Board of Finance Budget Hearing Agenda (linked)

FY22
BUDGET REQUEST
THE ARC
OF
NEW LONDON COUNTY

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~- The Arc Eastern Connecticut
. 125 Sachem Street
Norwich, CT 06360
T: 860.889.4435
TheArcECT.
- The Arc. 8
Eastern Connecticut Achieve with us
December 15, 2020
Kimberly Allen, Finance Director
Town of Waterford
15 Rope Ferry Rd.
Waterford, CT 06385
Dear Ms. Allen, Mr. Brule, and Members of the Allocations Committee:
Enclosed please find our Social Services Agency Funding Request for Fiscal Year 2021/22.
Our Community Life & Advocacy program served 147 people with intellectual and developmental disabilities this
year. Despite the pandemic, staff were able to hold virtual classes, groups and events that kept everyone connected
and progressing in their program goals. CL&A is the only program of its kind in the region; it receives no federal of
state funds and depends entirely on the generosity of area municipalities, private foundations, and contributions
from area families. CL&A’s programming is now offered to anyone with IDD in the entire eastern region.
Attached materials include a description of our services and who they benefit, our current budget for CL&A, our CL&A
brochure, and our latest Annual Report.
Number of staff employed by the entire agency, and personnel costs:
Full Time: 194 Part Time: 239 Seasonal: 30
Annual Cost of Wages for 2020: $13,338,319
Benefits and Payroll Taxes: $2,511,807
Total Personnel Costs: $15,850,126
Other Municipalities supporting our agency: the Town of Waterford ($1,800), the Town of Old Lyme ($850). The
Town of Ledyard also supports our agency through its support of both a group residence in town and our Farm
Stand/Community Supported Agriculture (CSA) employment training program.
United Way of SE CT Funding (FY19): $45,869 (29% of the CL&A program total)
In reviewing the attached materials, please consider not only the financial impact your funding has on the Community
Life & Advocacy program, but also how The Arc Eastern Connecticut utilizes your support to provide opportunities for
people with IDD in Waterford and beyond to give back to the community in meaningful and valuable ways. On behalf
of The Arc Eastern Connecticut and our participant families, thank you once again for your consideration.
Sincerely,
Kat#fieen Stauffer
Chief Executive Officer
For people with intellectual and developmental disabilities


Town of
) Waterford
CONNECTICUT
15 Rope Ferry Road
Waterford, CT 06385
860-442-0553
SOCIAL SERVICES FUNDING REQUEST
Organization Name: The Arc Eastern Connecticut
Request Date (Fiscal Year): 2021/22
Requested Amount: $1,800
Benefit Statement (Describe how these funds will be used)
The Arc Eastern Connecticut’s Community Life & Advocacy (CL&A) program supports over 145 adults and young adults
with intellectual and developmental disabilities (IDD) from around the region. It is one of several community-based
programs that The Arc ECT provides, and is the only program of its kind in the region. Health/fitness activities,
social/cultural programs, self-advocacy groups, civic participation, and personal enrichment are some of the varied
components of this program. We are once again requesting support from the Town of Waterford to continue to
provide, and augment, the services provided by CL&A.
CL&A is the oldest of The Arc’s programs, and served 147 adults with IDD in 2019/20, providing opportunities for them
to actively engage in the community as independently as possible, and to do so in ways that served personal choices and
goals and demonstrated measurable contributions to neighborhoods and to society. For many people with IDD who
take advantage of The Arc ECT’s services, the CL&A program is critical to the development of a sense of self-esteem
and independence. It uses a person-centered model and focuses its weekly activities on three life areas: Community
Involvement, Access, and Independence. Projects, events and activities under the CL&A umbrella all speak to at
least one, if not all three, of these focus areas to ensure participants have every opportunity to define the course of their
lives to meet their civic, social and personal enrichment goals and desires.
Although national studies and surveys have consistently shown that activities focusing on inclusion improve the quality of
life of people with IDD, no state or federal funding exists for these essential programs. The Arc collects a
modest fee from participants for each activity, but these fees do not cover the cost of important programs focusing on
life skills and self-advocacy, including an empowerment group meeting once a month for women who have
experienced sexual, physical or emotional violence in their lives, monthly meetings for men, self-advocacy groups
for teens and adults, community volunteering activities, and self-presentation/life skills classes.
Until March 2020, participants had the opportunity to attend in-person programming and volunteer/community
activities. After the CDC and the Department of Developmental Services issued guidelines regarding the closure of day
programs for people with IDD, CL&A staff developed a variety of online and phone-based activities and supports—
including developing the program’s first Men’s Group—that kept people adhering to important routines that mitigated
the isolation that many were feeling. The program, when fully operational, also provides door to door transportation for
outings. The CL&A program is unique in that it is not offered by any other agency serving people with IDD in
New London County. It’s open to all interested participants from other agencies, and is funded only by donations,
United Way, agency fundraising events, town grants, and the minimal activity fee paid by participants if they can afford it.
Funds will be used to defray the costs of outside speakers and facilitators who provide groups with entertaining, valuable
and important information on a variety of topics including good nutrition, stress relief, personal safety, trauma support,
family and personal relationships, etc. Funds are also used to cover the costs of some program expenses; for example,


The Arc ECT, p.2
participants are charged a nominal ($8 door to door) transportation fee to events and programs, but some of our
participants and their families are severely economically stressed so we cover that cost as well as other program fees.
The Town of Waterford has been one of CL&A’s longtime partners; some of our most enthusiastic participants have
come from the Waterford area.
Per Town of Waterford Budget Guidelines: please attach a certified audit report of all funds
appropriated during the last completed fiscal year to your funding request.
Complete agency audit attached. Also attached is the CL&A budget. We do not audit this program separately.
DECLARATION
|, the requester, understand that | am requesting public funds from the Town of Waterford.
| declare that this request does not pose any potential conflict with the Town of Waterford and | will provide any
documentation requested by the Town of Waterford to authorize funding this request or review the appropriateness of
this request.
Sf December 15, 2020
Signatur Date


C
Community Life & Advocacy--PROGRAM BUDGET
The Arc Eastern Connnecticut
Prior Year Current Year Proposed
Fiscal Year FY2020 FY2021 FY2022 % Inc./Dec*
REVENUE
4000 Contributions 44,976 45,000 50,000 11.11%
4001 United Way Of SE CT Designations 3,814 2,282 3,000 31.46%
4002 Foundations
4200 Special Events-Net 44,780 55,000 55,000
4300 Legacies and Bequests
4500 Coniributed by Associated Orgs.
4700 Other Federated Fund-Raising Orgs.
4702 Other United Ways
4800 Unassoc. & Non-Federated Orgs.
5000 Revenues/Grants from Gov't Agencies 32,630 8,375 8,375
6000 Membership Dues from Individuals
6100 Dues- Local Member Units
6200 Program Service Fee 19,552 15,000 10,000 -33.33%
Sales of Materials/Services to Units
6400 Sales to Public- Net
6500 Investment Income 1,739 5,000 5,000
6600 Gain/Losses on Sales of Assets
6900 Miscellaneous Revenues
6901 Transfers from Restricted Funds
United Way of Southeastern CT Allocation 43,806 45,869 46,000 0.29%
TOTAL REVENUE 191,298 176,526 177,375 0.48%
EXPENSE
7000 Salaries 105,402 112,780 113,908 1.00%
7100 Employee Benefits 2,688 2,957 3,253 » 10.00%
7200 Payroll Taxes 8,730 9,341 9,434 1.00%
8000 Professional Contracts/Fees 12,706 1,500 1,500
8100 Supplies 2,912 3,500 2,728 -22.07%
8200 Telephone 425
8300 Postage & Shipping
8400 Occupancy (Rent, Utilities, Maint.) 1,357 1,752 1,752
8500 Rental & Maintenance of Equipment
8550 Equipment Acquisition
8600 Printing & Publications
8700 Travel & Transportation 22,592 22,500 22,500
8800 Conferences, Conventions & Meetings
8900 Special Assistance to Individuals
9000 Membership Dues
9100 Awards & Grants
9200 Interest 40 40 40
9300 Insurance ; 72 477 477
9400 Miscellaneous (Admin & General) 21,679 21,783 0.48%
9500 Depreciation 245
9691 Dues to National Organization
TOTAL EXPENSE 157,170 176,526 177,375 0.48%|


PARTNERSHIP
STRATEGIC PLAN 2020-2023 FOR FULL
ro EQUALITY
\
OUR VISION FOR PEOPLE LIVING WITH DISABILITY
Equality of opportunity, equality of choice
OUR VISION FOR OUR ORGANIZATION
The Arc Eastern Connecticut will be eastern Connecticut’s leader in partnering and advocating for equality of
opportunity and equality of choice.
OUR MISSION IN PARTNERSHIP FOR FULL EQUALITY
To PARTNER with people living with intellectual and developmental disabilities for EQUAL participation and
inclusion in the communities of eastern Connecticut
OPERATING PRINCIPLES
1. Civil Rights: We partner with people living with disabilities to promote their voice and champion their per-
spective.
2. Community: We facilitate the development of natural relationships to connect people with their communities.
3. Innovation: We continuously break new ground in providing a menu of service options and improving how we
( - operate our organization, to bring about meaningful change for the future.
“a, Family: We encourage and facilitate family education and engagement as fundamental to helping people living
with disability achieve positive outcomes.
5. Leadership: We model choice in everything we do.
6. Change: We will change our community by modeling and raising awareness of our mission.
OUR VALUES
1. Person-centered: We respect and respond to individual choices as the guiding force in the lives of people
living with intellectual and developmental disabilities .
2. Dedication: Organizationally and individually we are dedicated to people living with disabilities who place
their trust in us to provide quality individualized, self-directed supports.
3. Integrity: We uphold the highest ethical standards in how we treat people living with disabilities and in
how we operate our organization.
4. Stewardship: We are fully committed to protecting and maximizing the return on the resources available
to us and to embracing the highest standards of accountability.
The Arc.
Eastern Connecticut

STRATEGIC INITIATIVE 1
\
CREATE AND NURTURE STRONG PARTNERSHIPS \
The Arc Eastern Connecticut values a person-centered approach in all that we do. We are committed to
strengthening and advancing relationships through concierge-style services to customers and team members
alike, offering education, advocacy, community partnerships and collaborations. We are committed to having a
customer base and team reflective of our community.
STRATEGIC INITIATIVE 2
INVEST IN A DIVERSE & TALENTED WORKFORCE
The Arc Eastern Connecticut is committed to building a workforce that invests in its most valuable resource, its
people (person-centered). We are committed to providing the team with training, personal and professional
development, access to technology, and a fair and consistent hiring, evaluation and retention processes.
STRATEGIC INITIATIVE 3
INFRASTRUCTURE
The Arc Eastern Connecticut will provide welcoming, safe and functional facilities. It is our priority to
consistently align facility needs with resources to ensure proper use and growth.
F iN
STRATEGIC INITIATIVE 4
COMMUNITY ENGAGEMENT
The Arc Eastern Connecticut values its advocates, partners, and supporters. We believe we are stronger
together. We are committed to growing our donor base, developing planned giving, and setting annual
fundraising goals.
STRATEGIC INITIATIVE 5
INNOVATION
The Arc Eastern Connecticut holds innovation, creativity and optimization in high regard. As we grow,
we are committed to providing plans that make The Arc Eastern Connecticut the “go to” innovator,
problem solver, and service collaborator for Connecticut.
The Arc
Eastern Connecticut

The Arc New London County, Inc.
Financial Statements
and Independent Auditor's Report
June 30, 2019 and 2018
CohnReznick
ADVISORY * ASSURANCE »* TAXD

The Arc New London County, Inc.
Index
Page
independent Auditor's Report 2
Financial Statements
Statements of Financial Position 4
Statements of Activities 6
Statement of Functional Expenses 7
Statements of Cash Flows ; 8
Notes to Financia! Statements 9

CohnReznick LLP CohnReznick@)
C ; cohnreznick.com ADVISORY * ASSURANCE © TAX
independent Auditor's Report
To the Board of Directors
The Arc New London County, Inc.
Report on Financial Statements
- We have audited the accompanying financial statements of The Arc New London County, Inc. (a
nonprofit organization), which comprise the statements of financial position as of June 30, 2019 and
2018, and the related statements of activities, and cash flows for the years then ended and the
statement of functional expenses for the year ended June 30, 2019, and the related notes to the
financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
oY
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion,
Opinion
in our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of The Arc New London County, Inc. as of June 30, 2019 and 2018, and the changes
in its net assets and its cash flows for the years then ended in accordance with accounting principles
generally accepted in the United States of America.

CohnReznick@)
e
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 29,
2020, on our consideration of The Arc New London County, Inc.'s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and
grant agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not
to provide an opinion on the effectiveness of The Arc New London County, Inc.'s internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering The Arc New London County, Inc.'s internal control
over financial reporting and compliance.
Hartford, Connecticut
January 29, 2020
cTM

The Arc New London County, Inc.
C ~ Statements of Financial Position
June 30, 2019 and 2018
Assets
2019 2018
Current assets
Cash $ 1,888,410 $ 1,646,884
Grants receivable 62,749 378,111
Accounts receivable, net 206,309 145,444
Prepaid expenses 232,413 185,122
Investments 32,571 30,176
Total current assets 2,422,452 2,385,737
Property, equipment and improvements, net 3,642,076 3,698,594
Other assets
Restricted cash 66,376 66,343
Investment held by third party 16,714 15,226
Other assets 9,447 9,447
Total other assets 92,537 91,016
C Total assets $ 6,157,065 $ 6,175,347

The Arc New London County, Inc.
Statements of Financial Position
June 30, 2019 and 2018
Liabilities and Net Assets
Current liabilities
Accounts payable $
Accrued expenses
Deferred revenue
Mortgage notes payable, current portion
Deferred capital improvements, current portion
Capital lease obligations, current portion
Total current liabilities
Long-term liabilities
DDS cash advances
Morigage notes payable, less current portion
Deferred capital improvements, less current portion
Capital lease obligations, less current portion
Total long-term liabilities
Total liabilities
Commitment and contingencies
Net assets
Without donor restrictions
With donor restrictions
Total net assets
Total liabilities and net assets $
2019 2018
231,480 §$ 120,086
728,801 700,460
238,246 247,235
117,186 125,197
24,801 26,337
16,758 15,789
1,357,272 1,235,104
219,712 132,057
1,239,598 1,356,692
145,844 170,644
531,884 547,730
2,137,038 2,207,123
3,494,310 3,442,227
2,593,937 2,625,437
68,818 107,683
2,662,755 2,733,120
6,157,065 $ 6,175,347
See Notes to Financial Statements.

f
The Arc New London County, Inc.
Statements of Activities
Years Ended June 30, 2019 and 2018
Changes in net assets without donor restrictions
Revenues
Residential and day programs
Fee for service
Grants and contributions
Other
Rental and interest income
Net assets released from restrictions
Total revenues
Expenses
Program expenses
Fundraising expenses
Administrative expenses
Total expenses
Change in net assets without donor restrictions
Changes in net assets with donor restrictions
Grants and contributions
Net assets released from restrictions
Change in net assets with donor restrictions
Change in net assets
Net assets, beginning
Net assets, end
See Notes to Financial Statements.
2019 2018
$ 11,811,703 $ 10,405,086
743,275 865,286
321,544 271,081
330,136 161,923
85,417 83,065
39,985 10,944
13,332,060 11,797,385
11,496,977 10,045,713
23,721 22,727
1,842,862 1,528,824
13,363,560 11,597,264
(31,500) 200,121
4,120 75,136
(39,985) (10,944)
(38,865) 64,192
(70,365) 264,313
2,733,120 2,468,807
$ 2,662,755 $ 2,733,120

Salaries and wages
Benefits and payroll tax
Transportation expenses
Program supplies
Utilities
Consulting
Depreciation and amortization
Repairs and maintenance
Interest
Rent
Professional services
Insurance
Activities
Training
Miscellaneous
Recruitment and hiring
Temporary help
Events expenses
Association membership
See Notes to Financial Statements.
The Arc New London County, Inc.
Statement of Functional Expenses
Year Ended June 30, 2019
(With comparative totals for 2018)
Program Administrative Fundraising Total Total
expenses expenses expenses 2019 2018
$ 7,521,099 $ 1,013,225 § - $ 8,534,324 $ 7,322,561
1,489,163 169,769 - 1,658,932 1,585,671
722,273 28,428 - 750,701 658,591
484,714 120,687 - 605,401 468,873
274,777 34,136 - 308,913 281,514
226,202 13,119 - 239,321 239,365
212,703 15,680 - 228,393 224,024
234,817 - - 234,817 178,436
101,115 1,312 ~ 102,427 109,408
106,098 - - 106,098 104,151
27,098 228,749 - 255,847 182,992
47,404 13,297 - 60,701 58,564
23,080 385 - 23,475 25,614
9,336 18,017 - 27,353 46,164
12,453 728 - 13,181 (4,976)
4,393 32,504 - 33,897 28,739
2,318 124,633 - 126,951 36,037
- - 23,721 23,721 22,727
924 28,183 - 29,107 31,809
$ 11,496,977 $ 1,842,862 $ 23,721 $ 13,363,560 $ 11,597,264

The Arc New London County, Inc.
Statements of Cash Flows
Years Ended June 30, 2019 and 2018
Cash flows from operating activities
Change in net assets
Adjustments to reconcile change in net assets to net
cash provided by operating activities
Net unrealized (gain) loss on investments
Net unrealized gain on investment held by third party
Depreciation and amortization
Deferred capital improvements amortization
Changes in operating assets and liabilities
Grants receivable
Accounts receivable
Prepaid expenses
Accounts payable
Accrued expenses
Deferred revenue
Net cash provided by operating activities
Cash flows from investing activities
Restricted cash
Purchases of investments
Purchase of property, equipment and improvements
Net cash used in investing activities
Cash flows from financing activities
Repayments of iong-term debt
DDS cash advance
Repayments of capital lease obligations
Net cash used in financing activities
Net increase in cash
Cash, beginning
Cash, end
Supplemental disclosures of cash flow data
interest paid
See Notes to Financial Statements.
2019 2018
$ (70,365) $ 264,313
(384) 436
(1,488) (1,096)
228,393 224,024
(26,336) (34,017)
315,362 156,343
(60,865) 981
(47,291) (38,956)
111,394 (4,101)
28,341 70,819
(8,989) 124,180
467,772 762,926
(33) (38)
(2,011) (1,230)
(171,875) (162,402)
(173,919) (163,670)
(125,105) (128,546)
87,655 -
(14,877) (14,919)
(52,327) (143,465)
241,526 455,791
1,646,884 1,191,093
$ 1,888,410 $ 1,646,884
$ 102,427 $ 109,408

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 1 - Organization and summary of significant accounting policies
Organization
The Arc New London County, Inc. (the "Arc") is a nonprofit organization which provides placement
opportunities and services for people in New London County, Connecticut with developmental
disabilities.
On July 1, 2019, the Arc acquired the assets and assumed the liabilities of The Arc of Quinebaug
Valley, Inc., which is a 501(c)(3) nonprofit corporation. The Arc of Quinebaug Valley, Inc. provides
mental health services for individuals with special needs that are located in the Quinebaug Valley
area. Detail of the assets acquired and liabilities assumed is provided in Note 17.
Basis of presentation
The accompanying financial statements of the Arc have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of
America ("GAAP"). Arc reports information regarding its financial position and activities according to
the following net asset categories:
Net assets without donor restrictions - Net assets without donor restrictions represent available
resources other than donor-restricted contributions. Included in net assets without donor
restrictions are funds that may be earmarked for specific purposes.
Net assets with donor restrictions - Net assets subject to donor- (or certain grantor-) imposed
restrictions are temporary in nature, such as those that will be met by the passage of time or
other events specified by the donor. Other donor-imposed restrictions are perpetual in nature,
where the donor stipulates that resources be maintained in perpetuity.
Tax-exempt status
The Arc is organized as a nonprofit corporation under Section 501(c)(3) of the Internal Revenue
Code and, as such, is not subject to federal or state corporate income taxes.
Are has no unrecognized tax benefits at June 30, 2019 and 2018. Arc's federal information returns
prior to fiscal year 2016 are closed and management continually evaluates expiring statutes of
limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.
if Arc has unrelated business income taxes, it would recognize interest and penalties associated
with any tax matters as part of the income tax provision and include accrued interest and penalties
with the related tax liability in the statements of financial position.
Cash
Cash includes all cash balances and highly liquid short-term investments with an original maturity of
three months or less when acquired. There were no cash equivalents as of June 30, 2019 and
2018.
Restricted cash
Restricted cash is held as collateral for debt with Saving Institute Bank and Trust (see Note 7).
Grants and accounts receivable
Accounts receivable principally represent monies due from Department of Developmental Services
("DDS") and Department of Social Services ("DSS"). Accounts receivable arising from regular
operations are stated net of an allowance for doubtful accounts when applicable. Allowances for

mm
The Arc New London County, inc.
Notes to Financial Statements
June 30, 2019 and 2018
accounts receivable are determined by management based on an assessment of their collectability.
Management considers past history, current economic conditions and overall viability of the third
party when considering the need for an allowance. Receivables are written off when management
determines amounts will not be collected. Receivables are considered past due based on invoice
date. There is an allowance for accounts receivable at both June 30, 2019 and 2018 of $6,200.
Investments
Arc reports investments at their current fair value and reflects any gain or loss in the statements of
activities. Gains and losses are considered unrestricted unless restricted by donor stipulation or
law. Nonmonetary investments received as gifts are immediately sold and recorded at the realized
value.
Property, equipment and improvements
Arc capitalizes all expenditures for property and equipment exceeding $2,500, with a useful life
greater than three years. Purchased property and equipment are carried at cost less accumulated
depreciation. Donated property and equipment are carried at the approximate fair value at the date
of donation. Depreciation and amortization are computed using the straight-line method over their
estimated useful lives or life of lease where applicable. Estimated lives for financial reporting
purposes are as follows:
Asset Estimated lives
Buildings and improvements § - 39.5 years
Vehicles 3-5 years
Furniture and equipment 5 - 10 years
Leasehold improvements Shorter of lease life or useful life
Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or
otherwise disposed of, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or joss is reflected in change in net assets for the period.
Investment held by third party
Are has an investment held by the Community Foundation of Southeastern Connecticut (the
"Foundation"). Arc established the fund in 2003. With each $10,000 contributed, the Foundation
matches $1,000. The $1,000 match is a contribution of net assets with donor restrictions.
Revenue recognition
Program and contract revenue
Arc manages residential facilities, in home support and day programs for individuals with special
needs. Revenue is recognized when the services are performed. The residential facilities are
reimbursed according to regulations governing Community Living Arrangements. Food and
lodging costs are reimbursed by DSS and other covered expenses are reimbursed by DDS.
Services provided by Arc related to day programs and in home and community residential
programs are reimbursed through a direct contract with DDS and/or billed through a fiscal
intermediary. Reimbursement of certain expenses is subject to maximum per diem rate
limitations and annual cost settlement regulations.
Fundraising and contributions
Arc conducts various fundraising activities during the year including special events and appeals
for donations. Revenues generated by these activities were $114,576 and $106,350 and the
10

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
total costs of fundraising activities were $23,721 and $22,727 for the years ended June 30,
2019 and 2018, respectively.
Are reports unconditional promises to give as revenue when the promise is received.
Conditional promises to give are recognized as revenue when the condition is met.
Contributions received are recorded as with or without donor restrictions depending on the
existence and/or nature of any donor restrictions. When a restriction expires (that is, when a
stipulated time restriction ends or purpose restriction is accomplished), net assets with donor
restrictions are reclassified to net assets without donor restrictions and reported in the
statements of activities as net assets released from restrictions. Donor-restricted contributions
whose restrictions are met in the same reporting period have been reported as unrestricted
support in the statements of activities.
Deferred revenue
Program and contract revenue received in advance is recorded as deferred revenue and recorded
in the period to which it relates.
Functional expense allocation
The statement of functional expenses presents the natural classification detail of expenses by
function. Accordingly, certain costs have been allocated among the programs and supporting
services benefited.
Use.of estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
Newly adopted accounting standards
During 2018, Arc adopted the provisions of Accounting Standards Update ("ASU") 2016-14. The
provisions improve the usefulness and reduce the complexities of information provided to donors,
grantors, creditors, and other users of the financial statements by eliminating the distinction
between resources with permanent restrictions and those with temporary restrictions from the face
of the financial statements. Enhanced disclosures in the notes to the financial statements will
provide useful information about the nature, amounts and effects of the various types of donor-
imposed restrictions, which often include limits on the purposes for which the resources can be
used as well as the time frame for their use. The guidance also enhances disclosures for board-
designated amounts, composition of net assets without donor restrictions, liquidity, and expenses
by both the nature and functional classification. While the adoption of ASU 2016-14 requires net
assets to be presented with and without donor restrictions, the ASU had no effect on Arc’s total net
assets.
Subsequent events
Arc has evaluated subsequent events through January 29, 2020, which is the date the financial
statements were available to be issued as noted in Note 17.
11

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 2 - Concentrations
Funding source
Arc's program revenue is primarily derived from contracts with DDS. Total revenue received from
DDS in 2019 and 2018 was $11,327,879 and $9,927,719, respectively. Amounts due from DDS at
June 30, 2019 and 2018 were $62,749 and $378,111, respectively.
Concentrations of credit risk
Financial instruments which potentially subject Arc to concentrations of credit risk consist primarily
of cash and accounts receivable. Arc maintains its cash with high-credit quality financial institutions.
At times, such amounts may exceed federally insured limits. At June 30, 2019, the cash balance
exceeded the federally insured limit by approximately $1,488,000.
Note 3 - Liquidity
Are regularly monitors liquidity required to meet its annual operating needs and other contractual
commitments while also striving to maximize the return on investment of its funds not required for
annual operations. As of June 30, 2019, Arc has approximately $2.1 million of financial assets
available to meet annual operating needs for the 2020 fiscal year, as follows:
Cash $ 1,888,410
Accounts receivable 206,309
Grants receivable 62,749
investments available for subsequent year 32,571
Total financial assets 2,190,039
Less net assets with donor restrictions (68,818)
Total financial! assets available $ 2,121,221
These financial assets are not subject to any donor or contractual restrictions.
Arc supports its general operations primarily with unrestricted donor contributions and donor-
restricted funds whose time or purpose restriction has been met.
Arc's invests in a portfolio to maintain liquid instruments within its portfolio to ensure assets are
available to meet general expenditures, liabilities and other obligations as they come due.
In addition to financial assets available to meet general expenditures within ane year, Arc has a line
of credit for up to $750,000 with Chelsea Groton Bank that they can draw upon (see Note 8).
Note 4 - Accounts receivable/ DDS bridge funding advances
Arc retains bridge funding advances from DDS to fund the cash flow requirements of Arc associated
with certain DDS programs. DDS provided Arc a cash advance equal to one month of claims
associated with Day and In Home Supports programs, which is $1,375,014.
12

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
As shown below, these advances are offset against DDS accounts receivable on the accompanying
statements of financial position.
2019 2018
DDS accounts receivable $ 1,437,763 $ 1,226,743
Less DDS bridge funding advance (1,375,014) (848,632)
Grants receivable, net $ 62,749 $ 378,111
Note 5 - Investments
The following summarizes Arc's investments at June 30, 2019 and 2018:
2019 2018
Money funds | $ 1,431 $ 2,112
Common stock 31,140 28,064
Community Foundation of Southeastern Connecticut 16,714 15,226
Total 5 49,285 $ 45,402
All investments are financial instruments whose fair value can be readily determined. Investments
are reported at fair value, which includes adjustments for unrealized gains and losses. Unrealized
gains and losses arise from changes in the fair value of investments exclusive of dividend and
interest income recognized but not yet received and exclusive of any write-down of the carrying
amount of investments because of impairment. Unrealized gains and losses are reported as
increases or decreases in unrestricted net assets. Arc's investments are not encumbered by any
restrictions from donors or creditors. The fair value is subject to the risks of market and economic
conditions.
Arc values its financial assets and liabilities based on the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction bétween market participants at the
measurement date. In order to increase consistency and comparability in fair value measurements,
a fair value hierarchy prioritizes observabie and unobservable inputs used to measure fair value into
three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement
date for identical assets or liabilities. The fair value hierarchy gives the highest priority
to level 1 inputs.
Level 2: Observable inputs other than level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in inactive markets; or model-derived valuations in which all
significant inputs are observable or can be derived principally from or corroborated
with observable market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value
hierarchy gives the lowest priority to level 3 inputs.
13

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
in determining fair value, Arc utilizes valuation techniques that maximize the use of observable
inputs and minimize the use of unobservable inputs to the extent possible as well as considers
counterparty credit risk in its assessment of fair value.
Money funds and common stock are valued at level 1. Common stocks that are listed on a national
securities exchange or reported on the NASDAQ national market are valued at their last sales price
or valuation date.
investments held by the Foundation are classified as level 3 using allocations provided by the third
party. Details regarding investments heid for long-term purposes measured at fair value on a
recurring basis using significant unobservable inputs (level 3) are as follows:
June 30, 2017 $ 14,130
Change in value 1,096
June 30, 2018 15,226
Change in value 1,488
June 30, 2019 $ 16,714
There have been no changes in valuation techniques and related inputs used at June 30, 2019 and
2018. Arc's policy is to recognize transfers in and out of various levels as of the actual date of the
event. There were no transfers during the years ended June 30, 2019 and 2018.
The preceding methods may produce a fair value calculation that may not be indicative of net
realizable value or reflective of future fair values. Furthermore, although Arc believes its valuation
methods are appropriate and consistent with other market participants, the use of different
methodologies or assumptions to determine the fair value of certain financial instruments could
result in a different fair value measurement at the reporting date.
Note 6 - Property and equipment
Components of property and equipment are as follows:
2019 2018
Buildings $ 3,409,885 $ 3,409,885
Capital and leasehold improvements 1,670,030 1,559,140
Furniture, fixtures and equipment 318,147 310,069
Vehicles 267,915 215,008
5,665,977 5,494,102
Less accumulated depreciation (3,195,674) (2,967,281)
Land 1,171,773 1,171,773
$ 3,642,076 $ 3,698,594
Depreciation expense including capital leased assets was $228,393 and $224,024 for the years
ended June 30, 2019 and 2018, respectively.
14

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 7 - Long-term debt
Long-term debt consists of the following at June 30, 2019 and 2018:
2019
2018
6.00% seven mortgage loans payable to DDS, collateralized
by real estate. Monthly principal and interest payments
ranging from $84 - $2,153 are payable through September
2030. $ 637,707
3.40% two mortgage loans payable to Connecticut Housing
and Financing Authority ("CHFA"), collateralized by real
estate. Monthly principal and interest payments ranging
from $1,547 - $2,353 are payable through December 2041. 600,232
4.5% - $4.88% two notes payable to Chelsea Groton Bank,
‘collateralized by real estate. Monthly principal and interest
payments of $2,003 - $2,224 are payable through April
2022. 72,614
2.55% note payable to Saving Institute Bank and Trust,
collateralized by cash which is restricted on the statements
of financial position. Monthly principal and interest
payments of $479 are payable through May 2027. 41,136
2.7% notes payable to Saving Institute Bank and Trust,
collateralized by equipment. Monthly principal and interest
payments of $288 are payable through December 2020. 5,095
$ 699,957
618,872
108,815
45,743
8,502
1,356,784
Less current portion (117,186)
1,481,889
(125,197)
Total $ 1,239,598
$_ 1,356,692
Future maturities of long-term debt for each of the five years subsequent to 2019 and thereafter are
as follows:
2020 $ 117,186
2021 119,109
2022 94,784
2023 71,610
2024 76,673
Thereafter 877,422
Total $ 1,356,784
Related interest expense for the years ended June 30, 2019 and 2018 was $66,909 and $73,444,
respectively.
15
-
(TM~

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 8 - Line of credit
Arc had a $350,000 line of credit with Chelsea Groton Bank which expired on April 2019. The line of
credit had a stated interest rate of 6.50% and was collateralized by the assets of Arc. The line of
credit was limited to 75% of eligible accounts receivable balances. There was no outstanding
balance as of June 30, 2018.
During August 2019, Arc entered into a $750,000 line of credit agreement with Chelsea Groton
Bank. The line of credit is limited to 75% of eligible accounts receivable balances. The line of credit
has a stated interest rate at one perceniage point above Chelsea Groton Bank's Base Rate with a
5% floor. There was no outstanding balance as of June 30, 2019.
Note 9 - Capital lease obligations
Arc leased two properties with CIL. Realty, Inc. ("CIL") through November 2039. The property will
transfer ownership at the end of the lease term. The assets and related liability under the capital
leases are recorded at the fair values of the assets. The assets are amortized over the shorter of
their related lease terms or their estimated productive lives. Amortization of the assets under the
capital leases is included in depreciation and amortization expense.
Accordingly, the assets were capitalized and have the following book values at June 30, 2019 and
2018:
2019 2018
Building $ 532,069 $ 532,069
Less accumulated amortization (204,441) (186,705)
Land 160,174 160,174
Total $ 487,802 $ 505,538
Related interest expense for the years ended June 30, 2019 and 2018 was $35,518 and $35,964,
respectively. Amortization expense relating to the capital lease obligations for both years ended
June 30, 2019 and 2018 was $17,736.
16

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
At June 30, 2019, future minimum lease payments due under capital leases are as follows:
2020 $ 50,841
2021 50,841
2022 50,841
2023 50,841
2024 50,841
Thereafter 684,297
Total future minimum lease payments 938,502
Less amount representing interest (389 860)
Present value of net minimum lease payments 548 642
Less current portion (16,758)
Long-term partian $ 531,884
Note 10 - Commitments
Real estate
Arc leases three facilities and is responsible for utilities, maintenance and insurance. Related rent
expense for the years ended June 30, 2019 and 2018 was $106,098 and $101,151, respectively.
Monthly rental payments range between $1,450 - $5,500 expiring at various times through May
2023.
Vehicles and equipment
Arc also leases vehicles and copiers for amounts ranging from $182 - $1,641 per month through
May 2024. Related rent expense for the years ended June 30, 2019 and 2018 was $195,069 and
$197,313, respectively.
Future minimum lease payments due under all non-cancelable operating leases are as follows:
2020 $ 251,799
2021 492,157
2022 147,623
2023 83,027
2024 14,260
Total $ 688,866
Note 11 - DDS cash advances
When a facility commences operations, Arc may receive an operational advance from DDS equal to
one month service revenue based on full capacity. These operational advances are applied against
the final reimbursement when a facility ceases its agency relationship with DDS. Total operational
advances received by Arc amounted to $219,712 and $132,057 the years ended June 30, 2019 and
2018, respectively.
17

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 12 - Deferred capital improvements
During the fiscal year ended June 30, 2009, Arc received funding from DDS for Grant-in-Aid
bonding funds of $92,165, which provided funding for replacement of the roof at Arc's headquarters
facility in Norwich, Connecticut. A 10-year lien has been filed in favor of the State of Connecticut for
the amount of the bond funding, of which a declining percentage of the award will be required to be
returned to the State should Arc cease their operations as a DDS funded day program site during
this period. Accordingly, the deferred bond revenue is being amortized over the 10-year lien period.
The balance of the bond funds at June 30, 2019 and 2018 was $0 and $1,536, respectively, and is
included under current liabilities on the statements of financial position.
During the fiscal year ended June 30, 2016, Arc received bond funds of $248,008 from Office of
Policy Management for building improvements. The improvements were placed in service during
this fiscal year; the grants are being amortized and recognized over the life of the improvements.
The deferred balance for these grants for the fiscal years ended June 30, 2019 and 2018 was
$170,645 and $195,445, respectively.
Note 13 - Retirement plan
Are maintains a 403(b) retirement plan covering all eligible employees. The matching percentage is
governed by the plan document. Arc contributed $45,404 and $40,727 to the plan for the years
ended June 30, 2019 and 2018, respectively.
Note 14 - Net assets with time or purpose donor restrictions
Net assets with time or purpose donor restrictions are availabie for the following purposes as of
June 30, 2019 and 2018:
2019 2018
Program restrictions $ 19,520 § 21,948
Capital restrictions 48,298 84,735
Total net assets with time and purpose restrictions 67,818 106,683
Net assets restricted in perpetuity 1,000 1,000
Total net assets with donor restrictions $ 68,818 § 107,683
Net assets with time or purpose donor restrictions released from restrictions for the years ended
June 30, 2019 and 2018 were as follows:
2019 2018
Program restrictions $ 2,798 § 4,473
Capital restrictions 37,187 6,471
Total net assets with time and purpose restrictions $ 39,985 § 10,944
18

The Arc New London County, Inc.
Notes to Financial Statements
June 30, 2019 and 2018
Note 15 - National and state affiliations
The Arc New London County, Inc. is affiliated with The Arc Connecticut and The Arc United States.
In exchange for dues to these two organizations, Arc gets assistance in promoting the joint causes
of the organizations with state and federal governments.
Note 16 - Functionalized expenses
The financial statements report certain categories of expenses that are attributed to more than one
program or supporting function. Therefore, expenses require allocation on a reasonable basis that
is consistently applied. The expenses that are allocated include occupancy, depreciation, and
amofttization, which are allocated on a square footage basis, as well as salaries and wages,
benefits, payroll taxes, professional services, office expenses, information technology, interest,
insurance, and other, which are allocated on the basis of estimates of time and effort.
Note 17 - Subsequent events.
As described in Note 1, the Arc acquired The Arc of Quinebaug Valley, Inc. ("QVArc") on July 1,
2019. Upon completion of the acquisition, Arc shall be the surviving corporation. No consideration
was paid as part of the acquisition. The following table summarizes assets acquired, and liabilities
assumed at the acquisition date.
Cash $ 763,514
Receivables 521,030
Inventory 13,449
Other current assets 72,325
Other assets 29,583
Property and equipment 2,266,645
Total assets $ 3,666,546
Notes payable $ 1,566,182
Accounts payable and accrued expenses 346,459
Total liabilities 1,912,641
Net assets . 1,753,905
Total liabilities and net assets $ 3,666,546
Final valuation of the assets acquired, and liabilities assumed will be determined after this report
date.
Subsequent to the merger with QVArc on July 1, 2019, The Arc New London County, Inc. changed
its name to The Arc Eastern Connecticut, Inc.
19

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APICELLA, TESTA & COMPANY, PC.
CERTIFIED PUBLIC ACCOUNTANTS
& BUSINESS ADVISORS
The Arc of Quinebaug Valley, Inc.
Financial Statements
June 30, 2019
C

The Arc of Quinebaug Valley, Inc.
June 30, 2019
Table of Contents
independent Auditor's Report 1-2
Financial Statements:
Statements of Financial Position 3
Statements of Activities 4
Statements of Functional Expenses 5-6
C Statements of Cash Flows 7
Notes to Financial Statements 8-20
C APICELLA, TESTA & COMPANY, PC.
CERTIFIED PUBLIC ACCOUNTANTS
& BUSINESS ADVISORS

APICELLA, TESTA & COMPANY, PC.
CERTIFIED PUBLIC ACCOUNTANTS
& BUSINESS ADVISORS
Achille A. Apicella, CPA ® John J. Zaprzalka, CPA ® James E. Traester, CPA
independent Auditor's Report
To the Board of Directors
The Arc of Quinebaug Valley, Inc.
We have audited the accompanying financial statements of The Arc of Quinebaug Valley, Inc. (a
nonprofit organization), which comprise the statements of financial position as of June 30, 2019 and
2018, and the related statements of activities, functional expenses, and cash flows for the years then
ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the fina