RMHS Audit Released at November Board of Directors Meeting
At the November 16, 2016 Board of Directors meeting, auditors from Kundinger, Corder & Engle, P.C. (KCE) presented an overview of the findings of the fiscal year 2016 audit of RMHS financials and the single audit required for federally funded programs. KCE, an auditing firm that specifically focuses on nonprofit clients, was selected by RMHS’ Finance Committee to provide a fresh set of eyes on RMHS’ finances and financial controls. The Finance Committee is composed of Board members, community members with financial expertise, and RMHS staff.
To complete their work, a team of CPAs met with various RMHS management staff, audited financial transactions and reviewed internal controls. Additionally, KCE completed a “single audit” report, which is required when an organization receives over $750K in revenue from the federal government annually.
RMHS received an “unmodified” opinion from the auditors, who congratulated the Board and finance team for the dramatic improvements in both financial controls and overall financial position from the year before. Highlights from the Fiscal Year 2016 audit include the following:
- Fiscal Year 2016 net income was positive at just under $1 million – a dramatic change from last year’s loss in excess of $6 million.
- The net asset deficit decreased by 50% in one year.
- In Fiscal Year 2016, $34 million of $38 million total revenue was spent on program services. KCE reported that nonprofit best practices suggest overhead percentages should be less than 25%. RMHS’ overhead for 2016 was exemplary, at 11%.
- $1.4 million cash was provided by operating activity, compared to a negative $1.4 million in Fiscal Year 2015.
- RMHS reduced its debt by $603,000.
- The federal compliance audit (single audit) also received an unmodified opinion. Last year, the single audit produced seven audit recommendations. Six of the seven were fully corrected. The remaining issue, related to time cards, was greatly improved.
Board members congratulated the RMHS team for the hard work and sacrifices necessary to ensure dramatic improvements. “Great job to the audit team and to CFO John Wetherington and his staff,” said board member Lloyd Lewis.
“We appreciate RMHS’ candor and commitment to transparency,” added new board member Jeanette Cordova.
KCE was also very complimentary of the organization. “The staff laid their cards on the table and were very committed to providing information and improving issues,” stated lead auditor Steve Corder.