The URL can be used to link to this page

Home My WebLink AboutMiscellaneous Information Funded in Dart by: Florida Department of Health u.s. Department of HHS: Health Resources Services Administration Health Foundation of South Florida, Inc. Monroe County Board of County Commissioners U.S. Department of Housing And Urban Development Catholic Charities of the Archdiocese of Miami, Inc. Monroe County Sheriff's Department Monroe County Health Department 80ard Officers: Chairman David P. Rice, Ph.D. Vice-Chair Robert H. Luse Treasurer Debbie Premoza, R.N. Secretary Charla Rodriguez Executive Director & President Mark L. Szurek, Ph.D. Rural Health Network of Monroe County, Florida, Inc. .. P.O. Box 4966, Key West, Florida 33041-4966 RECEIVED ~ovember12,2001 Mr. James Roberts, Administrator Monroe County 1100 Simonton St. Key West, FL 33040 NOV 1 5 2001 COUNTY ADMINISTRATOR Dear Jim: In compliance with contract compliance requirements, please find one copy of the independent audit for FY 2000-2001 conducted for the Rural Health ~etwork of Monroe Co., FL, Inc., enclosed for your review. The accompanying management letter, specific to audit findings, and management's response, is also attached for your review. Please do not hesitate to call if you have any questions or need additional clarification (305-293-7570, ext 10). Thank you. Sincerely, ijU ~L, M~~.;i Szurek, Ph.D. E~tive Director Enclosure (1) V'~ ~~.v_ -y )V' ~1Y~ Q Administration. Community Outreach Director, Finance Director, or Health Services Director VOICE 305-293-7570; FAX 305-293-7573 Referrals lI888-381-8nO; MediNan 305-797-4104; Rural Health at Ruth Ivins Clinic 305-289-3748 Healthy Kids/KidCare Director-VOICE 305-517-9002; FAX 305-517-9004 www.ruralhealth-floridakeys.org RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Financial Statements with Independent Auditors' Report Thereon and Schedule of Financial Assistance For the Year Ended June 30, 2001 . . SMITH, ORTIZ, GOMEZ AND BUZZI, P.A. CERTIFIED PUBLIC ACCOUNTANTS 132 MINORCA AVENUE CORAL GABLES, FLORIDA 33134 TEL.. (305) 441-1012 E-MAIL.:SOGB@AOL..COM FAX (305)442-1138 JULIO M. BUZZI, C.P.A. ANTONIO E. GOMEZ, C.P.A. FERNANDO L ORTIZ, C.P.A. SHADI J. SHOMAR, C.P.A. JOSE E. SMITH, C.P.A. NICANOR SUAREZ, C.P.A ROOOlFO L ORTIZ. CONSULTANT MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT To the Board of Directors of Rural Health Network of Monroe County, Florida, Inc. We have audited the accompanying statement of financial position of the Rural Health Network of Monroe County, Florida, Inc. (the -Network-) (a non-profit Network) as of June 30, 2001, and the related statement of activities, and cash flows for the year then ended. These financial statements are the responsibility of the Network's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of" the united states, and the provisions of Office of Management and Budget Circular A-l33, -Audits of States, Local Government and Other Nonprofit Organizations-. Those standards and OMS Circular A-l33 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 'of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our. audit provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects,: the financial position of the Network, as of June 30, 2001, the results of its operations and its cash flows for the year ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated September 19, 2001 on our consideration of Rural Health Network of Monroe County, Florida, Inc.'S internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations contracts and grants. 1 Our audit was performed for the purpose of forming an op~n~on on the basic financial statements of Rural Health Network of Monroe County, Florida, Inc. taken as a whole. The accompanying schedule of federal awards is presented for purposes of additional analysis as required by u.s. Office of Management and Budget Circular A-133, -"Audits of States, Local Governments, and Non- Profit Organizations", and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. ~/~~f'~ ~/~r-O _ September 19, 2001 2 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Statement of Financial Position June 30, 2001 Assets CUrrent assets Cash Contracts and other receivables Other assets Total current assets Assets restricted to investment in furniture, equipment and vehicles Accumulated depreciation Net assets restricted to investment in furniture and equipment Total assets Liabilities and Net Assets CUrrent liabilities Deferred support Accounts payable and accrued expenses Total current liabilities Net assets Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets See independent auditors' report and accompanying notes to financial statements. 3 . . $ 94,457 34,150 195 128,802 160,017 (37,467) 122,550 $ 251.352 $ 25,000 9,642 34,642 94,160 122,550 216,710 $ 251. 352 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Statement of Activities For the Year Ended June 30, 2001 Public support Grant revenue Monroe County Sheriff Special Total public support Revenue Patient co-pay Donated facilities Membership dues Fund raising Other Total revenue Total public support and revenue Functional Expenses Depreciation Personnel Payroll taxes Fringes Staff travel Bank charges Telephone Office supplies Postage Grant and other costs Printing/reproduction Bad debt expense Accounting/audit Interest expense Medivan costs Utilities Meetings/conferences Operating expenses Occupancy Community outreach projects and contracted services Insurance Primary care program Total expenses See independent auditors' report and accompanying notes to financial statements. 4 $ 948,591 3,000 951,591 48,884 2,000 22,180 31,324 8,005 112,393 1,063,984 22,289 465,388 35,711 29,314 21,644 770 18,409 28,617 1,368 1,114 4,737 4,650 6,406 890 20,262 15,768 10,065 8,533 2,000 217,619 13,801 55,580 984,935 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Statement of Activities For the Year Ended June 30, 2001 Increase in net assets Net assets, beginning of year Net assets, end of year See independent auditors' report and accompanying notes to financial statements. 5 $ 79,049 137,661 $ 216.710 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Statement of Cash Flows For the Year Ended June 30, 2001 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation Decrease in contracts, other receivables and other assets Increase in accounts payable and deferred support Net cash provided by operating activities Cash flows from investing activities: Purchase of equipment Cash flows from financing activities: Repayments on line of credit Net increase in cash and cash equivalents Cash and cash equivalents, at beginning of year Cash and cash equivalents, at end of year Interest paid during the year See independent auditors' report and accompanying notes to financial statements. 6 $ 79,049 22,289 5,040 18,128 124,506 (48,410) (10,000) 66,096 28,361 $ 94.457 $ 890 , . RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. . Notes to Financial Statements For the Year Ended June 30, 2001 1. Summary of Significant Accounting Policies a) Network The Rural Health Network of Monroe County, Florida, Inc. ("the Network") is a nonprofit Network which promotes the advancement of quality health services in Monroe County. The Network's funding comes primarily from public and private grants and membership dues from the private sector. b) Basis of Presentation The Network's financial statements have been prepared on the accrual basis of accounting and in conformity with the standards promulgated by the American Institute of Certified Public Accountants in its "Industry Audit Guide for Voluntary Health and Welfare Networks". The specialized accounting and reporting principles and practices contained in the Audit Guide are preferable accounting practices in accordance with statement of Financial Accounting Standards Number 117, issued by the Financial Accounting Standards Board. Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor- imposed restrictions. Accordingly, net assets of the Network and changes therein are classified and reported as follows: · Temporarily restricted net assets - Net assets subject to donor- imposed stipulations that mayor will be met, whether by actions of the Network and/or the passage of time. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. · Permanently restricted net assets - Net assets subject to donor- imposed stipulations that they be maintained permanently by the Network. Generally, the donors of these assets permit the Network to use all or part of the income earned on any related investments for general or specific purposes. The primary source of revenue for the Network consists of grants from governmental agencies which, absent a specific restriction by the grantor, are considered to be available for unrestricted use. Grant revenue includes only that portion of the grant that was earned prior to the statement of financial position date. All grant funds received as of the statement of financial position date which are considered to be applicable to future periods are reflected as deferred revenue on the Statement of Financial position. 7 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Notes to Financial Statements For the Year Ended June 30, 2001 1. Summary of Significant Accounting Policies - (Cont.) b) Basis of Presentation - (Cont.) The costs of providing the various programs and other activities have been detailed in the accompanying Statement of Activities. Salaries and other expenses which are associated with specific program are charged directly to that program. Salaries and other expenses which benefit more than one program are allocated to the various programs based on the relative costs incurred. Administrative and other support expenses are allocated to the various programs based on each program's salary expense. c) Assets Restricted to Investment in Furniture and Equipment Assets restricted to Investment in Furniture and Equipment are stated at cost and include expenditures for improvements and betterment which substantially increase the useful lives of the assets. Depreciation is computed on the straight-line method over the estimated useful life of the assets, which is principally five (5) years. Maintenance and repairs are charged to operation as incurred. d) Contributions Contributions are considered unrestricted unless otherwise stated by donor. Restricted donations are initially recorded as temporarily restricted net assets. When a donor restriction expires or purpose of restriction is accomplished. Temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. 8 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Notes to Financial Statements For the Year Ended June 30, 2001 1. Summary of Significant Accounting Policies - (Cont.) e) Restricted Revenues Received, Related Program Expense and Deferred Support Contract revenues presented in the statement of activities are principally cost reimbursement contracts and are stated at amounts equivalent to the program expenses incurred. Related program expenses incurred in excess of contract revenue received on cost reimbursement contracts are reflected as receivables from governments, to the extent realizable, on the statement of financial position. Contract receipts in excess of related program - expenses are deferred and recognized as revenue in the period in which the matching program expenses is incurred. The Network records revenue when earned. All expenses are recorded on the accrual basis and are charged against operations when incurred. Donated materials are recorded at fair value on the date of -donation as unrestricted support. Donated services have not been reflected in the financial statements. The impact of those services upon the financial statements is unknown as there is no objective basis available to measure the value of such services. However, because recognition of donated services are venue would also involve recognition of corresponding expenses, there would be no effect on the net assets. f) Income Taxes The Network was organized as a non-profit Network and has received exemption under the provisions of Section 501 (c) (3) of the Internal Revenue Code. Accordingly, no provision for income taxes is provided for in the accompanying financial statements. g) Allocation of Common Expenses Certain common expenses which benefit more than one program are allocated based on estimates of time of employees involved and on percentages of assets utilized, and to the extent permitted in the funding source contracts. h) Cash and Cash Equivalents For purposes of the statement of cash flows, the Network considers all cash and other highly liquid investments with initial maturities of three months or less to be cash equivalents. 9 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Notes to Financial Statements For the Year Ended June 30, 2001 1. Summary of Significant Accounting Policies - (Cont.) i) Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 2. Assets Restricted to Investment in Furniture and Equipment. Furniture and office equipment, at cost, and accumulated depreciation are summarized as follows at June 30, 2001: Computer Furniture, fixtures and medivan Office equipment $ 12,199 147,654 164 Total costs Less accumulated depreciation 160,017 (37,467) $122.550 Depreciation expense for the year ended June 30, 2001 amounted to $22,289. 3 . Funds Held in Trust At June 30, 2000, the Network was holding $5,604 in trust. Those funds, which were held in a separate bank account, were restricted by the donors for a specific purpose. The Network had established a corresponding liability to account for the funds held in trust. During fiscal 2001, the Network expended those funds in accordance with donor restrictions. The liability balance at June 30, 2001 amounts to $-0-. 10 RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, INC. Notes to Financial Statements For the Year Ended June 30, 2001 4. Line of Credit On June 27, 2000, the Network had obtained $10,000 against a credit card line of credit. These funds were drawn to cover cash flow needs pending collections of contracts and other receivables. The line of credit carried a stated rate of 16.49% per annum. No interest accrued between June 27 and June 30, 2000. The balance was repaid on July 26, 2000. In August, 2000, the $10,000 was reborrowed and repaid in September, 2000. Interest expense for 2001 amounted to $890. The balance outstanding amounted to $-0- at June 30, 2001. 5. Space Rental The Network's premises are in Key West, Florida. Future rentals are to be provided by the City of Key West, Florida's Housing Authority at a payment rate of $1 per annum. These donated facilities will be recorded as contributions with a corresponding expense in the Network's financial statements based on the use of a determinable method to assign a value to this service. For the year ended June 30, 2001 rent expense charged to operations amounted to $2,000. 6. Commitments and Contingencies The costs and unexpended funds reflected in the accompanying financial statements relating to government funded programs are subject to audit by the respective governmental agencies (funding sources). The possible disallowance by the related governmental agencies of any item charged to the program or request for the return of any unexpended funds cannot be determined at this time. No provision, for any liability that may result, has been made in the financial statements. 11 'tl ~ I 'I GI ~ ~ GI .... GI Q GI ~ 1IIr-< Ul ~.a N a ~ CII Oorl .. U GI rl U U I( GI P: " ....... " III III " ~ GI I:l ~ GI ;:I 0 0 PI ~ e ~ 0 0 PI Glorl 0 r- PI 1II'tl ClIo rlo ~ I:l 0 ;:I III \0 Ul N .a rl III orl ... Q ~ e~ 0 0 CD CD ~ c.i i'B 0 0 CII 0 GI 0 l"- I"- .. Z U ui ClIo .. .; H ~ ~ III PI Ul 0 ~ ,:loP: rl ~ III ..... H -llI P: III 3 I( rl j 0 ... r-< 0 III ~ III N GI N 0 0 PI ~ orl ;:I..... 0 0 PI tl .; I:l I:l 0 r- PI ~ ~ tI 0; ,..; PI ::- Ul I:l GI tl PI Ul N 0 orl GI P: III rl U ... ~ ~ P: ..... ... 1Il'tl 0 ~ ;:I ~ III I( 'tl N ~ GI CI) III 'g ..... r-< 'tl 0 0 N PI ~1 'tl0l IZ1 e~~ 0 0 CD PI ... I:l I:l oS III I:l 0 r- rl PI 0 Ill..... ~ k ~ ;:I ui 0; III CI) III ~ 0 PI rl GI I r-<~ III PI Ul .. N .... III >< k k ~ rl ~ k ,:lo 0 0- 1Il GI '" .d B III ~ ... k ..... = .... 0 ~ E-t 0 ... '" 0 rl CII 0 0 rl III ~ '" III 0 0 CII 0 0 0 .... III o ~ I , I , I I k r-< .... 41 rl 0 0 rl 0 0 rl 0 0 go = .a k ::- 0 ~ PI 0 ~ PI 0 ~ PI 41 0 I I I I , I k ~ III ,:loU I"- \0 0 \0 I"- \0 Po ..c: 0 0 rl 0 0 0 ~ tl Ul III P: '" ~ ..... tl ~ 111 111 GI CD PI PI ~~ rl .-4 CD '" 0 0 P: ~ ~ ~ 8 8z III ~ ~ k 01 CD CD I"- CD I"- 0 I( ~I .. I"- \0 I"- \0 ClO Ul 1"-'" l"- I"- '" I"- ~o ~~ I:l I:l 111 PI PI III PI PI III PI ~Ul U ;:I CD CII CII CII CII UlN Z <I>- III GI ~ " " '" I:l >. " " ;:I III 1Il ~ .d r-< e ..c: orl ~ tl III ~ I III ..c:r-< I:l ~ !. !. S tnlll orl ..... ;:I GI ~ e 6. -..... 0= ..c: .d " ~ ~ ~ III GI U tl tl " III ..c:.... ~~~ III III ~k ~ 0 .... CI III GI ~ 0 tn ~I 0 ~ ~ ~8' "'~ ,:lo k I': ~ ~ GI I:l Po ..... ~ 5 5 I( III GI ~ .d i I': III r-< III e o III tl GI ~ I:l III Ill~ -n..... .. E ... III CI orl H Pok III .d III ~ ~ III ~ k I GI III :Ef-f:E ~.... III III ~ I': r-< Po ~ Ill..... tl tl I:l ClI III ClI III Pol( '" '" III Cl ~ Q 'lj ClI orl ... H 0 " " " ~ I': Q ~ ~ Cl E-t -" ... ,:lo ~ ~ ... U 2l H II o ~ ~ II ..t II II III .-i II ..t o ~ ~- ..... .... 1I'tJ ~~ ~ III 1Il M "'lJI ~~ III .-i- II )4 . 'U . ... IN o . ..... .a . .<:I o III ~- H ~ i . o ~ :E ... o t:! I ~ .:l i 'tl~ II k k 0 )4 tI "il~ Q II II.-i ~.a s:: III g~ o 1Il o 0 I( 1Il P: ..... II II ~ tI ti k sB II'" III'U )4 s:: BO II ..... Q I ~I )4.... ~8 )4 II l:IoP: ..... o o l't II 'U~N ;:I..t i:l II ::- II U P: II PC o "" tI ~ 'U tI a 1-1 II II >< II .<:I u k o ... I os ~ 1-1 r I:l WI( g fk1d o 'U 'S~ ... 1Il k ::- tI 0 ,:loU ~ o ~ II tI l:~ 8i U I( ~I ~1l tJ =' 2l ~l ~ ~ ~ Po JI o o 111 l't ..... ..... o o 111 l't ..... ..... o o In l't ..... .-4 o o o ll'I l't l't ..... o o l't 8 .... ~ II '" g g ... A ~ .-i II II = o o Ln l't ..... o o o o ll'I o o o Ln o o Ln r- "" o o o - Ln o o o o Ln o o o ui o o o o In o o o ui .-4 o o l't o ..... o 0 I I rl 0 001"1 I ~ I o CII rl 0 II II ... ~ .... lot II A U tl ... r-< o .d ~ II U 8 ..t ~ 1Il II k o 111 .a u . ~ 1i ; ..... .... II ~ II ~ = I, II U >.S:: UI-4 :00: II \.4- U 'U GI ... ~ ~n;! oo~ .-4U ... o o o Ln rl o o o III ..... o o o In ..... o o o Ul ..... s:I o .... ~ oS o .a liIl .<:I ~ r-I II t1_ =:u l'iI.l ~:I! 11- :00: ~ II 1Il 'U~ ... s:: \.4 GI o U r-< ... o o o Ln l"II o o o Ln l't o o o Ul l't rl o o l"II ~ Po c! II .... .... ... k U .<:I III >. ~ s:: g U GI e I:l ~ o 111 '" ..... ..... o III '" .-4 ..... o Ln '" ..... ..... o ll'I '" .-4 ..... ..... o o l't A ~ r-< II :! >. ~~ S J: {) ! U~ ~ II II o Po k 1Il I:lQ o :II: I~j I~ ~ ~ ~ ~ o o o o ..... o ..... o 0 I I .....00 o~... I I o '" .-4 0 II \.4 1Il I:l o .... III III 1 U >. ~ I:l g U 1Il )4 .... III OU "'''' ~... II. :00: o III I,I o o o III l't 4 o o o III l't ~ o o o 111 l't 4 ~ ..... ..... o o l't . II ..t I g ..t ~ II "'Ii H go )4 ~ . 'IS ..t .. 'U ~ . k G 8 .... III .'" .... ... ~ B~ tJ >.~ ~~ g a ,88 ... 1Il o 0 ~ '" I:l loA 0 g:ll: 1II II ~ ~ H III o 110 ~o .. ~'" IIIl"11 .. . G:IJ 'IS I:l ::s U .-4 e u U s:: H ..t... I e 6. k .. tI OI~~ e&'m ,:lo ~ s:I k ,:lo:; o . 0 ......t~ II ..c: oS ZE-tZ " . " -" " ~" ~ i H P: 3 Ilro . o ~ ~ . "" . . I( r-< .. .... u fa A "" - ".&.I .... .-a ~~ ~ III . ..-t IE CI) ..-t- .. k . "i Ilro 'W o . .-i .a . '5 III i 8 IlIl i ~ i I i "i ~k k 0 .. . 'W ;:I . Q . ...-t ~~ g :> 0.... U 1Il o 0 I( . . ..... . . ~ . A .. IB ..... .-a .. I:l B GI . .... Q II ~~ ...... ~8 .. . ,:loP: " o o l"t · 'tli. ::I.... E 0 111= o 1'1 . ~ -a i e-a "k~ ~"I:l ..~g ,:lok~ o Ii: ~ .8 ~ .. o IIro 'tl '8:: .... .. :> . 0 ,:loU ~ o k .. . i! U eil tJ ;:I Z II ..-t .~ .... E1 Ii! . ~ ~ ,:lo 1ft l"t r- .G \0 ... l"t , l"t o l"t " III .. an III ... \0 " l"t l"t o l"t o o o , o o l"t .. o 1'1 o 0 I I "00 O~I'I I I an .. o 0 " o I o o l"t o o l:l .. ~ .c l"t ... en PI en 'i4 .. . 1Il -aU>.>. ~~~ .. 'W..-tlll .dOOPo ~ 110 ..-t I 0 .. Ao .111.&.10 = . r-< . Olio ........1Il0 Ot=~ ~..-i- s: CQ III GI "I( I!- s:l ;:I III ~ III III P: k e =: II ;:I ow Po = 0 I 1Il Q o r- Ift 1ft '" o I"- 1ft Ul '" o r- Ift 1ft III o " 1ft ... 10 " o ... o 0 I I "OlD O~l"t I I 1"1 l"t o 0 " o o .. I o ID III .. ... ~ .. ~ ~ lij"g t-e~ IIPO eo'tS 110' I:l Q s:l I 0 oS .... . ~u .00AII ~s:a~ ...... Ii.... ~ ~ go~ ",~'il~ 41 :> .d ~'WGllIl -riOQ. :!3 1'1 In o ... rl l"t 1"1 an o , " " l"t 1"1 1ft o " rl l"t o o o . o o \0 III " en 0 I I IDOl"- o~o I I r- r- o 0 " o an o I r- en III .. ~ .. " - U . ~I:l~ a...-t t-5':: ..=.... eo '" ..:l Q~I .. ~ 1Il In I:l ~ I:l 1Il ...... e ~g! "'=a 1Il :> U ow 1Il ....OQ :!3 ~ ~ ~ ~ 1 ; .. ~ ..... . . i 9 oft ~ i It II ~ .... .. 1 . '2 ! .-i r-< .c .-i II ~ ~ . ~ e In o .0 ~o II . ~an 1lIl"t .. . .~ 'tS A .:: ~ o U A k "" .... a s.& gae:: "'~01 ,:lo k I:l ... Ao~ o . 0 "r"I.... ~ . ..c: .. ZE-Z ........- " " " ~." ~" SMITH, ORTIZ, GOMEZ AND BUZZI, P.A. CERTIFIED PUBLIC ACCOUNTANTS 132 MINORCA AVENUE CORAL GABLES, FLORIDA 33134 TEL. (305) 441-1012 E-MA/L.:50GB@AOL..COM FAX (305)442-1 138 JlA.IO ... BUZZ!, C.P A ANTONIO E. GOMEZ, C.P A FERNANDo L ORTIZ, CPA SHADI J. SHOMAR, c.p A JOSE E. SMllM, c.p A NICANOR SUAREZ, C.PA ROOOlFO L ORTIZ, CONSULTANT MEMBERS: AMERICAN INST1TUTEOF CSRTlAED PUBlIC ACCOUNTANTS R.ORIDA INSTITlJTE OF CERT1AED PUBUC ACCOUNTANTS DlDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON D1TERNAL CONTROL OVER FmANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDAliCE WITH GOVER!1MENT AODITDtG STANDARDS To the Board of Directors of Rural Health Network of Monroe County, Florida., Inc.: We have audited the financial statements of Rural Health lIetwcrk of Monroe County, Florida, Inc. (the -llletwcrk-) as of and for the year ended June 30, 2001 and have issued our report thereon dated September 19, 2001. We conducted our audit in accordance with generally accepted auditing stlllnri=oT'Cis and Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the l!I'etwork's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an Objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under GoveD1lDent Auditing Stanrilllrds. . Internal Control OVer Financial Reporting In planning and performing our audit, we considered the Network's internal control over financial. reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control ove~ . financial reporting. OUr consideration of the internal control over financial reporting would not necessarily. disclose all matters in the internal. control over financiil reporting that might be material weaknesses. A material weakness is 15 a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk' that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving ~e internal control over financial reporting and its operation that we consider to be reportable conditions as defined above. This report is intended solely for the information and use of the Network's Board of Directors, management, and officials of applicable federal and state agencies and is not intended to be used and should not be used by anyone other than those specified parties. ~/~/h. ~IIJ September 19, 2001 16 SMITH, ORTIZ, GOMEZ AND BUZZI, P..A. CERTIFIED PUBLIC ACCOUNTANTS 132 MINORCA AVENUE CORAL GABLES, FLORIDA 33 134 TEL.. (305) 441- t 0 12 E-MAI L: SOGBtitAOL.COM FAX (305) 442-1t38 JUUO M. BU2ZI. CoP A ANTONIO E. GOMEZ, c.PA FERNANDO L ORTIZ. CoPA SHADl J. SHOMAR, C.P.A. JOSE E SMITH. C.P A NICANOR SUAREZ, CoP A FIODOlFO L ORTIZ, CONSULTANT MEMBERS: AMERICAN MTIllJTE OF csmRED PU8UC ACCOUNTANTS RORlDA INSTITUTE OF csmRED PIJBUC ACCOUNTANTS DmEPENDENT AUDITORS' REPORT ON COMPLIAlirCE wrm REQtT.IREMEll1TS APPLICABLE TO BACH 1QJOR PROGRAM AJ1D DJTElmAL COJITROL OVER COMPL:IAHCE Dr ACCCRDAllTCE wrm OMB CIRCDLAR A-133 To the Board of Directors of Rural Health Network of Monroe County, Florida, me.: Compliance We have audited the compliance of Rural Health )1'etwork of lIonroe County, Florida, Inc. (the "'lTetwo~) with the types of compliance requirements described in .the u.s. Office of Management and Budget (OMB) Circular A:-133 Compliance SUpplement that are applicable to each of its maj or federal programs for the year ended June 30, 2001. TJ;le Network's major federal programs are identified in the accompanying schedul.e of federal and State. financial assistance. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the )1'etwork's management. our responsibility is to express an opinion on the )1'etwork's compliance based on our audit. We conducted our audit of compliance in acco~ce with generally accepted auditing st~n(J::Irds; the standards applicable to financial audits c.ontained in Government Audi tinq Standards, issued by the COmptroller Genera]. of the UXli ted States; and ~ 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 aDd material effect on a major federal program occurred. An audit includes eJr::lmining, on a test basis, evidence about the Network's compliance with those require~ts and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. OUr audit does not provide a legal determination on the Network's compliance with those requirements. 17 In our op~nJ.on, the Network complied, in all material respects, w~.th the requirements ref!!!rred to above that are applicable to each of its major federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of. the Network is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the Network's internal control over compliance wi.th requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internaJ. control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the 1l1'et1llork's Board of Directors, management, and officials of applicable federal and state agencies and is not intended to be used and should not be used by anyone other than those specified parties. ~~~,H ,- ~I'/J. September 19, 2001 18 SMITH, ORTIZ, GOMEZ .AND BUZZI, P.A. CERTIFIED PUBLIC ACCOUNTANTS 132 MINORCA' AVENUE CORAL GABLES, FLORIDA 33134 TEL (305) 4A 1- t 0 12 E-MAIL: SOGB<lAOLCOM FAX(305)4A2-1138 JULIO M. BUZZ1. COP.A. ANTONIO E. GOMEZ. COP.A. FERNANDO L ORTIZ. c.p.A. SHAD! J. SHOMAR. C.P.A. JOSE E. SMIl1i. COP.A. NlCANOR SUAREZ, c.p.A. ROOOLFO L ORTIZ. CONSUlTANT MEMBERS: AMERICAN INSTTTUTE OF CERTlAED PUBUC ACCOUNTANTS R.ORIDA IHSTTTUTE OF CERTlAED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT em COMPLnHCE WI'l'H REQUIREMENTS APPLICABLE TO STATE GRAHTS AND AIDS APPROPRIATIOl\lS To the Board of Directors Rural Health Network of Monroe County, Florida, Inc.: We have audited the financial statements of :Rural Health llretwork of Monroe County, Florida, Inc. (a nonprofit organization) (the -liretwork"") as of and for the year ended June 30, 2001, and have issued our report thereon dated September 19, 2001. We conduct~d our audit in accordance with generaJ.ly accepted auditing standards and Government Auditing standards, issued by the C~troller General. of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Compliance with laws, regulations, contracts and grants applicable to the Network is the responsibility of the liretwork's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Network's compliance with certain provisions of laws, regulations, contracts, and grants applicable to state grants and aids appropriations identified in the schedule of Federal and State Financial.Assistance, pursuant to Section 216.349, Florida statutes, and Chapter 10.600, Rules of the Auditor General. However, the objective of our audit of the financi~ statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests indicate that with respect to the items tested the Hetwork complied, in all material respects with the previsions referr~ to in the preceding paragraph. With respect to the items not tested, nothing came to our attention that caused us to believe that the Network had not complied, in all material respects, with those provisions. 19 This report is intended solely for the information and use of the Network's Board of Directors, management, and officials of applicable federal aDd state agencies and is not intended to be used and should not be used by anyone other than those specified parties. ~/ ~ h--..Ih;rr'A September 19, 2001 20 " RURAL HEALm NETWORK OF MONROE COUNTY, FLORIDA, DlC. Schedule of Findings and Questioned Costs For the Year Ended June 30, 2001 Sec:t::l.OZ1 I - Summa.ry o~ Auditor'. Results ,:l.z1anc::l.aJ. Statements Type of auditor's report issued: unqualified Internal control over financial reporting: Material weakness(es) identified? Reportable condition(s) identified not considered to be material weaknesses? _Yes ~No _Yes ~None reported Noncompliance material to financial statements noted _Yes ~llTo .Federal Awards Internal control over maj or programs: Material weakness(es} identified? Reportable condition(s) identified not considered to be material weaknesses? _Yes ~llTo _Yes ~None reported Type of auditor's report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510(a)? ~ Yes _Bo Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster See # 5 below Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? ~ Yes No 21 .' , RURAL HEALTH NETWORK OF MONROE COUNTY, FLORIDA, DTC. Schedule of Findings and Questioned Costs For the Year Ended June 30, 2001. SUIIIIIIa%'Y of Audi t:or' s Resul t:s 1. The auditors' statements of ( '"RmlMC.) . report expresses an unqualified opinion on the financial Rural Health Network of Monroe County, Florida, Inc. 2. Ho reportable conditions were reported for the audit of the financial statements. 3. No reportable' conditions were reported for the audit of the major federal award programs. 4. The auditors' report on compliance for the major federal award programs for RBNMC expresses an unqualified opinion. 5 . The programs tested as maj or programs included: J'BDBRAL.. CJ'DA 1l1"O:MBBR PRO<:RAK Tr.rLE .IU.l'DDJ:'J.'DRBS united States Department of Housing and Urban Development - Lifeline R/A $ 211,053 Department of Health and Human Services 93.912A $ 202,216 State of Florida Department of Health Kid Care Outreach 93.767 $ 59,700 6. The threshold for ~stinguishing Types A and B programs was $300,000. 7. RBNMC was not determined to be a low-risk auditee. B. A separate management letter dated September 19, 2001 was issued for certain items noted. 22 SMITH, RTIZ, GOMEZ AND Bl ~ZI, P.A CERTIFIED PUBLIC ACCOUNTANTS 132 MINORCA AVENUE CORAL GABLES, FLORIDA 33134 TEL. (305) 441-1012 E-MAIL: SOGB@AOL.COM FAX (305) 442-1138 JULIO M. BUZZI, C.P.A. ANTONIO E. GOMEZ. C.P.A. FERNANDO L ORTIZ. C.P.A. SHADI J. SHOMAR. C.P.A. JOSE E. SMITH, C.P.A. NICANOR SUAREZ, C.P.A. RODOLFO L. ORTIZ. CONSULTANT MEMBERS: AMERICAN INSTITUTE OF CERTIFIED PUBUC ACCOUNTANTS FLORIDA INSmUTE OF CERTIFIED PUBLIC ACCOUNTANTS September 19, 2001 Dr. Mark Szurek, Executive Director Rural Health Network of Monroe County, Florida, Inc.: We have audited the financial statements of Rural Health Network of Monroe County, Florida, Inc., (the "Network"), for the year ended June 30, 2001, and have issued our report thereon dated September 19, 2001. In planning and performing our audit of the financial statements of the Network, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control structure. A material weakness is a condition in which the design or operation of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts th~t would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned. functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. However, we noted no matters involving internal control structure. and its operation that we consider to be material weaknesses as defined above. During our audit, we noted certain immaterial matters involving the internal control structure and other operational matters that are presented for y~ur consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve the internal control structure or results in other operating efficiencies and are summarized in Exhibit I. This letter is intended solely for the information and use of the Executive Director, management, and others within the Network. Dr. Mark Szurek, Ex~ Ative Director Rural Health Network of Monroe County, Florida, Inc. September 19, 2001 Page 2 We would like to take this opportunity to express our appreciation for the courtesy and cooperation extended to us by the employees of the Network during the course of our audit. We shall be pleased to discuss, at your convenience, the comments presented in this letter and provide any assistance that you may require for the implementation of our recommendations. Very truly yours, SMITH, ORTIZ, GOMEZ and BUZZI, P.A. EXHIBIT I 1 Finding During our review on contract compliance, we noted that the sub- recipients were not complying with the due dates for their submission of OMB A-133 compliant financial statements. However, each of the sub- recipients did provide a letter of compliance from their external auditors relating to the contracts passed through from the Network and a copy of their most recent audited financial statements. We also noted that current requirements were being amended to eliminate such due dates and to require evidence of payment to be submitted to the Network. Recommendation We recommend that evidencing payment Network's auditors. all subrecipients be required to submit support (fund use) propriety that can be reviewed by the 2 Finding During our review of ledger and billing documentation, we noted that payroll costs were properly allocated to various programs. However, the individual statements of activities were not incorporating allocated payroll. Accordingly, although the consolidated financial statements were correct, the program specific statements were off. This is the result of a report writer miscue in the general ledger that can be easily corrected. Recommendation We recommend statements of ledger report that the Network ensure that all program specific activities include allocated payroll and that the general writer be adjusted to accommodate this requirement. -1- C' Rl. 11 Health Network of Monroe County, Flori~~, Inc. P.o. Box 4966, Key West, Florida 33041-4966 October 16, 2001 Mr. Julio Buzzi, CPA Smith, Ortiz, Gomez & Buzzi, P.A. Certified Public Accountants 132 Minorca Ave. Coral Gables, FL 33134 Dear Mr. Buzzi: With regard to your letter of September 19, 2001 and your audit report, please accept the following as the executive management response to your findings: Finding 1. You have recommended that all sub-recipients of funding be required to submit support evidencing payment (fund use) propriety that can be reviewed by the Network's auditors. Executive Response: By October 31, 2001, all sub-recipients of Network funding will be required to sign a Letter of Agreement that (1) requires the submission of copies of all receipts for goods purchased and/ or services performed under any and all service agreements, to be delivered to the Network at the time of funding reimbursement request; (2) reserves the Network's (and/or its auditor's) right to examine original receipts and any other pertinent information or relevant documentation; and, (3) requires sub-recipients to supply a completed audit to the Network in a timely manner, but no later than 150 days after the sub-recipient's fiscal year. Finding 2. You have recommended that the Network ensure that all program specific statements of activities include allocated payroll and that the general ledger report writer be adjusted to accommodate that requirement Executive Response: By May 31, 2002, the Network will adjust its general ledger report writer to reflect payroll specific allocations, or will implement a procedure that, in the judgment of the independent auditor, satisfies this requirement The Rural Health Network and Staff thank you for your thorough and professional examination of our records. Thank you also for your assistance and guidance. Sincerely, Mark L. Szurek, Ph.D. Executive Director Administration, Community Outreach Director, Finance Director, or Health Services Director VOICE 305-293-7570; FAX 305-293-7573 Referrals 1/888-381-8770; Medi-Van 305-797~104; Rural Health at Ruth Ivins Clinic 305-289-3748 Healthy Kids/KidCare Director-VOICE 305-517-9002; FAX 305-517-9004 www.ruralhealth-floridakeys.org