LYCOMING-CLINTON JOINDER BOARD

FINANCIAL STATEMENTS AND SINGLE AUDIT REPORT

YEAR ENDED JUNE 30, 2025

TABLE OF CONTENTS

Page

Independent Auditor’s Report 1-3

Basic Financial Statements: 4

Government-Wide Financial Statements Statement of Net Position 5 Statement of Activities 6

Fund Financial Statements Balance Sheet – Governmental Funds 7 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 8 Statement of Revenues, Expenditures, and Changes in Fund Balance -

Governmental Funds 9 Reconciliation of the Statement of Revenues, Expenditures, and Changes in

Fund Balance of Governmental Funds to the Statement of Activities 10

Notes to the Financial Statements 11-24

Required Supplementary Information: 25

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Lycoming-Clinton Mental Health and Intellectual Disabilities Fund 26

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Lycoming Children and Youth Services Fund 27

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – HealthChoices Fund 28

Other Supplementary Information: 29

Single Audit Report:

Independent Auditor’s Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 30-31

Independent Auditor’s Report on Compliance for Each Major Federal and Pennsylvania Department of Human Services Program and Report on Internal Control Over Compliance in Accordance with the Uniform Guidance and the Pennsylvania Department of Human Services Single Audit Supplement 32-34

Schedule of Expenditures of Federal Awards 35 Notes to the Schedule of Expenditures of Federal Awards 36 Schedule of Findings and Questioned Costs 37-38 Summary of Prior Audit Findings 39

Agreed-Upon Procedures Report:

Independent Accountant’s Report on Applying Agreed-upon Procedures to the

Financial Schedules and Exhibits Required by the Pennsylvania Department of Human Services 40-42

TABLE OF CONTENTS (CONTINUED)

Page Schedules of Revenues, Expenditures, and Carryover Funds – Mental Health

Services – Exhibit IV(a) MH NBG 43 Report of Income and Expenditures – Mental Health Services – Exhibit IV(b)

MH NBG 44

Schedules of Revenues, Expenditures, and Carryover Funds – Intellectual

Disabilities Services – Exhibit IV(c) ID NBG 45 Report of Income and Expenditures – Intellectual Disabilities Services – Exhibit

IV(d) ID NBG 46 Schedules of Revenues, Expenditures, and Carryover Funds – Early Intervention

Services – Exhibit V(a) EI 47 Report of Income and Expenditures – Early Intervention Services – Exhibit V(b) EI 48 Reconciliation Schedule – Exhibit XX 49 County Children and Youth Agency Child Protective Services Law (CPSL)

Monitoring of In-Home Purchased Service Providers – Exhibit XXI 50

INDEPENDENT AUDITOR’S REPORT

Board of Commissioners Lycoming-Clinton Joinder Board

Report on the Audit of the Financial Statements

Opinions

We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Lycoming-Clinton Joinder Board (the “Joinder”), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Joinder’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Joinder, as of June 30, 2025, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (GAS), issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Joinder and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

The Joinder’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Joinder’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and GAS will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Lycoming-Clinton Joinder Board

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and GAS, we:

· Exercise professional judgment and maintain professional skepticism throughout the audit.

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

· Obtain an understanding of internal control relevant to the audit 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 Joinder’s internal control. Accordingly, no such opinion is expressed.

· Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

· Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Joinder’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Adoption of Governmental Accounting Standards Board (GASB) Pronouncements

As described in Note 1 to the financial statements, in 2025 the Joinder adopted the Governmental Accounting Standards Board’s Statement No. 101, “Compensated Absences” and Statement No. 102, “Certain Risk Disclosures”. Our opinion is not modified with respect to these matters.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 26 through 28 be presented to supplement the basic financial statements.

Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Matters

Omission of Management’s Discussion and Analysis

Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Joinder’s basic financial statements. The accompanying Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements.

The Schedule of Expenditures of Federal Awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2026, on our consideration of the Joinder’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 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 Joinder’s internal control over financial reporting and compliance.

ZELENKOFSKE AXELROD LLC

Harrisburg, Pennsylvania March 31, 2026

Basic Financial Statements

Assets Governmental

Activities Current assets:

Cash and cash equivalents 12,631,134$ Accounts receivable 5,853,459 Due from other governments 4,861,591 Other assets 3,236,858

Total current assets 26,583,042

Noncurrent assets:

Loans receivable 3,864 Capital assets, being depreciated & amortized, net 3,110,733

Total noncurrent assets 3,114,597 Total Assets 29,697,639

Liabilities Current liabilities:

Accounts payable 8,448,893 Accrued liabilities 376,367 Unearned revenue 9,809,159 Due to DHS - MCO assessment tax 4,125,549 Line of credit 1,691,000 Unapplied allocations 2,172,065 Lease liability 126,213 Loan liability 199,773

Total current liabilities 26,949,019

Noncurrent liabilities:

Compensated absences 406,709 Lease liability 900,011 Loan liability 1,910,923

Total noncurrent liabilities 3,217,643 Total liabilities 30,166,662

Net Position Net investment in capital assets (26,187) Restricted for mental health/intellectual disabilities/early intervention 2,677 Unrestricted (445,513)

Total Net Position (Deficit) (469,023)$

June 30, 2025 Statement of Net Position (Deficit) Lycoming-Clinton Joinder Board

The accompanying notes are an integral part of these financial statements

Net (Expense) Revenue and

Changes in Net Position

Functions/Programs: Expenses Charges for

Services

Operating Grants and

Contributions Governmental

Activities Government activities:

Mental health/intellectual disabilities/ early intervention 13,918,802$ 153,191$ 13,691,229$ (74,382)$

Children and youth 10,337,471 156,363 10,240,034 58,926 HealthChoices 56,522,073 18,486 55,935,027 (568,560) Other 756,470 176,019 571,968 (8,483)

Total governmental activities 81,534,816$ 504,059$ 80,438,258$ (592,499)

General Revenues:

Investment Earnings 634,384 Total General Revenues 634,384 Changes in Net Position 41,885

Net Position (Deficit) - Beginning (510,908) Net Position (Deficit) - Ending (469,023)$

Program Revenues

Statement of Activities Year Ended June 30, 2025

Lycoming-Clinton Joinder Board

Lycoming- Clinton Mental

Health/ Intellectual Disabilities Program

Lycoming Children and

Youth Services HealthChoices

Other Governmental

Funds

Total Governmental

Funds Assets Cash and cash equivalents 60,615$ 467,275$ 11,910,277$ 192,967$ 12,631,134$ Receivables:

Accounts 457,547 97,161 5,072,545 226,206 5,853,459 Loans - - - 3,864 3,864

Due from other governments 2,711,018 2,150,573 - - 4,861,591 Due from other funds 348,562 - 1,030 536,442 886,034 Other assets 47,700 77,086 3,105,985 6,087 3,236,858

Total Assets 3,625,442$ 2,792,095$ 20,089,837$ 965,566$ 27,472,940$

Liabilities and Fund Balance Liabilities:

Accounts payable 1,434,037$ 451,942$ 6,429,498$ 133,416$ 8,448,893$ Accrued liabilities 21,172 13,204 2,113 339,878 376,367 Unearned revenue - - 9,513,644 295,515 9,809,159 Due to other funds 134,764 542,021 19,033 190,216 886,034 Due to DHS - MCO assessment tax - - 4,125,549 - 4,125,549 Line of credit 690,000 1,001,000 - - 1,691,000 Unapplied allocations:

Commonwealth of Pennsylvania, Department of Human Services 1,388,137 - - - 1,388,137

Lycoming County - 783,928 - - 783,928 Total Liabilities 3,668,110 2,792,095 20,089,837 959,025 27,509,067

Fund Balance:

Nonspendable:

Loans - - - 3,864 3,864 Restricted:

Mental health/intellectual disabilities/ early intervention - - - 2,677 2,677

Unassigned (42,668) - - - (42,668) Total Fund Balance (42,668) - - 6,541 (36,127)

Total Liabilities and Fund Balance 3,625,442$ 2,792,095$ 20,089,837$ 965,566$ 27,472,940$

June 30, 2025 Balance Sheet - Governmental Funds

Lycoming-Clinton Joinder Board

Total Fund Balance of Governmental Funds

Amounts reported for governmental activities in the statement of net position are different because: (36,127)$

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. The cost of assets is $3,886,033 and accumulated depreciation/amortization is $775,300. 3,110,733

Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in governmental funds. Amounts reported for governmental activities in the statement of net position are different because:

Lease Liability (1,026,224) Loan Liability (2,110,696) Compensated Absences (406,709)

Total Net Position of Governmental Activities (469,023)$

June 30, 2025

Reconciliation of the Balance Sheet of Governmental Lycoming-Clinton Joinder Board

Funds to the Statement of Net Position

Lycoming-Clinton Mental

Health/Intellectual Disabilities Program

Lycoming Children and

Youth Services HealthChoices

Other Governmental

Funds

Total Governmental

Funds Revenues:

Commonwealth of Pennsylvania $ 12,354,488 $ 8,649,455 $ 55,935,027 $ 571,968 $ 77,510,938 County Funds:

Lycoming County 1,067,073 1,590,579 - - 2,657,652 Clinton County 269,668 - - - 269,668

Interest 41,571 20,606 566,644 5,563 634,384 Rental Income 4,860 - 540 - 5,400 Other 148,331 156,363 17,946 176,019 498,659

Total Revenues 13,885,991 10,417,003 56,520,157 753,550 81,576,701

Expenditures:

Mental health/intellectual disabilities/ early intervention 14,566,362 - - - 14,566,362 Children and Youth - 10,930,814 - - 10,930,814 HealthChoices - - 56,558,633 - 56,558,633 Other - - - 787,287 787,287

Total Expenditures 14,566,362 10,930,814 56,558,633 787,287 82,843,096

(Deficiency) of Revenues Over Expenditures (680,371) (513,811) (38,476) (33,737) (1,266,395)

Other Financing Sources (Uses):

Lease Financing 674,216 293,673 38,476 32,925 1,039,290 Loan Proceeds - 220,138 - - 220,138

Total Other Financing Sources (Uses) 674,216 513,811 38,476 32,925 1,259,428

Net Change in Fund Balance (6,155) - - (812) (6,967)

Fund Balance:

Beginning of year (36,513) - - 7,353 (29,160) End of year (42,668)$ -$ -$ 6,541$ (36,127)$

Year Ended June 30, 2025

Statement of Revenues, Expenditures, and Changes in Lycoming-Clinton Joinder Board

Fund Balance - Governmental Funds

Net Change in Fund Balance - Total Governmental Funds

Amounts reported for governmental activities in the statement of activities are different because: (6,967)$

Governmental funds report capital outlays as expenditures.

However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation/amortization expense exceeded capital outlays and disposals in the period. 947,892

In governmental funds, expenditures are not recognized for transactions not normally paid with expendable available resources. However, in the statement of activities expenses and liabilities are reported regardless of when financial resources are available. The adjustment in the net changes of the following balances:

Lease Proceeds (1,039,290) Loan Proceeds (220,138) Compensated Absences 47,725

Repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net position.

Repayments of Lease Principal 153,273 Repayments of Loan Principal 159,390

Change in Net Position of Governmental Activities 41,885$

Year Ended June 30, 2025

Reconciliation of The Statement of Revenues, Lycoming-Clinton Joinder Board

Of Governmental Funds to the Statement of Activities Expenditures, and Changes in Fund Balance

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Nature of Operations

The Lycoming-Clinton Joinder Board (the “Joinder”) administers and coordinates the Lycoming-Clinton Mental Health and Intellectual Disabilities Program to provide for the treatment, care, and vocational and social rehabilitation of mentally ill residents of Lycoming and Clinton Counties. The Joinder administers the Housing Enhancement Revolving Loan Account to help secure housing for mental health clients upon re-entry into the community. The Joinder has been designated as the administering agency for disbursement of Lycoming County funding of the Human Services Development Fund. Such funding represents payments from the Commonwealth of Pennsylvania Department of Human Services (DHS) to Lycoming County for use in meeting its service requirements. Eligibility for Human Services Development Fund service is determined in accordance with guidelines established by the DHS. The Joinder also has been designated as the administering agency for Lycoming County’s Children and Youth Services to provide treatment for and prevention of child abuse, neglect and exploitation, including services to help overcome problems that result in dependency and delinquency for residents of Lycoming County. Lycoming County provides and covers all expenditures necessary to carry on the work and legally mandated responsibilities of Lycoming Children and Youth Services. Lycoming County has also agreed to indemnify Clinton County for any responsibility which may flow from the Board as a result of the direct operation of Lycoming Children and Youth Services for Lycoming County.

B. Reporting Entity

The Joinder has been determined to be a joint venture between Lycoming and Clinton Counties. Commitments for future funding by the Lycoming and Clinton County Mental Health and Intellectual Disabilities program and the Lycoming County Children and Youth program are made on an annual basis. Reductions or loss of this funding could have a significant effect on the Joinder’s programs and activities.

C. Measurement Focus, Basis of Accounting

The basic financial statements of the Joinder are comprised of the following:

· Government-wide financial statements

· Fund financial statements

· Notes to the financial statements

1. Government-wide Financial Statements

Government-wide financial statements (i.e. the statement of net position and the statement of activities) report on all the nonfiduciary activities of the Joinder. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities which are supported by grant revenues are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Joinder has no business-type activities.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

C. Measurement Focus, Basis of Accounting (Continued)

1. Government-wide Financial Statements (Continued)

Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which incorporates noncurrent assets as well as long term debt and obligations.

Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues.

Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customer or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.

Amounts expended to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expenditure.

Proceeds of long-term debt are recorded as liabilities in the government-wide financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the Joinder are reported as a reduction of the related liability, rather than an expenditure.

2. Fund Financial Statements

The operations of the Joinder are organized and are recorded in individual funds. Each fund is a separate accounting entity, with self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures or expenses, as appropriate.

Governmental Funds

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Joinder considers revenues to be available if they are collected within one year of the end of the current fiscal period. In determining when to recognize intergovernmental revenues (grants and entitlements), the legal and contractual requirements of the individual programs are used as guidance. Revenues are recognized when the eligibility requirements have been met. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

D. Measurement Focus and Basis of Accounting (Continued)

2. Fund Financial Statements (Continued)

Under the current financial resources measurement focus, only current assets and current liabilities are generally included on the balance sheet. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental funds operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.

Amounts expended to acquire capital assets, including entering into contracts giving the Joinder the right to use leased assets, are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is made.

E. Basis of Presentation

The following are the Joinder’s major funds:

Governmental Fund Types

· The Lycoming-Clinton Mental Health and Intellectual Disabilities Program is used to account for specific revenue sources related to the provisions of Mental Health and Intellectual Disabilities services that are restricted to expenditures for those specified purposes.

· The Lycoming Children and Youth Services fund is used to account for the specific revenue sources related to the provisions of Child and Youth programs that are restricted to expenditures for those specified purposes.

· The HealthChoices Fund is used to account for the specific revenue sources related to the provisions of the HealthChoices program that are restricted to expenditures for those specific purposes.

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

F. Assets, Liabilities, Net Position or Fund Balance

1. Cash and Cash Equivalents

Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

2. Receivables

Receivables are reported at amounts management expects to collect on balances outstanding at year-end. Accounts are charged to bad debt expense when deemed uncollectible based upon a periodic review of individual accounts.

3. Interfund Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding for goods or services rendered at the end of the fiscal year are referred to as "due to/from other funds."

4. Capital Assets

Capital assets, which include property, plant, and equipment, are reported in the governmental or business-type activity column in the government-wide and the proprietary fund financial statements. The Joinder defines capital assets with an initial, individual cost of more than: $5,000 and an estimated useful life in excess of one year. Capital assets are recorded at historical cost or estimated historical costs if purchased or constructed (except for intangible right-to-use lease assets, the measurement of which is discussed in note 1.F.8 below). Donated capital assets are recorded at acquisition value.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its useful life are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are completed.

Capital assets of the Joinder are depreciated using the straight line method over the following intended useful lives:

Description Estimated Useful Lives

Improvements 20 years Furniture and Equipment 2-5 years Vehicles 5 years

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

F. Assets, Liabilities, Net Position or Fund Balance (Continued)

5. Claims Liability

The HealthChoices Fund accrues an estimate of its health care cost liability at the end of each accounting period. The estimate is developed using a process that accounts for the lag between the point in time that the payment is made for a service and the point in time that the managed care organization becomes liable for the service. Subsequent payments are reviewed to confirm the reasonableness of the estimate. The estimate for the claims liability is recorded as part of accounts payable on the balance sheet.

6. Unearned Revenue/ Unapplied Allocations

The unearned revenue and unapplied allocations will be recognized as revenue in the fiscal year in which they are earned in accordance with the modified accrual basis of accounting. The amounts have been allocated to the Joinder but the associated expenses have not yet been incurred.

7. Compensated Absences

Compensated absences are those for which employees receive pay or for leave that is attributable for services already rendered, accumulates, or is more likely than not to be used as time off in future periods. A liability is recorded through the use of estimates, which apply historical data to current factors. The Joinder maintains records of unused absences and applies current and/or contracted compensation rates to the various types of compensated absences using the termination method.

8. Leases

The Joinder is a lessee for noncancellable leases of buildings and vehicles. The Joinder recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide financial statements. The Joinder recognizes lease liabilities with an initial, individual value of $5,000 or more.

At the commencement of a lease, the Joinder initially measures the lease liability at the present value of payments expected to be made during the lease term.

Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured at the initial amount of the lease liability, adjusted for lease payments made at or before the commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgements related to leases include how the Joinder determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

· The Joinder users the interest rate charged the lessor as the discount rate.

When the discount rate charged by the lessor is not provided, the Joinder generally uses its estimated incremental borrowing rate as the discount rate for leases.

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

F. Assets, Liabilities, Net Position or Fund Balance (Continued)

8. Leases (Continued)

· The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the Joinder is reasonably certain to exercise.

The Joinder monitors changes in circumstance that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

9. Fund Balance

The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the Joinder is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:

· Nonspendable fund balance – This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The Joinder has classified Loan Repayment Income in the Housing Enhancement Loan Fund as being nonspendable.

· Restricted fund balance – This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation.

· Unassigned fund balance – This classification represents amounts that are available for any purpose.

In circumstances where an expenditure is to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended is as follows: restricted fund balance, followed by committed fund balance, assigned fund balance and lastly unassigned fund balance.

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

F. Assets, Liabilities, Net Position or Fund Balance (Continued)

10. Net Position

The government-wide utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted and unrestricted.

· Net Investment in capital assets – This category groups all capital assets into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

· Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

· Unrestricted Net Position – This category represents net position of the Joinder, not restricted for any project or other purpose.

When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the Joinder’s policy is to apply restricted net position first.

11. Accounting Estimates

The preparation of the 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 amounts may differ from those estimates.

G. Adoption of Governmental Accounting Standards Board (GASB) Statements

The Joinder adopted GASB Statement No. 101, “Compensated Absences” and Statement No. 102, “Certain Risk Disclosures”. The adoption of these statements did not result in modification of previously reported amounts.

H. Pending Changes in Accounting Principles

In April 2024, the GASB issued Statement No. 103, “Financial Reporting Model Improvements”. The Joinder is required to adopt the provisions of Statement No.

103 for its fiscal year 2026 financial statements.

In September 2024, the GASB issued Statement No. 104, “Disclosure of Certain Capital Assets”. The Joinder is required to adopt the provisions of Statement No.

104 for its fiscal year 2026 financial statements.

In December 2025, the GASB issues Statement No. 105 “Subsequent Events”.

The Joinder is required to adopt the provisions of Statement No. 105 for its fiscal year 2027 financial statements.

JUNE 30, 2025

NOTE 1: NATURE OF ENTITY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

H. Pending Changes in Accounting Principles (Continued)

The Joinder has not yet completed the various analysis required to estimate the financial statement impact of these new pronouncements.

NOTE 2: BUDGETS AND BUDGETARY ACCOUNTING

The budget is adopted on a basis consistent with generally accepted accounting principles.

These tentative allocations assume successful passage of the state budget. The Joinder also prepares and submits a proposed budget for each program. After the state budget is approved by the state legislature, notification of primary allocations is received. At this time, the operating budgets of the Lycoming-Clinton Mental Health and Intellectual Disabilities Program and HealthChoices Program are presented to the Board for approval and the operating budget of Lycoming Children and Youth Services and Human Services Development Fund is presented to the Children and Youth Services and the Human Services Development Fund Standing Committee (Lycoming County Commissioners) for recommendation and final approval. Any changes in the budget throughout the year must be approved by the Board or Standing Committee and DHS.

NOTE 3: DEPOSIT AND INVESTMENT RISK

In accordance with the DHS, the Joinder is allowed to invest in certain “approved investment securities”. As of June 30, 2025 the Joinder has no investments.

Custodial Credit Risk – For deposits, custodial credit risk is the risk that in the event of the failure of the counterparty, the Joinder will not be able to recover the value of its deposits or collateral securities that are in the possession of an outside party. As of June 30, 2025, the Joinder’s cash balances for its governmental activities was $12,631,134 and its bank balances were $12,718,331. Of these bank balances, $12,468,331 were exposed to custodial credit risk and they were collateralized by the pledging of pooled assets held by the pledging financial institutions and uninsured. The Joinder does not have a written policy to limit its exposure to custodial credit risk.

JUNE 30, 2025

NOTE 4: CAPITAL ASSETS

A summary of Capital Asset transactions for the year ended June 30, 2025 is as follows:

Balance July 1, 2024* Additions Deletions

Balance June 30, 2025

Governmental Activities:

Capital Assets Not Being Depreciated/Amortized Construction in Progress $ 1,823,203 $ 220,138 $ (2,043,341) $ - Total Capital Assets Not Being Depreciated/Amortized

Capital Assets Being Depreciated/Amortized

1,823,203 220,138 (2,043,341) -

Improvements 663,433 - (663,433) - Furniture, Equipment and Vehicles 709,932 21,396 (146,975) 584,353 Right-to-Use Lease Equipment Right-to-Use Lease Vehicles

122,045 118,400

7,891

(21,396)

108,540 118,400

Right-to-Use Lease Buildings/Improvements 1,401,229 3,074,740 (1,401,229) 3,074,740 Total Capital Assets Being Depreciated/Amortized 3,015,039 3,104,027 (2,233,033) 3,886,033

Less Accumulated Depreciation/Amortization for:

Improvements (663,433) - 663,433 - Furniture, Equipment and Vehicles (499,170) (68,265) 146,975 (420,460) Right-to-Use Lease Equipment Right-to-Use Lease Vehicles

(28,688) (82,881)

(25,987) (23,679)

12,838

(41,837) (106,560)

Right-to-Use Lease Buildings/Improvements (1,401,229) (206,443) 1,401,229 (206,443) Total Accumulated Depreciation (2,675,401) (324,374) 2,224,475 (775,300)

Governmental Capital Assets, Net $ 2,162,841 $ 2,999,791 $ (2,051,899) $ 3,110,733

*Beginning balances were restated to reflect construction in progress related to leasehold improvements (See Note 13).

During the year, right-to-use equipment with a value of $21,396 and accumulated depreciation of $12,838 was reclassified to furniture, equipment and vehicles.

Depreciation/Amortization expense was charged to functions/programs of the primary government as follows:

Governmental Activities:

Mental Health/Intellectual Disabilities/Early Intervention $ 201,007 Children and Youth 94,713 HealthChoices

Other Governmental 8,494 7,322

Total Depreciation/Amortization $ 311,536

JUNE 30, 2025

NOTE 5: INTERFUND BALANCES

Interfund balances are primarily for the reimbursement of expenditures and undistributed cash receipts. As of June 30, 2025, interfund balances were as follows:

Due From Other Funds

Due To Other Funds

Lycoming-Clinton Mental Health/ Intellectual Disabilities Program $ 348,562 $ 134,764 Lycoming Children and Youth Services - 542,021 HealthChoices 1,030 19,033 Other Governmental Funds 536,442 190,216

$ 886,034 $ 886,034

NOTE 6: COMPENSATED ABSENCES

The Joinder’s Personnel Policies specify the sick leave and vacation leave policies for employees. Sick leave, although accumulated up to a maximum of thirty-days, is not payable upon termination. Vacation leave is available to all employees and is earned in the year in which service is performed. Employees are entitled to accrue an annual designated number of days, which carry over from year to year. Upon termination, vacation leave is paid at the employee’s current rate of pay and sick leave is not compensated. The change in the Joinder’s compensated absences during the year ended June 30, 2025 are as follows:

NOTE 7: PENSION PLAN

The Tax Deferred Annuity Plan of the Lycoming-Clinton Joinder Board is a defined contribution plan established and administered by the Joinder to provide benefits at retirement to its employees. The Joinder’s contributions are discretionary, currently 7% of each eligible employee’s salary. Employees are allowed to make contributions. However, combined Joinder and employee contributions may not exceed 20% of the employees’ annual compensation. Plan provisions and contribution requirements are established and may be amended by the Board. The total Joinder expense related to the purchase of annuities for the year ended June 30, 2025 amounted to $665,702. Joinder employees contributed $459,853.

NOTE 8: RISK MANAGEMENT

The Joinder is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; inquiries to employees; and natural disasters.

The Joinder purchases commercial insurance to cover risks of loss including general liability, excess liability, workers’ compensation, property insurance, and life and accident insurance. Settled claims have not exceeded the commercial coverage insurance in any of the past three fiscal years, and there have been no significant changes in insurance coverage in those years.

Beginning Balance $ 454,434 Increases - Decreases 47,725 Ending Balance $ 406,709

JUNE 30, 2025

NOTE 9: CONTINGENT LIABILITIES

The Joinder participates in both state and federally assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The Joinder is potentially liable for any expenditures which may be disallowed pursuant to the terms of these grant programs. Management is not aware of any material items on noncompliance which would result in the disallowance of program expenditures.

NOTE 10: LINE OF CREDIT

The Joinder has a line of credit with a local bank where the Joinder can draw up to $2,500,000 at an interest rate equal to the prime rate discounted 25%. As of June 30, 2025, the balance on the line of credit was $1,001,000 and the interest rate was 5.630%. The line of credit is collateralized by revenue earned by the Children and Youth Fund.

The Joinder has a line of credit with a local bank where the Joinder can draw up to $2,000,000 at an interest rate equal to the prime rate discounted 25%. As of June 30, 2025, the balance on the line of credit was $690,000 and the interest rate was 5.630%. The line of credit is collateralized by revenue earned by the Mental Health, Intellectual Disabilities, Early Intervention, and Human Services Development Funds.

NOTE 11: LEASES

In 2021 the Joinder entered into five-year lease agreements for the use of vehicles with an initial lease liability balance of $118,400. The Joinder is required to make monthly principal and interest payments ranging from $323 to $386. The interest rate implicit in the lease based on the fair market value of the asset is 1.1%. The vehicles have an estimated useful life of five years. As of June 30, 2025, the outstanding lease liability under these agreements is $4,208.

In 2024 the Joinder entered into a three-year lease agreement for the use of computers with an initial lease liability balance of $36,662. The Joinder is required to make monthly principal and interest payments of $1,116 through April 1, 2026. The interest rate implicit in the lease based on the fair market value of the asset is 6.5%. The computers have an estimated useful life of five years. As of June 30, 2025, the outstanding lease liability under this agreement is $12,184.

In 2024 the Joinder entered into a three-year lease agreement for the use of computers with an initial lease liability balance of $63,987. The Joinder is required to make monthly principal and interest payments of $1,948 through May 1, 2026. The interest rate implicit in the lease based on the fair market value of the asset is 6.5%. The computers have an estimated useful life of five years. As of June 30, 2025, the outstanding lease liability under this agreement is $21,265.

In 2025 the Joinder entered into a three-year lease agreement for the use of computers with an initial lease liability balance of $7,891. The Joinder is required to make monthly principal and interest payments of $2,947 through October 1, 2026. The interest rate implicit in the lease based on the fair market value of the asset is 6.5%. The computers have an estimated useful life of five years. As of June 30, 2025, the outstanding lease liability under this agreement is $4,944.

JUNE 30, 2025

NOTE 11: LEASES (CONTINUED)

In 2025 the Joinder entered into a two-year lease agreement for the use of a parking lot from the Horizon Federal Credit Union with an initial lease liability balance of $87,604. The Joinder is required to make monthly principal and interest payments of $3,850 through April 1, 2027. The lease has an interest rate based on the Joinder’s incremental borrowing rate of 5.63%. The right-of-use lease parking lot is amortized over an estimated life equal to the lease term. As of June 30, 2025, the outstanding lease liability under this agreement is $80,673.

In 2025 the Joinder entered into a long-term lease agreement for the use of the 4th floor office space in the Lycoming County Treasurer’s Office building with an initial lease liability of $943,795. The Joinder is required to make monthly principal and interest payments of $7,800 through July 31, 2039. The interest rate implicit in the lease based on the fair market value of the asset is 5.75%. The right-of-use lease building is amortized over an estimated life equal to the lease term. The Joinder has an agreement to make leasehold improvements to the space, which are not considered an allowance and therefore are not included as part of the lease liability. As of June 30, 2025, the outstanding lease liability under this agreement is $902,950.

The future principal and interest on the lease payments as of June 30, 2025, are as follows:

Year Ended: Principal Interest Total

2026 $ 126,213 $ 57,510 $ 183,723

2031 – 2035 2036 – 2039

86,130 48,516 51,380 54,413

324,221 335,351

48,917 45,084 42,220 39,187

143,779 39,048

135,047 93,600 93,600 93,600

468,000 374,499

Total $ 1,026,224 $ 415,745 $ 1,441,969

NOTE 12: GENERAL LONG-TERM DEBT

On April 3, 2024, the Joinder issued a General Obligation Note, Series of 2024 A with a maximum principal amount of $500,000. This is a drawn down loan with a variable interest rate ranging from 5.750% to 6.375%. The note is payable in monthly installments beginning on August 3, 2024 through July 3, 2031, or until the outstanding principal balance has been repaid. As of June 30, 2025 the Joinder has drawn down $226,745 on the note.

On January 18, 2024, the Joinder issued a General Obligation Note, Series of 2024 B with a maximum principal amount of $2,500,000. This is a drawn down loan with a variable interest rate ranging from 5.750% to 6.375%. The note is payable in monthly installments beginning on November 18, 2025 through October 18, 2039, or until the outstanding principal balance has been repaid. As of June 30, 2025 the Joinder has drawn down $2,043,341 on the note.

JUNE 30, 2025

NOTE 12: GENERAL LONG-TERM DEBT (CONTINUED)

The following changes occurred during the year:

Beginning Balance Additions Deletions

Ending Balance

Due Within One Year

2024 Note A 2024 Note B

$ 226,745 1,823,203* $ 2,049,948

220,138 $220,138

$ 69,552 89,838 $ 159,390

$ 157,193 1,953,503 $ 2,110,696

$ 80,621 119,152 $199,773

*The beginning balance of this note was restated to reflect draw downs that occurred in the prior year (See Note 13).

The Joinder’s notes are direct borrowings and contain a provision that in the event of default, the interest rate on the note shall be…