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HomeMy WebLinkAboutCOM 0667.036 1998-2000tOraQ,<a. Stephen K. Yamashird -- Mayor • _ • Qtountp of 3amaii if05tu00t_et fOyrrU ' lirrr DEPARTMENT OF FINANCE 25 Aupuni Street, Room 118 • lido, Hawaii 96720 -4252 (808) 9618234 • Fax (808) 9618248 HAWAII COUNTY NONPROFIT GRANTS (FY 2000 -01) HUMAN SERVICES NONPROFIT GRANTS REVIEW COMMITTEE (HSNPGRC) FISCAL YEAR ENDING:June 30, 2001 DATE OF APPLICATION: January 31, 2000 GRANT APPLICATION FOR: Kona Krafts Domiciliary Home Harry A. Takahashi Director S. K. Schutte Deputy (Program Title) Legal Name of Organization: Kona Association for Retarded Citizens dba Kona Krafts Mailing Address: P. 0. Box 127 Kealakekua, HI 96750 Facility /Site Address: 81 -1065 Konawaena School Road Kealakekua, HI 96750 Director /Site Manager: Ursula D'Angelo Phone: (808) 323 -2626 Organization President: Georgine Busch Phone: (808) 882 -1657 Contact Person (Grant Writer) Gretchen Lawson Phone: (808) 323 -2626 Amount of request for County funds: $ 32, 248.00 Total annual budget of organization: Has the applicant applied for any other funds from the County of Hawaii this fiscal year? Yes $ 1,015,000.00 Source /Department: e No Agency /Program(s): . 5 Social Services Check Category (ies) V Culture and Arts Disabled 0 Youth Programs 0 Education 0 Elderly Programs Other Briefly, define the program for which funding is being requested: Revenue to support the only Residential Domiciliary Home facility in West Hawaii for individuals who are developmentally disabled or mentally retarded. 1 Comm. No 667. File No. AkN Ref. To. 4 4SEDC., Ref. Date FEB 2 3 2000 I. OUALIFYING STANDARDS FOR APPLICANTS An applicant must meet all of the following standards: Be chartered or otherwise authorized to do business cJ exempted from the Federal income tax by the Internal C. Comply with such other requirements as the Director by the nonprofit organization with Federal, State, and fiscal and program management III. RECORDS AND REPORTS the State for charitable purposes and revenue Service. 05 Have a governing board whose members serve without compensation and hase no conflict of interest between their regular occupations and the services provided. Have bylaws or policies which describe the manner in which business is conducted, including management, audit, fiscal policies and procedures, po icies on nepotism. and policies on management of potential conflict of interest. Have at least one year's experience with the service or activity for which the appropriation is sought or can otherwise demonstrate to the satisfaction of the County sufficient expertise to successfully carry out the service or activity. Be licensed and accredited in accordance with applicable requirements of Federal. State and County laws. II. GRANT CONDITIONS The applicant agrees to comply with the following terms & conditions prior to receiving a grant award. A Comply with applicable Federal and State laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, or handicap B. Agree not to use any public funds for purposes of entertainment or perquisites B The County expending agency, Director of Finance, or County Council may request periodic written reports on the use of County funds. .••+tea,= f Finance may prescribe to ensure adherence : ounty laws, and established standards for D Allow the Director of Finance, the committees of the council and their staffs, and the Legislative Auditor access to records, reports, files, and other related documents in order that the program, management, and fiscal practices of the nonprofit organization may be monitored and evaluated to assure the proper and effective expenditure of public funds. A. The applicant shall follow generally accepted accounting procedures and practices and shall maintain books, records, documents, and other evidene, which sufficiently and properly account for the expenditure of County funds. The books, reco and documents shall be subject at all reasonable times to inspection, reviews, or audits by the County expending agency, the Director of Finance, and the Legislative Auditor, or by their representatives. C The nonprofit organization shall submit a final written report to the Legislative Auditor within sixty (60) days after June 30 of the fiscal year. The report shall include an explanation of the public benefits derived from the awarding of the grant and a listing of other funding sources and amounts obtained during the award period. 1. t a- IV. QUARTERLY ALLOCATION V. GRIEVANCE PROCEDURE • • Under no circumstances shall grant funds be disbursed in a lump sum payment. Grant Funds will be disbursed to Grantees only through a quarterly allocation process. The, disbursement of _rant funds can be formulated on an equal quarterly apportionment basis. The applicant will adopt and maintain a g rievance procedure to assure proper accounting for any concerns and complaints about its programs or services that may arise from its members, emplo }ees, clients or from other members of the public VI. DISCLOSURE OF INFORMATION All information, data, or any other material provided to the County by virtue of this application shall be subject to the Uniform Information Practices Act (UIPA), ch. 92F, Hawaii Revised Statutes. All such material is deemed government record and shall be open to the public and may be provided to other public and/or private funding sources VII. CONTINUED ELIGIBILITY Any applicant or recipient who withholds or omits any material facts or deliberately misrepresents such facts to the County of Hawaii shall I) Immediately be disqualified from consideration for Nonprofit Grant funding; OR 2) be in violation of the terms of the Grant Agreement of County Funds in which case a grant agreement can be terminated by the County and the recipient or provider may be liable to reimburse all or a portion of any funds received therein. VIII. ACKNOWLEDGMENT Kona Association for Retarded Citizens dba Kona Krafts (Legal Name of Organization) hereby agrees to administer the Kona Krafts Domiciliary Home (Program Title) in accordance with the regulations, policies and procedures prescribed by the Hawaii County Finance Department. Distribution of grant funds is limited to grantees, which are in compliance with Count> regulations, policies and procedures. The County reserves the right to withhold grant distributions at any time the grantee is not in compliance. It is the policy of the County of Hawaii and for.those who do business with the County to provide equal employment opportunities to all persons regardless of race, physical disabilities, color, religion, sex, age, or national origin as mandated by the Federal Civil Rights Acts, as amended, and any other federal or state laws relating to equal employment opportunities. IX. AMENDMENTS TO THE APPLICATION/EVALUATION The applicant assures that it will submit to the HSNPGRC for prior review and approval, a written request and justification for any changes, additions, or deletions to any portion(s) of the grant application or a dui> executed Grant Agreement of County Funds. The applicant will cooperate and assist in any effort undertaken by the HSNPGRC to evaluate, inspect or otherwise monitor the effectiveness, feasibility, and/or cost efficiency of any and all practices, policies and procedures or activities pursuant to this application or any grant designation or allocation received as a result of this application. 3 • X. AUTHORITY AND CAPACITY OF APPLICANT The applicant certifies that it has the authority and capacity fully administer the program(s) pursuant to this application. UNSIGNED PROPOSALS WILL NOT BE rt Signature of President/Chairperson Sign lure of Executive Director /Manager * Board President was unavailable. Vice - President signed after application was approved at 1/27/2000 Board of Directors Meeting. 4 U develop and submit this application, and to ACCEPTED! Date ,-a7- ?-o00 Date I TIFTRATIVE ANSWERS A. OVERVIEW: • KONA ASSOCIATION FOR RIIPRDED CITIZENS dba KONA KRAFT'S APPLICATION FOR NON-PROFIT GRANT FUNDS JANUARY 2000 PROGRAM SE RVICE/DESCRiPTION 1) Describe the program for which funding is being requested. Kona Knits is a non -profit organization whose purpose is to assist persons with disabilities to learn the skills they need and obtain the services/ supports they require to live as independently as possible in their own communities. Each program is designed to promote skills acquisition and provide behavioral supports that result in greater acceptance in their own communities. The premise is that all people, including those persons limited by disability, gain from the satisfaction of performing work and the ability to live as independently as possible. Not only does Kona ARC assist individuals to attain their personal goals, but the organization strives to educate the public so that people with differences are more accepted. Kona Krafts is committed to emphasizing the abilities of the people we serve rather than concentrating on their disabilities. Specifically, Kona Krafts will use the revenue generated from this grant application to pay the costs of 1.3 FTE for two certified caregivers to provide supports for the five residents who live in the Captain Cook Domiciliary Home. This revenue is necessary to keep the home open on the weekends and to enable residents to pursue activities of their choice without being tied to the group at large for all options. This will ensure that the individual's choices are respected and that the residents have a safe and positive place to call home. It is unfortunate that the level of care funding provided by the Social Security Administration (SSA) and the Supplemental State Insurance Programs (SSI) do not cover all the essential costs of operating this program while the various requirements for operating the home demand a precise level of care. 2) What unique or significant service will be provided? The Domiciliary Home houses five (5) individuals with Developmental Disabilities and some level of Mental Retardation. These residents are capable of many activities but cannot be left without supervision. Each person has a Day Program that specifies goals for mastery; the Residential Program works in conjunction so that skills such as rudimentary money management, hygiene, mobility, self care, home management (cooking, cleaning, washing clothes, etc) are improved. A very important part of living independently is learning how to use leisure time in ways that are satisfactory and contribute to a better quality of life. 3) What specific outcomes are to be achieved? The ability of these adults to live separately from their families means more self - respect for the individuals. It also makes it possible for their natural families to be free of the constant responsibility of providing care/supervision. This freedom from caregiving allows those families to be more productive members of society; thus enabling them to add to the tax base rather than depend on tax dollars for support. It also means that aging parents or siblings can be free of the concern about what will happen to their adult dependents when they may no longer be able to care for them due to illness or death. • A healthy and safe environment will be maintained for 24 hours a day, 365 days a year for 5 residents with developmental disabilities or mental retardation. • Meals will be provided for the five residents that conform to the specifications set forth in Chapter 89 of the Hawaii Administrative Code. • Transportation to the day activity program, necessary medical appointments and to community activities will be provided to the 5 residents I • • B. PROBLEM/NEED KONA ASSOCIATION FOR RED CITIZENS dba KONA 'CRAFTS APPLICATION FOR NON- PROFIT GRANT FUNDS JANUARY 2000 4) How will the proposal program empower participants/clients to become self - sufficient and facilitate positive social change? The Residential program for these individuals allows them to feel safe and relatively free from anxiety. The benefit of such a program is that it is easier for the residents to take risks and learn new skills. Although the people in this assisted living environment may never have the ability to live totally independently, they can and do work for wages, volunteer in their communities and contribute to a positive social climate in the community. As they gain in skills and take part in the various community activities, people without disabilities in the community learn to value the abilities of each person. This means a more tolerant society and that tolerance means less need for more expensive institutionalization. 1) What is the problem/need the proposed program is designed to meet? All communities have a diversity of population. As a nation, The United States is home to over 49,000,000 people who are limited by some disability. Hawaii County has 11% of the State's population which means that 24,804 people with disabilities reside here (# extrapolated from figures supplied by the State Department of Business, Economic Development & Tourism 7185). These disabling conditions mean that they are unable to fully participate in many activities that non - disabled people take for granted and are thus excluded from work, play and regular family life. This results in a cost to society to support their need for food, shelter and other essentials. When the disabling condition is mental retardation or a developmental disability the individual's judgment is impaired; therefore, to insure the health and safety of these individuals, a caregiver must always be present to supervise their Activities of Daily Living (ADL). The caregiver must devote their full attention to the affected person and cannot otherwise participate in society. Two problems are created by this condition: 1) society is prevented from benefiting from the affected individual's contributions of their strengths and 2) the caregivers productivity is devoted to the individual rather than to society at large. The need is for providing care that frees both the individual and the caregiver to participate productivity to the benefit of the community. 2) Who is the target population and what are the specific needs? The population served by the Residential program are individuals diagnosed as being Developmentally Disabled or Mentally Retarded. This means they suffer from limitations that are not expected to get better, a condition having it's onset prior to the age of 19; thus the term `developmental'. Most, but not all, of this population also have some mental (cognitive) limitation that prevents them from learning basic life skills. Specifically they need supports to bathe, dress, care for themselves, learn appropriate behaviors to be accepted in society, gain function in fine motor, gross motor movements, and learn basic academics and are dependent on such services as transportation to get from one place to another. Usually a lack of judgment makes supervision necessary for safety. 3) What is the geographical area(s) to be served, facility and hours of operation? The Kona !Crafts' Domiciliary (Group) Home is located in Captain Cook and serves the West Hawaii area. The facility houses five persons referred for placement by the Department of Health, Developmental Disabilities Division. The Home is licensed by the Hospital and Facilities Division of the Department of Human Services/State of Hawaii. The Domiciliary Home operates for 18 hours Monday through Friday (the residents attend day program for the other 6 las/day) and 24 hours a day on the weekends. If any of the residents are sick and cannot attend the day program, the weekday hours must be expanded to accommodate their supervision. 2 • • C. COLLABORATION /COORDINATION: 1) What specific measures will be taken to collaborate/coordinate with other community resources to achieve maximum program efficiency and cost effectiveness? Kona Krafts collaborates with many other Human Service agencies throughout Hawaii County. These collaborative efforts are targeted towards maximizing the resources available to help reinforce our training programs on behalf of all individuals. Examples of our collaborative efforts are: * sharing information with Brantley Center in Honokaa. In previous fiscal years, Kona Krafts assisted Brantley Center to develop systems needed for participation with the Medicaid Home & Community Based Programs. More recently, the two organizations have worked collaboratively to bring Personal Assistance to families unable to access facility-based programs. * State Department of Health, Developmental Disabilities Division (DDD): This agency acts as our referral source for admittance to programs and supplies the Case Manager who is responsible for approving all services and monitoring progress. In West Hawaii, the working relationship with DDD is carefully managed so we each understand and respect the others' roles and know how to implement the best services for people with whom we work. * Kona Kraft's Executive Director was the past Co -Chair of the Health & Human Services Council. This organization no longer exists as the constant budget cutting meant agencies had a more difficult time attending meetings not specifically targeted to meeting compliance requirements. However, the connections made over the two years of active participation meant that Kona Knits was able to gain a better understanding of other agencies' programs so that we are able to access assistance to meet needs beyond our scope. * Kona Krafts is an active member of the West Hawaii Committee for the Council on Developmental Disabilities; as such we stay in contact with appropriate services. " Kona Knits participates with Special Olympics so that our consumers have more opportunity to become involved in sports and community activities. * Kona Krafts has worked in conjunction with the Center for Independent Living (CIL) to connect our consumers to a wellness program sponsored by the CIL and the YMCA, this collaboration continues with efforts to combine staff training and planning when the consumers are served by both groups. *Kona Krafts is working collaboratively with the Kona Adult Day Center and Keauhou Rehabilitation Center to share usage of a wheelchair accessible van that was recently awarded to Kona Krafts. KONA ASSOCIATION FOR RET ED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 2) How will these measures reduce or eliminate any existing duplication of services to your designate target group? When the services of one organization enhances the services provided by another, it increases the benefits to the consumer without incurring additional agency cost. Although Kona Krafts has not yet taken delivery of the long awaited wheelchair accessible van, it is expected that the ability to use the new accessible van by several agencies will eliminate the need for each organization to purchase their own, thus insuring a more efficient operation for all. D. GOALS AND OBJECTIVES: 1) What are the major goals /benchmarks of the proposed program? 2) What specific action steps are planned for each goal? 3) What is the timeline (start and end dates for each action step)? 4) What significant client-centered outcome(s) will the program achieve: Include in your answer how many participants/clients will: a) Attain at least one personal program outcome; or b) Show measurable progress towards your program goals. Please see the chart on the following page for answers to these questions. 3 Goals/Benchmarks Action Steps Timeline Outcomes Expected 1. To insure access to the community for a. Transport residents to Special a. Beginning July 1, 2000 continuing once Four residents will attend one practice social, recreational and medical interaction Olympics. per week or as scheduled for each resident. b. As scheduled usually once per quarter each week during scheduled sessions. Five residents will keep their medical b. Accompany residents to their medical appointments. or more often as needed. appointments once every three months. c. Accompany the residents on c. Ongoing throughout the year on Five residents will attend at least one recreational /social outings. weekends. recreational /social outing a week. 2. Assist each resident in completing 2a. Washing dishes after dinner; a. Rotating each day for each resident- Five residents will complete all individual living activities at home and at 2b. Washing clothes, folding them and daily from July 1, 2000 to June 30, 2001 scheduled chores per week. the facility. putting them away; 2c. Cleaning their own rooms in the Dom home; b. Once each week per resident, ongoing from July I, 2000 to June 30, 2001 c. Daily from July 1, 2000 -June 30, 2001 2d. Insuring proper hygiene, showering, brushing teeth, combing hair, etc. 3. Assisting each resident to accomplish 3a. Each resident `s plan is designed to Ongoing 3 times per week per resident Five residents will spend at least three Objectives listed on their Individualized enhance skills needed to progress to from July 1,2000 to June 30, 2001. 20 minute periods a week on goal Plans more independence and integration to community life. The goals are specified as money management, mobility use of transportation, communication, vocational, activities of daily living & skill development for social awareness. attainment. KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 GOALS & OBJECTIVES E. SERVICE DELIVERY • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON- PROFIT GRANT FUNDS JANUARY 2000 1) What methodology will be used in the proposed program's delivery of services? Kona Kraft's Domiciliary Home operates as a family living situation (called assisted living). As such, each client rents their own room in the larger home. The State of Hawaii rules for Domiciliary Homes limits the number of residents to five (5). The Home's general living quarters (living room, kitchen, utility rooms and bathrooms) are furnished by Kona Krafts; the residents' rooms are furnished by the residents/families or guardians. Twenty-four hour a day care is supplied by Kona Knits; from Monday through Friday the residents spend two hours each morning from 6:00am to 8:00am waking up, showering, dressing, eating breakfast and getting ready to come to the Kona Krafts Day Program. During the Day program, Individualized Plans are developed and implemented. These programs are designed for skill attainment and to increase independence thus decreasing dependence. Once program activities are finished at 2:00pm, the residents are transported back to the Home. The Home Manager is on site to insure they get supervision in afternoon activities. There are no training demands except as listed in Goal 3 -- homework to reinforce the Day program goals or to insure cooperation and smooth operation of the household. From 2:00pm until time to leave for Special Olympics or other appointments, the residents relax or begin their daily chores. At approximately 6:00pm dinner preparation gets underway and depending on who is scheduled to help, each person assists in the meal preparation and setting the table. Meals are planned with nutrition and dietary needs taken into consideration. The residents may participate in the planning of meals by expressing their likes for certain menu items. The menus were developed in collaboration with a registered dietitian from Kona Community Hospital. After dinner, the residents help with clean up; once again the schedule includes who is responsible for each chore. When dinner clean up is over, the evenings are free for watching TV, listening to music, drawing or other leisure activities. Bedtime is 10:00pm. The Home Manager stays on site in case there is a problem during the night. There are two Home Managers: one shift is Monday at 2:00pm through Friday morning at 8;OOam- Four days per week, ten hours a day; the other House Manager works two days per week, 16 hours per day. A third staff person, a half -time caregiver, provides flexibility for the residents so that if one person chooses a different activity from the group, or merely wishes to stay home when the others want to go out, arrangements for supervision can be met. The residents and the Caregivers function as a family. The goal of the Residential Program is to provide a safe and comfortable environment that will foster and encourage the greatest level of independence possible for each resident. The Domiciliary Home is well nut and the residents appear happy and well adjusted. Two of the residents are able to hold down part-time jobs in the community and another resident is working in the sheltered workshop at Kona Krafts, the other two residents are not working for wages, but are showing the ability to adapt to expectations of inclusion in community activities. F. EVALUATION 1) What process will be used to evaluate the program and services? Each of the residents has a program file kept on site at the Home. Their individually scheduled activities and notes pertaining to their medications schedule, appointments, recreational activities and significant behavioral or injury related incidents are kept in their files. These files are reviewed daily prior to the beginning of each staff person's shift. They are reviewed quarterly by the Consumer Services Manager to insure progress and that all specifically scheduled activities were met. Once each year, the Department of Health, Division of Developmental Disabilities performs a site visit to insure all aspects of Chapter 89 of the Hawaii Revised Statues are carried out in full compliance. The Hospital and Facilities Division of the Department of Human Services visits the home prior to issuing a license to operate in the State. These monitoring reports are submitted directly to the Administrator for review. 5 • 2) How will this process measure the outcomes specified in item d. (1 -4) There are five residents in the Domiciliary Home, the outcome measurements specify that each resident participate and that the individuals work to improve their ability to care for the Home, enjoy recreational/social activities and comply with expectations for performing and improving in certain skills. The evaluation reviews are targeted specifically to compare the expectations against actual performance so that any failure to achieve desired results comes to the attention of Kona Krafts management. G. PROGRAM FEES 1) Does your organization charge a membership fee for service participants? (If yes): Describe or attach fee for service information. No membership fee is required, however, the Association for Retarded Citizens (ARC) does encourage all families of participants to join the organization. The fee for membership is $10.00 /year. 2) Does the proposed program charge participants a fee for service(s) provided by your organization? a) Describe or attach fee for service information: Residents of the Domiciliary Home each pay rent for their living quarters. This rent is set by the Housing and Urban Development Department (HUD). The money to pay their rent is subsidized by the HUD Section 8 existing program. The Section 8 existing housing program certifies the tenants as eligible based on income level and disability. Since the residents have little or no income, all residents gimlify. In addition to rent, the residents pay a monthly fee equal to their Supplemental State Insurance (SSI) grant. The State pays the individual who then passes the payment to Kona !Crafts; there is no cost to the individual above the level of care payment from SSI. b) Describe how you will ensure that all interested participants will be included despite an inability to pay the entire fee. Not applicable. H. VIABILITY • KONA ASSOCIATION FOR RET�ED CITIZENS dba KONA !CRAFTS APPLICATION FOR NON- PROFIT GRANT FUNDS JANUARY 2000 1) What is your justification or rationale for the expenditure of public funds for the proposed program? The amount of public funds expended to help fund the services provided to the individuals at the at the Domiciliary Home is warranted because the money the public invests is recovered in many ways. For instance, a family with an adult that has Developmental Disabilities must provide for their care forever, these adults do not leave home and begin paying their own way as most adults would. Without the option of the Domiciliary Home, many of these families would not be able to work and earn wages. Since they pay taxes on their wages, their inability to earn income would withdraw from the economy and tax base of their communities. In addition, our communities benefit as we learn to accept people with differences -be they differences in race, color, religion or limitations. It is a shared responsibility for those people who cannot enjoy the freedom from dependence on others and marks our society as caring and supportive of one another. Furthermore, as the residents learn new skills and progress in their abilities they can and do volunteer at Parks, the Food Bank and other community enterprises; thus a small public investment returns a great deal to the people who support them. 6 i L BUDGET • KONA ASSOCIATION FOR RET�ED CITIZENS dim KONA 'CRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 2) What are your financial and programmatic plans to sustain the proposed program beyond the upcoming fiscal year? Kona 'Crafts has operated this Domiciliary Home since 1985. This Home has always operated at a deficit. With contributions from the community, rent subsidy from HUD and level of care payments from the individuals' entitlements ( SSA. &SSI), donations and fund raising have helped cover the loss. The organization has been able to manage the Home so that it is now almost break even. The money received from the County will go to insuring adequate supervision for individual needs. Each resident will have the support they require to live a more self - determined life. The resident can now choose which activities they want to pursue and be free from the requirement that the entire group do activities together so that adequate supervision can be maintained. 1) Complete the attached Budget Tables; and 2) Provide appropriate attachments, as indicated. See attachments. 7 • • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFT'S APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 ORGANIZATIONAIJAGENCY INFORMATION A. BOARD OF DIRECTORS 1) Has the organization's Board of Directors received formal training within the past two fiscal years? Yes. In FY '99, the Board of Directors and senior staff spent a full day at a long range planning retreat. This day was facilitated by Dan Anderson, PHD, Director of the Pacific Basin Rehabilitation Research and Training Center-UH Manoa. A follow -up evaluation of the Strategic Plan is scheduled for March 2000. a) What plans do you have to provide formal training to your current Board of Directors? In addition to the retreat mentioned previously, the Board sets aside a 15 minute segment at each Board meeting (1I per year) to discuss aspects of Board leadership and responsibility. b) When will the next Board training be completed? This training will be completed by March 2000. c) How will you provide formal training to newly arriving board members or board members who miss a scheduled training? New members to the Board are given a Board Manual that is updated each time a new member is elected. Our annual meetings take place in October so Board training is scheduled in the spring of the following year to insure new members have the latest training available. Members who miss a scheduled training attend a committee meeting so that they can catch up without the necessity to use time during a full Board meeting. 2) What are the primary roles and responsibilities of your organization's Executive Director? The Executive Director is responsible for the daily operations of the organization. The primary realms of responsibility include, but are not limited to: Personnel Management, Financial Management, Planning for new and enhanced programs, Public Relations, and Board/Community/Staff relations. A complete job description is attached for your review. 3) What are the primary roles and responsibilities of your organization's Board of Directors? (Clarify role of executive officers vs. general membership) The Board of Directors of Kona Krafts is a governing Board. This Board is responsible for setting the policies that dictate how the Executive Director carries out the day to day operations. It is the Board's responsibility to look at the needs in the community and to provide the general direction for the agency to pursue. The role of the Board is to reach out to the community and the 'ownership' of the organization is vested in the people elected to their offices by the general membership. The general membership of the organization is open to any person wishing to support our Mission. The general membership meets once a year to elect the Board members. The general membership has the responsibility to support the organization throughout the year and to elect the Board of Directors at the annual meeting each year. B. PAST PERFORMANCE: 1) How effective has your organization/agency been in achieving program goats in the past two(2) fiscal years? Include the following information: a) Quantitative Data on numbers served; and b) Qualitative data showing number and % of participants achieving measurable outcomes. Residential Program / Captain Cook Domiciliary Home a. # served in 98,99 5 b. 100% 1) attend special Olympics Activities 4 80% 2) keep all medical appointments 5 100% 3) provision of a healthy, secure shelter 365 days a year 5 100% 4) provision of nutritious meals each day 5 100% 5) participate in activities of daily living (cook, clean, wash clothes) 5 100% 6) attend social/recreational events 5 100% 8 • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON- PROFIT GRANT FUNDS JANUARY 2000 C. FINANCIAL la) Have your organization's current program operations remained the same as last year? What major program or financial changes will be incurred next year? During 1999, Kona ARC expanded services to Hamakua to provide in home Personal Assistance to individuals who are not able to attend the Day Program at Brantley Center. The services are critical to those individuals, as they had not previously been able to get assistance with their needs. It has been and continues to be a challenge economically but it is also demonstrated proof that the Board and staff are committed to the Mission statement and are willing to risk resources to provide supports to people in need. 1b) What major program or financial changes will be incurred next year? At this time, the State of Hawaii is advertising to find a contractor who will train families and individuals on how best to make decisions regarding the use of public funds to purchase services and supports that allow them to achieve a self - determined life. Kona Krafts will be selling their services directly to families rather than operating under contracts with the State. This major change in how services are delivered has been planned for almost four years: it will mean doing business more closely modeled after private business where the customer chooses (and pays for) the best quality they can buy with their hard -earned dollars. The organization has positioned itself to best adjust to these changes and is ready to meet the challenges. 2) What is the status of all of your organization's major contracts or agreements for the coming year (employment agreements, office leases, primary grant revenue/supplier, etc)? All of our State contracts are in place, and we will not be competing for new contracts until this time next year. Due to the anticipated implementation of the Self - Determination Project, we may be in danger of losing the Partnerships in Community Living (PICL) Program for West Hawaii, but that would not affect the agency's resources significantly. Kona Krafts has worked to increase their own revenue earning enterprises to enable even more people with disabilities learn to contribute to their communities as wage earners and tax payers. 3) How does the proposed program fit into your organization's long range financial plan? The Residential Program, for which funds are requested, is a core service and one of the greatest needs for the Developmentally Disabled population. The program will remain a high priority. D. MONITORING 1) During the past two fiscal years, what financial and/or administrative monitoring has your organization received from any and all funding sources? During the past two fiscal years, Kona Krafts has undergone an organizational wide compliance and financial audit for `98/'99. Ms. Jennifer Gossert, CPA- 969 -3115, conducted a yearly monitoring visit to review the Department of Health Programs, the Adult Day Program, the Domiciliary Home, and PICL (Ms. Salod Like, 974 -4000 X 3- 6416#). A licensing review conducted by the De of Huma Services for the Domiciliary Home (Ms. Faye Ogoshi, 9744000 X 6-4112#). The Division of Vocational Rehabilitation both audited and monitored Specialized Job Placement and Supported Employment ( Mr. John Noland, 974 -4000 X6- 5366#) and the State of Hawaii Department of Labor and Industrial Relations ( Ms. Gloria Mento, 322.4822) reviews our Sheltered Workshop certificate annually. In November '99, we underwent a thorough Quality Assurance review performed by the Department of Human Service, Social Services Division, Medicaid Section (Mr. Tony Wunsch, 9744000; 6-5593#) 9 • • • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA 'CRAFTS APPLICATION FOR NON- PROFIT GRANT FUNDS JANUARY 2000 E. ALCOHOL, TOBACCO AND DRUG-FREE WORKPLACE POLICIES AND INFORMATION: 1) How does your organization address alcohol, tobacco, and other drug prevention information dissemination as part of your workplace and/or program environment? Kona Krafts has a policy covering prohibition of alcohol. Smoking is confined to designated areas and a drug policy that covers drug testing, and outlines procedures for employee assistance if warranted. These policies are contained in the Personnel Manual and disseminated as part of a new employee orientation. Every quarter, Kona Krafts has an organizational meeting, at which, pertinent policies are discussed. Alcohol, tobacco, and drugs may be a topic covered during these meetings. 10 9 BUDGET TABLES AGENCY /ORGANIZATION: KONA ASSOCIATION FOR RETARDED CITIZENS BUDGET TABLE 1 DETAILS OF PERSONNEL SERVICES � /! /rs /� / r��r� % //�� % % ��ioi%i /�r�a�i�i /oo // �, %� / / / % / / / / / / / / / /�/// % / / / / Total Agency Total Agency Total Program ,� %;;,., % /00 /�//////%/;; !o,, / /O %O /�//////// / / /// %� j -- - Total Pro ram / j �- - , jj/ �� � / j j Budget Budget Budget Budget �y %j /- /�� ��� �����/ / i ' ; -' / % FY 99 -00 FY 99 -00 FY 00 -01 FY 00 -01 :,,•.•;< / i jai //�/� b) Salaries PROJECT NAME: KONA KRAFTS 5 Title: Group Home Manager F/T 1 Title:Executive Director F/T Name: Lawson, Gretchen 2 Title: Dir. Of Administrative Services 41000 F/T Name: Whitman, Larry 17680 Name: Davis, Michaele 28000 3 Title: Administrative Specialist F/T Name: Yamamoto, Avis 19110 4 Title: Office Worker F/T Name: Tripp, Darlene 10920 Name: Rodrigues, Kalena 0 6 Title: Consumer Plan Mgr. F/T Name: D'Angelo, Ursula 2 4 0 Title: Weekend Relief Manager F/T 7 Name: Sparks, Steve % % % % %%///// 15454 Name: Cason, Sue 0 8 Title: Group Home Relief P/T Name: Belanger, Andrew 6000 /// '/ /9 % /, % y 8 TO 33 Other Program Salaries 315226 43000 F/T 23 453390 0 0 0 0 0 0 0 0 0 0 17680 F/T 0 0 15454 0 0 6000 0 3 39134 F/T 30500 F/T 20202 F 0 11248 F/T 19136 F/T 28000 F/T 0 15600 F/T 7280 526151 23 681981 0 1290 0 930 0 628 0 0 375 0 19136 0 17971 0 0 12480 F/T 7280 0 8 60090 1290 930 628 0 375 0 0 840 0 12480 7280 7 23823 INSTRUCTIONS: 1. All administrative and Direct Program Salaries must be included. (Please exclude non - program positions) 2. a) P= Indicate if employee is F/T =Full Time Employed (30 -40 hours per week) OR P/T =Part -Time Employed (20 or less hours per week) • • AGENCY /ORGANIZATION: KONA ASSOCIATION FOR RETARDED CITIZENS TABLE 2 EMPLOYEE BENEFITS /PAYROLL TAXES PROJECT NAME: KONA KRAFTS 2. 3. /%% i%/ i/ ii % % % %ii /i %i / /i� /,vOii %i /�jii / /ii // /iii / /i / %i / /i %i % / //ii /ii%i //i zA j a�/�i/ oo / i oa % 0 00 /o °aaoo /ice oao Total Agency Budget FY 99 -00 Total Program Budget FY 99 -00 Total Agency Budget FY 00 -01 39636 0 0 39636 %a 90904 4404 0 0 j A 4404 A 7846 jj 48636 48636 A 7226 7226 10180 2199 a 2199 I Total Program Budget FY 00 -01 EMPLOYEE BENEFITS (TOTAL) Health Insurance Dental Insurance Other Benefits (Specify) PAYROLL TAXES (TOTAL) FICA 7.65% SUI(Unemployment Ins.) 3.45% Workers Compensation 5.09% TDI (Disability) 0.75% 34684 21083 31737 3400 130540 107057 2994 %//// 48346 % / 4597 / /j� /j 1820 j 21803 / , 2073 , 2739 y/ A 3059 44 3059 293 % 4740 451 j f 12250 155693 17406 1822 822 1213 179 = MUST itemize as attachment(s). Applicable only to the "Grant Request Only Projected Expenditures" column. 4036 6235 AGENCY /ORGANIZATION: KONA ASSOCIATION FOR RETARDED CITIZENS PROJECT NAME: KONA KRAFTS TABLE 3 DETAILS OF OTHER CURRENT EXPENSES ,W / iii/ % / Total Program Budget FY 99 -00 0 Total Agency Budget FY 00 -01 9000 LA Total Program Budget FY 00 -01 0 0 A' ii 55359 4196 1860 43445 � � 8936 0 0 0 0 700 1450 15444 O, 0 474 330 0 0 0 300 00 /%% / i aiiiiii a i / /a V / z % 17594 300 0 804 300 4 � , 0 0 9000 0 0 9198 15871 15000 0 20200 6195 0 10168 /, A 0 1275 7455 40069 0 0 0 0 0 3000 1700 36563 8730 4' A' e /tA 0 0 0 0 1260 0 0 0 %////// / /%// /////%a /// / 0 /�/ % %%%/O/ �% 4 %%// / 70 0 �Q/, 0 / / / / / / / / / / /// �/ / / / //, % •/ //./. % 0 00// o 0%% 0 O� /G / % ��� 1260 0 0 0 % G , 0 0 0 0 0 0 0 0 0 1260 0 0 70 0 4 1260 0 7700 0 7730 19629 28000 18117 10734 4263 10331 0 1167 7769 7700 / x 2. 3. 4. 5. 6. PROFESSIONAL FEES (TOTAL) Legal Accounting /Bookkeeping Audit Fees Administrative Fees Other SUPPLIES (TOTAL) Office Program Consumable TELEPHONE POSTAGE & FREIGHT OCCUPANCY (TOTAL) Rent(Mortgage) Utilities Janitorial Repairs and Maintenance EQUIPMENT (TOTAL) Purchase Rental OA Repairs and Maintenance Total Agency Budget FY 99 -00 * = MUST itemize as attachment(s), Applicable only to the "Grant Request Only Projected Expenditure" column. AGENCY /ORGANIZATION: KONA ASSOCIATION FOR RETARDED CITIZENS PROJECT NAME: KONA KRAFTS TABLE 3 (CONTINUED) DETAILS OF OTHER CURRENT EXPENSES (OPERATING COSTS) / j /iOi /i / /O/ %0� //% / / /O% % ��O /O % ��� ��i.✓/ /� 1/3 %1% IAN% % j��� % / / /��� //% % iii %i% H �� %iii ji�% ,j�� //. / ' %H /� �zr���j / / %i% / / 1 Ya A���� / /H / Total Agency Budget Total Program Budget Total Agency Budget Total Program Budget / /j; FY 99-00 FY 00-01 10. 9. 11. 12 INSURANCE (TOTAL) General Liability Fire Auto NDOA(Board Ins.) PRINTING PUBLICATIONS & SUBSCRIPTIONS TRAVEL Air Fare Per Diem Auto Rental AUTO MILEAGE REIMBURSEMENT AUTO GASOLINE PURCHASES 3692 2212 7997 1050 14951 300 0 0 y I y S /A 0 0 300 j. rA 7497 8129 j 200 337 0 537 j 0 0 0 j i 50 0 0 A re v 0 1500 3906 1200 10520 1050 600 200 200 A 16676 i O 1700 1300 1000 7000 5000 0 0 0 0 0 4 0 0 0 0 360 0 0 0 0 // 0 0 0 0 0 eivA 360 13 14 MEMBERSHIP DUES STAFF TRAINING / j VA / 600 1500 0 500 1000 1000 d 500 0 500 190858 2040 34729 346031 23625 132708 = MUST itemize as attachment(s). Applicable only to the "Grant Request Only Projected Expenditure" column. 2190 2190 AGENCY /ORGANIZATION: KONA ASSOCIATION FOR RETARDED CITIZENS TABLE 4 SUMMARY OF PERSONNEL REQUIREMENTS TABLE 5 SUMMARY OF EXPENSES PROJECT NAME: KONA KRAFTS Personnel Requirements: Salary ($) and Number of Positions (P) (Table 1) TOTAL POSITION COUNT (P) (Table 1) TOTAL SALARIES ($) (Table 2) EMPLOYEE BENEFITS /PAYROLL TAXES j re ii: Total Agency Budget FY 99 -00 23 453390 130540 583930 23 Total Program Budge FY 99 -00 3 39134 12250 51384 3 Total Agency Budget Total Program Budget FY 00 -01 FY 00 -01 33 631981 155693 787674 33 8 60090 17406 77496 8 7 23823 6235 30058 7 Total Budget Summary of Personnel Services and Other Current Expenses / r // rho /y /% % (Table 4) TOTAL PERSONNEL SERVICES 583930 (Table 3) TOTAL OF OTHER CURRENT EXPENSES 346031 / /rr / /// 929961 Total Agency Budget Total Program Budget Total Agency Budget Total Program Budget FY 99 -00 FY 99 -00 FY 00 -01 FY 00 -01 51384 23625 75009 787674 132708 920382 77496 2190 79686 30058 2190 32248 AGENCY /ORGANIZATION KONA ASSOCIATION FOR RETARDED CITIZENS PROJECT NAME: KONA KRAFTS TABLE 6 Summary of Income %v /JJ//i //J//i /J //i /J. Amount Requested 32248 586070 43140 0 24650 Amount Projected 0 /// % / A // / / Total Agency Amount County of Hawaii State of Hawaii Federal Funds Private Foundations* United Way Funds Admissions Donations Fundraising Pay Phone Vending Machines Service /Program Fees Third -party Reimbursement(s) Tuition Others (Please list) Interest Income 12000 609547 43140 0 29000 0 14400 22000 0 15604 179270 0 0 5000 /iii, /i;,,, r 25- -3 4 929961 Total Program Amount 12000 0 0 0 0 0 5301 10000 20000 9187 15604 38521 179270 0 0 0 14400 0 0 0 5000 75009 686108 234274 * - Please list funding source on a separate sheet and indicate the amount requested> ** - Must correspond with Table 5. FOR OFFICE USE ONLY BUSINESS START DATE IN HAWAII IF APPLICABLE HAWAII RETURNS FILED IF APPLICABLE 19 19 19 TE APPROVAL_.�STALtl� /.02 t !1 .„ i nvt PEC 2 0 1999 per V. 604:411 . \ Department of Taxation / C NTERRI WEI Et'E ICE\ C APPROVED DEC 2 7 1999 er q1- (1562i/ �est \ Pacific District J CERTIFIED COPY STAMP FORM A-6 (REV. 3/1998) 1. APPUCANT INFORMATION: Address P.O. BOX 127 City /State/ ZIP Code DBA/ Trade Name SOCIAL SECURITY # KEALAKEKUA, HAWAII 96750 KONA KRAFTS 3. APPUCANT IS A/AN: (CHECK ONLY ONE BOX) ❑ CORPORATION ❑ INDIVIDUAL ❑ LIMITED UABILITY COMPANY 4. THE TAX CLEARANCE IS REQUIRED FOR: ❑ FINANCIAL CLOSING ❑ HAWAII STATE RESIDENCY ❑ SUBCONTRACT IRS APPROVAL STAMP IS FOR PURPOSES IND/CA TED BY ASTERISK 5. NO. OF CERTIFIED COPIES REQUESTED: 6. SIGNATURE- • • Applicant KO"7A ASSOf TATTON POP RFTAPDP11 rTTT7PNS 2. TAX IDENTIFICATION NUMBER(S): HAWAII GENERAL EXCISE ID # 3 0 0 _1 — 4_ _2_ FEDERAL EMPLOYER ID # 9 9 - 0 1 _0_ _8— g _9_ _6_ ® CITY, COUNTY, OR STATE GOVERNMENT CONTRACT IN HAWAII' ❑ REAL ESTATE LICENSE ❑ CONTRACTOR LICENSE STATE OF HAWAII — DEPARTMENT OF TAXATION TAX CLEARANCE APPLICATION PLEASE TYPE OR PRINT CLEARLY (PLEASE PRINT CLEARLY) ❑ S CORPORATION TAX EXEMPT ORGANIZATION ❑ PARTNERSHIP ❑ ESTATE ❑ TRUST ❑ LIMITED LIABILITY PARTNERSHIP ❑ PROGRESS PAYMENT ❑ FEDERAL CONTRACT ❑ OTHER 8 (Page 1 of 2) ❑ LIQUOR LICENSE * ❑ BULK SALES ❑ PERSONAL ❑ LOAN Executive Director PRINT SPECIFIC TITLE: Corporate Officer, General Partner, Individual (Sole Proprietor) fi t, l y4in (808) 323 - 2626 ( 808) 323 -9444 DATE TELEPHONE FAX POWER OF ATTORNEY. If submitted by someone other than a Corporate Officer, General Partner, or Individual (Sole Proprietor), a power of attorney (State of Hawaii Department of Taxation Form N848) must be submitted with this application. If a Tax Clearance is required from the Internal Revenue Service, IRS Form 8821, or IRS Form 2848 is also required. Applications submitted without proper authorization will be sent to the address of record with the taxing authority. UNSIGNED APPLICATIONS WILL NOT BE PROCESSED. PLEASE TYPE OR PRINT CLEARLY — THE FRONT PAGE OF THIS APPLICATION BECOMES THE CERTIFICATE UPON APPROVAL SEE PAGE 2 ON REVERSE & INSTRUCTIONS. Failure to provide required information on page 2 of this application or as required to the separate instructions to this application will result in a denial of the Tax Clearance request • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 Financial Questionnaire Stephen K Yamashiro Mayor Yes No C1 C� e C� e C5 o e C3 8 0 Ct C� C� (0 0 O 0 O 0 O 0 Prepared by: Certified by: 2. 3. 4. 5. 6. 7 8. 9. to. I I. 12. HAWAII COUNTY NONPROFIT GRANTS (FY 2000 - 01) Please include as an attachment an explanation for all "NO" answers to questions #1 thru 11 below: Has the agency operated continuously for the past three (3) years? Has the agency operated with a positive cash flow for the past (3) years? Doesyour Board of Directors approve a detailed cash flow budget before the beginning of each fiscal year? Do your Board meeting minutes show that quarterly financial statements are approved? Is your equity balance at least 20% of your Total Liability balance? Is your Total Current Asset balance larger than your Total Current Liability balance? Are bank reconciliations and accounting performed by someone other than the check signatory? Are you fully insured for the agency's vehicle(s) and building(s)? Is your Workers' Compensation at least 2% of payroll? Are you current (not delinquent) on all payroll and payroll tax payments? Is the agency free of any pending litigation, liens or judgments? As the gra applicant, l certify that the agency has satisfactorily responded to each of the above questions and explained as needed. i hereby certify that this in formation is true and correct to the best of my knowledge. Agency: Kona Assor For Retarded Citizens Phone: (808)323 -2626 Michaele Davis Within the past 12 months, has the agency applied for vendor or bank credit and was denied credit? If yes, please explain. Gretchen Lawson Print Name of Executive Director Qtountp of 3aivaii DEPARTMENT OF FINANCE 2 23 Aupunt Street. Roam 113 • Htta, Hawaii 96720 -4252 (505) 961-8234 • Fax (808) 961 -6248 FINANCIAL QUESTIONNAIRE • Signature ignaturc Harry A Takahashi Oa, [ h+r S. K. Schutte Dcputy o1 /.trpoao • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA /CRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 Financial Statements (Audits) • June 30, 1998 • June 30, 1997 KONA ASSOCIATION FOR RETARDED CITIZENS Financial Statements June 30, 1999 Jennifer L. Gossert, CPA An Accounting Corporation To the Board of Directors of Kona Association For Retarded Citizens ••NIFER L. GOSSEa CERTIFIED PUBLIC ACCOUNTANT An Accounting Corporation 688 Kinoole Street, Suite 201 • Hilo, Hawaii 96720 • Phone (808) 9693115 Fax (808) 969 -7463 Independent Auditor's Report I have audited the accompanying statement of financial position of Kona Association For Retarded Citizens (a nonprofit organization) as of June 30, 1999, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audit. Information for the year ended June 30, 1998, is presented for comparative purposes only and was extracted from the financial statements presented for that year, on which I expressed an unqualified opinion in my report dated January 6, 1999. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 whether the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kona Association For Retarded Citizens as of June 30, 1999, and the changes in its net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. December 15, 1999 KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF FINANCIAL POSITION June 30, 1999, with Comparative Totals for 1998 ASSETS Current assets: Cash and cash equivalents $ 247,671 $ 204,651 Accounts receivable 21,526 35,755 Hawaii Island United Way receivable 14,500 14,500 Grant/Contract receivables 89,883 41,831 Prepaid expenses 13,196 3,391 Total current assets 386,776 300,128 Land 12,000 57,000 Property and equipment - at cost (net of accumulated depreciation of $198,478) 168,573 150,898 Replacement reserves 8,520 7,132 Total assets $ 575,869 $ 515,158 LIABILITIES AND NET ASSETS Current liabilities: Accounts payable $ 15,804 $ 6,250 Accrued liabilities 13,521 8,676 Payable to grantors 12,468 12,468 Deferred revenue 29,977 82,076 Current portion -long term debt 1,600 1,600 Vacation accrual 11,491 12,609 Total current liabilities 84,861 123,679 Mortgage note payable, less current portion 195,942 197,718 Security deposits payable 919 774 Total liabilities 281,722 322,171 Net assets: Unrestricted 249,670 145,186 Temporarily restricted 44,477 47,801 Total net assets 294,147 192,987 Total liabilities and net assets $ 575,869 $ 515,158 See accompanying Notes to Financial Statements. 2 1999 1998 Total revenues KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF ACTIVITIES For theYear ended June 30, 1999, with Comparative Totals for 1998 Public Support and Revenues: Public Support: Dept. of Housing and Urban Development: Section . 8 Housing Assistance State contracts: Department of Health Department of Human Services County grants Hawaii Island United Way Other contributions Non cash contributions Total public support Revenues: Contract services Transportation Client rent Interest and other investment income Client fees Special events Total public support and revenue Expenses: Program services Support services - management Total expenses Total change in net assets Total net assets, beginning of year Total net assets, end of year See accompanying Notes to Financial Statements. 3 1999 1998 $ 28,382 $ 27,082 248,531 199,771 354,336 307,042 12,000 11,000 29,000 29,000 50,114 . 94,529 8,029 54,418 730,392 722,842 142,015 135,140 3,652 3,905 14,663 12,996 6,117 2,541 45,917 45,522 25,364 15,158 237,728 215,262 968,120 938,104 760,553 689,110 106,407 87,747 866,960 . 776,857 101,160 161,247 192,987 31,740 $ 294,147 $ 192,987 4 Salaries and wages Employee benefits Payroll taxes Materials and supplies Professional fees Vehicle expenses Travel Postage and shipping Staff training Interest Direct service costs Loss on asset disposals Other Total salaries and related expenses Insurance Utilities Repairs and maintenance Total occupancy expense Total other operating expenses Total expenses before depreciation Depreciation expense Total expenses KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF FUNCTIONAL EXPENSES Year ended June 30, 1999 See accompanying Notes to Financial Statements. Program Services $ 404,900 33,411 57,405 495,716 10,573 6,775 8,206 25,554 42,074 8,158 17,377 4,325 1,626 1,365 18,767 124,590 6,411 224,693 745,963 14,590 $ 760,553 Supporting Services $ 74,560 6,364 10,934 91,858 1,866 1,195 1,448 4,509 2,686 906 481 287 Total Program and Supporting Services $ 479,460 39,775 68,339 587,574 12,439 7,970 9,654 30,063 44,760 9,064 17,377 4,806 1,913 1,365 18,767 124,590 4,313 4,313 600 7,011 9,273 233,966 105,640 851,603 767 15,357 106,407 $ 866,960 KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF CASH FLOWS For the Year Ended June 30, 1999 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation Non cash transactions Loss on sale of assets (Increase) decrease in: Accounts receivable Unconditional promises to give Prepaid expenses Grants receivable Increase (decrease) in: Accounts payable Accrued liabilities Deferred revenue Net cash provided by operating activities Cash flows for investing activities: Purchase of depreciable assets Reserve account funding Net proceeds on sale of assets Net cash provided by investing activities Cash flows for financing activities: Mortgage note principal payments Net cash used for financing activities Net increase (decrease) in cash Cash, beginning of year Cash, end of year See accompanying Notes to Financial Statements. 5 • 1999 $ 102,160 15,357 (8,029) 4,313 (56,831) (9,805) 23,008 9,554 4,990 (52,099) 32,618 (27,860) (1,224) 41,385 12,301 (1,899) (1,899) 43,020 204,651 $ 247,671 (1) Summary of Significant Accounting Policies Organization: The Kona Association for Retarded Citizens (KARC) is a not - for - profit organization incorporated on December 19, 1966 in the State of Hawaii. The KARC provides vocational rehabilitation and residential services to persons with disabilities residing in Hawaii County. In providing residential services to clients, KARC administers a residential facility financed via U.S. Department of Housing and Urban Development (HUD) secured mortgage. Approximately sixty nine percent of KARC revenues are from federal, state, and local governments. Basis of Accounting: The financial statements of KARC have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles. Financial Statement Presentation: Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statement of Not - for - Profit Organizations ". Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets (unrestricted, temporarily restricted net assets, and permanently restricted net assets) based upon the existence or absence of donor - imposed restrictions. In addition, KARC is also required to present a statement of cash flows. Contributions: • • All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted use by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a temporary restriction expires, temporarily restricted net assets are reclassed to unrestricted net assets. Cash Equivalents: KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements For the Year Ended June 30, 1999 For purposes of the statement of cash flows, cash equivalents consist of short-term, highly liquid investments that are readily convertible into cash within ninety (90) days of purchase or donation. 6 • Property and Equipment: • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 Property and equipment are stated at cost at the date of acquisition or at fair market value at the time of donation. Major renewals and betterments are capitalized while repairs and maintenance that does not extend the lives of assets is charged to expense. Depreciation is calculated by use of the'straight -line method over the estimated useful lives of the properties. Depreciation lives range generally from five (5) to forty (40) , years. • ' Donated Property, Equipment, Facilities, Materials, and Services: Non -cash contributions include donations of equipment and facility leasehold improvements with a fair market value of $8,029 during the fiscal year ended June 30, 1999. No other amounts have been reflected in the `statements for donated services inasmuch as no objective basis is available to measure the value of such services. Functional Allocation of Expenses: Certain expenses have been allocated among program activities and supporting services on the basis of estimates made by the management of KARC. Support and Revenue: All support and revenue are considered available for unrestricted use, unless specifically restricted by the donor or by terms of the contract or grant. Contract and grant revenues are recognized at the time an expense has been incurred for an authorized purpose under the terms of the contractual agreement. Rental Revenue: Clients living in the KARC residential facility are charged a monthly rent that is subsidized through the HUD Section 8 Housing Assistance Program. Rental revenue is recognized as the total monthly rent, net of the housing assistance subsidy. 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. 7 Income Taxes: • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 KARC is classified as a tax- exempt organization under Section 501© (3) of the U.S. Internal Revenue Code and is exempt from Federal and State income taxes. gl HUD Cash Reserves Under the HUD regulatory agreement, annual contributions of $1,224 are required to be made to the reserve replacement account for the HUD project administered by KARC. The cumulative reserve balances are maintained in federally insured bank accounts. The balance of the reserve replacement account as June 30, 1999 is $8,520. (3) Fair Value of Financial Instruments KARC financial instruments, none of which are held for trading purposes, include cash and cash equivalents. KARC estimates that the fair value of all financial instruments at June 30, 1999, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying statement of financial position. (4) Property, Equipment, and Improvements Property, equipment and improvements consist of the following: Improvements $ 12,528 Furnishings and equipment 28,960 Vehicles 95,167 HUD residence 230,396 367,051 less accumulated depreciation 198,478 $ 168,573 (5) Mortgage Note Payable At June 30, 1999 the Project owed $197,542 to the Department of Housing and Urban Development. The mortgage is payable in equal monthly installments of $1,683 consisting of interest at a rate of 9.25 percent per annum, with the balance of the 8 • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30 1999 payment applied to the unpaid principle balance. The note is secured by the building that has a net book value of $121,093 at June 30, 1999. The mortgage matures in January 2025. Future maturities on the note payable are as follows: Year ended June 30, 2000 1,600 Year ended June 30, 2001 1,800 Year ended June 30, 2002 2,000 Year ended June 30, 2003 2,200 Year ended June 30, 2004 2,400 Thereafter 187,542 Total maturity on note payable 197,542 Less current portion 1,600 Total long term note payable $ 195,942 (6) Reconciliation of Temporarily Restricted Net Assets The following is a reconciliation of activity affecting the temporarily restricted net assets for KARC for the year ended June 30, 1999: Balance as of June 30, 1998 $ 47,801 Additions Unconditional promises to give for 1999 State funds received in advance for state designated recipients 29,000 76,801 Released from temporary restriction during 1999 (32,324) Balance as of June 30, 1999 $ 44,477 9 • • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 (7) Leases KARC leases its main facility, located,above the Konawaena School in Kealakekua, Hawaii, from the County of Hawaii for an annual rent of $1 per year. The lease term runs through the year 2034. The fair market value of this lease is not readily determinable. 10 KONA ASSOCIATION FOR RETARDED CITIZENS Financial Statements June 30, 1998 Jennifer L. Gossert, CPA An Accounting Corporation 11 /JENNIFER L. Goss To the Board of Directors of Kona Association For Retarded Citizens January 6, 1999 CERTIFIED PUBLIC ACCOUNTANT An Accounting Corporation 688 Kinoole Street, Suite 201 • Hilo, Hawaii 96720 • Phone (808) 9693115 Fax (808) 969-7463 Independent Auditor's Report I have audited the accompanying statement of financial position of Kona Association For Retarded Citizens (a nonprofit organization) as of June 30, 1998, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audit. Information for the year ended June 30, 1997, is presented for comparative purposes only and was extracted from the financial statements presented for that year, on which I expressed an unqualified opinion in my report dated December 15, 1997. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 whether the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kona Association For Retarded Citizens as of June 30, 1998, and the changes in its net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF FINANCIAL POSITION June 30, 1998, with Comparative Totals for 1997 Current assets: Cash and cash equivalents Accounts receivable Hawaii Island United Way receivable Grant receivables Prepaid expenses Land ASSETS Total current assets • • Property and equipment - at cost (net of accumulated depreciation of $219,714) Replacement reserves Total assets LIABILITIES AND NET ASSETS 2 1998 1997 $ 204,651 $ 53,689 35,755 15,715 14,500 12,325 41,831 16,934 3,391 8,109 300,128 106,772 57,000 12,000 150,898 145,641 7,132 6,587 $ 515,158 $ 271,000 Current liabilities: Accounts payable $ 6,250 $ 10,208 Accrued liabilities 8,676 8,094 Payable to grantors 12,468 12,468 Deferred revenue 82,076 Current portion -long term debt 1,600 1,600 Vacation accrual 12,609 6,499 Total current liabilities 123,679 38,869 Mortgage note payable, less current portion 197,718 199,617 Security deposits payable 774 774 Total liabilities 322,171 239,260 Net assets: Unrestricted 145,186 19,415 Temporarily restricted 47,801 12,325 Total net assets 192,987 31,740 Total liabilities and net assets $ 515,158 $ 271,000 See accompanying Notes to Financial Statements. • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF ACTIVITIES For theYear ended June 30, 1998, with Comparative Totals for 1997 1998 1997 Public Support and Revenues: Public Support: Dept. of Housing and Urban Development: Section 8 Housing Assistance $ 27,082 $ 17,949 State contracts: Department of Health 199,771 182,282 Department of Human Services 307,042 57,641 County grants 11,000 12,000 Hawaii Island United Way 29,000 24,650 Other contributions 94,529 69,900 Non cash contributions 54,418 3,301 Total public support 722,842 367,723 Revenues: Contract services 135,140 126,800 Transportation 3,905 20,844 Client rent 12,996 14,136 Interest and other investment income 2,541 5,050 Client fees 45,522 38,534 Special events 15,158 Total revenues 215,262 205,364 Total public support and revenue 938,104 573,087 Expenses: Program services 689,110 468,323 Support services - management 87,747 87,690 Total expenses 776,857 556,013 Total change in net assets 161,247 17,074 Total net assets, beginning of year 31,740 14,666 Total net assets, end of year $ 192,987 $ 31,740 See accompanying Notes to Financial Statements. 3 Salaries and wages Employee benefits Payroll taxes • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF FUNCTIONAL EXPENSES Year ended June 30, 1998 Total Program Program Supporting and Supporting Services Services Services $ 384,293 $ 62,660 $ 446,953 57,036 10,065 67,101 31,983 5,644 37,627 Total salaries and related expenses 473,312 78,369 551,681 Insurance 10,319 1,821 12,140 Utilities 11,341 2,000 13,341 Repairs and maintenance 6,042 1,057 7,099 Total occupancy expense 27,702 4,878 32,580 Materials and supplies 42,402 2,500 44,902 Professional fees 9,468 9,468 Vehicle expenses 19,469 1,500 20,969 Interest 19,139 19,139 Direct service costs 80,824 80,824 Other 5,346 5,346 Total other operating expenses 176,648 4,000 180,648 Total expenses before depreciation 677,662 87,247 764,909 Depreciation expense 11,448 500 11,948 Total expenses $ 689,110 $ 87,747 $ 776,857 See accompanying Notes to Financial Statements. 4 • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF CASH FLOWS For the Year Ended June 30, 1998 Cash flows from operating activities: Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation Non cash transactions (Increase) decrease in: Accounts receivable Unconditional promises to give Prepaid expenses Grants receivable Increase (decrease) in: Accounts payable Accrued liabilities Deferred revenue Net cash provided by ,operating activities Cash flows for investing activities: Purchase of depreciable assets Reserve account funding Reserve account withdrawals Net cash used by investing activities Cash flows for financing activities: Mortgage note principal payments 1998 $ 161,247 11,948 (54,418) (20,040) (2,175) 4,718 (24,897) (3,938) 6,692 82,076 161,213 (7,980) (1,415) 1,043 (8,352) (1,899) Net cash used for financing activities (1,899) Net increase (decrease) in cash 150,962 Cash, beginning of year 53,689 Cash, end of year $ 204,651 See accompanying Notes to Financial Statements. 5 (1) Summary of Significant Accounting Policies Organization: KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements For the Year Ended June 30, 1998 The Kona Association for Retarded Citizens (KARC) is a not- for - profit organization incorporated on December 19, 1966 in the State of Hawaii. The KARC provides vocational rehabilitation and residential services to persons with disabilities residing in Hawaii County. In providing residential services to clients, KARC administers a residential facility financed via U.S. Department of Housing and Urban Development (HUD) secured mortgage. Approximately fifty eight percent of KARC revenues are from federal, state, and local governments. Financial Statement Presentation: KARC has adopted Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statement of Not- for - Profit Organizations ".. Under SFAS No. 117, KARC is required to report information regarding its financial position and activities according to three classes of net assets (unrestricted, temporarily restricted net assets, and permanently restricted net assets) based upon the existence or absence of donor - imposed restrictions. In addition, KARL is also required to present a statement of cash flows. As permitted by the statement, KARC has discontinued its use of fund accounting. Contributions: KARC has also adopted SFAS No. 116, "Accounting for Contributions Received and Made ". In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and /or nature of any donor imposed restrictions. Basis of Accounting: The financial statements of KARC have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles. Cash Equivalents: For purposes of the statement of cash flows, cash equivalents consist of short-term, highly liquid investments that are readily convertible into cash within ninety (90) days of purchase or donation. Property and Equipment: Property and equipment are stated at cost at the date of acquisition or at fair market 6 value at the time of donation. Major renewals and betterments are capitalized while repairs and maintenance that does not extend the lives of assets is charged to expense. Depreciation is calculated by use of the straight -line method over the estimated useful lives of the properties. Depreciation lives range generally from five (5) to forty (40) years. • • Donated Property, Equipment, Facilities, Materials, and Services: Non cash contributions include donations of real property, equipment and other supplies with a fair market value of $54,418 during the fiscal year ended June 30, 1998. KARC received a 50% ownership in donated real property in early 1998 with an appraised value of $45,000. The real property is located in Kailua Views Estate Subdivision lot 29, TMK (3) 7 -5- 033 -56. The remaining $9,418 of non cash contributions is comprised of supplies, equipment and kitchen additions for use at the day facility located in Kealakekua. No other amounts have been reflected in the statements for donated services inasmuch as no objective basis' is available to measure the value of such services. Functional Allocation of Expenses: KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1998 Certain expenses have been allocated among program activities and supporting services on the basis of estimates made by the management of KARC. Support and Revenue: All support and revenue are considered available for unrestricted use, unless specifically restricted by the donor or by terms of the contract or grant. Contract and grant revenues are recognized at the time an expense has been incurred for an authorized purpose under the terms of the contractual agreement. Rental Revenue: Clients living in the KARC residential facility are charged a monthly rent that is subsidized through the HUD Section 8 Housing Assistance Program. Rental revenue is recognized as the total monthly rent, net of the housing assistance subsidy. 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. 7 Income Taxes: KARC is classified as a tax - exempt organization under Section 501© (3) of the U.S. Internal Revenue Code and is exempt from Federal and State income taxes. (2) HUD Cash Reserves Under the HUD regulatory agreement, annual contributions of $885 are required to be made to the reserve replacement account for the HUD project administered by KARC. The cumulative reserve balances are maintained in federally insured bank accounts. The balance of the reserve replacement' account as June 30, 1998 is $7,132. (3) Fair Value of Financial Instruments KARC financial instruments, none of which are held for trading purposes, include cash and cash equivalents. KARC estimates that the fair value of all financial instruments at June 30, 1998, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying statement of financial position. (4) Property, Equipment, and Improvements Property, equipment and improvements consist of the following: Greenhouse Improvements Furnishings and equipment Vehicles HUD residence less accumulated depreciation (5) Mortgage Note Payable • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1998 $ 3,276 5,492 24,896 106,552 230,396 370,612 (219,714) $ 150,898 At June 30, 1998 the Project owed $199;318 to the Department of Housing and Urban Development. The mortgage is payable in equal monthly installments of $1,683 consisting of interest at a rate of 9.25 percent per annum, with the balance of the 8 • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1998 payment applied to the unpaid principle balance. The note is secured by the building that has a net book value of $126,853 at June 30, 1998. The mortgage matures in January 2025. Future maturities on the note payable are as follows: Year ended June 30, 1999 1,600 Year ended June 30, 2000 1,800 Year ended June 30, 2001 2,000 Year ended June 30, 2002 2,200 Year ended June 30, 2003 2,400 Thereafter 189,318 Total maturity on note payable 199,318 Less current portion (1,600) Total long term note payable $ 197,718 (6) Reconciliation of Temporarily Restricted Net Assets The following is a reconciliation of activity affecting the temporarily restricted net assets for KARL for the year ended June 30, 1998: Balance as of June 30, 1997 $ 12,325 Additions • Unconditional promises to give for 1998 State funds received in advance for state designated recipients Released from temporary restriction •during 1998 9 29,000 33,301 74,626 (26,825) Balance as of June 30, 1998 $ 47,801 • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1998 (7) Significant Single Donor Cash Contribution KARC received a cash contribution in March 1998 for $81,256 from an individual donor. The amount received represents a fifty (50) percent interest in the net proceeds on the sale of a Kona Sunshine Estates Lot, TMK (3) 7 -7- 003 -045. Title in the real property was conveyed to KARC and the Mokuaikaua Church, as tenants in common, prior to the sale that same month. The contribution is currently held in a FDIC insured bank account separate from KARC operating cash. (8) Leases KARC leases its main facility, located above the Konawaena School in Kealakekua, Hawaii, from the County of Hawaii for an annual rent of $1 per year. The lease term runs through the year 2034. The fair market value of this lease is not readily determinable. 10 • • KONA ASSOCIATION FOR RETARDED CITIZENS Financial Statements June 30, 1997 December 15, 1997 The Board of Directors Kona Association For Retarded Citizens rTh •NNIFER L. GOSSE• CERTIFIED PUBLIC ACCOUNTANT An Accounting Corporation 688 Kinoole Street, Suite 201 • Hilo, Hawaii 96720 • Phone (808) 9693115 Fax (808) 969-7463 Independent Auditor's Report I have audited the accompanying statement of financial position of the Kona Association For Retarded Citizens (a nonprofit organization) as of June 30, 1997, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Kona Association For Retarded Citizens as of June 30, 1997, and the changes in its net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. • f Current Assets: Cash and cash equivalents Other receivables Unconditional promises to give Grant receivable Prepaid expenses Total current assets Land Fixed assets - at cost (net of accumulated depreciation of $210,616) Replacement reserves TOTAL ASSETS Current Liabilities: Accounts payable $ 10,208 Accrued liabilities 8,094 Payable to grantors 12,468 Vacation accrual 6,499 Current portion - L.T. debt 1,600 Total current liabilities 38,869 Mortgage payable, less current portion 199,617 Security deposits payable 774 Total liabilities 239,260 Net assets: Unrestricted Temporarily restricted Total net assets • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF FINANCIAL POSITION June 30, 1997 ASSETS LIABILITIES AND NET ASSETS TOTAL LIABILITIES AND NET ASSETS See accompanying notes to financial statements. $ 53,689 15,715 12,325 16,934 8,109 106,772 12,000 145,641 6,587 $ 271,000 19,415 12,325 31,740 $ 271,000 SUPPORT AND REVENUE: Public Support: Dept. of Housing and Urban Development Section 8 Housing Assistance $ 17,949 State grants: Department of Health 182,282 Department of Human Services 57,641 County of Hawaii grant 12,000 Contributions: Hawaii Island United Way 24,650 Other contributions 69,900 Noncash contributions 3,301 Total Public Support 367,723 Revenue: Contract services 126,800' Transportation 20,844 Client rent 14,136 Interest 1,598 Other investment income 3,452 Client fees 38,534 Total Revenue 205,364 Total Support and Revenue 573,087 EXPENSES: Support services Program services Total Expenses TOTAL INCREASE IN NET ASSETS NET ASSETS, beginning of year NET ASSETS, end of year • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF ACTIVITIES For the Year Ended June 30, 1997 See accompanying notes to financial statements. 87,690 468,323 556,013 17,074 14,666 $ 31,740 Salaries and Related Expenses: Salaries and wages Payroll tax and assessments Fringe benefits Total Salaries and Related Expenses Occupancy Expenses: Insurance Utilities Repairs and maintenance Total Occupancy Expenses Other Expenses: Materials and supplies Professional fees Vehicle expenses Interest expense Loss on vehicle disposals Other • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 1997 Support Program Services Services $ 63,446 11,617 5,039 80,102 2,664 2,224 4,888 37,128 2,500 $234,956 43,703 18,954 297,613 15,098 12,160 9,870 37,214 8,087 18,206 21,235 16,723 14,410 Total $298,402 55,320 23,993 377,715 17,762 14,384 9,870 42,016 39,714 8,087 18,206 21,235 16,723 14,410 Total Other Expenses 2,500 115,875 118,375 Total Expenses Before Depreciation 87,490 450,616 538,106 Depreciation expense 200 17,707 17,907 Total Expenses $ 87,690 $468,323 1556,013 See accompanying notes to financial statements. • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF CASH FLOWS For the Year Ended June 30, 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Increase in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Loss on vehicle disposals Depreciation Donated equipment Increase in receivables Increase in prepaid expenses Decrease in accounts payable and accrued liabilities Decrease in other assets Decrease in deferred revenue Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Reserve account funding Reserve account withdrawals Net cash provided for investing activities 5,565 CASH FLOWS FROM FINANCING ACTIVITIES: Repayment on bank loan Mortgage note principal payments Net cash used for financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS -June 30, 1996 CASH AND CASH EQUIVALENTS -June 30, 1997 See accompanying notes to financial statements. $ 17,074 16,723 17,907 ( 3,301) ( 5,208) ( 3,531) (17,068) 5,159 ( 5,682) 4,999 ( 885) 6,450 (10,000) ( 1,357) (11,357) 16,281 37,408 $ 53,689 Organization: Financial Statement Presentation: Basis of Accounting: • • KONA ASSOCIATION FOR RETARDED CITIZENS NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30. 1997 (1) Summary of Significant Accounting Policies The Kona Association for Retarded Citizens MARC) is a not - for - profit organization incorporated on December 19, 1966 in the State of Hawaii. The KARC provides vocational rehabilitation and residential services to mentally handicapped and developmentally disabled persons residing in West Hawaii. In providing residential services to clients, the KARC administers a residential facility financed via U.S. Department of Housing and Urban Development (HUD) secured mortgage. Approximately half of the KARC revenues are from HUD Section 8 housing assistance and grants obtained from state and local governments. For fiscal year ended June 30, 1996, KARC adopted Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statements of Not - for - Profit Organizations ". Under SFAS No. 117, KARC is required to report information regarding its financial position and activities according to three classes of net assets (unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets) based upon the existence or absence of donor- imposed restrictions. As permitted by this new standard, KARC has discontinued its use of fund accounting and has, accordingly, reclassified its financial statements to present classes of net assets. KARC also adopted SFAS No. 116, "Accounting for Contributions Received and Made ", in fiscal year 1996. In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and /or nature of any donor imposed restrictions. The financial statements of the KARC have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles. Cash Equivalents: For purposes of the statement of cash flows, cash equivalents consist of short-term, highly liquid investments which are readily convertible into cash within ninety (90) days of purchase or donation. 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. Income Taxes: The KARC is classified as a tax- exempt organization under Section 501(c)(3) of the U.S. Internal Revenue Code and is exempt from Federal and State income taxes. (2) HUD Cash Reserves • • KONA ASSOCIATION FOR RETARDED CITIZENS NOTES TO FINANCIAL STATEMENTS, continued FOR THE YEAR ENDED JUNE 30. 1997 Under the HUD regulatory agreement, annual contributions of $885 are required to be made to the reserve replacement account for the HUD project administered by the KARC. The cumulative reserve balances are maintained in federally insured bank accounts. The balances as of June 30, 1997 are as follows: Reserve replacement Residual receipts Total (3) Fair Value of Financial Instruments KARC's financial instruments, none of which are held for trading purposes, include cash, cash equivalents. KARC estimates that the fair value of all financial instruments at June 30, 1997, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying statement of financial position. (4) Property. Equipment and Improvements Property, equipment and improvements consist of the following: Greenhouse $ 3,276 Improvements 4,185 Furnishings and equipment 13,414 Vehicles 104,986 HUD residence 230.396 356,257 less accumulated depreciation (210.616) $ 145.641 $ 6,587 $ 6.587 t (5) Mortgage Note Payable • • KONA ASSOCIATION FOR RETARDED CITIZENS NOTES TO FINANCIAL STATEMENTS, continued FOR THE YEAR ENDED JUNE 30, 1997 At June 30, 1997 the Project owed $201,217 to the Department of Housing and Urban Development. The mortgage is payable in equal monthly installments of $1,683 consisting of interest at a rate of 9.25 percent per annum, with the balance of the payment applied to the unpaid principal balance. The note is secured by the building that had a net book value of $132,613 at June 30, 1997. The mortgage matures in January 2025. Future maturities on the note payable are as follows: Year ended June 30, 1998 $ 1,600 Year ended June 30, 1999 1,800 Year ended June 30, 2000 2,000 Year ended June 30, 2001 2,200 Year ended June 30, 2002 2,400 Thereafter 219.217 Total maturities on note payable $ 201,217 Less current portion (1,600) Total long term note payable $ 199.617 (6) Summary of State Grants /Contracts Funding: KARC expended the following State of Hawaii contract funds over the biennium period of July 1, 1995 through June 30, 1997: Source FYE 1996 FYE 1997 Total Contract Dept. of Health ASO 96 -035 170,918 182,282 $ 353,200 DHS -DVR DHS -96 -VRSBD -5108 57,641 57.641 115.282 Total 228,559 239.933 $ 468,482 Property and Equipment: Property and equipment are stated at cost at the date of acquisition or at fair market value at the time of donation. Major renewals and betterments are capitalized while repairs and maintenance which do not improve or extend the lives of assets are charged to expense. Depreciation is calculated by use of the straight -line method over the estimated useful lives of the properties. Depreciation lives range generally from 5 to 40 years. Donated Materials. Services. Facilities, and Equipment: Donations include equipment and other supplies with a fair market value of $3,301 during the fiscal year ended June 30, 1997. No other amounts have been reflected in the statements for donated services inasmuch as no objective basis is available to measure the value of such services. Functional Allocation of Expenses: Certain expenses have been allocated among program activities and supporting services on the basis of estimates made by the management of the KARC. Sunport and Revenue: MI support and revenue are considered available for unrestricted use, unless specifically restricted by the donor or by the terms of the grant. Grant revenues are recognized at the time an expense has been incurred for an authorized purpose under the terms of the grant contract. Contributions: All contributions are considered available for unrestricted use unless specifically restricted by the donor. Unconditional promises to give are contributions pledged that are recorded as revenue in the period that the pledge is made. The uncollected balance for these pledges comprise KARC's temporarily restricted net assets on the statement of financial position. When the restriction, in this case the passage of time, occurs these temporarily restricted net assets are reclassified to unrestricted. Rental Revenue: • • KONA ASSOCIATION FOR RETARDED CITIZENS NOTES TO FINANCIAL STATEMENTS, continued FOR THE YEAR ENDED JUNE 30, 1997 Clients living in the KARC residential facility are charged a monthly rent which is subsidized through the HUD Section 8 housing assistance program. Rental revenue is recognized as the total monthly rent, net of the housing assistance subsidy. r • • • KONA ASSOCIATION FOR RETARDED CITIZENS NOTES TO FINANCIAL STATEMENTS, continued FOR THE YEAR ENDED JUNE 30, 1997 (8) Reconciliation of Temporarily Restricted Net Assets: Balance as of June 30, 1996 $ 13,775 Unconditional promises to give for 1997 24,650 Net assets released from restriction due to the passage of time (26.100) Balance as of June 20, 1997 $ 13.325 (9) Leases The KARC leases its main facility, located above the Konawaena School in Kealakekua, Hawaii, from the County of Hawaii. The lease term runs through the year 2034 and KARC pays an annual rent of $1. i • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA }CRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 Current Audit • June 30, 1999 • • KONA ASSOCIATION FOR RETARDED CITIZENS Financial Statements June 30, 1999 Jennifer L. Gossert, CPA An Accounting Corporation t - • � ENNIFER L. GOSSF.�' CERTIFIED PUBLIC ACCOUNT An Accounting Corporation 688 Kinoole Street, Suite 201 • Hilo, Hawaii 96720 • Phone (808) 969-3115 Fax (808) 969-7463 To the Board of Directors of Kona Association For Retarded Citizens Independent Auditor's Report I have audited the accompanying statement of financial position of Kona Association For Retarded Citizens (a nonprofit organization) as of June 30, 1999, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audit. Information for the year ended June 30, 1998, is presented for comparative purposes only and was extracted from the financial statements presented for that year, on which I expressed an unqualified opinion in my report dated January 6, 1999. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 whether the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kona Association For Retarded Citizens as of June 30, 1999, and the changes in its net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. December 15, 1999 d ASSETS Current assets: Cash and cash equivalents Accounts receivable Hawaii Island United Way receivable Grant/Contract receivables Prepaid expenses Land Total current assets KOLA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF FINANCIAL POSITION June 30, 1999, with Comparative Totals for 1998 Property and equipment - at cost (net of accumulated depreciation of $198,478) Replacement reserves Total assets LIABILITIES AND NET ASSETS Current liabilities: Accounts payable Accrued liabilities Payable to grantors Deferred revenue Current portion -long term debt Vacation accrual Total current liabilities Mortgage note payable, less current portion Security deposits payable Total liabilities 1999 1998 $ 247,671 $ 204,651 21,526 35,755 14,500 14,500 89,883 41,831 13,196 3,391 386,776 300,128 12,000 57,000 168,573 150,898 8,520 7,132 $ 575,869 $ 515,158 $ 15,804 $ 6,250 13,521 8,676 12,468 12,468 29,977 82,076 1,600 1,600 11,491 12,609 84,861 123,679 195,942 197,718 919 774 281,722 322,171 Net assets Unrestricted 249,670 145,186 Temporarily restricted 44,477 47,801 Total net assets 294,147 192,987 Total liabilities and net assets $ 575,869 $ 515,158 See accompanying Notes to Financial Statements. so • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF ACTIVITIES For theYear ended June 30, 1999, with Comparative Totals for 1998 1999 1998 Public Support and Revenues: Public Support: Dept. of Housing and Urban Development: Section 8 Housing Assistance $ 28,382 $ 27,082 State contracts: Department of Health 248,531 199,771 Department of Human Services 354,336 307,042 County grants 12,000 11,000 Hawaii Island United Way 29,000 29,000 Other contributions 50,114 94,529 Non cash contributions 8,029 54,418 Total public support 730,392 722,842 Revenues: Contract services 142,015 135,140 Transportation 3,652 3,905 Client rent 14,663 12,996 Interest and other investment income 6,117 2,541 Client fees 45,917 45,522 Special events 25,364 15,158 Total revenues 237,728 215,262 Total public support and revenue 968,120 938,104 Expenses: Program services 760,553 689,110 Support services- management 106,407 87,747 Total expenses 866,960 776,857 Total change in net assets 101,160 161,247 Total net assets, beginning of year 192,987 31,740 Total net assets, end of year $ 294,147 $ 192,987 See accompanying Notes to Financial Statements. 3 i Salaries and wages Employee benefits Payroll taxes KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENT OF FUNCTIONAL EXPENSES Year ended June 30, 1999 Total salaries and related expenses • • Insurance 10,573 1,866 12,439 Utilities 6,775 1,195 7,970 Repairs and maintenance 8,206 1,448 9,654 Total occupancy expense 25,554 4,509 30,063 Materials and supplies 42,074 2,686 44,760 Professional fees 8,158 906 9,064 Vehicle expenses 17,377 17,377 Travel 4,325 481 4,806 Postage and shipping 1,626 287 1,913 Staff training 1,365 1,365 Interest 18,767 18,767 Direct service costs 124,590 124,590 Loss on asset disposals 4,313 4,313 Other 6,411 600 7,011 Total other operating expenses 224,693 9,273 233,966 Total expenses before depreciation 745,963 105,640 851,603 Depreciation expense 14,590 767 15,357 Total expenses $ 760,553 $ 106,407 $ 866,960 See accompanying Notes to Financial Statements. Total Program Program Supporting and Supporting Services Services Services $ 404,900 $ 74,560 $ 479,460 33,411 6,364 39,775 57,405 10,934 68,339 4 495,716 91,858 587,574 • • • KONA ASSOCIATION FOR RETARDED CITIZENS STATEMENTS OF CASH FLOWS For the Year Ended Jude 30, 1999 Cash flows from operating activities: Change in net assets $ 102,160 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation 15,357 Non cash transactions (8,029) Loss on sale of assets 4,313 (Increase) decrease in: Accounts receivable (56,831) Unconditional promises to give Prepaid expenses (9,805) Grants receivable 23,008 Increase (decrease) in: Accounts payable 9,554 Accrued liabilities 4,990 Deferred revenue (52,099) Net cash provided by operating activities 32,618 Cash flows for investing activities: Purchase of depreciable assets (27,860) Reserve account funding (1,224) Net proceeds on sale of assets 41,385 Net cash provided by investing activities 12,301 Cash flows for financing activities: Mortgage note principal payments (1,899) Net cash used for financing activities (1,899) Net increase (decrease) in cash Cash, beginning of year Cash, end of year See accompanying Notes to Financial Statements. 5 1999 43,020 204,651 $ 247,671 • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements For the Year Ended June 30, 1999 (1) Summary of Significant Accounting Policies Organization: The Kona Association for Retarded Citizens (KARC) is a not -for- profit organization incorporated on December 19, 1966 in the State of Hawaii. The KARC provides vocational rehabilitation and residential services to persons with disabilities residing in Hawaii County. In providing residential services to clients, KARC administers a residential facility financed via U.S. Department of Housing and Urban Development (HUD) secured mortgage. Approximately sixty nine percent of KARC revenues are from federal, state, and local governments. Basis of Accounting: The financial statements of KARC have been prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles. Financial Statement Presentation: Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statement of Not - for - Profit Organizations ". Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets (unrestricted, temporarily restricted net assets, and permanently restricted net assets) based upon the existence or absence of donor - imposed restrictions. In addition, KARC is also required to present a statement of cash flows. Contributions: All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. Amounts received that are designated for future periods or restricted use by the donor for specific purposes are reported as temporarily restricted or permanently restricted support that increases those net asset classes. When a temporary restriction expires, temporarily restricted net assets are reclassed to unrestricted net assets. Cash Equivalents: For purposes of the statement of cash flows, cash equivalents consist of short-term, highly liquid investments that are readily convertible into cash within ninety (90) days of purchase or donation. 6 Property and Equipment: Functional Allocation of Expenses: • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 Property and equipment are stated at cost at the date of acquisition or at fair market value at the time of donation. Major renewals and betterments are capitalized while repairs and maintenance that does not extend the lives of assets is charged to expense. Depreciation is calculated by use of the straight -line method over the estimated useful lives of the properties. Depreciation lives range generally from five (5) to forty (40) years. Donated Property, Equipment, Facilities, Materials, and Services: Non -cash contributions include donations of equipment and facility leasehold improvements with a fair market value of $8,029 during the fiscal year ended June 30, 1999. No other amounts have been reflected in the statements for donated services inasmuch as no objective basis is available to measure the value of such services. Certain expenses have been allocated among program activities and supporting services on the basis of estimates made by the management of KARC. Support and Revenue: All support and revenue are considered available for unrestricted use, unless specifically restricted by the donor or by terms of the contract or grant. Contract and grant revenues are recognized at the time an expense has been incurred for an authorized purpose under the terms of the contractual agreement. Rental Revenue: Clients living in the KARC residential facility are charged a monthly rent that is subsidized through the HUD Section 8 Housing Assistance Program. Rental revenue is recognized as the total monthly rent, net of the housing assistance subsidy. 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. 7 • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 Income Taxes: KARC is classified as a tax - exempt organization under Section 501© (3) of the U.S. Internal Revenue Code and is exempt from Federal and State income taxes. (2) HUD Cash Reserves Under the HUD regulatory agreement, annual contributions of $1,224 are required to be made to the reserve replacement account for the HUD project administered by KARC. The cumulative reserve balances are maintained in federally insured bank accounts. The balance of the reserve replacement account as June 30, 1999 is $8,520. (3) Fair Value of Financial Instruments KARC financial instruments, none of which are held for trading purposes, include cash and cash equivalents. KARC estimates that the fair value of all financial instruments at June 30, 1999, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying statement of financial position. (4) Property, Equipment, and Improvements Property, equipment and improvements consist of the following: Improvements $ 12,528 Furnishings and equipment 28,960 Vehicles 95,167 HUD residence 230,396 367,051 less accumulated depreciation 198,478 $ 168,573 (5) Mortgage Note Payable At June 30, 1999 the Project owed $197,542 to the Department of Housing and Urban Development. The mortgage is payable in equal monthly installments of $1,683 consisting of interest at a rate of 9.25 percent per annum, with the balance of the 8 e KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 payment applied to the unpaid principle balance. The note is secured by the building that has a net book value of $121,093 at June 30, 1999. The mortgage matures in January 2025. Future maturities on the note payable are as follows: Year ended June 30, 2000 1,600 Year ended June 30, 2001 1,800 Year ended June 30, 2002 2,000 Year ended June 30, 2003 2,200 Year ended June 30, 2004 2,400 Thereafter 187,542 Total maturity on note payable 197,542 Less current portion 1,600 Total long term note payable $ 195,942 (6) Reconciliation of Temporarily Restricted Net Assets The following is a reconciliation of activity affecting the temporarily restricted net assets for KARC for the year ended June 30, 1999: Balance as of June 30, 1998 $ 47,801 Additions Unconditional promises to give for 1999 State funds received in advance for state designated recipients 29,000 76,801 Released from temporary restriction during 1999 (32,324) Balance as of June 30, 1999 $ 44,477 9 • t ID Leases • • KONA ASSOCIATION FOR RETARDED CITIZENS Notes to Financial Statements, continued For the Year Ended June 30, 1999 KARC leases its main facility, located above the Konawaena School in Kealakekua, Hawaii, from the County of Hawaii for an annual rent of $1 per year. The lease term runs through the year 2034. The fair market value of this lease is not readily determinable, 10 • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 IRS Form 990 Form 990 Department of the Treasury Internal Revenue Service 9 check If: n change ar address Retu Organization Exempt Fr ncome Tax Under section 501(c) of the Internal Revenue Code (except black lung benefit trust or private foundation) or section 4947(a)(1) nonexempt charitable trust Note: The organization may have to use a copy of this return to satisfy state reporting requirements. A For the 1997 calendar year, OR tax year period beginning 7/ 1 , 1997, and ending 99- 0108896 fxl (C) is elis a separate return filed by an oryanizanon covered by a group ruling? C Yes LJ No K Check here • n if the organization's gross receipts are normally not more than $25,000. The organization need not file a return with the IRS; but if it received a Form 990 Package In the mail, it should file a retum without financial data. Some states require a complete return. Note: Form 990 -EZ may be used by organizations with gross receipts less than $100,000 and total assets less than $250,000 at end o year. l 'Pait if Revenue, Expenses, and Changes in Net Assets or Fund Balances OMB No 1545-0047 1 997 This Form Is Open to Public Inspection 6/30 , 1998 C Name of organization KONA ASSOCIATION FOR RETARDED CITIZENS Number and street (or P.O. box if mail is not delivered to street address) P.O. BOX 127 Room/suite 0 Employer Wen ification number Please use IRS label or nlnleal print e um See IIreturn Specific n Amended Insbuc- re none City, town, or post office, state, and ZIP+4 F Check • C if exemption I g nd "Se KEALAKEKUA, HI 96750 application is pending G Type of organization —► ai Exempt under 501(c) ( 3 ).4 (insert number) OR ■ =section 4947(a)(1) nonexempt chartitable trust Note: Section 501(c)(3) exempt organizations and 4947(a)(1) nonexempt charitable trusts MUST attach a completed Schedule A (Form 990). H(a) Is this a group retum filed for affiliates? ............................ 0 Yes I X I No I If either box in H is checked 'Yes,' enter four -digit group (b) If 'Yes,' enter the number of affiliates for which this exemption number (GEN) • return is filed: • J Accounting method' C Cash Accrual C Other (specify) • E State registration number 30013142 Form 990 (1997) LHA For Paperwork Reduction Act Notice, see page 1 of the separate instructions. m-�es 1 1 7120512 783626 092 KONA ASSOCIATION FOR RETARDED 03891276 1 Contributions, gifts, grants, and similar amounts received: a Direct public support b Indirect public support ..._._. ...... ... c Govemment contributions (grants) .. ..................... d Total (add lines 13 through 1c) (attach schedule of contributors) STMT 1 la 148,947.' lb 40,000. lc (cash$ 134,529. noncash$ 54,418.) 10 188,947. 2 Program service revenue including government fees and contracts (from Part VII, line 93) ......... 731,458. 3 Membership dues and assessments 3 4 Interest on savings and temporary cash investments , 4 2,541. 5 Dividends and Interest from securities ...... ............................... . 5 6 a Gross rents h Less: rental expenses 6a c Net rental income or (loss) (subtract line 6b from line 6a) 6c 7 Other investment income (describe • ) 7 Reve 8 a Gross amount from sale of assets other than inventory . b Less: cost or other basis and sales expenses c Gain or (loss) (attach schedule) (A) Securities (8) Other Be 8b 8c d Net gain or (loss) (combine line 8c, columns (A) and (B)) 8d 9 Special events and activities (attach schedule): a Gross revenue (not including $ of contributions .:.... reported on line 1a) b Less: direct expenses other than fundraising expenses .... 9b c Net income or (loss) from special events (subtract line 9b from line 9a) .......................... .. .. 9e 10 a Grass sales of inventory, less returns and allowances 110a b Less: cost of goods sold 10b .. . e Gross profit or (loss) from sales of inventory (attach schedule) (subtract line 10b from line 10a) 10c 11 Other revenue (from Part VII, line 103) 11 15,158. 12 Total revenue (add lines 1d, 2, 3, 4, 5, 6c, 7, 8d, 9c, 10c, and 11) .... .. 12 938,104. 13 Program services (from line 44, column (B)) 13 689,110. 14 Management and general (from line 44, column (C)) 14 87,747. U01 15 Fundraising (from line 44, column (D)) 15 16 Payments to affiliates (attach schedule) 16 17 Total expenses (add lines 16 and 44, column (A)) . 17 776,857. Net Assets 18 Excess or (defied) for the year (subtract line 17 from line 12) 18 161,247. 19 Net assets or fund balances at beginning of year (from line 73, column (A)) 19 31,740. 20 Other changes in net assets or fund balances (attach explanation) 20 O. 21 Net assets or fund balances at end of year (combine lines 18, 19, and 20) ................. 21 192,987. Form 990 Department of the Treasury Internal Revenue Service 9 check If: n change ar address Retu Organization Exempt Fr ncome Tax Under section 501(c) of the Internal Revenue Code (except black lung benefit trust or private foundation) or section 4947(a)(1) nonexempt charitable trust Note: The organization may have to use a copy of this return to satisfy state reporting requirements. A For the 1997 calendar year, OR tax year period beginning 7/ 1 , 1997, and ending 99- 0108896 fxl (C) is elis a separate return filed by an oryanizanon covered by a group ruling? C Yes LJ No K Check here • n if the organization's gross receipts are normally not more than $25,000. The organization need not file a return with the IRS; but if it received a Form 990 Package In the mail, it should file a retum without financial data. Some states require a complete return. Note: Form 990 -EZ may be used by organizations with gross receipts less than $100,000 and total assets less than $250,000 at end o year. l 'Pait if Revenue, Expenses, and Changes in Net Assets or Fund Balances OMB No 1545-0047 1 997 This Form Is Open to Public Inspection 6/30 , 1998 C Name of organization KONA ASSOCIATION FOR RETARDED CITIZENS Number and street (or P.O. box if mail is not delivered to street address) P.O. BOX 127 Room/suite 0 Employer Wen ification number Please use IRS label or nlnleal print e um See IIreturn Specific n Amended Insbuc- re none City, town, or post office, state, and ZIP+4 F Check • C if exemption I g nd "Se KEALAKEKUA, HI 96750 application is pending G Type of organization —► ai Exempt under 501(c) ( 3 ).4 (insert number) OR ■ =section 4947(a)(1) nonexempt chartitable trust Note: Section 501(c)(3) exempt organizations and 4947(a)(1) nonexempt charitable trusts MUST attach a completed Schedule A (Form 990). H(a) Is this a group retum filed for affiliates? ............................ 0 Yes I X I No I If either box in H is checked 'Yes,' enter four -digit group (b) If 'Yes,' enter the number of affiliates for which this exemption number (GEN) • return is filed: • J Accounting method' C Cash Accrual C Other (specify) • E State registration number 30013142 Form 990 (1997) LHA For Paperwork Reduction Act Notice, see page 1 of the separate instructions. m-�es 1 1 7120512 783626 092 KONA ASSOCIATION FOR RETARDED 03891276 L Form 2758 (Rev. May 1995) Department of the Treasury Internal Revenue Service Please type or print. File the original and one copy by the due date for filing your return. See Instructions on back. Name Kona Association for Retarded Citizens Number, street, and room or suite no. (or P.O. box no. if mail is not delivered to street address) City, to or post office, slate, and 2IP code. For a foreign address, see Instructions. Kealakekua, HI 96750 Note: Corporate income tax return filers must use Form 7004 to request an extension of time to file. Partnerships, REMICs, and trusts must use Form 8736 to request an extension of time to file Form 1065, 1066, or 1041. 1 I request an extension of time until February 15 19 to file (check only one): ❑ Form 706 -GS(D) ❑ For&r99trTT401(a) or 408(a) trust) - Form 1120 -ND (4951 taxes) ❑ Form 8612 ❑ Form 705 -GSM ❑ Form 990 -T (trust other than above) ❑ Form 3520 -A ❑ Form 8613 ® Form 990 or 990-EZ ❑ Form 1041 (estate) (see instructions) ❑ Form 4720 ❑ Form 9725 O Form 990 -BL ❑ Form 1041 -A ❑ Form 5227 ❑ Form 8804 ❑ Form 990 -PF ❑ Form 1042 ❑ Form 6069 ❑ Form 8831 If the organization does not have an office or place of business in the United States, check this box ► ❑ 2a For calendar year 19 , or other tax year beginning July 1, 1997 and ending June 30 1998 b If this tax year is for less than 12 months, check reason: ❑ Initial return ❑ Final return ❑ Change in accounting period 3 Has an extension of time to file been previously granted for this tax year? . . . . ❑ Yes ® No 4 State in detail why you need the extension rending completion of t he annual aud 5a If this form is for Form 706- GS(D), 706- 05(T), 990 -BL, 990 -PF, 990 -T, 1041 (estate), 1042, 1120 -ND, 4720, 6069, 8612, 8613, 8725, 8804, or 8831, enter the tentative tax, less any nonrefundable credits. See instructions. $ b If this form is for Form 990 -PF, 990 -T, 1041 (estate), 1042, or 8804, enter any refundable credits and estimated tax payments made. Include any prior year overpayment allowed as a credit $ c Balance due. Subtract line 5b from line 5a. Include your payment with this form, or deposit with FTD coupon if required. See instructions $ Signature and Verification Under penalties of perjury, I declare coat I have examined this form, including ac3 r51Z4O x+g sch43Wes- andrst6temapts, and to the best of my knowledge and belief, it is true, correct, and complete: and that I am authorzed to prepare this form Az, - < 688 Kinoc St. , Suite 231 [1 Signatur �'• Trtle • Ri HI .98723 Date • r V - L V 1: FILE ORIG AL AND ONE COPY. The IRS will show below whether or not your application is approved and will return the copy. Noti to Applicant — To Be Completed by the IRS We HAVE approved yow application. Please attach this form to your return. ❑ We HAVE NOT approved your application. However, we have granted a 10 -day grace period from the later of the date shown below or the due date of your return (including any prior extensions). This grace period is considered to be a valid extension of time for elections otherwise required to be made on a timely return. Please attach this form to your return. ❑ We HAVE NOT approved your application. After considering the reasons stated in item 4, we cannot ;grafltycu,meque,efo an extension of time to file. We are not granting the 10 -day grace period. ❑ We cannot consider your application because it was filed after the due date of the return for which an extension was requested. r tS I 5 )9S9 ❑ Other: Director • • For Paperwork Reduction Act Notice, see back of form. Application for Extension of Time To File Certain Excise, Income, Information, and Other Returns P.O. Box 127 ► File a separate application for each return. By. OMB No. 1545 -0148 Employer identification number 99;0108896 i.`EBC.R ki c DE.. ( - . _ Date If you want a copy of this form to be retumed to an address other than that shown above, please enter the address to which the copy should be sent. Name Jennifer L. Gossert, C.P.A. Please An Accounting Corporation Type Number, street, and room or suite no. (or P.O. box no if mail is not delivered to street address) or 688 Kinoole St., Ste 201 Print City, town or post office, state, and ZIP code. For a foreign address, see instructions. Hilo, HI 96720 289 Cat. No. 119768 Porn, 2758 (Rev 5 -95) e • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 IRS Letter Internal Revenue S ice Departmen f the Treasury District 300 N. Los An eles Street, MS 7043 Director Los Angeles, CA 90012 Person to Contact: L BARRAGAN KONA ASSOCIATION FOR RETARDED CITIZENS Telephone Number: P.O. BOX 127 (213) 894 - 2336 KEALAKEKUA, HI 96750 -0127 ReferReplyto: E0(1019)98 Date: OCTOBER 29, 1998 EIN: 99- 0108896 Dear Taxpayer: This letter is in response to your request for a copy of the determination letter for the above named organization. Our records indicate this organization was recognized to be exempt from Federal Income Tax in DECEMBER 1966 as described in Internal Revenue Code Section 501(c)(3). It is further classified as an organization that is not a private foundation as defined in Section 509(a) of the Code, because it is an organization described in Section 170(b)(1)(A)(vi). The exempt status for the determination letter issued in DECEMBER 1966 continues to be in effect. If you need further assistance, please contact our office at the above address or telephone number. Sincerely, Disclosure Adsistant • Cent lean: Toy • are c•utloned that which are unrelated to You are cautioned that trtbuted to an orgonls• and exempt from federal Uun 6edenaf IV II a 99- 0108896 S. TREASURY DEPARTMt. INTERNA REVENUE SERVIC .raster D112f7011 . 14 730 r. O. COx site ' MONOtUIV, HAPAH Mel 'S JUL 12 1967 Kona Aesoctttlon for Aet•rded'Children P. 0. float 738 Lsalakekua, IiawaLL Vry truly your?. /;C14' 2/-4.4/ • 1 f1H- E0-67 -40 4 Farm L-1m Cade 414 a ucotional cad Charitable ARUR12$ taco:t ns O ri n2ZT1yH» PITH UnTeICT OH'aaCTart N .ITSeefat 11aW MIK Qonolulu, flat.afi • Cat The hauls of your stated ptepooes and the ueisretarding that your operation. will continua an ' evidenced to dole or will conform to those proposed In your ruling application, sous have cvncludad that you ore entry from Federal lamina tax as an crrrinleatton deealbed In section 501(e)(3) of the intorno) Revenue Code. Any changes In operation from those desalbed, or fn your clannctr7 or purposes, must he repotted Ius:irdlatelY to your District Director for Comidcrotlon of their effect upon your •xompt status. You must also report any change in your wan or address. You era nc1 requlrvd to Ilk retool In:v o.e tor rcfurna so long os you roluln an orn:7ryt ■tolty), err nos you ono subject to On toy( m w hears imvooid by sectlan 511 el tin Cabo, In which event you ate required to filo Faro 9'x) - T. Ow determination art to your nobility for li1inq the ann<nl lnfatnutlen rattan, Fam 490-1, is est lath °hove. That return. If requL'nd, mat he filed on a betas the 156 day of the (itch month alter the close of yaw annual accounting ported Indicated above. • Corxtlbtnlons node to you are dtduullble by donors a, provided In section 170 of tin Cade. De- que•ts, Iegncles, devises, trarHtlrrs of oats to or for Your use an deductible for Fatteral rotate and gill tax purposes under tine provlslons of section 2055, 2106 and 2522 of the Code. . You use not liable for the trims Impex ed under the Federal Insurance Contributions Act (social security loxes) unless you (lit a waiver d exemption cvrtlllrate as provided In nth act. You nos not liable la the lax impound under the F'erival Vnonvloyn»nt Tax Act. Inqulslns about the waiver of esansatlon certificate la social security taxes should be whttsssod,to this office, as should any questions concerning excise, employment a other Federal tans. Tito la a delandnotlon latter.' Evart S. Lloyd District Director if you engage to a substantial degree in activities' your purposes, you will jeopardize your exampt'etatua. upon diseotutton your remaining assets coat be die.. clan described in section 501(c)(3) of the Code locome tax. ranee t..178 $4e# • 0 • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFfS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 Liability Insurance Certificate AGUKU "1 .E s M �• t .. . w. •ROOUCER INSURANCE RESOURCES, INC. l$ LTA 1 ;1,'ESM' IM5 V R «- 4-FrM> ;t tto:; 06/04/99 Yf.. ..aS Y.d ' Ni/'i' a'{ v , ,. x:an4y °.:ni. ` •.. � �.:<<�. 1 :w..4 . ..tea.: a a ,_ THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 75 -5722 KUAKINI HWY, SUITE 216 COMPANIES AFFORDING COVERAGE KAILUA — KONA, HAWAII 96740 1 COMPANY TAD NO'i'TAOE_ A NORTHFIELD INSURANCE COMPANY _ INSURED I COMPANY KONA ASSOCIATION FOR RETARDED I B CITIZENS D$A KONA KRAFTS I COMPANY P.O. BOX 127 KEALAKEKUA,; HI.. 96750 I cQotM44 :Cia \): ,A :i:�%a x n ,.,), : ••�ki tp _. ESL % "H'St :V�I ( �G!W. 11�.! .in: \l1. {w 6<: <s" �'114,�rn % niYtM v riM. 4h^• 5�' J: 41�rii. THIS Is TO CERTIFY THAT THE�POLICIES OF INSURANCE LISTED BELOW HAVE INDICATED, NOTWITHSTANDIND ANY REOUTREMBNT, TERM OR CONDITION CERTIFICATE MAY BE ISSUED/ OR MAY PERTAIN, THE INSURANCE AFFORDED EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE COMPANY 0 < :nn: , deRa . ,.0 , a:RfjQ s i r ``ek:� u Ekf: '.n.;�'B)�!::n�'�}L.RYtlsZK.�V �N «�i {.e: ra Ri?+.MiinB i% i, A .' �nM �+ hb�Q 6Oi ,�.:R�:Yi� n BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS BY THE POLICIES DESCRIBED HEREIN I9 SUBJECT TO ALL THE TERMS, SEEN REDUCED BY PAID CLAIMS. TYPE OF INSURANCE POUCY NUMBER POLICY EiiECTVE POLICY EXPIRATION DATE (MM/DO/W( DATE (MWODAY) LIMITS A GENERAL UABIUTY F 07/01/99 07/01/00 GENERAL AGGREGATE S 000 000 TO —i COMMERCIAL GENERAL LIABILITY 1 CINMS MADE LX]OCCURI PRODUCTS - COMP/OP AGO E 4 , 0 00 , 000 PERSONAL IS ADV INJURY S1 000 000 OWNER'S& CONTRACTOR 'SPROT CP 364216 EACH OCCURRENCE *1, 000, 000 $1000 S 5 000 FIRE DAMAGE (Any one fire) MEDEXP(Any ono person) AUTOMOBILE HI LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS i I COMOINCD SINGLE LIMIT S FO J)RY S HIRED AUTOS NON.OWNED AUTOS BODILY INJURY (Pp (Per accident) $ PROPERTY DAMAGE GARAGE 1 LIABILITY I I ANY AUTO I I� AUTO ONLY - EA A(x /DENT I OTHER THAN AUTp ONLY; .. ...,. ... .. ■ I EACH ACCIDENT S AGGREGATE EACH OCCURRENCE $ S i t EXCESS UA UMBRELLA FORM !! OTHER THAN UMBRELLA FOR M AGGREGATE S WORKERS COMPENSATION AND; EMPLOYERS' LIABILITY i ER ......... ... .... I THE PROPRIETOR/ 1NCL EL EACH ACCIDENT i PARTNERS/EXECURVE p OFFICERS ARE' 1 IX0. °TN i" EL DISEASE - POLICY LIMIT S EL bISEASE - EA EMPLOYEE A DESCRIPTION PROFESSIONAL LIABILITY I OF 07/01/99 I 07/01/00 AGGREGATE OCCURRENCE S 2,000,000 1,000,000 O /LOCAYIONENEISCLES/EPECLAL ITEMS CERTIFICATE HOLDER IS NAMED AS ADDITIONAL CE� a�R lifl s Tgl R, ,',t ab - • • 4.M • �3iyV r kne: ➢r`24. R ;. ::4, +: .::➢ <w ... `cF 'n, « 5:' • .,..n COUNTY OF HAWAII DEPT. OF FINANCE 25 AUPLTN STREET HILO, HI.. ' 96720 ,_...... : 4ATTN M _ ,... HARRY TAKAHASHI a afs: <,`_RM -y: r:. „ ^ Q>nk, . itnr: ;....aR ���.)' F' ywt� ?'�fiQ k:::!,; YR 11a: iii -. INSURED. TT � K 1� > ➢ °kx.„ i� nF ilvi a Aa �x ....... s.P ��fFSrM.....•. �tt::: �r ��.. F'.. ..r - '0"�'kz:w�' k��r.3T^'� SHOULD ARV OF THE ABOVE DESCRIBED POLICIES SE CANCELLED BEFORE THE EXPIRATION GATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL � p DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBUO L ATION OR LIABILITY OF ANY KIND UPON THE CoMPANY, ITS OR R!►NIBENTAM AUTHORIZED REPRE SENTA Q i.'!YRIYr L 9 it DATE (MM /DOfYYI tssbs THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT DR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY HE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED RY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS INSRI LTR TYPE OF INSURANCE -- POLICY NUMBER FOTTCWEPFFEEC IVE DATE (MMIDD(NI POLI1CY'ETWRa8bN DATE(MMIOOITY) LI GENERAL LIABILITY EACH OCCURRENCE COMMERCIAL GENERAL LIABILITY FIRE DAMAGE' (Any one Fro l e 7 CLAIMS MADE OCCUR MED EXP (Any one poreon) PERSONAL & ADV IN JURY GENERAL AGGREGA GEN'L AGGREGATE LIMIT APPLIES PER PRODUCTS - COMPIOP AGO POLICY -- JRO- JECr J 3 LOC – AUTOMOBILE ^— LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON- OWNEOAUTOS • S Insurance contract Is iss licensed by the State of Ha regulation or examination. if t claims under this contract are fund of the State of Hawaii,' ad by an Insur r which Is not ail and Is not subject to it s e Insurer is fo nd insolvent not covered by any Guaranty COMBINED SINGLE LIMIT (Ea Pccidorn) BODILY INJURY (Per pecan) S. , BODILY INJURY' Par ace; eni) PROPERTY DAMAGE (Per ACCaaml GARAGE UABIU r LilbEION INSURANCE AGENC (Surplus Line BrokB,rL;censa #1 660 twilei Rd., Ste. 760, Horalu OF HAWAII INC, 0022) , HI 86817 AUTO ONLY EA ACCIDENT ANY AUTO OTHER THAN EA ACC E AUTO ONLY, AGC $ H EXCESS LIABILITY OCCUR n CLAIMS MADE DEDUCTIBLE H RETENTION $ EACH OCCURREN E AGGREGATE $ S E S WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Wb I LI S JTO MIT ER OIH- E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE S E.L. DISEASE • POLICY LIMIT S A OTHER commercial Property CP371172 01/18/00 01/18/01 Building $265000 Dad. $1,000 DESCRIPTION OF OPERATIONSILOCATIONSNEHICLESIEXCLUSIONS ADDED BY ENDORSEMENT /SPECIAL PROVISIONS 82 -6155 Keloa Rd., Captain Cook, HI 96704 2% hurricane Deductible ($5,000 minimum) Proof of insurance 'ACJRO CERTIFI TE OF LIABILITY IN PRODUCER Bishop Insurance -Kona Insurance Hawaii 7h -j.67E Hualalai Rd Suite #1 Kai7Lua -Kona HI 96740 Phone ;808- 329 -4844 INSURED Kona Krafts Kona Assn For Retarded Citizen P 0 Box 127 Kealakekua HI 96750 _ COVERAGES CERTIFICATE HOLDER ACORD 25 -8 (7(97) County of Hawaii Dept. of Finance 25 Aupuni St. Hilo HI 96720 N I ADDITIONAL INSURED; INSURER LETTER; COUNTY; THIS CERTIFICATE IS ISSUED AS A MATTER OF NFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES IES BE nIAI INSURER A. INSURER B. INSURER C; INSURER D INSURER E ANC REPRESENTATIVES, James K. Takauye ANCk,It°`R 1 DA oizs o0 INSURERS AFFORDING COVERAGE orthfield Insurance Co, SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION BATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL XX DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. BUT FAILURE TO 0080 SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR WSNDP IAU$UPANCE A^%NCv OF HAWAII, INC. PRESIDENT -29 RFO TION 1988 I S • • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON -PROFIT GRANT FUNDS JANUARY 2000 Articles of Incorporation $ • Lu Chengo of Carpurntr ,me Uou- Ptoftt Corpora it Filo So Duplicate , a STATE OF HAWAII COUNTY OP IIANAII Corporat less I, D7curl laee Admictorristaf Moths :tkes c' i•; kd n, falloue: Dept. or Rt._ '.atory tur.oelr.. Pea $5) _-Duroau- f Conveyances Pee STATE 07 HAWAII DEPARTMENT OP vs-Guymon AGENCIES Business Registration Division IOW Richards Street Mailing Address' P.O. Lux 40, Honolulu, Havnil 96310 _ In the Matter or the Amendment of ti., Charter of incorporation Of ) •,lnit "'n'H ' ) Otbwnn ., wow _ ✓ KONA ASSOCIATION FOR RETARDED ) S no ' o CHILDREN, a non- nroflt corporation) 1 '7 _ll.11 ^_1 CERTIFICATE OF AMENDMENT y KONA ASSOCIATION' FOR The President and Secretary, respectively, of RETARDED CHILDREN a Hawaii non - profit corporation, do hereby certify that at a special mooting of the ne.bere of said corporation duly celled end held at Koalakekua, Kona, Hawaii on the 29th day of June ,1978 , for the purp000 of changing the name of the aid corporation, it was voted by not less than two- thirds of the members present at the muting to amend the Charter of Incorporation of paid corporation by KONA ASSOCIATIONI FOR deleting the name RETARDED CHILDREN wherever it appear, in the Charter of Incorporation, and inserting in lieu thereof the name KONA ASSOCIATION POR RETARDED CITIZENS . /a /S - t IN WITNESS {HEREOF, the undaroigned have hereunto an their hands this ;Sth day of - Mel. TMQ/ 19 79 12ti os 1JOnt RIKIO MORIMOTO e JIA nv b ` "riam6 Wm. M. Usui l being .) first duly warn on oath deposes Ind say that they are the PresiJnnt and Seetvts , y ; y ASSOCIATION KONA ASSOCIATIOti FOR respectively of RETARDED CHILDREN ; that as ouch officers they ere duly authorized to sign the foregoing Certificate of Amendment; and that they have read the said Certificate, know the coq ten a thereof, and that the same is true. f f yy { p( (� t it 7 Orr " 7. (\ f// Pr el Jent Subs /ribed and pen to before me this 9 /S• day of - ./14 1 / 7 - ,ig y , /1 J.,/ A Lzct, a ..p o. E. Bata Public 4 1 lic J udicial Circuit, State of Hawaii My temalseion expires: /a -/r. L I hereby Approve the Corecoing amendment this 4 a day of .8eveeeasy T - oa .owrer ieesenroy T•eaaurer l9 f fi . t..�,ulnlo f /.Leaches H:; • STATE OF HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS THE DIRECTOR'S OFFICIAL CERTIFICATION APPEARS ON THE BACK OF TIIE FIRST PAGE OF TILE ATTACHED DOCUMENT. 1 NLBFBY CLBIIIY InJ IMx I Vx� IMF nnI )7 S PS SI 77i comma Mo SLR a73 D'e Ma, YS s • • STATE OF HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS Honolulu I. RUSSEL S. NACATA, Director of Commerce end Consumer Affairs of the Stets of Hawaii. do hereby certify that according to the records of this Department. BONA ASSOCIATION FOR RETARDED CITIZENS was Incorporatad on December 19. 1966 a. • nonprofit corporation; that it is still In exi•t•nce, and that it has complied with all the provisions of Chapter 416 of the Hawaii Reviled Statute.. regulating domestic nonprofit corporation.. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the noel of tha Department of Commerce and Consumer Affalre, at Honolulu, this 7th day of June, 19E4 Director of Commer and nenenr Affairs Acting Corporation L Securities Administrator I • DEPARTEENT OF REGULATORY AGENCIES STATE OF HAWAII In the Batter of the Petition ) For Charter ) of ) KONA ASSOCIATION FOR RETARDED CHILDREN ) CHARTER OF INCORPORATION OF KONA ASSOCIATION FOR RETARDED CHILDREN Know ye, that whereas HARK U. SUTHERLAND, KID 1CCUY, TrNU JR., O.V.H., KATSUWBA.TOHITA, dA@IF F. CHILLING WORTH, and 11,451— (Mrs.) RUTH A. SIEIUHTHOLM, all of whom are rooldunte of the Stets of Hawaii, have made application to mo, no Director of Regulatory Agonise of the State of Hawaii, to grunt u Charter of Incorporation to thorn and thulr aosociatuo; NOW, THEREFORE, I, SIDNEY I. IIASIIILiOTO, DIHiCTOn OF REGULATORY AOEECIES, in the exercise of all powor and authority anywise enabling we in this behalf, do horaby constitute the above named persons and their aaooclatoo a body corporate, and do confer upon them the following Chartor: CHARTER OF INCORPORATION OF NONA ASSOCIATION FOR RETARDED CHILDREN I. The name of the corporation shall be I:OI:A ASSOCIATION FOR RETARDED CHILDREN. II. The location and principal offico of the corporation shall be at Kealakatua, Hawaii, State of Hawaii, or at ouch other location in the Kona area as the Board of Uircctors shall from time to time designate and its poet offlca adiruss Se P. O. Box 7}8, Koolatekun, Hawaii. • • folloue: r The object(' and purposes of the corporation uro as A. To promote the bonoral welfare of mentally rut:trdud and handlcappod persona of all acne throuchout the Lona area in the County of Hawaii, State of Hamill; at home. In the cor.munitloa, In inatitutiono, and in public. private old rolitlouo ochoola and workaholic; U. To further the advanaomont of all ameliorative and provantallva study, rueearch, therapy. education and troloita In the fields Involved In mental retardation and human handicaps. C. To devolop a better undurstand1n5 of the problomo of mental retardation and human handicaps by the public, private, and rellblous neonates, and International, national, state, and local departments of aducation, health and institutions; D. To further the traininG and education of porcunoal for work in the flolde of mental retardation and human handicaps; 6. To aorve as a olearinG house for cathorinc and disseminating information. rayardiny the mentally ru tard,.d and the handicapped, and to foster the development of inte6ratod probrams in their behalf; F. To provide special purpose activities, achoo is, day care centers, workshops, auxiliaries. etc.; and d. To cooperate with other corporations, oociatica, clubs, associations, etc. in the interests of mentally retarded and handicapped parsons. Iv. The powers of the corporation aro as folloaa; A. To purchase, take on, lease, exchanGe, or otlrtrt.i e 2. a • acquire any lards, buildings and Proporty, real or personal, which may be roquielto for the purpose of, or conveniently used in connection with any of the purpaooe of the corporation. and to sail, demise, mortgago, glvo in cxchanua, or dispose. of tha sumo; D. To invent and deal with the monoye of tho corporation. not Immediately required, in such eocurltloo and In ouch manner as may from time to time be doterminod; C• To borrow, rates, and give oecurity for money by tae Inoue of promissory notes or other obligation° or by mortgngo of all or any part of the property of the corporation; D. To solicit, acquire and reoelvo charitable contributions consisting of cash, securities, or other Properties; E. To expend any of the moneys or pro!crtlaa of the corporation, whether they be capital invootmdnto or 1ncamo from the name, for the purpooee of the corporation; F. To do and perform all such acts and thing's and to carry on all much buelnese ae shall be proper, naccuuury, ur convenient for the furtherance of the objects and purposes aforesaid; and G. To have all other such powers capablo of boing vested in corporations not organized for profit urxlur Lhu laws of the State of Hawaii. V. The duration of the corporation shall bo per ?otual. VI. The busincea and affairs of the corporation shall be managed by a Board of Directors consisting of not less than five (5) nor more than twelve (12) persona, mho shall bo qualified, nominntad, elooted, and appointed as la Provided 3. • • for In the By -Lows. The Board of Directors shall huvo full power to control and direct the buelneoo affairs of the corporation, subject, however, to instructions by the mumboro and to any limitation. containod herein or In the By-Lauo of Lho corporation. The initial directors of the corporation and their business. and home addroaeoa are as follows: Name Duelnoos Addreos Home Address Konawnona Elementary Koulukokua, Ilawall Sohool Kealakokua, Hawaii Kld McCoy, Jr., D.V.M. Kealakekuo, Hawnil Koulakekua, Hawaii Katoumaeo Tomita Department of Social Rural Route Services Iloluuloa, Ilawall Kealakokua, Hawaii Chuck Bell's Service Station Kailua -Kona, Hawaii Kealakokua, Hawaii Kealakokua, Hawaii Kealakekua, Hawaii Work W. Sutherland .. ,4r1" F. Ch1111ngworth A Huth A. Sleightholm William Ueul Wilmot D. Boone, Y.D. Ethel F. (Rusty) Murray Kailua -Kona, Hawaii Margaret Apple David M. Fraser Konawaona Elementary School Koalakekua, Hawaii Dillingham Investment Corporation Captain Cook, Hamill VII. The officers of the corporation shall consist of such officers as shall be provided for In the By -Lowe with such qualifications, duties and powers as are provided for In the By -Lave. The initial officers of the corporation and their business and home addresses are as follows: Office Name Business Address Iloee Address President Dark Y. Sutherland Konawaona Kealakokua, Hawaii Elementary School Kealakekua, Hawaii 4 . Captain Cook, Hawaii Kealakokua, Hauull Koolukokua, Hawaii l :ualukekua, Hawaii Kalluu -Kona, Hawaii Honaunau, Hawaii Captain Cook, Ilawall • Office Name Uuolnaoo Addrsus Vice I-resident I:atoumaoa Tomlta Dcpartmant of Cocial Corvine° hoalakokua, Ilanull Secretary huth A. Slolghtholm Kealakekua, Hawaii Treaourer William Caul State Tax Office Kealakekua, Hawaii Ilome A :drots Rural louto Iloluulou, Ila.a11 Kua lake kua, ilav :all 1 o:t Ia kc kua, liana 1i VIII. bombers may be admitted and oxpollod In the manner provided for in the By-Laws. The proposed Dy - Lano provide that members shall conelat of reeldento of the Kona area of the County of Ilawall,,state of Hawaii, who certify thoir unselfish Interest In promoting the stated purpoaoo of the corporation. These proposed By-Lows further provide that membership shall terminate either upon resignation of mumboro duly accepted by the Board of Directors, by failure to moot the duos or eery ice requirement for membership after due notice, or by a majority vote of the quorum of the mumt- ro:ilp in form of expulsion. IX. Tho corporation shall have the power to dissolve, and It shall have the power to distribute all or any part of Its properties or assets either before or after dl000lutlun, to any other charitable corporation or trust having purpusos similar to those of this corporation, as a majority of the membership at the time of dissolution shall agree upon. x . The corporation is not organized for profit and will part of its assets, Income, or not Issue any stock. Ho earnints will be issued for dividends, or will othuroise be withdrawn or distributed to its members. Direutora, ur Officers, except for cervices actually roniorad to tn..: corporation, or as otherwise provided heroin. 5. 4 • • XI. Tha property of the Corporation ohall alone be liable for payments of the debts and liabilities of the corporation. Xi'. The corporation ohull complete Ito organl;:atlun within sixty days after Issuance of the Charter of Incorporation. XIII. The initial Dy -Lune of the corporation ohnll bu adopted by a majority vote or the members proaent uL a mooting duly called and to be hold within thirty (3 days from the isouanco of thin Charter of Incorporation. Notice mull ho Given thereof atating that a purpose of the mnotlnE la to consider the adoption of the By-Laws. The Dy -Lowe may ho amended by a two - thirds majority of the memboroh in pi-uncut at any meeting of the members duly called for tho purpoou of considering the amondmont of the Dy -Laws. A cortiflcd cop of said By -Laws shall be filed oath the Director of regulatory Aganoles of the State of Howell. IH WITNESS WHEREOF. I have hereunto oat my hand and caused the official seal of the Department of Regulatory Agencies of the State of Hawaii to be horeunto offload this 42Ziday :alitd _. 1966 " J 'I C7 • S�d�iey f A F� ciaElmo to Director of Regulatory ALonclua 6. • AMENDMENTS TO TIIC CHARTER OF INCORPORATION OP KONA ASSOCIATION FOR RETARDED CfTIZCNS FIRST: Article III is hereby amended by the addition of paragraphs II and I, ne follows: H. To provided elderly persons and handicapped persons with housing facilities and services specially designed to meet their physical, social and psychological needs, and to promote their hclath, security, happiness and usefulness in longer living, the charges for such facilities and services to be predicated upon the provision, maintenance and operation thereof on a nonprofit basis. I. The Corporation is irrevocably dedicated to and operated exclusively for, nonprofit purposes; and no part of the income or assets of the Corporation shall be distributed to, nor inure to the benufit of, any individual. SCCOND: Article IV is hereby amended as follows: 1. Paragraph C is hereby deleted and substituted therefor is the following new paragraph C. C. To borrow money and issue evidence of indebtedness in furtherance of any or all of the objects of its business, and to secure the same by mortgage, pledge or other lien on the Corporation's property. 2. Article IV is further amended by the addition of paragraphs H, I, and J, as follows: N. To buy, own, sell, assign, mortgage or lease any interest in real estate and personal property And to construct, maintain and operate improvements thereon necessary or incident to the accomplishment of the purposes set forth in Article III hereof. s • • Page 2 AMENDMENTS TO THE CHARTER OF INCORPORATION OF KONA ASSOCIATION FOR RETARDED CITIZENS To do and perform all acts reasonably necessary to accomplish the purposes of the Corporation, including the execution of a Regulatory Agreement with the Secretary of Housing and Urban Development, and of such other instruments and undertakings as may be necessary to enable the Corporation to secure the benefits of financing under Section 202 of the Housing Act of 1959. Such Regulatory Agreement and other instruments and undertakings shall remian binding upon the Corporation, its successors and assigns, so Long as a mortgage on the Corporation's property is held by the Secretary of Housing and Urban Development. J. In the event of the dissolution of the Corporation or the winding up of its affairs, or other liquidation of its assets, the Corporation's property 'hall not be conveyed to any organization created or operated for profit or to any individual for less than the fair market value of such property, and all assets remaining after the payment of the Corporation's debts shall be conveyed or distributed only to an organization or organizations created and operated for nonprofit purposes similar to those of the Corporations:PROVIDED, however, that the Corporation shall at all times have the power to convey any or all of its property to the Secretary of Housing and Urban Development. THIRD: Article VI is hereby amended by the deletion of the first sentence which reads: The business and affairs of the corporation shall be managed by a Board of Directors consisting of not less than five CS) nor more than twelve (12) persons, who shall be qualified, nominated, elected, and appointed as is provided for in the By -laws. And substituted therefor is the following: Page 3 AMENDMENTS TO THE CIARTER OF INCORPORATION OF KONA ASSOCIATION FOR RETARDED CITIZENS The business and affairs of the corporation shall be managed by a Board of Directors consisting of not less than five (5) nor more than twenty -five (25) persons, who shall be qualified, nominated, elected, and appointed as is provided for in the By -Laws. FOURTH: Article XIII is hereby amended by the deletion of said Article and substituted therefor is the following new Article XIII: The initial By -Laws of the corporation shall be adopted by a majority vote of the members present at a meeting duly called and to be held within thirty (30) days from the issuance of this Charter of Incorporation. Notice shall be given thereof stating that a purpose of the meeting is to consider the adoption of the By -Laws. The By -Laws may be amended by a two - thirds majority of the membership present at any meeting of the members duly called for the purpose of considering the amendment of the By -Laws. The By -Laws shall not be inconsistent with the provisions of these Articles or of the Regulatory Agreement between the Corporation and the Secretary of (lousing and Urban Development pursuant to Article III hereof. A certified copy of said By -Laws shall be filed with the Director of Regulatory agencies of the State of Hawaii. FIFTH: A new Article XIV is hereby added which shall read as follows: So long as a mortgage on the Corporation's property is held by the Secretary of Housing and Urban Development, these Articles may not be amended without the prior written approval of the said Secretary. ADOPTED: Special Membership Meeting DAT an. 2j,-l983 PLACE: Kona grafts SECRETARY: 'V . _ /, %`- • (signature) • • DEPARTMENT OF REGULATORY AGENCIES STATE OF HAWAII In the Mutter of the Petition For Charter ) of ) ) EDNA ASS0CIATION FOR hETARDED CHILDREN ) PETITION FOR CHARTER OF INCORPORATION OF otrADH4u l bf eta — KONA ASSOCIATION FOR RETARDED CHILDItE'N AGEPCrs .StNF Of H" To Tho Honorable SIDIG:Y I. HASHII'OTO OIIIduIIiR • Director of Regulatory Agenoles af,tHnier, ".PC State of Hawaii: Como now MARX Y. SUTHERLAND. KID MCCUY, JR.. U.V.K., 7 � o,, KATSUKASA TOMITA, JA-Aeit e% F. CHILLINJWORTH and RUTH A. „ if SIEISHTIIOLU and respectfully petition for Uho losuanco of a charter of Incorporation In the form and manner of the Charter of Incorporation attached hereto and incorporated herein by reference. IN WITNESS WHEREOF the incorporators have horuunto set their hands as of this « day of 412rt 196G. Mari K. Suthor and teumasa Tomita t /�f • oCoy, J - U.V.Y. es./ e. Ruth A. S FJ elm 1 . F: C th SngwJjl•th 4 6 s • THIRD JUDICIAL CIRCUIT ) COUNTY OF HAWAII ) STATE OF HAWAII ) LARK U. SUTHERLAND, being first duly morn, deposes and. nays under oath, that he le the Petitioner In the furucoinc Petition for Charter of Kona Association For Roturlud Children, that he has rend the Bold Petition aril Charter, known the contents thereof, and that the 0 m 10 true. Sutodr}he4 and sworn to before mo ',Lh }a Y'• of ..,,. -k_„{ 1966. C Notary :rublic, 3r1 Jud y Circuit. 'r <• 1,• , ' State of Ilawafl '•) Sy1Coomlealon expires J • THIRD JUDICIAL CIRCUIT COUNTY OP HAWAII STATE OF IIAYWAII ) I:ID MCCOY, JH., D.V.Y., being first duly onorn, dopooee and says under oath, that he in the Petitioner in the Cor•enetnt:Petition for Charter of Kona Association For Retarded Children, that he has read the Geld Petition and Charter, known the contents thereof, and that the mime is true. C d MoCyJr., D.V.Y. C r :94b'oe rd11� nnl eww2�rn to before ma ( I h d( ,_... Y 1966. ctIotaryOublio, 3rd Judl�� y 41 ° Circult /I State of Hawn - 11 '•yy11Q,'omm laslon expires THIRD JUDICIAL CIRCUIT COUNTY OP HAWAII STATE OF HAWAII 2. ) ) r Y. 3uthorlund KATSUSASA TOYITA, being first duly sworn, dopuseu and says under oath, that he le the Petitioner in Lho foregoing Petition for Charter of Kona Association For Retarded Children, that he has read the said Petition and Charter, known the contents thereof, and that the Same ;e true. KaLeumusa Tomita Sube61 cc and °Aprn to before ms th\a - m " .day of✓l wwwwww ./ , 1966. ' / Nota Fry llblle, 3rd Judi Circuit ` L I C ' 'State of Ila:al i 4 Com=lcsion axplroa S- t' Cf /IG1'Ini • • • • THIRD JUDICIAL CIhCUIT ) COUNTY OF HAWAII ) STATE OF HAWAII ) JACK F. CIIILLINDWOKTi1, being first duly sworn, dopouos and says undur oath, that ho io the Petitioner In thu forogoing Petition for Charter of Kona Aaooeiatlun For Rotardod Children, that ho hue road the uald Potltlon and Charter, known the contents t1}grnpf „ and ,/t.hut the same Is true. 4 4 p and awgrn to boforo me ,i i L” tli'£s 3 ''ASS day of �'“rt^c--+ 1966. . l:otpry Public, 3rd Ju�lic t Clrcutt S1 State of lawn '/1 +.y expires .4- -J'- G.t THIRD JUDICIAL CIRCUIT ) COUNTY OF HAWAII STATE OF HAWAII ) 71 F4 worth (4 .1-0-04 F. Ch1 11 w RUTH A.. SLEIUIITIIOLLI, being [trot duly sworn, dopuoua and says under oath, that she is the Petitioner In the foreCoing Petition for Charter of None Association For Retarded Children, that ohs has read the said Petition and Charter, knows the contents thereof, and that the same is true. Y e. Ruth 5 h L gholm < ,Subsc ^ and sworn to before me • thle en day of + -4.-f✓, 1966. 'notary PuU ic,3rd Judi CZroult State of Ilan 1 Ly Commiaelon expires -t ..n • 3. a • KONA ASSOCIATION FOR RETARDED CITIZENS dba KONA KRAFTS APPLICATION FOR NON - PROFIT GRANT FUNDS JANUARY 2000 By -Laws KONA' \9999\380V 209.1 \WNG BYLAWS OF KONA ASSOCIATION FOR RETARDED CITIZENS ARTICLE I MEMBERS • 1. Membership. The corporation shall have one class of members to be known as regular members. A person may become a regular member upon: a) Making known his or her desire to promote the objectives and purposes of the corporation by signing the corporation membership application form; b) Satisfying the dues requirement for membership as set by the Board of Directors from time to time; and c) Receiving a majority vote of approval by the Board of Directors when his or her name is presented for approval. 2. Voting Rights of Members. At every meeting of members each member shall be entitled to vote in person, or by proxy. Each member of the corporation shall be entitled to one vote. Upon the demand of any member, the vote for director(s) and/or the vote upon any question before the meeting, shall be by ballot. Except as otherwise provided by the corporation's Charter of Incorporation, these Bylaws or by law, all elections shall be had and all questions shall be decided by a majority vote of the members present in person or by proxy. 3. Termination of Membership. The Board of Directors, by affirmative vote of at least two- thirds of all of the members of the Board, may suspend or expel a member for cause after an appropriate hearing. Also, a member's annual membership shall automatically terminate upon a member failing to satisfy the dues requirement for any membership year by the date specified by the Board of Directors, however, the person may reinstate his or her membership at any time by paying the dues specified for the then current membership year. Any person whose membership has been terminated for cause, other than a failure to pay annual dues, shall not be eligible for membership for a period of one (1) year from the date of termination. 4. Resignation of Member. Any member may terminate his or her membership by filing a written statement to that effect with the secretary. or assignable. ARTICLE II MEETING OF MEMBERS KONA1\9999\3110V209. 1 \WHG 2 • 1 5. Transfer ofMemhershin. Membership in this corporation is not transferable 1. Annual Meeting. An annual meeting of the members shall be held on such date and at such time as the Board of Directors may from time to time designate, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. 2. Special MeetinFT. Special meetings If the members may be called by the president, the Board of Directors or by members having one -tenth of the votes entitled to be cast at the meeting. 3. Place of Meetinrs. The Board of Directors may designate any place within the District of North or South Kona, within the State of Hawaii, as the place of meeting for any annual meeting or for any special meeting called by the Board o f Directors. If the place of meeting is not designated then the place of meeting shall be the registered office of the corporation in the State of Hawaii. If all of the members shall meet at any time a place, and consent to the holding of a meeting, such meeting shall be valid without call or notice, and at such meeting any corporate action may be taken. 4. Notice of Meetings. Written or printed notice stating the place, day and hour of any meeting of members shall be delivered, either personally or by mail, to each member entitled to vote at such meetings, not less than 10 nor more than 60 days before the date of such meeting, by or at the direction of the president, the secretary, the officers or persons calling the meeting. In case of a special meeting, the purpose or purposes for which the meeting is called shall be stated in the notice, If mailed, the notice of a meeting shall be deemed to delivered when deposited in the United States mail addressed to the member at his or her address as it appears on the records of the corporation, with postage thereon prepaid. 5. Action by Members Without a Meeting. Any action required or permitted under Section 415B -16, Hawaii Revised Statutes, as amended, to be taken at a meeting of the members, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the members entitled to vote on the subject matter thereof. 6. Quorum. The members holding at least ten percent (10 %) of the total outstanding votes which may be cast at any meeting shall constitute a quorum at such meeting. If a quorum is not present at any meeting of members, a majority of the members present may adjourn the meeting from time to time without further notice. • • 7. proxies. At any meeting of members, a member entitled to vote may vote by proxy executed in writing by the member or by his or her duly authorized attorney in fact. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy. ARTICLE III BOARD OF DIRECTORS I. Number. Tenure and Qualification. The number of directors shall consist of not less than five (5) nor more than twenty-five (25) persons. Each director shall hold office until the conclusion of the next annual meeting of the members of the corporation or until he or she has been earlier removed pursuant to Article III, Section 2 of these Bylaws. 2. Resignation/Removal. Any director may resign at any time by giving written notice of such resignation to the Board of Directors. Any director may be removed from office at any time with or without cause and another elected in his or her place to serve for the remainder of his or her term by a majority of the members present at a special meeting of the members called for such purposes or pursuant to Article II, Section 5 of these Bylaws. Any vacancy not filled by the members at the meeting shall be filled by the Board of Directors in accordance with Article III, Section 3, herein. 3. Vacancy. Any vacancy in the Board of Directors occurring during the year not filled by the members may be filled for the unexpired portion of the term by the affirmative vote of the majority of the remaining Board of Directors then serving. Any director so elected by the Board of Directors shall hold office until the next annual meeting of the members of the corporation. KONAI\9999\380V209. 1 \WHG ARTICLE IV MEETINGS OF DIRECTORS 1. Regular Meetinpi. A regular annual meeting of the Board of Directors shall be held without other notice than these Bylaws, immediately after, and at the same place as, the annual meeting of members. The Board of Directors may provide by resolution the time and place, either within or without the State of Hawaii, for the holding of additional regular meetings of the Board without other notice than such resolution. 2. Special Meetinos. Special meetings of the Board of Directors may be called by or at the request of the president or any two directors. The person or persons authorized to call special meetings of the Board may fix any place within the District of North or South Kona, State of Hawaii, as the place for holding any special meeting of the Board called by them. 3. Notice. Notice of any special meeting of the Board of Directors shall be given at least five (5) days prior to the date set for the meeting by verbal or written notice delivered personally or sent by mail or facsimile transmission ( "fax ") to each director at his or her address or fax number as shown by the records of the corporation. if mailed, such notice shall be deemed to 3 KONA 1 \99993 60V 209.1 \W HC compensation. be delivered when deposited in the United States mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by fax, such notice shall be deemed to be delivered when the fax is successfully sent. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting, unless specifically required by law or by these Bylaws. 4. thignam. At all meetings of the Board of Directors a majority of the directors shall be necessary and sufficient to constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by these Bylaws. If at any meeting there is less than a quorum present, a majority of those present may adjourn the meeting from time to time without further notice to any absent director. 5. Action liy Directors Without a Meeting, Any action required or permitted under Section 4I5B -16, Hawaii Revised Statutes, as amended, to be taken at a meeting of the Board of Directors, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the directors. 6. Compensation Directors shall not receive any stated salary or any other ARTICLE V OFFICERS 1. Officers. The officers of the corporation shall be a president, one or more vice - presidents (the number thereof to be determined by the Board of Directors), a secretary, a treasurer and such other officers as may be elected in accordance with the provisions of this Article. The Board of Directors may elect or appoint such other officers, including one or more assistant secretaries and one or more assistant treasurers, as it shall deem desirable, such officers to have the authority and perform the duties prescribed, from time to time, by the Board of' Directors. 2. Election and Tenn of Office. The officers of the corporation shall be elected annually by the Board of Directors at the regular annual meeting of the Board of Directors. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. New offices may be created and fil ed at any meeting of the Board of Directors. Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified. 3. Resignation/Removal. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors if the resignation would not be a violation of any 4 e • • contractual obligation that the officer may have to the corporation. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the officer so removed. 4. Vacancies. In case of any office of the corporation becomes vacant by death, resignation or any other cause, the majority of the Directors then in office, although less than a quorum, may elect a person to fill such vacancy, and the person so elected shall hold office and serve until his or her successor shall have been duly elected and shall have qualified. 5. President. The president shall be the principal executive officer of the corporation and shall preside over the business and affairs of the corporation. He or she shall preside at all meetings of the members. He or she may sign, with the secretary or any other proper officer of the corporation authorized by the Board of Directors, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws or by statute to some other officer or agent of the corporation; and in general he or she shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time. 6. Vice - President. In the absence of the president or in event of his or her inability or refusal to act, the vice - president (or in the event there be more than one vice - president, the vice - presidents in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. Any vice - president shall perform such other duties as, from time to time, may be assigned to him or her by the president or by the Board of Directors. 7. Treasurer. The treasurer shall have the custody of all funds, property, and securities of the corporation, subject to such regulation as may be imposed by the Board of Directors. He or she may be required to give bond for the faithful performance of his or her duties, in such sum and with such surety as the Board of Directors may require. He or she shall enter regularly on the books of the corporation to be kept by him or her for the purpose, full and accurate account of all moneys and obligations received and paid or incurred by him or her for or on account of the corporation, and shall exhibit such books at all reasonable time to any director or member on application at the offices of the corporation. The treasurer shall, in general, perform all the duties incident to the office of treasurer, subject to the control of the Board of Directors. 8. Secretary. The secretary shall have charge of such books, documents and papers as the Board of Directors may determine and shall have the custody of the corporate seal, if any. He or she shall attend and keep the minutes of all the meetings of the Board of Directors and members of the corporation. He or she shall keep a record, contairiing the names, alphabetically arranged, of all persons who are members of the corporation, showing their places of residence, and such book shall be open for inspection as prescribed by law. He or she may sign with the president KONA 1 \9999\7a0V 209.1 \W HG 5 KONA 1 \9999\38OV 209.1 \W HG • • or vice - president in the name of and on behalf of the corporation any contracts or agreements authorized by the Board of Directors, and when so authorized or ordered by the Board of Directors, he or she may affix the seal of the corporation, if any, to any contracts or agreements. The secretary shall, in general, perform all the duties incident to the office of secretary, subject to the control of the Board of Directors, and shall do and perform such other duties as may be assigned to him or her by the Board of Directors. 9. Assistant Treasurers and Assistant Secretaries. If required by the Board of Directors, the assistant treasurers shall give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The assistant treasurers and assistant secretaries, in general, shall perform such duties as shall be assigned to them by the treasurer or the secretary or by the president or the Board of Directors. ARTICLE VI COMMITTEES I. Committees of Directors. The Board of Directors, by resolution adopted by a majority of the directors in office, may designate and appoint one or more committees, each of which shall consist of two or more directors, which committees, to the extent provided in said resolution, shall have and exercise the authority of the Board of Directors in the management of the corporation; provided, however, that no such committee shall have the authority of the Board of Directors in reference to amending, altering or repealing the Bylaws, electing, appointing or removing any member of any such committee or any director or officer of the corporation; amending the Charter of Incorporation; restating the Charter of Incorporation; adopting a plan of merger; adopting a plan of consolidation with another corporation; or authorizing the sale, lease, exchange or mortgage of all or substantially all of the property and assets of the corporation; authorizing the voluntary dissolution of the corporation or revoking proceedings therefor; adopting a plan for the distribution of the assets of the corporation; or amending, altering or repealing any resolution of the Board of Directors which by its terms provides that it shall not be amended, altered or repealed by such committee. The designation and appointment of any such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors or any individual director, of any responsibility imposed upon it or him by law. 2. Other Committees. Other committees not having and exercising the authority of the Board of Directors in the management of the corporation may be designated by a resolution adopted by a majority of the directors present at a meeting at which a quorum is present. Any member thereof may be removed by the person or persons authorized to appoint such member whenever, in their judgment, the best interests of the corporation shall be served by such removal. 3. Term of Office. Each member of a committee shall continue as such until the next annual meeting of the members of the corporation and until his or her successor is appointed, unless the committee shall be sooner terminated, such member is removed from such committee, or unless such member ceases to qualify as a member thereof. 6 • to • • 4. Chairman. One member of each committee shall be appointed chairman by the person or persons authorized to appoint the members thereof. 5. Vacancies. Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments. 6. Ouoruni. Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee. 7. Rulez. Each committee may adopt rules for its own government not inconsistent with these Bylaws or with rules adopted by the Board of Directors. KO N A 1\9999\3 80 \7209.1W/HG ARTICLE VII INDEMNIFICATION OF OFFICERS AND DIRECTORS 1. Non- derivative Actions. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) if that person is or was a director or officer of the corporation, against expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of this corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. 2. Derivative Actiona. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or complete action or suit by or in the right of the corporation to procure ajudgment in its favor because that person is or was a director or officer of the corporation, against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of the action if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of this corporation; except that no indemnification shall be made in respect of any claims, issue, or matter as to which the person shall have been adjudged to be liable for negligence or misconduct in the performance of the person's duty to this corporation unless and only to the extent that the court in which that action or suit was brought shall determine upon application 7 • that, despite the adjudication of liability but in view of all the circumstances of the case, the person if fairly and reasonably entitled to indemnity for such expenses as the court deems proper. 3. Authorization. Any indemnification under Sections 1 and 2 of this Article (unless ordered by a court) shall be made by the corporation only if authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because the director or officer has met the applicable standard of conduct set forth in Sections 1 or 2. The determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to the proceeding, or (b) if a quorum is not obtainable, or, even if obtainable if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion to the corporation, or (c) by a majority vote of the members (if any); or (d) by the court in which the proceeding is or was pending upon application made by the corporation or the director or officer or the attomey or other person rendering services in connection with the defense, whether or not the application by the director, officer, attorney, or other person is opposed by this corporation. 4. Advance Payments. Expenses incurred in defending any proceeding may be paid by the corporation in advance of the final disposition of the proceeding as authorized by the Board of Directors in a particular case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that the director or officer is entitled to be indemnified by the corporation as authorized' in this Article. 5. Other Rights. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs and personal representatives of such a person. 6. Insurance. The corporation shall have the power to purchase and maintain insurance on behalf of any director or officer of the corporation, against any liability asserted against or incurred by the director's or officer's status as such, whether or not the corporation would have the power to indemnify the director or officer against liability under this Article. ARTICLE VIII CONTRACTS, CHECKS, DEPOSITS AND FUNDS 1. Contracts. The Board of Directors may authorize any officer or officers, agent or agents of the corporation, in addition to the officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. 2. Checks. Drafts. etc. All checks, drafts or orders for the payment of' money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall, from time KONA I\9999 V80\7209.1 \WHG 8 • f • • to time, be determined by resolution of the Board of Directors. In the absence of such determination by the Board of Directors, such instruments shall be signed by the treasurer or an assistant treasurer and countersigned by the president or a vice - president of the corporation. 3. Deposits• All funds of the corporation shall be deposited as soon as possible to the credit of the corporation in such banks, trust companies or other depositaries as the Board of Directors may select. 4. Gifts• The Board of Directors may accept on behalf of the corporation any contribution, gift, bequest or devise for the general purposes or for any special purpose of the corporation. ARTICLE IX CERTIFICATES OF MEMBERSHIP 1. Certificates of Membership. The Board of Directors may provide for the issuance of certificates evidencing membership in the corporation, which shall be in such form as may be determined by the Board. Such certificates shall be signed by the president or a vice - president and by the secretary or an assistant secretary and shall be sealed with the seal of the corporation, if any. All certificates evidencing membership of any class shall be consecutively numbered. The name and address of each member and the date of issuance of the certificate shall be entered on the records of the corporation. If any certificate shall become lost, mutilated or destroyed, a new certificate may be issued therefor upon such terms and conditions as the Board of Directors may determine. 2. Issuance of Certificates. When a member has been elected to or is entitled to a membership and has paid any initiation fee and/or dues that may then be required, a certificate of membership shall be issued in his or her name and delivered to him by the secretary, if the Board of Directors shall have provided for the issuance of certificates of membership under the provisions of Section 1 of this Article IX. ARTICLE X BOOKS AND RECORDS The corporation shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its members, Board of Directors and committees having any of the authority of the Board of Directors, and shall keep at the registered or principal office a record giving the names and addresses of the members entitled to vote. All books and records of the corporation may be inspected by any member, or the members agent or the member's attorney for any proper purpose at any reasonable time. KONA I\9999\380V 209.1 \WHG 9 • ARTICLE XI FISCAL YEAR The fiscal year of the corporation shall begin on th last day of June in each year. ARTICLE XII DUES ARTICLE XIII SEAL • first day of July and end on the 1. Annual Dues. The Board of Directors may determine, from time to time, the amount of annual dues payable to the corporation by members. 2. payment of Duel. Dues for existing members shall be paid on or before such date as the Board of Directors may specify as being the date for a particular membership year. A person, however, may become a member at any time during a membership year upon satisfying the requirements set forth in Article 1, Section 1 herein. The corporation may have a seal of such form as the Board of Directors may from time to time determine, which seal shall be in the custody of the secretary. The Board of Directors may change the form of the seal or the inscription thereon at pleasure. Whenever any notice is required to be given under the provisions of the Hawaii Nonprofit Corporation Act or under the provisions of the Charter of Incorporation or the Bylaws of the corporation, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by a two- thirds majority of the members present at any meeting of the members duly called for the purpose of considering the amendment of the Bylaws. No amendment to these Bylaws, however, may be made which would render them inconsistent with the provisions of the corporation's Charter of Incorporation or the regulatory agreement between the corpora ion and the Secretary of Housing and Urban Development. KONA I\9999 N. 380V209.1 \WHG ARTICLE XIV WAIVER OF NOTICE ARTICLE XV AMENDMENT TO BYLAWS 10 0 1 ARTICLE XVI RULES OF ORDER ADOPTION OF BYLAWS Secretary Robert's Rules of Order, revised, shall govern the conduct of business at all meetings of the members, the Board of Directors and committees in all cases in which they are applicable and not in conflict with the Charter of Incorporation or these Bylaws. I, the undersigned Secretary of the corporation, on this 1 6 day of Alta ) , 1995, do hereby certify that the foregoing provisions were adopted as the Bylaws of said corporation by the required vote of the members of the corporation at a meeting duly called for that purpose held on •urkQ-- , 1995. e_Q._a_ri VsLc l U PERSONNEL POLICIES AND PROCEDURES SUBJECT: EMPLOYMENT OF RELATIVES PAGE NO. 1 OF 2 PAGES FILE UNDER SECTION: EP 3.0 EFFECTIVE DATE: JULY L 1994 DAT/ AP?ROVm 51 SQUID O! DTRKTOAS: JIDR 16, 1996 REVISION DATE: JUNE 1994 • • Kona ARC Employment Policies Section EP 3 0 - Employment of Relatives Kona ARC permits the employment of qualified relatives of employees as long as such employment does not, in the opinion of Kona ARC, create actual or perceived conflicts of interest For purposes of this policy, "relative" is defined as a spouse, child, parent, sibling, grandparent, grandchild, aunt, uncle, first cousin, or corresponding in -law or "step" relation. Kona ARC will exercise sound business judgment in the placement of related employees in accordance with the following guidelines: - -- Individuals who are related by blood or marriage are permitted to work in the same program area, provided no direct reporting or supervisory/management relationship exists. That is, no employee is permitted to work within the "chain of command" of a relative such that one relative's work responsibilities, salary, or career progress could be influenced by the other relative. - - -No relatives are permitted to work in the same department or in any other positions in which Kona ARC believes an inherent conflict of interest may exist. - -- Employees who marry while employed are treated in accordance with these guidelines. That is, if, in the opinion of Kona ARC, a conflict or an apparent conflict arises as a result of the marriage, one of the employees will be trans- ferred (if possible) at the earliest practicable time. This policy applies to all categories of employment at Kona ARC, including regular, temporary, and part-time classifications. 5 PERSONNEL POLICIES AND PROCEDURES SUBJECT: EMPLOYMENT OF RELATIVES PAGE NO. 2 OF 2 PAGES FILE UNDER SECTION: EP 3.0 EFFECTIVE DATE: JULY 1,1994 DATE APPROVED BY BOARD or DIRECTORS: sops 16, 1994 REVISION DATE: JUNE 1994 the Board of Directors. • Kona ARC Employment Policies This policy also applies to the relationships described as they apply to employees and members of 6 PERSONNEL POLICIES & PROCEDURES SUBJECT: AIRING FAMILY MEMBERS OF CONSUMERS AS EMPLOYEES PAGE 1 OF 2 PILE UNDER SECTION: EP 3.1 Related to Nepotism EFFECTIVE DATE: 9/24/99 DATE APPROVED BY BOARD OF DIRECTORS: 9/23/99 • Kona ARC Employment Policies Section EP 3.1 — Family Members of Consumers as Employees Medicaid rules now allow the hiring of family members to serve other members of their immediate family. This may be a valuable option to find appropriate service providers to care for the needs of the individual with a developmental disability or level of mental retardation. The focus for such providers, as it is for all others, has to be on service to the recipient. Indirect services such as cleaning house is not sufficiently focused, thus the hiring of family members as employees of Kona Krafts may present conflicts that are difficult to manage. Therefore this policy outlines the extra care necessary to insure a minimum of conflict. Policy:Kona Association for Retarded Citizens is a private non - profit corporation overseen by a governing Board and held accountable for insuring adherence to regulations deemed necessary by the funding source. Implementation of these regulations must always be in support of the service beneficiary's interest, even if, at times, the regulations may be contrary to the paid family member's interests. Therefore, Kona Association for Retarded Citizens wil: hire family members to serve their own family member only when: • 1) no other providers are available 2) a separate agreement defining the role of the family member as employee is signed at orientation. (a copy of which is attached to this policy) 3) Procedure: The Executive Director delegates this to the Programs Manager for implementation. 1) When a referral is received by DOH to use a family member for the direct service worker, it will be immediately determined if there are other service providers available outside the family unit. If not, then 2) The Programs Manager will arrange for the prospective family member /employee to come to the administrative office for an interview. 3) At this time orientation to the organization takes place. This is separate from orientation to the job performance expectations. 4) Administrative paperwork expectations, organizational policies and procedures and generalized work performance expectations will be outlined. The prospective employee will be required to sign acknowledgment of the orientation. In addition, an agreement to abide by certain rules and regulations is signed for the personnel file. PERSONNEL POLICIES AND PROCEDURES SUBJECT: CONFLICT OF INTEREST PAGE NO. 1 OF 1 PAGE FILE UNDER SECTION: EP 10.0 EFFECTIVE DATE: JULY 1,1994 DATE 12PROVID !r OORFD Or DIRLCTOA6: JONI 16, 1996 REVISION DATE: JUNE 1994 • • • Kona ARC Employment Policies Section FP 10 0 - Conflict Of interest No employee or director shall: - -- Solicit or accept any gift, directly or indirectly, whether in the form of money, loan, gratuity, favor, service, thing or promise, or in any other form, under circumstances in which it can reasonably be inferred that the gift is intended to influence him/her in the performance of his duties at Kona ARC. - -- Engage in any business transaction or activity or have a financial interest, direct or indirect, which is incompatible with the proper discharge of his duties or which may tend to impair his independence of judgment in the performance of his duties. ---Receive any compensation for his services as an officer of Kona ARC from any source other than Kona ARC, except as otherwise provided by the by -laws. 14 •