CONSUMER CREDIT COUNSELING SERVICE OF CENTRAL OKLAHOMA FINANCIAL STATEMENTS. FOR THE YEARS ENDING December 31, 2009 and 2008

Transcription

1 CONSUMER CREDIT COUNSELING SERVICE OF CENTRAL OKLAHOMA FINANCIAL STATEMENTS FOR THE YEARS ENDING December 31, 2009 and 2008

2 TABLE OF CONTENTS Independent Auditors' Report 1 Statements of Financial Position 2 Statements of Activities 3 Statement of Cash Flows 4 Statements of Functional Expenses 5-7 Notes to Financial Statements 8-11 Independent Auditor's Report on Internal Control Independent Auditor's Report on Applying Agreed-Upon Procedure 14

3 CHARLES D. MULLINS CERTIFIED PUBLIC ACCOUNTANT 4430 NW 50 TH, STE. S OKLAHOMA CITY, OK (405) FAX (405) The Board of Directors Consumer Credit Counseling Service of Central Oklahoma Bethany, Oklahoma INDEPENDENT AUDITOR'S REPORT I have audited the accompanying statements of financial position of the Consumer Credit Counseling Service of Central Oklahoma as of December 31, 2009 and 2008, and the related statements of activities, cash flows and functional expenses for the years then ended. These financial statements are the responsibility of the Organization's management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with U.S. generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Consumer Credit Counseling Service of Central Oklahoma as of December 31, 2009 and 2008, and its changes in net assets and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, I have also issued my report dated July 20, 2010, on my consideration of the Organization's internal control over fmancial reporting of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of my audits. Charles D. Mullins, CPA Oklahoma City, Oklahoma July 20,

4 STATEMENTS OF FINANCIAL POSITION December 31, 2009 and /31/09 12/31/08 CURRENT ASSETS Cash $ 53,978 $ 45,250 Certificates of deposit 296, ,260 Accounts receivable 6,179 35,873 Prepaid expenses 1,996 1,356 Total current assets 358, ,739 NON-CURRENT ASSETS Endowment fund beneficial interest 10,973 13,891 Property and equipment 145, ,794 Other assets 5,402 5,402 Total non-current Assets 161, ,087 Total assets $ 520,710 $ 610,826 CURRENT LIABILITIES Accounts payable $ 11,292 $ 16,369 Accrued liabilities 66,464 69,069 Line of credit 38,214 48,214 Current portion of long-term debt 16,230 15,219 Total current liabilities 132, ,871 Long-term debt 1,404 17,378 Total liabilities 133, ,249 NET ASSETS Unrestricted 376, ,686 Temporarily restricted - Permanently restricted 10,973 13,891 Total net assets 387, ,577 Total liabilities and net assets $ 520,710 $ 610,826 See accountants' report and notes to financial statements. 2

5 STATEMENTS OF ACTIVITIES For The Years Ended December 31, 2009 and Unrestricted Temporarily Restricted Permanently Restricted Total Total SUPPORT AND REVENUES Creditor contributions 654,757 $ $ 654,757 $ 854,103 Client fees 524, , ,240 Bankruptcy revenues 329, , ,385 Other contributions/grants 60,607 60,607 51,170 United Way contributions 45,548 45,548 41,890 HUD revenue ,539 Interest income 8,566 8,566 11,811 NFMCP revenue 148, , ,302 Miscellaneous income 1,073 1,073 8,880 Education revenue 56,885 56,885 3,764 Endowment earnings 1,138 (2,918) (1,780) 1,218 Net assets release from restrictions: Restrictions satisfied by payments 45,819 (45,819) Total support and revenues 1,830,876 (2,918) 1,827,958 2,100,302 EXPENSES Management and general 127, , ,680 Program expenses - Consumer education 88,500 88,500 99,265 Counseling 687, , ,093 Debt management 760, , ,086 Bankruptcy 171, , ,661 Fundraising 49,546 49,546 53,980 Total expenses 1,885,429 1,885,429 2,099,765 INCREASE (DECREASE) IN NET ASSETS (54,553) (2,918) (57,471) 537 NET ASSETS, BEGINNING OF YEAR 430,686 13, , ,040 NET ASSETS, END OF YEAR $ 376,133 $ $ 10,973 $ 387,106 $ 444,577 See accountants' report and notes to financial statements. 3

6 STATEMENTS OF CASH FLOWS For The Years Ended December 31, 2009 and 2008 CASH FLOWS FROM OPERATING ACTIVITIES Net income(loss) Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation Write down to fair market value endowment fund (Increase) decrease in: Year Ended, 12/31/09 $ (57,471) 30,357 2,918 Year Ended, 12/31/08 $ ,281 Prepaid assets (640) 707 Accounts receivable 29,694 (35,873) Increase (decrease) in: Accounts payable (5,077) 14,559 Accrued expenses (2,605) (24,651) Net cash provided (used) by operating activities (2,824) (11,440) CASH FLOWS FROM INVESTING ACTIVITIES Interest collection of certificates of deposits (5,230) (9,446) Plant and equipment purchases (5,750) (Purchase)surrender of certificates of deposit 41,745 (39,159) Net cash provided (used) by investing activities 36,515 (54,355) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt Proceeds from short-term debt 30, ,532 Repayment of short-term debt (40,000) (92,318) Principal payments on long-term debt (14,963) (13,807) Net cash provided (used) by fmancing activities (24,963) 22,407 NET INCREASE (DECREASE) IN CASH 8,728 (43,388) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 45,250 88,638 CASH AND CASH EQUIVALENTS, END OF YEAR $ 53,978 $ 45,250 SUPPLEMENTARY INFORMATION Cash paid during the year for: Income tax Interest paid 4,417 $ 5,832 See accountants' report and accompanying notes. 4

7 STATEMENTS OF FUNCTIONAL EXPENSES For The Years Ended December 31, 2009 and /31/09 12/31/08 Salaries and personnel $ 1,143,527 $ 1,271,308 Employee benefits 26,936 $ 28,592 Payroll taxes 88,368 $ 95,602 Total salaries and related expenses 1,258,831 1,395,502 Advertising 43,101 93,309 Bank charges 12,658 10,500 Conventions Dues & subscriptions 39,241 35,245 Education 13,060 14,243 Insurance - employee 129, ,511 Insurance-general 17,842 18,088 Miscellaneous 11,069 6,959 Postage 20,324 25,020 Printing 9,212 3,923 Professional services 53,144 79,635 Rents 37349, 46,542 Repairs 5,345 5,309 Supplies 10,147 11,609 Telephone 84,540 71,373 Technology 65,564 71,518 Travel 11,795 11,031 Interest expense 4,417 5,832 Utilities 26,869 27,488 Total expenses before depreciation 1,855,072 2,066,484 Depreciation 30,357 33,281 Total expenses $ 1, 885,429 $ 2.099,765 See accountants' report and notes to financial statements. 5

8 STATEMENT OF FUNCTIONAL EXPENSES For The Years Ended December 31, 2009 Management and General Consumer Education Counseling Debt Management Bankruptcy Fundraising Total Salaries and personnel $ 68,611 $ 57,176 $ 423,105 $ 445,976 $ 114,353 $ 34,306 $1,143,527 Employee benefits 4,578 2,155 8,620 8,889 1, ,936 Payroll taxes 7,070 4,418 33,580 36,231 4,418 2,651 88,368 Total salaries and related expenses 80,259 63, , , ,657 37,765 1,258,831 Advertising 1 2,155 19,395 18,964 2,586 43,101 Bank charges 1, ,924 6, ,658 Conventions Dues & subscriptions 15,697 1,177 10,203 11, ,241 Education ,832 3,526 4, ,060 Insurance - employee 5,189 5,188 57,072 54,478 3,891 3, ,709 Insurance - general 1, ,282 8,207 3,033 17,842 Miscellaneous ,206 5, ,069 Postage ,658 13,211 2, ,324 Printing ,487 3,869 1, ,212 Professional services 8,503 3,720 12,755 19,663 6,377 2,126 53,144 Rents 1, ,313 14,940 5,229-37,349 Repairs - equipment ,871 2, ,345 Supplies ,856 3,754 1, ,147 Telephone 2,537 2,536 27,898 39,734 9,299 2,536 84,540 Technology 1,967 1,967 24,914 30,815 5, ,564 Travel 354 1,887 4,364 4, ,795 Interest expense 4,417 4,417 Utilities 806 1,881 10,210 9,942 4,030-26,869 Total expenses before depreciation 125,670 87, , , ,589 49,546 1,855,072 Depreciation 2, ,929 16,696 30,357 Total expenses $ 127,795 88,500 $ 687,474 $ 760,525 $ 171,589 $ 49,546 $1,885,429 See accountants' report and notes to financial statements. 6

9 STATEMENT OF FUNCTIONAL EXPENSES For The Years Ended December 31, 2008 Management and General Consumer Education Counseling Debt Management Bankruptcy Fundraising Total Salaries and personnel $ 76,279 $ 63,565 $ 470,384 $ 495,810 $ 127,131 $ 38,139 $ 1,271,308 Employee benefits 4,862 2,287 9,149 9,435 2, ,592 Payroll taxes 7,648 4,780 36,329 39,197 4,780 2,868 95,602 Total salaries and related expenses 88,789 70, , , ,912 41,865 1,395,502 Advertising - 4,665 41,989 41,056 5,599 93,309 Bank charges ,255 5, ,500 Conventions Dues & subscriptions 14,098 1,057 9,164 10, ,245 Education ( 1 ) 285 5,270 3,846 4, ,243 Insurance - employee 5,301 5,300 58,305 55,655 3,975 3, ,511 Insurance - general 1, ,341 8,320 3,075-18,088 Miscellaneous ,644 3, ,959 Postage ,504 16,263 2, ,020 Printing ,059 1, ,923 Professional services 12,743 5,574 19,112 29,465 9,556 3,185 79,635 Rents 1, ,082 18,617 6,516 46,542 Repairs - equipment ,858 2, ,309 Supplies ,411 4,295 1, ,609 Telephone 2,142 2,141 23,553 33,545 7,851 2,141 71,373 Technology 2,146 2,146 27,177 33,613 5, ,518 Travel 332 1,765 4,081 4, ,031 Interest expense 5,832-5,832 Utilities 825 1,924 10,445 10,171 4,123 27,488 Total expenses before depreciation 138,351 98, , , ,661 53,980 2,066,484 Depreciation 2, ,981 23,952-33,281 Total expenses $ 140,680 $ 99,265 $ 768,093 $ 851,733 $ 191,661 53,980 $2,099,765 See accountants' report and notes to financial statements. 7

10 NOTES TO FINANCIAL STATEMENTS For The Years Ended December 31, 2009 and 2008 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities The stated purpose of Consumer Credit Counseling Service of Central Oklahoma, Inc. is to help the residents of central and western Oklahoma help themselves become fmancially strong individuals and families through counseling, debt management and education. Basis of Accounting The Organization utilizes the accrual basis of accounting, whereby revenues are recognized when earned, and costs are recognized when incurred. Basis of Presentation Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements for Not-for-Profit Organizations. Under SFAS No. 117, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Advertising Advertising costs are expensed in the year incurred. Total advertising expense for the years ended December 31, 2009 and 2008 was $43,101 and $93,309, respectively. Income Taxes The Internal Revenue Service has determined that the Consumer Credit Counseling Service of Central Oklahoma is exempt from federal income tax under the meaning of Section 501(c)(3) of the Internal Revenue Code of The Organization is exempt from Oklahoma income tax under Oklahoma tax statutes. Property and Equipment Property and equipment are presented at cost or donated value and are being depreciated by the straight-line method over the useful lives of three to thirty-two years. The cost of maintenance and repairs is charged to expense as incurred; significant renewals and betterments are capitalized. Cash and Cash Equivalents For purposes of the statement of cash flows, the Organization considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

11 NOTES TO FINANCIAL STATEMENTS For The Years Ended December 31, 2009 and 2008 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.) Donated Property and Equipment Donations of property and equipment are recorded as support at their estimated fair value at the date of donation. Assets donated with explicit restrictions regarding their use are reported as restricted support. It is the organization's policy to imply a time restriction, based on the assets' estimated useful lives, on donation of property and equipment that are not restricted as to their use by the donor. Accordingly, those donations are recorded as support increasing temporarily restricted net assets. The Organization reclassifies temporarily restricted net assets to unrestricted net assets each year for the amount of the donated property and equipment's depreciation expense. NOTE B CERTIFICATES OF DEPOSIT The Organization held certificates of deposit at December 31, 2009 and 2008 in the amount of $296,745 and $333,260, respectively. The certificates of deposit earn interest from approximately 0.995% to 4.88% and mature between July 2010 and June NOTE C - PROPERTY AND EQUIPMENT Property and equipment at December 31, 2009 and 2008 is summarized as follows: 12/31/09 12/31/08 Land $ 54,464 $ 54,464 Buildings 278, ,709 Furniture and equipment 355, ,339 License 25,319 25, , ,831 Accumulated depreciation and amortization (568,394) (538,037) $ 145,437 $ 175,794 Current depreciation totaled $30,357 and $33,281 for the periods ending December 31, 2009 and 2008, respectively. 9

12 NOTES TO FINANCIAL STAI EMENTS For The Years Ended December 31, 2009 and 2008 NOTE D ENDOWMENT FUND BENEFICIAL INTEREST The Organization has an endowment fund with the Oklahoma City Community Foundation. The corpus of the funds may not be withdrawn; however, income distributed to the Organization by the fund may be used for any purpose. The interest in the endowment fun is recorded in the financial statements in accordance with Statement of Financial Accounting Standards No. 136 "Transfers to a Not-For-Profit Organization or Charitable Trust That Raises or Holds Contributions for others". The December 31, 2009 and 2008 market value of the Endowment Fund Beneficial Interest was $10,973 and $13,891, respectively. NOTE E LINE OF CREDIT The Organization has a line of credit with a bank. The note is an $81,256 renewable line of credit, for working capital, with an interest rate of 6.121%. It is secured by a certificate of deposit. The line of credit matures January 10, The balance on the line of credit was $38,214 and $48,214 at December 31, 2009 and 2008, respectively. NOTE F - LONG-TERM DEBT On January 9, 2006, the Organization borrowed $70,125 from JPMorgan Chase Bank, NA at 7.75%. Monthly payments are $1,414. The note matures January 2011 and is secured by the phone system for which the funds were borrowed. Principal payments on long-term debt are due as follows at December : , ,404 $ 17,378 10

13 NOTES TO FINANCIAL STATEMENTS For The Years Ended December 31, 2009 and 2008 NOTE G LEASES The Organization leases office space under various lease agreements on a month-tomonth basis. These leases have monthly lease payments of approximately $2,974. Rent expense under all operating leases was $37,349 and $46,542 for the years ending December 31, 2009 and 2008 respectively. NOTE H FUNCTIONAL ALLOCATION OF EXPENSES The costs of providing the various programs and activities have been summarized on a functional basis in the statement of activities and in the statement of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services that benefited from these expenses. NOTE I RETIREMENT PLAN Effective January 1, 1997, the Organization adopted a 403 (b) retirement plan which covers all employees who are at least 21 years of age with one or more years of service. The plan provides for the Organization to make contributions based on matching 100% of the first 5% of salary deferral elected by each eligible employee while also making provisions for employer discretionary contributions. No discretionary contributions have been made to the plan, but the Organization's matching contribution for the years ended December 31, 2009 and 2008 totaled $26,936 and $28,592, respectively. NOTE J CONCENTRATIONS AND CONTINGENCIES The Organization maintains cash in bank accounts. At various times throughout the year the balance in these accounts may exceed the federally insured limit The Organization has letters of credit as required by its trust agreement. These letters of credit amount to $ 183,308. No amounts have been drawn against these letters of credit. The letters of credit are secured by certificates of deposit. 11

14 CHARLES D. MULLINS CERTIFIED PUBLIC ACCOUNTANT 4430 NW 50 m, STE. S OKLAHOMA CITY, OK (405) FAX (405) The Board of Directors Consumer Credit Counseling Service of Central Oklahoma Bethany, Oklahoma INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL I have audited the financial statements of Consumer Credit Counseling Service of Oklahoma (a nonprofit Organization) as of and for the year ended December 31, 2009, and have issued my report thereon dated July 20, I conducted my audits in accordance with U.S. generally accepted auditing standards, the standards applicable to financial statements contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether Consumer Credit Counseling Service of Central Oklahoma complied with laws and regulations. The management of Consumer Credit Counseling Service of Central Oklahoma is responsible for establishing and maintaining effective internal control. In planning and performing my audit of the financial statements, I considered Consumer Credit Counseling Service of Central Oklahoma's internal control over financial reporting in order to determine my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Consumer Credit Counseling Service of Central Oklahoma's internal control. Accordingly, I do not express an opinion on the effectiveness of Consumer Credit Counseling Service of Central Oklahoma's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect on a timely basis misstatements. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process or report financial data in accordance with generally accepted accounting principles such that there is a more than remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected. 12

15 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. My consideration of internal control over financial reporting was for the limited purpose described above and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control that I consider to be material weaknesses, as described above. This report is intended solely for the information and use of the Board of Directors, management, and others within the organization, and is not intended to be and should not be used by anyone other than these specified parties. Charles D. Mullins, CPA Oklahoma City, Oklahoma July 20,

16 CHARLES D. MULLINS CERTIFIED PUBLIC ACCOUNTANT 4430 NW 50 TH, STE. S OKLAHOMA CITY, OK (405) FAX (405) The Board of Directors Consumer Credit Counseling Service of Central Oklahoma Bethany, Oklahoma INDEPENDENT AUDITOR'S REPORT ON APPLYING AGREED-UPON PROCEDURE I have performed the procedure described in the second paragraph of this report, which was agreed to by Consumer Credit Counseling Service of Central Oklahoma. Consumer Credit Counseling Service of Central Oklahoma is responsible for the accuracy of their information. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in the Government Auditing Standards issued by the Comptroller General of the United States. The sufficiency of the procedure is solely the responsibility of those parties specified in this report. Consequently, I make no representation regarding the sufficiency of the procedure described below either for the purpose for which this report has been requested or for any other purpose. I performed the following on the Trust Account for the year ended December 31, 2009: Fifty clients were randomly selected from the population of all Consumer Credit Counseling Service customers active during the year ended December 31, The customer file of each client selected was checked to make sure the payment amount and the contracted amount was the same, their payments went to the proper creditor on the proper date, the check number was correct, and the checks were in the proper batch. No exceptions were noted with any of the fifty items. This report is intended solely for the information of Consumer Credit Counseling Service of Central Oklahoma and accrediting agencies and is not intended to be and should not be used by anyone other than these specified parties. Charles D. Mullins, CPA Oklahoma City, Oklahoma July 20,