Certification of Major Programs CFDA Number

Name of Federal Program or Cluster

14.181

Supportive Housing for Persons with Disabilities under Section 811 of the National Affordable Housing Act

14.241

Housing Opportunities for Persons with AIDS (HOPWA)

Dollar threshold used to distinguish between type A and type B Programs: Auditee qualified as low-risk auditee?

$ 300,000 X

-32-

yes

no


CHICAGO HOUSE AND SOCIAL SERVICE AGENCY AND FRED WOODS HOME, INC. CONSOLIDATED SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended June 30, 2013 Section II - Financial Statement Findings None Section III - Federal Award Findings and Questioned Costs None Section IV - Federal Award Findings and Questioned Costs – prior year None

-33-

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