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HomeMy WebLinkAboutAgenda - 12-01-1998 - 9bORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. Q- 6 ACTION AGENDA ITEM ABSTRACT Meeting Date: December 1, 1998 SUBJECT: Request for Funding-J000A DEPARTMENT: Manager's Office PUBLIC HEARING: (Y/N) BUDGET AMENDMENT: (Y/N) ATTACHMENT(S): Correspondence from JOCCA Memorandum from Finance Director INFORMATION CONTACT: Albert T. Kittrell, Assistant County Manager TELEPHONE NUMBERS: - -ext. 2300 Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To consider a funding request from Joint Orange Chatham Community Action Agency. BACKGROUND: JOCCA has requested a one time funding request of $40,000 to assist in reduction of a long term deficit and strengthen their current financial situation. The attached correspondence from JOCCA highlights the reason for the deficit. Edith Hubbazd ,Chair, JOCCA Boazd of Directors will report the status of JOCCA financial difficulties and steps taken to prevent financial shortfalls in the future. The County Finance Director has reviewed JOCCA's audit for the fiscal yeaz ending June 30, 1998 and his comments aze in the attached memorandum. RECOMMENDATION : The Manager's recommends that the Boazd match dollar for dollar the amount JOCCA reduces their deficit at the end of the fiscal year, June 30, 1999. The amount of the County match should not exceed $12,500 or approximately one half of the JOCCA's current deficit, $25,683. 2 OINT ORANGE-CHATHAM COMMUNITY ACTION, INC. P.O. BOX 27 • PrI'I'SHORO, NORTH CAROLINA 27312 •(919) 542.4781 • FAX (919) 542-0563 • (ORANGE COUNTY (919) 929-0494) GLORIA M. WII.LiAMS October 15, 1998 Ms. Margaret Brown, Chairperson Orange County Board of Commissioners Post Office Box 8181 Hillsborough, North Carolina 27278 Dear Commissioner Brown: ~~~co~~ OCT 2 0 1~a8 This.correspondence is written to advise you that I, along with other members of the JOCCA Board of Directors, plan to appear before the Board of Commissioners at its November 4, 1998 meeting. JOCCA is a thirty-two (32) year old nonprofit human service organization established by the Boards of Commissioners of Orange and Chatham counties to address the causes and conditions that contribute to poverty in the two county area. You may recall that we appeared at an earlier meeting and at that time, you and the Commissioners were advised that we planned to return after our fiscal year 1998 audit was completed. The purpose of our appearance will be to request consideration for cone-time allocation to JOCCA, Inc. to address the agency's financial deficit. JOCCA's Board of Directors will make a brief presentation to the Commissioners to provide background information on the agency's history, current programs and services, and financial condition. JOCCA has accumulated a budget deficit and/or shortfall in its restricted net assets due to the following reasons: o New FAS-B Audit regulations were instituted by 1RS in 1996 that required JOCCA to incorporate its wholly owned subsidiary, Orange Chatham Home Repair, Inc.(OCHR), into JOCCA's audit. The net assets (deficit) at June 30, 1997 included OCHR's deficit. OCHR, Inc. is currently being dissolved. Y,~ ~.a~ A UNITED WAY AGENCY RECYCLED PAPER 3 Commissioner Brown 10/15/98 Page Two (2) o In the past, JOCCA operated some programs that did not honor any administrative costs. These programs were fully subsidized by the agency. JOCCA's current policy is not to operate any programs that do not honor administrative costs. o Financial management was inadequate for several years. In March 1998 JOCCA hired a professional Financial Director who has been effective in restoring responsible financial reporting and planning. JOCCA has had a deficit for some years. At the end of FYE June 30, 1997 it was $83,652 (restated). The audit for the FYE June 30, 1998 has been completed and the agency's deficit has been reduced to $25,683. This deficit reduction represents the hard work of the staff in ending the FYE 1998 with a positive $57,969., instead of the budgeted $35,000. The audit also reflects that the agency has outstanding payables of approximately $69,000. It is the goal of the JOCCA Board to move over the next three years, to achieve a cash balance of $50,000. Therefore the JOCCA Board of Directors hereby requests a one time allocation of $40,000, that will greatly assist in placing this nonprofit agency in a positive financial status. JOCCA Board members have already appeared before the Chatham County Board of Commissioners and made a similar request for cone-time contribution. The JOCCA Board of Directors hopes that the Orange County Board of Commissioners will act favorably to this request. Sincerely, `~~ ~ Edith Hubbard Chairperson ED:ea xc: Members Orange County Board of Commissioners John Link, Orange County Manager Gloria M. Williams, Executive Director 4 FINANCE DEPARTMENT MEMORANDUM TO: John Link, County Manager Albert Kittrell, Assistant Co. Manager FROM: Ken Chavious, Finance Director ,~~ DATE: November 18, 1998 ~/ SUBJECT: JOCCA Audit Report `•,,•ir .r •. ~`` ~~: ,~ ' ~•'+r e.~a''• ORANGE COUNTY NORTH CAROLINA I have reviewed the audit report submitted by JOCCA for the fiscal year ended June 30, 1998. The following observations are made as a result of my review. • JOCCA ended the year with a deficit in net assets of ($25,683). You may recall that a similar situation existed at the end of the 1997 fiscal year. The year-end deficit last year was (83,652). The 1998 financial statements reflect notable improvement in financial condition from 97 to 98. • The auditor rendered an "unqualified opinion" on JOCCA's financial statements. This means that there were no indications of material weaknesses in the accounting system or internal control structure of the organization. As a recipient of Federal and State grants, JOCCA, like the County, must also have a "Single Audit" performed. This audit resulted in no findings or questioned costs. In fact, the auditor considers the organization "low risk". This means that they have a history of compliance with all grant requirements and guidelines. • For many years JOCCA operated without a Finance Director. Last spring they took action to hire a professional trained in fiscal management and accounting issues. This initiative will strengthen the organization's financial planning and reporting abilities. Proper financial planning and adequate accounting serve to prevent deficit situations. I have worked with JOCCA over the years and the organization has continuously adhered to the provisions contained in our program agreements. In addition, they have always been prompt in responding to our requests for information. Please contact me if you have any questions or need more information. 208 SOUTH CAMERON ST • P.O. BOX 8181 • HILLSBOROUGH, NORTH CAROLINA • 9191732-8181 ~~ ~~ ~-~ .I000A BUDGET STATUS 1998-1999 SUPPLEMENTARY REQUEST DECEMBER. 1998 I. Causes of Deficit 1. Has existed for most of the 1990's. Yearly Surplus / (Deficit) has rangP.d from $57,969 to ($68,649). 2. Accepting programs with inadequate administrative funding, e. g. Kellogg Community Based Initiative. 3. Providing more service than called for in contract, e. g. Title III-C nutrition program. We've never turned anyone away. Some years Triangle J has funds to cover, some years it doesn't. 4. Expansion of programs during the FY that require matching funds, e.g. CBA. No money in county budgets to provide required match. 5. Sudden loss of nutrition program in Chatham County (FY 1996-97). 6. Inadequate financial management. II. Financial Results for Fiscal Year 1998. s~, 9~q 1. Reduced deficit by $~E,9-9i~ from $83 652 to $25 683 Action taken included • Prepared a 3 year Strategic Plan and put it into use. • Tight control on all spending. • No salary increases for 4th consecutive year. • Consolidated office space. • Hired a new, professionally trained financial director. • Made vacation plan less generous. • Changed auditors. • Many of these steps aze one-time events. III. Looking Ahead 1. Current budget projects a surplus of $21,000 for year ending June 30, 1999. 2. As of start of 1999 fiscal year (July 1, 1998), Cash Deficit = $69,017. To operate properly need cash balance of about $50,000 (two weeks expenses). Goal is to achieve this over next three years. 3. Will do additional fund raising. 4. Will update Strategic Plan annually to be sure that JOCCA keeps well focused on both the programs it provides and its financial health. This includes not accepting new programs that do not provide adequate funds for administration. 5. Requesting aone-time payment from Orange County to help reach a positive operating cash balance. ~y A STAN o ~/ ~ ~ ~ R `Wrvs~ North Carolina Department of Health and Human Services OFFICE OF ECONOMIC OPPORTUNITY 222 North Person Street, Raleigh, North Carolina 27601 James B. Hunt, Jr., Governor H. David Bruton, M.D., Secretary November 24,1998 Ms. Edith Hubbard, Chairperson Boazd of Directors Joint Orange-Chatham Community Action, Inc. 109 Cedazwood Lane Carrboro, North Carolina 27510 Deaz Ms. Hubbard: Lawrence D. Wilson, Director Our review of your first quarter Project Review Report (OEO Form 240) for Office grant programs indicated the following accomplishments for the period July 1, 1998 through September 30, 1998. First Quarter Accomplishments Basic Support Project Percent Performance Measure Planned Reported Accomplished The number of low-income families participating in comprehensive activities designed to remove them from poverty 5 5 100% Telephone (919) 715-5850 Fax (919) 715-5855 North Carolina: Host of the 1999 Special Olympics World Summer Games. An Equal Opportunity/Affirmative Action Employer Ms. Edith Hubbard Page 2 November 24, 1998 Percent Planned Reported Accomplished Efficiency Measure The cost per family participating in compre- hensive activities designed to remove them from poverty $6,242 $6,347 Emplovment Project Performance Measure The number of clients placed in permanent jobs 4 5 125% Efficiency Measure The cost per client placed in a permanent job $4,314 $5,509 Accomplishment Rates through September 30. 1998 Project Expected Reported Basic Support Project 100% 100% Employment 100% 125% Expenditure Rates through September 30. 1998 Grant Expected Reported Community Services Block Grant 25% 26% Ms. Edith Hubbard Page 3 November 24, 1998 Comments Actual performance met or exceeded expectations in your Basic Support and Employment Projects during the first quarter. We have noted that activities for your Congregate Nutrition Project are scheduled to begin in the second quarter. The expenditure rate for the Community Services Block Grant Program was as expected. If you have questions concerning this letter, please contact Anthony Williams. Sincerely, ~ - o . ~~ Lawrence D. Wilson LD W/AW/vlm cc: Mrs. Gloria M. Williams Executive Director