2014 Missouri Reentry Conference
November 19-21


ARCHS Continues Financial & Program Success with Audits

Area Resources for Community and Human Services (ARCHS) once again has important news about its financial and programmatic success as a new year approaches.

The news is especially welcome in the recent climate both locally and nationally of increased public scrutiny shining more light on not-for-profit accountability and transparency practices.

For the past 11 fiscal years (2002-2012) ARCHS’ financial statements have earned unqualified or “clean,” audits from independent auditors.

ARCHS’ FY2012 (July 1, 2011-June 30, 2012) audit was reviewed and approved by ARCHS’ Board of Directors at their December 12, 2012 meeting.

Issuance of an “unqualified opinion” means an auditor, upon review of an organization’s financial statements and accompanying notes, concluded that the financial statements and accompanying notes are presented fairly, conform to generally accepted accounting principles and fairly represent the true financial picture of the organization.

The FY2012 audit also highlighted that ARCHS’ “administrative overhead” costs are only 15 percent, substantially below the national average of 25 percent as calculated by the national United Way and other groups. This means that ARCHS is able to directly allocate at least 85 cents out of every dollar it manages to provide vital education and social service programs with a focus on early childhood, K-12, and family and community education. The remaining 15 cents provide necessary program support services that help manage and evaluate the programs to assure their long-term success.

"The audit opinion is more than an approval of accounting controls and principles. It assures our federal, state, private, and philanthropic funders that ARCHS is responsibly and properly managing, spending, and reporting the funds entrusted to us to serve the region’s most vulnerable residents,” says Wendell E. Kimbrough, ARCHS’ Chief Executive Officer. “Each month, ARCHS’ staff visits each program we fund and support, to provided a real time “audit” of how things are going, and if there are any issues, find ways to make improvements. ”

Over the past three years, ARCHS has also successfully completed federal A-133 audits for its work with federal grants. An A-133 audit is required for any organization that expends more than $500,000 or more in a year in funding from the federal government.

Another example of ARCHS’ strong focus on its fiduciary responsibilities are the efforts being made by its subsidiary, Leveraged Resources Management, Inc.

LRM has achieved a new milestone, having recently completed a special audit that verifies its conformity with an important standard known as the Statement on Standards for Attestation Engagements (SSAE) No. 16.

Completing a sought after SSAE No. 16 audit provides reasonable assurance that the financial data and information provided by LRM’s clients will be processed and reported in an accurate and secure manner.

By completing this industry standard audit, LRM’s clients are assured that LRM adheres to key industry best practices for policies, procedures, and operations, including the security of information and data. It is important for financial services providers to comply with SSAE standards due to the sensitive nature of the data that is being managed.

LRM’s SSAE No. 16 report was compiled by the accounting firm of Huber, Ring, Helm & Co., P.C. and covers the period from July 1, 2011 through June 30, 2012. The examination means that an independent service auditor has formally evaluated and issued an opinion on the description of selected LRM systems and the suitability of the design and operating effectiveness of applicable controls.

For FY12 (July 1, 2011-June 30, 2012), ARCHS had a $46.6 million impact on the region. Within that number, $8.2 million were grants and other revenues, $20 million were funds managed by ARCHS for other area not-for-profits, and $18.4 million were funds/resources secured by ARCHS' program providers.