Florida Sheriffs Youth Ranches, Inc. · 2018-05-18 · Florida Sheriffs Youth Ranches, Inc. Live Oak, Florida We have audited the consolidated financial statements of Florida Sheriffs

Florida Sheriffs Youth Ranches, Inc.

Reporting Package

For The Year Ended September 30, 2017

FLORIDA SHERIFFS YOUTH RANCHES, INC. Live Oak, Florida CONSOLIDATED FINANCIAL STATEMENTS AND RELATED SUPPLEMENTAL INFORMATION AND REPORTS For The Year Ended September 30, 2017 CONTENTS REPORT OF INDEPENDENT AUDITOR ........................................................................................................... 1 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Position .................................................................................. 3 Consolidated Statements of Activities ................................................................................................. 4 Consolidated Statements of Cash Flows ............................................................................................. 5 Consolidated Statements of Functional Expenses .............................................................................. 6 Notes to Consolidated Financial Statements .................................................................................... 10 SUPPLEMENTAL INFORMATION Consolidating Statements of Financial Position ............................................................................... 18 Consolidating Statements of Activities.............................................................................................. 20 Consolidating Statements of Cash Flows .......................................................................................... 22 Schedule of Expenditures of Federal Awards ................................................................................... 24 Notes to Schedule of Expenditures of Federal Awards .................................................................... 25 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS .............................................. 26 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE ................................................... 27 SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL PROGRAMS .............................................. 29

REPORT OF INDEPENDENT AUDITOR The Board of Directors Florida Sheriffs Youth Ranches, Inc. Live Oak, Florida We have audited the consolidated financial statements of Florida Sheriffs Youth Ranches, Inc. (“the Organization”), which comprise the consolidated statements of financial position as of September 30, 2017 and 2016, and the related consolidated statements of activities, cash flows, and functional expenses for the years then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Florida Sheriffs Youth Ranches, Inc. as of September 30, 2017 and 2016, the consolidated changes in its net assets, and its consolidated cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

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Other Matters – Supplementary Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplemental consolidating statements of financial position as of September 30, 2017 and 2016, and the related supplemental consolidating statements of activities and cash flows for the years then ended, and the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 13, 2018, on our consideration of the Organization’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control over financial reporting and compliance. B A T T S M O R R I S O N W A L E S & L E E , P . A . Orlando, Florida February 13, 2018

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The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 2017 2016

ASSETSCash and cash equivalents 1,453,556$ 2,109,805$ Cash held for self-funded health insurance plan 895,662 824,190 Investments 10,730,964 9,744,027 Investments and other assets restricted for long-term purposes 35,943,956 33,260,763 Beneficial interests in trusts and endowments held by others 5,649,918 6,514,684 Property and equipment, net 7,172,935 7,197,232 Other assets 2,580,763 2,610,536 Total assets 64,427,754$ 62,261,237$

LIABILITIESAccounts payable and accrued expenses 1,650,888$ 1,764,658$ Deferred compensation payable 1,601,510 1,643,625 Liabilities for annuities and other 4,899,831 5,207,002 Total liabilities 8,152,229 8,615,285

NET ASSETSUnrestricted 8,775,699 8,746,204 Temporarily restricted 24,150,634 21,995,466 Permanently restricted 23,349,192 22,904,282 Total net assets 56,275,525 53,645,952

Total liabilities and net assets 64,427,754$ 62,261,237$

ASSETS

LIABILITIES AND NET ASSETS

September 30,

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENTS OF ACTIVITIES 2017 2016

CHANGE IN UNRESTRICTED NET ASSETSPublic support and revenueContributions 5,800,136$ 4,661,001$ Medicaid and third party reimbursements 4,544,584 4,495,930 Sales of donated goods 3,655,758 3,588,442 Investment income, net 271,010 292,551 Other income 152,952 646,065 Total public support and revenue 14,424,440 13,683,989 Net assets released from time and use restrictions 4,473,573 5,222,221 Total public support and revenue and net assets released from time and use restrictions 18,898,013 18,906,210 ExpensesProgram activitiesHome and subsistence 9,826,069 10,023,116 Operation of thrift stores 2,854,858 2,528,286 Medical and clinical 1,673,766 1,863,881 Total program activities 14,354,693 14,415,283 Supporting activitiesManagement and general 2,359,758 2,502,269 Development and public relations 2,154,067 2,185,212 Total supporting activities 4,513,825 4,687,481 Total expenses 18,868,518 19,102,764 Change in unrestricted net assets 29,495 (196,554)

CHANGE IN TEMPORARILY RESTRICTED NET ASSETSContributions 3,092,566 5,162,923 Investment income, net 3,955,299 2,963,911 Change in value of split-interest agreements (419,124) (337,176) Net assets released from time and use restrictions (4,473,573) (5,169,272) Change in temporarily restricted net assets 2,155,168 2,620,386

CHANGE IN PERMANENTLY RESTRICTED NET ASSETSContributions 111,074 16,854 Change in value of split-interest agreements 333,836 289,605 Net assets released from restrictions — (52,949) Change in permanently restricted net assets 444,910 253,510

CHANGE IN NET ASSETS 2,629,573 2,677,342

NET ASSETS - Beginning of year 53,645,952 50,968,610

NET ASSETS - End of year 56,275,525$ 53,645,952$

September 30,For The Years Ended

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2017 2016

OPERATING CASH FLOWSCash received from contributors 9,760,258$ 9,191,252$ Cash received from Medicaid and third party reimbursements 4,544,584 4,495,930 Cash received from sales of donated goods 3,655,758 3,588,442 Other revenue received 955,261 909,386 Cash paid for operating activities and costs (18,660,360) (18,731,344) Net operating cash flows 255,501 (546,334)

INVESTING CASH FLOWSReinvestment of interest and dividends (887,324) (690,222)Net sales of investments 3,351,079 3,253,771Net investment in assets restricted for long-term purposes (2,683,193) (1,402,900)Purchases of and improvements to property and equipment (803,386) (839,414) Net investing cash flows (1,022,824) 321,235

FINANCING CASH FLOWSContributions restricted for endowments 111,074 16,854 Net financing cash flows 111,074 16,854

NET CHANGE IN CASH AND CASH EQUIVALENTS (656,249) (208,245)

CASH AND CASH EQUIVALENTS - Beginning of year 2,109,805 2,318,050

CASH AND CASH EQUIVALENTS - End of year 1,453,556$ 2,109,805$

RECONCILIATION OF CHANGE IN NET ASSETS TO NET OPERATING CASH FLOWSChange in net assets 2,629,573$ 2,677,342$ Adjustments to reconcile change in net assets to net operating cash flowsDepreciation 827,683 819,563 Contributions restricted for endowments (111,074) (16,854) Gain on investments, net (3,450,692) (2,523,950) Change in cash held for self-funded health insurance plan (71,472) 640,961 Change in beneficial interests in trusts and endowments held by others 864,766 (650,507) Change in other assets 29,773 (271,518) Change in accounts payable and accrued expenses (113,770) (767,282) Change in deferred compensation payable (42,115) (41,404) Change in liabilities for annuities and other (307,171) (412,685)

Net operating cash flows 255,501$ (546,334)$

September 30,For The Years Ended

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For The Year Ended September 30, 2017 Home and subsistence Operation of thrift stores Medical and clinical Total program activitiesSalaries 4,351,155$ 1,198,343$ 937,805$ 6,487,303$ Payroll-related expenses 1,217,008 333,434 269,272 1,819,714 Total personnel-related expenses 5,568,163 1,531,777 1,207,077 8,307,017 Agency membership 30,407 4,944 5,198 40,549 Food 944,505 — — 944,505 Utilities 485,060 170,777 35,804 691,641 Building and grounds repair and maintenance 456,549 39,279 77,699 573,527 Furniture and equipment rental and maintenance 66,592 4,859 10,733 82,184 Printing and office supplies 37,044 4,818 4,000 45,862 Clothing and personal care 107,186 — — 107,186 Insurance 359,630 49,744 61,480 470,854 Communications 174,250 31,433 20,996 226,679 Postage and freight 5,734 6,089 976 12,799 Farm expense 61,352 — 134 61,486 Supplies 52,442 26,092 427 78,961 Professional services — 1,254 — 1,254 Work program 109,929 — — 109,929 Noncash - sales expense — 68,865 — 68,865 Bank fees 2,941 57,147 497 60,585 Program write-offs 9,035 — 1,545 10,580 Rent expense and real estate tax 26,927 609,664 4,603 641,194 Travel 144,051 7,909 5,525 157,485 Personnel services 17,744 3,180 3,241 24,165 President's discretionary fund 1,964 — 336 2,300 Medical and dental services 1,363 — 70,580 71,943 Recreation 106,305 — — 106,305 Vehicle expense 159,395 114,885 21,882 296,162 Alumni scholarships and expenses 122,078 — 20,970 143,048 Awards and special events 40,129 — — 40,129 Community affairs 39,025 205 6,672 45,902 Education supplies 28,604 — 11 28,615 Religion/music supplies and activities 2,330 — — 2,330 Staff recruitment and development 58,993 8,952 10,028 77,973 Depreciation and loss on disposals 606,342 112,985 103,352 822,679

Total 9,826,069$ 2,854,858$ 1,673,766$ 14,354,693$

Program activities

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES (Continued) For The Year Ended September 30, 2017 Total program activities Management and general Development and public relations Total supporting activities Total expensesSalaries 6,487,303$ 1,333,939$ 761,525$ 2,095,464$ 8,582,767$ Payroll-related expenses 1,819,714 310,075 211,931 522,006 2,341,720 Total personnel-related expenses 8,307,017 1,644,014 973,456 2,617,470 10,924,487 Agency membership 40,549 785 14,306 15,091 55,640 Food 944,505 — — — 944,505 Utilities 691,641 32,465 — 32,465 724,106 Building and grounds repair and maintenance 573,527 24,755 — 24,755 598,282 Furniture and equipment rental and maintenance 82,184 44,431 72,079 116,510 198,694 Printing and office supplies 45,862 16,681 551,248 567,929 613,791 Clothing and personal care 107,186 — — — 107,186 Insurance 470,854 91,983 1,325 93,308 564,162 Communications 226,679 94,720 11,515 106,235 332,914 Postage and freight 12,799 2,256 287,264 289,520 302,319 Farm expense 61,486 — — — 61,486 Supplies 78,961 1,184 33,292 34,476 113,437 Expenses on investment property — 17,095 — 17,095 17,095 Professional services 1,254 252,276 69,692 321,968 323,222 Work program 109,929 — — — 109,929 Noncash - sales expense 68,865 10 — 10 68,875 Bank fees 60,585 90 10,667 10,757 71,342 Program write-offs 10,580 — — — 10,580 Rent expense and real estate tax 641,194 — — — 641,194 Travel 157,485 31,664 28,406 60,070 217,555 Personnel services 24,165 5,966 131 6,097 30,262 President's discretionary fund 2,300 500 — 500 2,800 Medical and dental services 71,943 — — — 71,943 Recreation 106,305 — — — 106,305 Vehicle expense 296,162 9,588 21,627 31,215 327,377 Alumni scholarships and expenses 143,048 — — — 143,048 Awards and special events 40,129 — — — 40,129 Community affairs 45,902 7,556 71,356 78,912 124,814 Education supplies 28,615 — — — 28,615 Religion/music supplies and activities 2,330 — — — 2,330 Staff recruitment and development 77,973 4,739 6,186 10,925 88,898 Depreciation and loss on disposals 822,679 77,000 1,517 78,517 901,196

Total 14,354,693$ 2,359,758$ 2,154,067$ 4,513,825$ 18,868,518$

Supporting activities

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For The Year Ended September 30, 2016 Home and subsistence Operation of thrift stores Medical and clinical Total program activitiesSalaries 4,333,212$ 1,041,946$ 1,006,670$ 6,381,828$ Payroll-related expenses 1,519,376 258,574 368,611 2,146,561 Total personnel-related expenses 5,852,588 1,300,520 1,375,281 8,528,389 Agency membership 31,800 4,573 5,840 42,213 Food 848,966 — — 848,966 Utilities 496,705 159,395 32,452 688,552 Building and grounds repair and maintenance 386,140 25,109 70,165 481,414 Furniture and equipment rental and maintenance 61,963 9,495 10,905 82,363 Printing and office supplies 52,346 10,315 4,383 67,044 Clothing and personal care 115,551 — — 115,551 Insurance 338,824 46,671 62,203 447,698 Communications 221,554 31,432 34,926 287,912 Postage and freight 4,816 4,079 884 9,779 Farm expense 66,305 — 124 66,429 Supplies 59,070 25,918 308 85,296 Professional services — 1,335 — 1,335 Work program 96,879 — — 96,879 Noncash - sales expense — 17,146 — 17,146 Bank fees 1,034 60,848 185 62,067 Program write-offs 22,135 — 4,064 26,199 Rent expense and real estate tax 31,061 603,260 5,702 640,023 Travel 125,917 10,472 5,184 141,573 Personnel services 12,727 3,554 2,336 18,617 President's discretionary fund 17 — 3 20 Medical and dental services 1,927 — 69,538 71,465 Recreation 97,395 — — 97,395 Vehicle expense 158,907 123,268 23,084 305,259 Alumni scholarships and expenses 190,281 — 34,933 225,214 Awards and special events 39,644 — — 39,644 Community affairs 39,227 95 7,201 46,523 Education supplies 42,560 — — 42,560 Religion/music supplies and activities 2,740 — — 2,740 Staff recruitment and development 60,611 14,352 11,071 86,034 Depreciation and loss on disposals 563,426 76,449 103,109 742,984

Total 10,023,116$ 2,528,286$ 1,863,881$ 14,415,283$

Program activities

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FLORIDA SHERIFFS YOUTH RANCHES, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES (Continued) For The Year Ended September 30, 2016 Total program activities Management and general Development and public relations Total supporting activities Total expensesSalaries 6,381,828$ 1,446,468$ 759,849$ 2,206,317$ 8,588,145$ Payroll-related expenses 2,146,561 381,171 255,881 637,052 2,783,613 Total personnel-related expenses 8,528,389 1,827,639 1,015,730 2,843,369 11,371,758 Agency membership 42,213 947 11,582 12,529 54,742 Food 848,966 — — — 848,966 Utilities 688,552 33,439 — 33,439 721,991 Building and grounds repair and maintenance 481,414 24,296 — 24,296 505,710 Furniture and equipment rental and maintenance 82,363 42,947 56,387 99,334 181,697 Printing and office supplies 67,044 16,765 595,081 611,846 678,890 Clothing and personal care 115,551 — — — 115,551 Insurance 447,698 84,639 1,247 85,886 533,584 Communications 287,912 86,951 14,591 101,542 389,454 Postage and freight 9,779 2,023 296,893 298,916 308,695 Farm expense 66,429 — — — 66,429 Supplies 85,296 819 28,034 28,853 114,149 Expenses on investment property — 11,339 — 11,339 11,339 Professional services 1,335 229,615 74,146 303,761 305,096 Work program 96,879 — — — 96,879 Noncash - sales expense 17,146 — — — 17,146 Bank fees 62,067 167 7,709 7,876 69,943 Program write-offs 26,199 — — — 26,199 Rent expense and real estate tax 640,023 — — — 640,023 Travel 141,573 34,761 32,370 67,131 208,704 Personnel services 18,617 5,247 876 6,123 24,740 President's discretionary fund 20 1,249 — 1,249 1,269 Medical and dental services 71,465 — — — 71,465 Recreation 97,395 — — — 97,395 Vehicle expense 305,259 12,028 23,379 35,407 340,666 Alumni scholarships and expenses 225,214 — — — 225,214 Awards and special events 39,644 — — — 39,644 Community affairs 46,523 4,686 18,941 23,627 70,150 Education supplies 42,560 — — — 42,560 Religion/music supplies and activities 2,740 — — — 2,740 Staff recruitment and development 86,034 8,590 4,429 13,019 99,053 Depreciation and loss on disposals 742,984 73,122 3,817 76,939 819,923 Unrelated business income taxes — 1,000 — 1,000 1,000

Total 14,415,283$ 2,502,269$ 2,185,212$ 4,687,481$ 19,102,764$

Supporting activities

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FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A – NATURE OF ACTIVITIES Florida Sheriffs Youth Ranches, Inc. (“FSYR”) is a Florida not-for-profit corporation formed in 1973 to prevent juvenile delinquency by providing services to children and youth who may be abandoned, homeless, destitute, neglected, dependent, or in need of supervision regardless of race, creed, color, or sex; to care for said children and youth by providing as-needed and feasible residential care, camping programs, education, and related services. Sheriffs Ranches Enterprises, Inc. (“SRE”) is a Florida not-for-profit corporation formed in 2005. SRE is a supporting organization of FSYR and FSYR has certain approval rights regarding SRE’s governing board. The primary purpose of SRE is to operate the productive enterprises of FSYR. SRE fulfills its purpose through the help of community donors who provide goods for sale in SRE’s thrift stores. SRE operates a vehicle sales lot and six thrift stores in Citrus, Pinellas, Suwannee, Hernando, Lake, and Marion Counties (all in Florida). In conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the consolidated financial statements of FSYR include the accounts of SRE. All significant inter-organization accounts and transactions have been eliminated in consolidation. FSYR and SRE are collectively referred to as “the Organization” in these notes. NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Restricted and unrestricted revenue and support Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions. Donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statements of activities as “net assets released from time and use restrictions.” Cash and cash equivalents The Organization considers investment instruments purchased or donated with original maturities of three months or less to be cash equivalents. Cash held for self-funded health insurance plan Cash held for self-funded health insurance plan includes cash set aside for future claims related to FSYR’s self-funded health insurance plan. Investments and other assets restricted for long-term purposes Investments and other assets restricted for long-term purposes include mutual funds, corporate stock, corporate bonds, and government securities carried at estimated fair value, and beneficial interests in perpetual trusts and endowments held by others. These assets are primarily restricted pursuant to the endowment agreements to which they relate. Split-interest gifts For irrevocable split-interest arrangements such as charitable gift annuities and similar arrangements in which FSYR is a trustee or custodian, the assets of such arrangements are reflected in the consolidated financial statements as further described in Note D. The carrying values of such investments conform to U.S. GAAP, which generally requires that investment securities be carried at estimated fair value at all times and that other assets be carried at the estimated fair value of the assets on the date the assets are contributed, unadjusted for subsequent changes in value. Also, for arrangements in which FSYR is a trustee or custodian, a liability is recognized for the estimated present value of benefits payable to other beneficiaries. For split-interest arrangements in which FSYR is not the trustee or custodian, FSYR recognizes an asset for the estimated present value of FSYR’s benefits under the arrangements.

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FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Split-interest gifts (Continued) For all irrevocable split-interest arrangements, regardless of whether or not FSYR acts as trustee or custodian, unrestricted, temporarily restricted, or permanently restricted contribution revenue is recognized for the estimated present value of FSYR’s benefits under each such arrangement in the year the arrangement is established or in the year in which FSYR is provided sufficient information about the existence and nature of the arrangement. Periodic adjustments are made for changes in estimated present values using applicable mortality tables and appropriate discount rates. State law imposes certain restrictions on the manner in which charitable gift annuity assets may be invested. FSYR is also the beneficiary of certain perpetual irrevocable trusts and endowments held and administered by other parties. FSYR generally has the irrevocable right to receive the income earned on the underlying assets in perpetuity. The estimated fair value of such amounts is recognized as an asset and as permanently restricted contribution revenue at the date FSYR becomes aware of the agreement. FSYR’s estimate of fair value is based on fair value information received from the other parties. The underlying assets are not subject to FSYR’s discretion or control. Gains and losses, which are not distributed, are reflected within “change in value of split-interest agreements” in the consolidated statements of activities. Property and equipment Property and equipment are stated at cost, if purchased, or estimated fair value on the date of donation, if donated. The Organization uses the straight-line method of depreciating property and equipment over the estimated useful lives of the related assets. Income taxes FSYR and SRE are exempt from federal income tax as organizations described in Section 501(c)(3) of the Internal Revenue Code and from state income tax pursuant to Florida law. FSYR and SRE are further classified as public charities and not private foundations for federal tax purposes. FSYR engages in a certain unrelated business income activity. Income taxes (if any) are recognized as expenses when the related income is generated. FSYR and SRE have not taken any material uncertain tax positions for which the associated tax benefits may not be recognized under accounting principles generally accepted in the United States of America. Use of estimates Management uses estimates and assumptions in preparing the consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and reported revenues and expenses. Significant estimates used in preparing these consolidated financial statements include those related to the estimated fair value of investments, those used in determining the useful lives of property and equipment, and those used to estimate the liabilities for annuities. Actual results could differ from the estimates. Reclassifications Certain amounts included in the September 30, 2016 consolidated financial statements have been reclassified to conform to classifications adopted during the year ended September 30, 2017. The reclassifications had no material effect on the accompanying consolidated financial statements. Subsequent events The Organization has evaluated for possible financial statement reporting and disclosure subsequent events through February 13, 2018, the date as of which the consolidated financial statements were available to be issued.

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FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE C – CONCENTRATIONS OF CREDIT RISK The Organization maintains its cash and cash equivalents in deposit accounts which may not be federally insured, may exceed federally insured limits, or may be insured by an entity other than an agency of the federal government. The Organization has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to cash and cash equivalents. NOTE D – INVESTMENTS FSYR holds investments of various types both in its capacity as trustee or custodian and in its capacity as owner. Investments are carried at estimated fair value. Investments were held for the following purposes or activities: September 30, 2017 2016 Investments held as trustee or in a similar capacity

• Investments held to satisfy charitable gift annuity obligations $ 5,719,261 $ 6,056,028 Investments subject to temporary donor restrictions • Investments held for temporarily restricted purposes 4,692,244 3,357,125

Investments subject to permanent donor restrictions (see Note E) • Restricted investments held for permanent endowments 16,191,156 16,064,568 • Net appreciation 12,594,764 10,356,481 Investments held for other purposes • Investments held for other purposes 319,459 330,874 Total investments $ 39,516,884 $ 36,165,076

Investments consisted of the following: September 30, 2017 2016 Money market and similar funds $ 1,276,550 $ 907,402 Mutual funds 13,061,556 11,354,016 Corporate stocks 16,284,262 15,047,405 Corporate bonds 5,132,511 5,253,515 Government securities 3,762,005 3,602,738 Total investments $ 39,516,884 $ 36,165,076 NOTE E – INVESTMENTS AND OTHER ASSETS RESTRICTED FOR LONG-TERM PURPOSES Investments and other assets restricted for long-term purposes were held for the following purposes or activities: September 30, 2017 2016 Investments held for permanent endowments $ 16,191,156 $ 16,064,568 Net appreciation on investments held for permanent endowments 12,594,764 10,356,481 Beneficial interests in perpetual trusts and endowments held by others 7,158,036 6,839,714 Total investments and other assets restricted for long-term purposes $ 35,943,956 $ 33,260,763

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FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE F – FAIR VALUE MEASUREMENTS U.S. GAAP defines fair value for an investment as the price an organization would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. Accordingly, U.S. GAAP recognizes a hierarchy of “inputs” an organization may use in determining or estimating fair value. The inputs are categorized into “levels” that relate to the extent to which an input is objectively observable and the extent to which markets exist for identical or comparable investments. In determining or estimating fair value, an organization is required to maximize the use of observable market data (to the extent available) and minimize the use of unobservable inputs. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical items (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Following is a description of each of the three levels of input within the fair value hierarchy: Level 1 – unadjusted quoted market prices in active markets for identical items Level 2 – other significant observable inputs (such as quoted prices for similar items) Level 3 – significant unobservable inputs The estimated fair value of items measured on a recurring basis at September 30, 2017, is as follows: Total Level 1 Level 2 Level 3 Mutual funds $ 13,061,556 $ 13,061,556 $ — $ — Corporate stocks 16,284,262 16,284,262 — — Corporate bonds 5,132,511 5,132,511 — — Government securities 3,762,005 3,762,005 — — Total unrestricted and restricted beneficial interests in trusts and endowments held by others 12,807,954 — — 12,807,954 Total $ 51,048,288 $ 38,240,334 $ — $ 12,807,954 Liabilities for annuities and other $ (4,899,831) $ — $ (4,899,831) $ — The estimated fair value of items measured on a recurring basis at September 30, 2016, is as follows: Total Level 1 Level 2 Level 3 Mutual funds $ 11,354,016 $ 11,354,016 $ — $ — Corporate stocks 15,047,405 15,047,405 — — Corporate bonds 5,253,515 5,253,515 — — Government securities 3,602,738 3,602,738 — — Total unrestricted and restricted beneficial interests in trusts and endowments held by others 13,354,398 — — 13,354,398 Total $ 48,612,072 $ 35,257,674 $ — $ 13,354,398 Liabilities for annuities and other $ (5,207,002) $ — $ (5,207,002) $ —

13

FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE F – FAIR VALUE MEASUREMENTS (Continued) Beneficial interests in trusts and endowments are primarily administered by banks and other financial institutions. The estimated fair value of FSYR’s beneficial interests in trusts and endowments held by others using Level 3 inputs is based on amounts provided by the banks and other financial institutions. During the years ended September 30, 2017 and 2016, the change in the components of the beneficial interests in trusts and endowments held by others was immaterial. Liabilities for annuities and other are based on estimated present value, applying certain assumptions regarding interest rates and life expectancies. NOTE G – BENEFICIAL INTERESTS IN TRUSTS AND ENDOWMENTS HELD BY OTHERS Beneficial interests in trusts and endowments held by others consisted of the following: September 30, 2017 2016 Beneficial interests in remainder trusts held by others $ 4,794,918 $ 6,007,079 Estates receivable 855,000 507,605 Total beneficial interests in trusts and endowments held by others $ 5,649,918 $ 6,514,684 NOTE H – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: September 30, Category 2017 2016 Land and land improvements $ 2,851,221 $ 2,810,715 Buildings and building improvements (including leasehold improvements) 22,681,531 22,411,237 Furniture, fixtures, and equipment 3,040,942 3,047,543 Vehicles 2,437,478 2,361,494 Construction in progress 33,854 — Total property and equipment 31,045,026 30,630,989 Less: Accumulated depreciation (23,872,091) (23,433,757) Net property and equipment $ 7,172,935 $ 7,197,232 Depreciation expense amounted to $827,683 and $819,563 during the years ended September 30, 2017 and 2016, respectively. NOTE I – DEFERRED COMPENSATION PAYABLE FSYR has entered into unfunded deferred compensation agreements with two of its former presidents. The agreements provide for certain percentages of the former presidents’ salaries to be paid to the former presidents or their surviving spouses for the remainder of their lives. The present value of the estimated remaining payments due under the deferred compensation agreements is $1,601,510 and $1,643,625 as of September 30, 2017 and 2016, respectively.

14

FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE J – TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets consisted of the following: September 30, 2017 2016 Appreciation of endowments $ 12,594,764 $ 10,356,481 Beneficial interests in remainder trusts held by others and estates receivable 5,649,918 6,514,684 Scholarships 4,056,735 3,583,862 Amounts held to satisfy charitable gift annuity obligations 1,000,751 1,036,936 Other 848,466 503,503 Total temporarily restricted net assets $ 24,150,634 $ 21,995,466 NOTE K – PERMANENTLY RESTRICTED NET ASSETS Permanently restricted net assets consisted of the following: September 30, 2017 2016 Endowments $ 16,191,156 $ 16,064,568 Beneficial interests in perpetual trusts and endowments held by others 7,158,036 6,839,714 Total permanently restricted net assets $ 23,349,192 $ 22,904,282 Earnings from permanently restricted net assets are primarily available to support the general purposes of FSYR. FSYR preserves the estimated fair value of all original endowment gifts as of the gift date, which management deems is in compliance with state law. Accordingly, FSYR classifies as “permanently restricted net assets” (a) the original value of gifts donated to the permanent endowment and (b) the original value of subsequent gifts to the permanent endowment. FSYR has adopted an investment policy for endowment assets that attempts to provide a predictable stream of funding to supported programs while seeking to maintain the purchasing power of the endowment assets and to preserve the invested capital. FSYR seeks the advice of investment counsel, as well as management and certain committees of the Board, when determining amounts to be spent on supported programs. FSYR’s spending policy stipulates that 5% of the estimated fair value of each fund (valued as of September 30th of the prior year) is available for program-related distributions. During the year ended September 30, 2016, FSYR released permanently restricted net assets in the amount of $52,949 related to a certain endowment upon the direction of the donor. NOTE L – SELF-FUNDED HEALTH INSURANCE PLAN FSYR maintains a self-funded health insurance plan for eligible employees and their eligible dependents. FSYR has contracted with a third party administrator to process claims. FSYR has stop-loss insurance coverage for claims incurred which exceed $110,000 per individual per year, with an unlimited annual maximum. The Organization’s consolidated statements of financial position as of September 30, 2017 and 2016 includes $895,662 and $824,190 of cash related to the plan, respectively. In addition, management estimated the liability associated with claims incurred but not reported to the plan as of September 30, 2017 and 2016 to be approximately $205,000 and $178,000, respectively. Such amounts are included in “accounts payable and accrued expenses” in the accompanying consolidated statements of financial position.

15

FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE M – RETIREMENT PLAN The Organization contributes to a 401(k) profit-sharing plan (“the Plan”). All employees age 20.5 and older are eligible to participate in the Plan. Participating employees may elect to make salary deferral contributions to the Plan. The Plan requires the Organization to make matching contributions of up to 3% of an employee’s annual compensation up to a maximum of 5% (increasing by 50% of salary deferrals between 3% and 5% of an employee’s annual compensation). The Organization contributed approximately $184,000 and $183,000 to the Plan during the years ended September 30, 2017 and 2016, respectively. The Organization may also provide an additional discretionary matching contribution to the Plan. No additional discretionary matching contributions were made to the Plan during the years ended September 30, 2017 and 2016. NOTE N – FLORIDA SHERIFFS ASSOCIATION The Florida Sheriffs Association (“the Association”) is a not-for-profit corporation which is responsible for ratifying FSYR Board member appointments. Occasionally, the Association and FSYR may also have common board members. In addition, the Association provides the following support activities which benefit FSYR:

• Providing an organized awards program of lifetime honorary memberships in the Association to those individuals who make a donation of a certain amount to FSYR, including publication of such memberships in The Sheriff’s Star which is issued four times per year; and • Publishing articles, news items, and solicitations of support through The Sheriff’s Star and online via Facebook and the Association’s website. Since the dollar value of these activities cannot be reasonably estimated, and since the activities are not directed by FSYR, no amounts are included in the accompanying consolidated financial statements related to such activities.

NOTE O – OPERATING LEASES SRE leases building space under operating lease agreements. Rent expense (including common area maintenance and other charges) related to such leases was approximately $606,000 and $600,000 during the years ended September 30, 2017 and 2016, respectively. Future minimum rental payments under noncancellable operating leases are approximately as follows: Year Ending September 30, 2018 $ 546,000 2019 502,000 2020 493,000 2021 405,000 2022 149,000 Thereafter 292,000 Total $ 2,387,000

NOTE P – COMMITMENT FSYR has a $1,000,000 unsecured revolving line of credit with a certain financial institution. As of September 30, 2017, there were no amounts outstanding under this line of credit. 16

SUPPLEMENTAL SCHEDULES

17

See the Accompanying Report of Independent Auditor

FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF FINANCIAL POSITION September 30, 2017 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

ASSETSCash and cash equivalents 1,249,651$ 203,905$ — $ 1,453,556$ Cash held for self-funded health insurance plan 895,662 — — 895,662 Investments 10,730,964 — — 10,730,964 Investments and other assets restricted for long-term purposes 35,943,956 — — 35,943,956 Beneficial interests in trusts and endowments held by others 5,649,918 — — 5,649,918 Investment in Sheriffs Ranches Enterprises, Inc. 972,273 — (972,273) — Property and equipment, net 6,878,278 294,657 — 7,172,935 Other assets 2,189,208 391,555 — 2,580,763 Total assets 64,509,910$ 890,117$ (972,273)$ 64,427,754$

LIABILITIESAccounts payable and accrued expenses 1,441,656$ 209,232$ — $ 1,650,888$ Deferred compensation payable 1,601,510 — — 1,601,510 Liabilities for annuities and other 4,899,831 — — 4,899,831 Total liabilities 7,942,997 209,232 — 8,152,229

NET ASSETSUnrestricted 9,067,087 680,885 (972,273) 8,775,699 Temporarily restricted 24,150,634 — — 24,150,634 Permanently restricted 23,349,192 — — 23,349,192 Total net assets 56,566,913 680,885 (972,273) 56,275,525

Total liabilities and net assets 64,509,910$ 890,117$ (972,273)$ 64,427,754$

18


FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF FINANCIAL POSITION September 30, 2016 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

ASSETSCash and cash equivalents 1,847,169$ 262,636$ — $ 2,109,805$ Cash held for self-funded health insurance plan 824,190 — — 824,190 Investments 9,744,027 — — 9,744,027 Investments and other assets restricted for long-term purposes 33,260,763 — — 33,260,763 Beneficial interests in trusts and endowments held by others 6,514,684 — — 6,514,684 Investment in Sheriffs Ranches Enterprises, Inc. 972,273 — (972,273) — Property and equipment, net 6,891,305 305,927 — 7,197,232 Other assets 2,147,610 462,926 — 2,610,536 Total assets 62,202,021$ 1,031,489$ (972,273)$ 62,261,237$

LIABILITIESAccounts payable and accrued expenses 1,538,880$ 225,778$ — $ 1,764,658$ Deferred compensation payable 1,643,625 — — 1,643,625 Liabilities for annuities and other 5,207,002 — — 5,207,002 Total liabilities 8,389,507 225,778 — 8,615,285

NET ASSETSUnrestricted 8,912,766 805,711 (972,273) 8,746,204 Temporarily restricted 21,995,466 — — 21,995,466 Permanently restricted 22,904,282 — — 22,904,282 Total net assets 53,812,514 805,711 (972,273) 53,645,952

Total liabilities and net assets 62,202,021$ 1,031,489$ (972,273)$ 62,261,237$ 19


FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF ACTIVITIES For The Year Ended September 30, 2017 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

CHANGE IN UNRESTRICTED NET ASSETSPublic support and revenueContributions 5,770,465$ 32,461$ (2,790)$ 5,800,136$ Medicaid and third party reimbursements 4,544,584 — — 4,544,584 Sales of donated goods — 3,655,758 — 3,655,758 Grant from Sheriffs Ranches Enterprises, Inc. 450,000 — (450,000) — Investment income, net 271,010 — — 271,010 Other income 119,917 33,035 — 152,952 Total public support and revenue 11,155,976 3,721,254 (452,790) 14,424,440 Net assets released from time and use restrictions 4,473,573 — — 4,473,573 Total public support and revenue and net assets released from time and use restrictions 15,629,549 3,721,254 (452,790) 18,898,013 ExpensesProgram activitiesHome and subsistence 9,826,069 — — 9,826,069 Operation of thrift stores — 2,854,858 — 2,854,858 Medical and clinical 1,673,766 — — 1,673,766 Grant to Florida Sheriffs Youth Ranches, Inc. — 450,000 (450,000) — Total program activities 11,499,835 3,304,858 (450,000) 14,354,693 Supporting activitiesManagement and general 1,930,703 431,845 (2,790) 2,359,758 Development and public relations 2,044,690 109,377 — 2,154,067 Total supporting activities 3,975,393 541,222 (2,790) 4,513,825 Total expenses 15,475,228 3,846,080 (452,790) 18,868,518 Change in unrestricted net assets 154,321 (124,826) — 29,495

CHANGE IN TEMPORARILY RESTRICTED NET ASSETSContributions 3,092,566 — — 3,092,566 Investment income, net 3,955,299 — — 3,955,299 Change in value of split-interest agreements (419,124) — — (419,124) Net assets released from time and use restrictions (4,473,573) — — (4,473,573) Change in temporarily restricted net assets 2,155,168 — — 2,155,168

CHANGE IN PERMANENTLY RESTRICTED NET ASSETSContributions 111,074 — — 111,074 Change in value of split-interest agreements 333,836 — — 333,836 Change in permanently restricted net assets 444,910 — — 444,910

CHANGE IN NET ASSETS 2,754,399 (124,826) — 2,629,573

NET ASSETS - Beginning of year 53,812,514 805,711 (972,273) 53,645,952

NET ASSETS - End of year 56,566,913$ 680,885$ (972,273)$ 56,275,525$ 20


FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF ACTIVITIES For The Year Ended September 30, 2016 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

CHANGE IN UNRESTRICTED NET ASSETSPublic support and revenueContributions 4,660,678$ 18,158$ (17,835)$ 4,661,001$ Medicaid and third party reimbursements 4,495,930 — — 4,495,930 Sales of donated goods — 3,588,442 — 3,588,442 Grant from Sheriffs Ranches Enterprises, Inc. 450,000 — (450,000) — Investment income, net 292,551 — — 292,551 Other income 603,457 42,608 — 646,065 Total public support and revenue 10,502,616 3,649,208 (467,835) 13,683,989 Net assets released from time and use restrictions 5,222,221 — — 5,222,221 Total public support and revenue and net assets released from time and use restrictions 15,724,837 3,649,208 (467,835) 18,906,210 ExpensesProgram activitiesHome and subsistence 10,023,116 — — 10,023,116 Operation of thrift stores — 2,528,286 — 2,528,286 Medical and clinical 1,863,881 — — 1,863,881 Grant to Florida Sheriffs Youth Ranches, Inc. — 450,000 (450,000) — Total program activities 11,886,997 2,978,286 (450,000) 14,415,283 Supporting activitiesManagement and general 2,022,091 498,013 (17,835) 2,502,269 Development and public relations 2,086,503 98,709 — 2,185,212 Total supporting activities 4,108,594 596,722 (17,835) 4,687,481 Total expenses 15,995,591 3,575,008 (467,835) 19,102,764 Change in unrestricted net assets (270,754) 74,200 — (196,554)

CHANGE IN TEMPORARILY RESTRICTED NET ASSETSContributions 5,162,923 — — 5,162,923 Investment loss, net 2,963,911 — — 2,963,911 Change in value of split-interest agreements (337,176) — — (337,176) Net assets released from time and use restrictions (5,169,272) — — (5,169,272) Change in temporarily restricted net assets 2,620,386 — — 2,620,386

CHANGE IN PERMANENTLY RESTRICTED NET ASSETSContributions 16,854 — — 16,854 Change in value of split-interest agreements 289,605 289,605 Net assets released from time and use restrictions (52,949) — — (52,949) Change in permanently restricted net assets 253,510 — — 253,510

CHANGE IN NET ASSETS 2,603,142 74,200 — 2,677,342

NET ASSETS - Beginning of year 51,209,372 731,511 (972,273) 50,968,610

NET ASSETS - End of year 53,812,514$ 805,711$ (972,273)$ 53,645,952$ 21


FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF CASH FLOWS For The Year Ended September 30, 2017 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

OPERATING CASH FLOWSCash received from contributors 9,727,797$ 32,461$ — $ 9,760,258$ Cash received from Medicaid and third party reimbursements 4,544,584 — — 4,544,584 Cash received from sales of donated goods — 3,655,758 — 3,655,758 Other revenue received 922,226 33,035 — 955,261 Grant from Sheriffs Ranches Enterprises, Inc. 450,000 — (450,000) — Cash paid for operating activities and costs (15,400,562) (3,259,798) — (18,660,360) Grant to Florida Sheriffs Youth Ranches, Inc. — (450,000) 450,000 — Net operating cash flows 244,045 11,456 — 255,501

INVESTING CASH FLOWSReinvestment of interest and dividends (887,324) — — (887,324) Net sales of investments 3,351,079 — — 3,351,079Net investment in assets restricted for long-term purposes (2,683,193) — — (2,683,193) Purchases of and improvements to property and equipment (733,199) (70,187) — (803,386) Net investing cash flows (952,637) (70,187) — (1,022,824)

FINANCING CASH FLOWSContributions restricted for endowments 111,074 — — 111,074 Net financing cash flows 111,074 — — 111,074

NET CHANGE IN CASH AND CASH EQUIVALENTS (597,518) (58,731) — (656,249)

CASH AND CASH EQUIVALENTS - Beginning of year 1,847,169 262,636 — 2,109,805

CASH AND CASH EQUIVALENTS - End of year 1,249,651$ 203,905$ — $ 1,453,556$

RECONCILIATION OF CHANGE IN NET ASSETS TO NET OPERATING CASH FLOWSChange in net assets 2,754,399$ (124,826)$ — $ 2,629,573$ Adjustments to reconcile change in net assets to net operating cash flowsDepreciation 746,226 81,457 — 827,683 Contributions restricted for endowments (111,074) — — (111,074) Gain on investments, net (3,450,692) — — (3,450,692) Change in cash held for self-funded health insurance plan (71,472) — — (71,472) Change in beneficial interests in trusts and endowments held by others 864,766 — — 864,766 Change in other assets (41,598) 71,371 — 29,773 Change in accounts payable and accrued expenses (97,224) (16,546) — (113,770) Change in deferred compensation payable (42,115) — — (42,115) Change in liabilities for annuities and other (307,171) — — (307,171)

Net operating cash flows 244,045$ 11,456$ — $ 255,501$

22


FLORIDA SHERIFFS YOUTH RANCHES, INC. SHERIFFS RANCHES ENTERPRISES, INC. CONSOLIDATING STATEMENT OF CASH FLOWS For The Year Ended September 30, 2016 Florida SheriffsSheriffs Youth RanchesRanches, Inc. Enterprises, Inc. Eliminations Total

OPERATING CASH FLOWSCash received from contributors 9,173,094$ 18,158$ — $ 9,191,252$ Cash received from Medicaid and third party reimbursements 4,495,930 — — 4,495,930 Cash received from sales of donated goods — 3,588,442 — 3,588,442 Other revenue received 866,778 42,608 — 909,386 Grant from Sheriffs Ranches Enterprises, Inc. 450,000 — (450,000) — Cash paid for operating activities and costs (15,586,529) (3,144,815) — (18,731,344) Grant to Florida Sheriffs Youth Ranches, Inc. — (450,000) 450,000 — Net operating cash flows (600,727) 54,393 — (546,334)

INVESTING CASH FLOWSReinvestment of interest and dividends (690,222) — — (690,222)Net sales of investments 3,253,771 — — 3,253,771Net release of assets restricted for long-term purposes (1,402,900) — — (1,402,900) Purchases of and improvements to property and equipment (707,183) (132,231) — (839,414) Net investing cash flows 453,466 (132,231) — 321,235

FINANCING CASH FLOWSContributions restricted for endowments 16,854 — — 16,854 Net financing cash flows 16,854 — — 16,854

NET CHANGE IN CASH AND CASH EQUIVALENTS (130,407) (77,838) — (208,245)

CASH AND CASH EQUIVALENTS - Beginning of year 1,977,576 340,474 — 2,318,050

CASH AND CASH EQUIVALENTS - End of year 1,847,169$ 262,636$ — $ 2,109,805$

RECONCILIATION OF CHANGE IN NET ASSETS TO NET OPERATING CASH FLOWSChange in net assets 2,603,142$ 74,200$ — $ 2,677,342$ Adjustments to reconcile change in net assets to net operating cash flowsDepreciation 742,943 76,620 — 819,563 Contributions restricted for endowments (16,854) — — (16,854) Gain on investments, net (2,523,950) — — (2,523,950) Change in cash held for self-funded health insurance plan 640,961 — — 640,961 Change in beneficial interests in trusts and endowments held by others (650,507) — — (650,507) Change in other assets (160,932) (110,586) — (271,518) Change in accounts payable and accrued expenses (781,441) 14,159 — (767,282) Change in deferred compensation payable (41,404) — — (41,404) Change in liabilities for annuities and other (412,685) — — (412,685)

Net operating cash flows (600,727)$ 54,393$ — $ (546,334)$

23

FLORIDA SHERIFFS YOUTH RANCHES, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Federal CFDA Contract/GrantNumber Number Expenditures

U.S. Department of Health and Human ServicesPassed through State of Florida Department of Children and Families

Sarasota Family YMCA, Inc.Foster Care Title IV-E 93.658 FSYOHCS18 862,127$ Social Services Block Grant 93.667 FSYOHCS18 229,173

Lakeview Center Baptist Health CareFoster Care Title IV-E 93.658 Other Assistance 612,396 Social Services Block Grant 93.667 Other Assistance 201,774

Heartland for Children, Inc.Foster Care Title IV-E 93.658 MFS01 430,146 Social Services Block Grant 93.667 MFS01 114,334 Foster Care Title IV-E 93.658 NFS01 79,902 Social Services Block Grant 93.667 NFS01 21,238

Family Support Services of North Florida, Inc.Foster Care Title IV-E 93.658 RGH 015 FSYR 89,238 Social Services Block Grant 93.667 RGH 015 FSYR 29,402

ChildNet of Palm BeachFoster Care Title IV-E 93.658 IJ706 & JJ212 67,696 Social Services Block Grant 93.667 IJ706 & JJ212 22,305

Partnership for Strong FamiliesFoster Care Title IV-E 93.658 PCM419 47,211 Social Services Block Grant 93.667 PCM419 12,549

Our Kids of Miami-Dade/Monroe, Inc.Foster Care Title IV-E 93.658 Other Assistance 34,602 Social Services Block Grant 93.667 Other Assistance 9,197

Eckerd Youth Alternatives, Inc.Foster Care Title IV-E 93.658 ECA-C6-RGC-FSY-FY17 27,097 Social Services Block Grant 93.667 ECA-C6-RGC-FSY-FY17 7,203 Foster Care Title IV-E 93.658 ECA-C6-RGC-FSY-FY19 16,906 Social Services Block Grant 93.667 ECA-C6-RGC-FSY-FY19 4,494

Children's Network of Southwest Florida, Inc.Foster Care Title IV-E 93.658 SBM03 15,360 Social Services Block Grant 93.667 SBM03 9,241

Total Expenditures of Federal Awards 2,943,591$

Reconciliation of Above Amounts as Reported by Federal CFDA Number

Federal CFDANumber Expenditures

Foster Care Title IV-E 93.658 2,282,681$ Social Services Block Grant 93.667 660,910

Total Expenditures of Federal Awards by CFDA Number 2,943,591$

Federal Agency

Federal Program Title

24

FLORIDA SHERIFFS YOUTH RANCHES, INC. NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


NOTE A – BASIS OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal award activity of Florida Sheriffs Youth Ranches, Inc. (“the Organization”) under programs of the federal government for the year ended September 30, 2017. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the consolidated financial position, consolidated changes in net assets, or consolidated cash flows of the Organization.

NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance and OMB Circular A-122, Cost Principles for Non-profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

NOTE C – INDIRECT COST RATE The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.

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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Board of Directors Florida Sheriffs Youth Ranches, Inc. Live Oak, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of Florida Sheriffs Youth Ranches, Inc. (“the Organization”), which comprise the consolidated statement of financial position as of September 30, 2017, and the related consolidated statements of activities, cash flows, and functional expenses for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated February 13, 2018. Internal Control Over Financial Reporting In planning and performing our audit of the consolidated financial statements, we considered the Organization’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Organization’s consolidated financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization’s consolidated financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of consolidated 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 or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. B A T T S M O R R I S O N W A L E S & L E E , P . A . February 13, 2018

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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE The Board of Directors Florida Sheriffs Youth Ranches, Inc. Live Oak, Florida Report on Compliance for Each Major Federal Program We have audited Florida Sheriffs Youth Ranches, Inc.’s (“the Organization”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Organization’s major federal programs for the year ended September 30, 2017. The Organization’s major federal programs are identified in the summary of auditor’s results section of the accompanying Schedule of Findings and Questioned Costs – Federal Programs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the Organization’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Organization’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Organization’s compliance. Opinion on Each Major Federal Program In our opinion, the Organization complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2017. Report on Internal Control Over Compliance Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Organization’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organization’s internal control over compliance.

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Florida Sheriffs Youth Ranches, Inc. February 13, 2018 Page 2 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. B A T T S M O R R I S O N W A L E S & L E E , P . A . February 13, 2018

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FLORIDA SHERIFFS YOUTH RANCHES, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS – FEDERAL PROGRAMS For The Year Ended September 30, 2017 A. SUMMARY OF AUDITOR’S RESULTS 1. The auditor’s report expresses an unmodified opinion on whether the consolidated financial statements of Florida Sheriffs Youth Ranches, Inc. were prepared in accordance with accounting principles generally accepted in the United States of America. 2. No significant deficiencies relating to the audit of the consolidated financial statements are reported in the Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Consolidated Financial Statements Performed in Accordance with Government Auditing Standards. 3. No instances of noncompliance material to the consolidated financial statements of Florida Sheriffs Youth Ranches, Inc., which would be required to be reported in accordance with Government Auditing

Standards, were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award programs are reported in the Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance. 5. The auditor’s report on compliance for the major federal programs for Florida Sheriffs Youth Ranches, Inc. expresses an unmodified opinion on all major federal programs. 6. Our audit disclosed no findings required to be reported in accordance with 2 CFR section 200.516(a). 7. The program tested as a major program was as follows: Federal Program Federal CFDA Number U.S. Department of Health and Human Services: Foster Care Title IV-E 93.658 8. The threshold used for distinguishing between Type A and B programs was $750,000. 9. Florida Sheriffs Youth Ranches, Inc. was determined to be a low-risk auditee. B. FINDINGS None.

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Documents

Florida Sheriffs Youth Ranches, Inc. · 2018-05-18 · Florida Sheriffs Youth Ranches, Inc. Live Oak, Florida We have audited the consolidated financial statements of Florida Sheriffs