HomeMy WebLinkAbout790555.tiff FINANCIAL STATEMENTS AND INFORMATION
TABLE OF CONTENTS
WELD MENTAL HEALTH CENTER, INCORPORATED
YEAR ENDED JUNE 30 , 1979 WITH COMPARATIVE
TOTALS FOR 1978
Page
Auditor' s Opinion 2
Balance Sheets 3
Balance Sheets 4
Statement of Support, Revenue and
Expenses and Changes. in Fund Balance 5
Statement of Functional Expense 6
Notes to Financial Statements 7
Auditors Statement Concerning
Accompanying Data 11
Schedule of Income With Budget
Comparisons 12
Schedule of Personnel Expenses With
Budget Comparisons 13
Schedule of Operating Expenses With
Budget Comparisons 14
Management Letter 15
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790555
• _ /l/ ;,9
Certified Public Accountants
ACCOUNTANTS ' OPINION
To The Board of Directors of the
Weld Mental Health Center, Incorporated:
We have examined the balance sheets of Weld Mental Health Center,
Incorporated as of June 30 , 1979 and 1978, and the related statements
of support, revenue and expenses and changes in fund balances, and
functional expenses, including 1979 units of service rendered as follows:
Inpatient 1, 583
Other 24 Hour 3,093
Partial Care 2,634
Outpatient 26 ,039
Consultation and
Education 2 , 977
for the years then ended. Our examinations were made in accordance
with generally accepted auditing standards and, accordingly , included
such tests of the accounting records and such other auditing procedures
as we considered necessary in the circumstances.
In our report dated September 25 , 1978 , our opinion on the 1978
financial statements was qualified as being subject to the effects on
the 1978 financial statements of such adjustments, if any, as might
have been required had the final determination of qualifying reimburs-
able costs been known. As explained in Note 2 , the qualifying reim-
bursable costs under the federal staffing grant for fiscal years prior
to June 30 , 1973, were not reviewed within the allowable time period
and will remain as previously claimed and reported. Accordingly, our
present opinion on the 1978 financial statements , as presented herein,
is different from that expressed in our previous report.
In our opinion, the accompanying financial statements present fairly
the financial position of the Weld Mental Health Center, Incorporated as
of June 30 , 1979 and 1978, and the results of its operations and the
changes in its fund balances ,and functional expenses , including 1979 units
of service rendered, for the years then ended, in conformity with gener-
ally accepted accounting principles. consistently applied during :the period
except for the changes, with which we concur, in the method of accounting
for inventory and accrued vacation and sick-pay described in Note 10 to
the financial statements. •
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WELD MENTAL HEALTH CENTER, INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30 , 1979
1. SUMMARY OF SIGNIFICANT- ACCOUNTING POLICIES
PROPERTY AND DEPRECIATION'
Property is recorded at cost. Depreciation is taken on Center
owned fixed assets in accordance with industry guidelines. The
straightline method is used with an average estimated useful life
of ten years.
ACCOUNTING/AUDITING GUIDELINES OF THE DIVISION OF MENTAL HEALTH
The Center follows the accounting/auditing guidelines setforth
by the Division of Mental Health, State of Colorado.
2. FEDERAL STAFFING GRANT
The Weld Mental Health Center, Incorporated is the recipient
of a federal staffing grant. During the grant years preceding the
fiscal year ended June 30 , 1973, the Center paid Weld County
General Hospital for psychiatric ward services on the basis of
estimated staffing costs. Adequate detail to substantiate the
actual costs of the ward are lacking and we are unable to deter-
mine if Center remittances were in conformity with the requirements
of the federal staffing grant. The Department of Health, Education
and Welfare has final determination as to the qualifying reimburs-
able costs under the grant. The Department of Health, Education
and Welfare has chosen not to review the grant costs prior to the
fiscal year ended June 30 , 1973, and the costs will remain as sub-
mitted and reported for those periods.
3. RESTRICTED CASH
Represents donations for use by specified programs administered
by the Center.
4. INVENTORY
Inventory is valued at cost using the FIFO (first-in, first-out)
method.
5. NOTES PAYABLE
Notes payable consisted of the following as of June 30:
1979 1978
LONG- LONG-
CURRENT TERM CURRENT TERM
A 5. 5% installment note
payable to Burroughs Cor-
poration, due December 1,
1981, collateralized by
equipment with a cost of
$15 , 976 , payable in
monthly installments of
$257 , including interest $ 2,767 $ 4,230 $ 2,595 $ 7 ,256
WELD MENTAL HEALTH CENTER, INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30 , 1979
1979 1978
5. NOTES PAYABLE (Cont' d)
LONG- LONG-
• CURRENT TERM CURRENT TERM
A 6. 5% installment note
payable to Xerox, due •
August 1, 1983, collater-
alized by a purchase money
security in equipment with
a cost of $7 , 940, payable
in monthly payments of $139
including interest $ 1,303 $ 4 , 870 $ 1,241 $ 5 , 855
TOTAL $ 4,070 $ 9, 100 $ 3, 836 $13,111
A 10. 5% unsecured note
payable to the United Bank
of Greeley due July 20 , 1978 $ - $ - $30 ,000 $ -
6. DONATED MATERIALS AND SERVICES
Donated services for volunteer employees are recorded in
accordance with Division of Mental Health accounting guidelines.
Donated services for hospital care are recorded at the fair market
value of the service as billed by the local hospital. The services
recorded for the fiscal year ended June 30 are as follows:
1979 1978
Volunteer Services $ 6 ,298 $ 1, 815
Hospital Services 28, 950 19,795
TOTAL $ 35,248 $21,610
7. FIXED AND VARIABLE ANNUITY
The Center contributes $40 for each employee covered by social
security and contributes the equivalent of social security for
employees not covered by social security. The plan is available
to all employees who have completed one year's employment..as of
each July 1 or January 1.
8. FLOW-THROUGH FUNDS
The Center was the recipient of funds from various sources that
are flowed-through to other local agencies. The Center received
$47 , 880 and $20 , 350 of flow-through funds for the fiscal year 1979
and 1978 , respectively.
WELD MENTAL HEALTH CENTER, INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30 , 1979
9. REVENUE SHARING •
During the fiscal year ending June 30, 1979, the Center was a
secondary recipient of General Revenue Sharing Funds through the
State of Colorado. Secondary recipients are required to be
audited in accordance with generally accepted auditing standards
and also to make certain assurances concerning the use of these
funds. The following are the required assurances:
a. Concerning Civil Rights: That the applicable
portion of Audit Guide and Standards for Revenue
Sharing . . . Recipients section 11, part C,
subpart E have been adhered to.
b. Appropriate controls governing the use of revenue
sharing funds are no different than those used for
any other funding source.
c. Revenue Sharing funds were not used for lobbying.
d. That the citizens of the area, through their
appointed Board of Directors, have had the oppor-
tunity to present oral and written comments and to
ask questions concerning the proposed use of revenue
sharing funds.
10. CHANGE. IN ACCOUNTING PRINCIPLES
The fiscal year 1979 financial statements reflect two changes
in accounting principles. First, inventory was not previously
accounted for but expensed as purchased. Second, vacation and
sick-pay was not accrued but reflected as an expense as paid.
The effect of the above two changes in accounting principles is
to record $7 ,120 of inventory and $56, 157 of accrued vacation
and sick-pay as of June 30 , 1979. The independent auditors agree
with the adoption of the above accounting principles by the
management of the Center.
SUPPLEMENTARY
INFORMATION
in
ACCOUNTANTS ' OPINION
ON
SUPPLEMENTARY INFORMATION
Our examination of the basic financial statements presented
in the preceding section of this report was made primarily to
form an opinion on such financial statements taken as a whole.
Supplementary information contained in the following pages is not
considered essential for the fair presentation of the financial
position of the Center , the results of its operations and the
changes in its fund balances and functional expenses , including
1979 units of service rendered, in conformity with generally
accepted accounting principles . However , the following data were
subjected to the audit procedures applied in the examination 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.
September 22, 1979
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Certified Public Accountants
To The Board of Directors of the
Weld Mental Health Center, Incorporated:
We have examined the financial statements of Weld Mental Health
Center , Incorporated for the year ended June 30 , 1979, and have issued
our opinion thereon dated September 22 , 1979. As a part of our ex-
amination, we made a study and evaluation of the Center' s system of
internal accounting control to the extent we considered necessary to
evaluate the system as required by generally accepted auditing stan-
dards. Under these standards , the purposes of such evaluation are to
establish a basis for reliance on the system of internal accounting
control in determining the nature, timing, and extent of other auditing
procedures that are necessary for expressing an opinion on the financial
statements and to assist the auditor in planning and performing his
examination of the financial statements.
The objective of internal accounting control is to provide reason-
able , but not absolute , assurance as to the safeguarding of assets
against loss from unauthorized use or disposition, and the reliability
of financial records for preparing financial statements and maintaining
accountability for assets. The concept of reasonable assurance rec-
ognizes that the cost of a system of internal accounting control should
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not exceed the benefits derived and also recognizes that the e-
valuation of these factors necessarily requires estimates and
judgments by management.
There are inherent limitations that should be recognized in con-
sidering the potential effectiveness of any system of internal ac-
counting control. In the performance of most control procedures ,
errors can result from misunderstandings of instructions , mistakes
of judgment , carelessness , or other personal factors. Control pro-
cedures whose effectiveness depends upon segregation of duties can
be circumvented by collusion. Similarly, control procedures can by
circumvented intentionally by management either with respect to the
execution and recording of transactions or with respect to the esti-
mates and judgments required in the preparation of financial state-
ments. Further, projection of any evaluation of internal accounting
control to future periods is subject to the risk that the procedures
may become inadequate because of changes in conditions and that the
degree of compliance with the procedures may deteriorate.
Our examination of the financial statements made in accordance
with generally accepted auditing standards , including the study and
evaluation of the Center' s system of internal accounting control for
the year ended June 30 , 1979, that was made for the purposes set forth
in the first paragraph, of this report , would not necessarily disclose
all weaknesses in the system because it was based on selective tests
of accounting records and related data. ' However , such study and
evaluation disclosed the following conditions that we believe to be
weaknesses for which corrective action by management may be practicable
is
in the circumstances.
Budgeting, Accounting and Reporting
Budgeting, accounting and reporting are related functions and
should by easily related to each other. At the present time, these
three areas require additional time for regroupings to be meaningful.
Format changes in budgeting and accounting are suggested in order to
conform to State of Colorado reporting guidelines.
Fixed Asset Management
Appropriate detail records should by maintained on a current
basis for each fixed asset owned by the Center. The records should
reflect the asset identification number, serial number , date acquired,
cost and location if possible. This information is valuable in in-
ventorying fixed assets , recording sales , trades and missing items ,
insurance coverage and for meeting the requirements of grants involving
asset acquisition. The Center should review its fixed asset manage-
ment policies to ensure that they provide for the above and update
their records to reflect the results of the inventory of its fixed
assets.
The foregoing conditions were considered in determining the nature,
timing and extent of audit tests to be applied 'in our examination of
the financial statements , and this report of such conditions does not
modify our opinion dated September 22 , 1979, on such financial state-
ments.
September 22 , 1979 Suwwu)tu) PodateAA T NCielketa
Hello