This report presents the results of our financial statement audit of the Catawba County Partnership for Children (Catawba Partnership) as of and for the year ended June 30, 2000. Our audit was made by authority of Article 5A of G.S. Sec. 147. The accounts and operations of the Catawba Partnership were subject to audit procedures as we considered necessary for us to report on the accompanying financial statement. The audit procedures were conducted in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. The audit of the Catawba Partnership was made in conjunction with the Early Childhood Initiatives (Smart Start) program authorized by G.S. 143B-168.10-.16. This statute created the North Carolina Partnership for Children, Inc. and required the implementation of local demonstration projects (local partnerships). The Catawba Partnership is one of these local partnerships. As such, the Catawba Partnership is a private nonprofit 501(c)(3) organization and is required by G.S. 143B-168.14(b) to have an annual financial and compliance audit conducted by the State Auditor. Some of the results are: The accompanying financial statement presents fairly, in all material respects, the amounts and disclosures made in accordance with the regulatory basis of accounting established by the North Carolina Partnership for Children, Inc. These matters are described in the Independent Auditor's Report. Our tests disclosed no instances of noncompliance which require disclosure herein under Government Auditing Standards. Our tests disclosed no material weaknesses in the internal control over financial reporting which require disclosure herein under Government Auditing Standards.