ENGINEERING MINISTRIES INTERNATIONAL, INC.

Transcription

1 ENGINEERING MINISTRIES INTERNATIONAL, INC. FINANCIAL STATEMENTS With Independent Auditors' Report December 31, 2014 and 2013

2 Table of Contents Independent Auditors' Report 1 Financial Statements Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Notes to Financial Statements 6 Page

3 INDEPENDENT AUDITORS REPORT Board of Directors Engineering Ministries International, Inc. Colorado Springs, Colorado We have audited the accompanying financial statements of Engineering Ministries International, Inc., which comprise the statements of financial position as of December 31, 2014 and 2013, and the related statements of activities 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. Auditors' 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 audits 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 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. -1-

4 Board of Directors Engineering Ministries International, Inc. Colorado Springs, Colorado Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Engineering Ministries International, Inc. as of December 31, 2014 and 2013, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Colorado Springs, Colorado June 4,

5 Statements of Financial Position December 31, ASSETS: Cash and cash equivalents $ 1,842,200 $ 1,859,311 Investments 601, ,722 Pledges receivable net 30,774 22,367 Prepaid expenses 69, ,131 Furniture, equipment, and website net 231,907 27,873 Total Assets $ 2,776,539 $ 2,407,404 LIABILITIES AND NET ASSETS: Liabilities: Accounts payable and accrued expenses $ 61,861 $ 110,789 Net assets: Unrestricted: Operating 743, ,279 Equity in furniture, equipment, and website 231,907 27, , ,152 Temporarily restricted: Staff support 1,105,943 1,021,186 Projects 602, ,910 Pledges receivable 30,774 22,367 1,739,024 1,694,463 Total net assets 2,714,678 2,296,615 Total Liabilities and Net Assets $ 2,776,539 $ 2,407,404 See notes to financial statements -3-

6 Statements of Activities Year Ended December 31, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total SUPPORT AND REVENUE: Contributed services $ 5,305,033 $ - $ 5,305,033 $ 6,262,277 $ - $ 6,262,277 Contributions 106,008 4,239,131 4,345, ,627 4,054,486 4,324,113 Interest income 7,578-7,578 8,085-8,085 Loss on disposal of furniture, equipment, and website (11,300) - (11,300) Other income 202, , , ,762 Total Support and Revenue 5,620,755 4,239,131 9,859,886 6,638,451 4,054,486 10,692,937 NET ASSETS RELEASED: Purpose restrictions 3,866,985 (3,866,985) - 3,397,535 (3,397,535) - Administrative assessments 294,240 (294,240) - 316,514 (316,514) - Time restrictions 33,345 (33,345) - 33,705 (33,705) - 4,194,570 (4,194,570) - 3,747,754 (3,747,754) - EXPENSES: Program services 8,659,566-8,659,566 9,598,582-9,598,582 Supporting activities: General and administrative 634, , , ,568 Fund-raising 147, , , , , , , ,158 Total Expenses 9,441,823-9,441,823 10,358,740-10,358,740 Change in Net Assets 373,502 44, ,063 27, , ,197 Net Assets, Beginning of Year 602,152 1,694,463 2,296, ,687 1,387,731 1,962,418 Net Assets, End of Year $ 975,654 $ 1,739,024 $ 2,714,678 $ 602,152 $ 1,694,463 $ 2,296,615 See notes to financial statements -4-

7 Statements of Cash Flows Year Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 418,063 $ 334,197 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation and amortization 20,108 25,038 Loss on disposal of furniture, equipment, and website - 11,300 Changes in operating assets and liabilities: Pledges receivable (8,407) (3,155) Prepaid expenses 62,239 (27,573) Accounts payable and accrued expenses (48,928) (8,376) Net Cash Provided by Operating Activities 443, ,431 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (245,807) (78,000) Reinvested interest and dividends (7,578) (5,910) Proceeds from maturities of certificates of deposits 17, ,222 Proceeds from sale of furniture, equipment, and website Purchases of furniture, equipment, and website (224,142) (21,458) Net Cash Provided (Used) by Investing Activities (460,186) 101,254 Net Change in Cash and Cash Equivalents (17,111) 432,685 Cash and Cash Equivalents, Beginning of Year 1,859,311 1,426,626 Cash and Cash Equivalents, End of Year $ 1,842,200 $ 1,859,311 See notes to financial statements -5-

8 Notes to Financial Statements December 31, 2014 and NATURE OF ORGANIZATION: The vision of Engineering Ministries International, Inc. (EMI) is to design a world of hope to the spiritually and physically poor. EMI's mission is to mobilize design professionals to minister to the less fortunate in developing nations. EMI proclaims the Gospel of Jesus by helping others change their world, through the development of hospitals, schools, orphanages, bridges, water supplies, electricity, and more. EMI's commitment is to enrich the lives of those who give and those who receive. EMI, a nonprofit organization incorporated in the State of Colorado, is exempt from income tax under Section 501(c)(3) of the U.S. Internal Revenue Code (the Code) and is not a private foundation under Section 509(a) of the Code. EMI has an office in the Middle East-North Africa that is a legally recognized entity in that area. This affiliate is under common control as defined by accounting principles generally accepted in the United States of America and is included in the financial statements. The organization exists to further EMI's work and operates under its mission and vision. All significant intercompany balances and transactions have been eliminated. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: EMI maintains its accounts and prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. 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 the reported amounts of assets and liabilities, the disclosure of any contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could differ from the estimates. The significant accounting policies followed are described below to enhance the usefulness of the financial statements to the reader. CASH AND CASH EQUIVALENTS Cash and cash equivalents include checking and money market accounts. These accounts may at times, exceed federally insured limits. EMI has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. FAIR VALUE MEASUREMENTS The Fair Value Measurement Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority, Level 2 inputs consist of observable inputs other than quoted prices for identical assets, and Level 3 inputs have the lower priority. All investments held by EMI are reflected as Level 1 fair value measurement based on the Fair Value Measurement Topic of the FASB ASC. -6-

9 Notes to Financial Statements December 31, 2014 and SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: INVESTMENTS Investments consist of certificates of deposit held at cost. All certificates of deposit held have an original maturity date of ninety days or more. PLEDGES RECEIVABLE NET Pledges receivable are unconditional promises to give and are recognized as assets and support in the period made and recorded at their net realizable value based upon management's estimate of the pledges being collectible. An allowance for uncollectible amounts of $9,406 and $6,716 was recorded as of December 31, 2014 and 2013, respectively. FURNITURE, EQUIPMENT, AND WEBSITE Furniture, equipment, and website are recorded at cost or, if donated, estimated fair value at the date of receipt. Items with a cost or fair value greater than $3,000 are capitalized. Depreciation and amortization is provided on the straight-line method over estimated useful lives of three to seven years. CLASSES OF NET ASSETS The financial statements report amounts separately by class of net assets: Unrestricted net assets include resources that are used to support EMI's current operations and provide for the long-term needs of EMI, as well as resources invested in furniture, equipment, and website. Temporarily restricted net assets are resources restricted according to donors requests and primarily for the support of EMI's staff, field ministries, and pledges receivable. UNCERTAIN TAX POSITION The financial statement effects of a tax position taken or expected to be taken are recognized in the financial statements when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Interest and penalties, if any, are included in expenses in the statements of activities. As of December 31, 2014, EMI had no uncertain tax positions that qualify for recognition or disclosure in the financial statements. EMI is generally no longer subject to U.S. federal and state tax examinations by tax authorities for years before

10 Notes to Financial Statements December 31, 2014 and SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: SUPPORT AND REVENUE Contributions are recorded when made, which may be when cash or other assets are received or unconditionally promised. Gifts of cash and other assets are reported as restricted support if they are received with donor stipulations that limit the use of the donated amounts. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is satisfied, temporarily restricted net assets are reclassified to unrestricted net assets in the statements of activities as net assets released from restrictions. All contributions are considered available for unrestricted use unless specifically restricted by the donor. Those contributions received after year-end that were postmarked by December 31, 2014, were recorded as contributions and cash and cash equivalents rather than pledges receivable. EMI recognizes contributed services that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation. Other income is recognized when it is earned. ALLOCATION OF EXPENSES The costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities. Accordingly, certain costs relating to more than one function (salaries, promotional expenses, and depreciation) have been allocated among the program services and supporting activities benefited. FIELD OFFICES EMI has field offices located in India and Uganda. As of December 31, 2014 and 2013, current assets in these countries and the Middle East-North Africa affiliate, including cash and cash equivalents, totaled $261,260 and $173,013 respectively; and current liabilities amounted to $21,465 and $17,116, respectively. There was no support and revenue received from foreign sources during the years ending December 31, 2014 and 2013, respectively. All significant intercompany balances and transactions have been eliminated. -8-

11 Notes to Financial Statements December 31, 2014 and PLEDGES RECEIVABLE NET: Pledges receivable consist of the following: December 31, Due in less than one year $ 40,180 $ 29,083 Allowance for doubtful pledges (9,406) (6,716) No discount was calculated due to all pledges maturity in less than one year. $ 30,774 $ 22, FURNITURE, EQUIPMENT, AND WEBSITE NET: Furniture, equipment, and website net consists of the following: December 31, Furniture and equipment $ 177,514 $ 175,414 Website development 11,185 11, , ,599 Less accumulated depreciation and amortization (151,104) (158,726) 37,595 27,873 Construction in progress * 194,312 - $ 231,907 $ 27,873 * Items capitalized in construction in progress are for a joint building project in Uganda with another organization. This amount reflects EMI's portion of the building. -9-

12 Notes to Financial Statements December 31, 2014 and CONTRIBUTED SERVICES: A substantial number of volunteers have made significant contributions of time to develop programs and provide technical assistance on projects for EMI. These services are an integral part of EMI's ministry. The total number of hours contributed to EMI during the years ended December 31, 2014 and 2013 were approximately 68,752 and 82,650, respectively. These hours consisted of approximately 31,363 professional hours and 37,389 intern hours for 2014, and approximately 37,480 professional hours and 45,170 intern hours for These hours were valued at $102 per hour for professionals and $54 per hour for interns for the years ended December 31, 2014 and These hours are reflected as revenue and as expense in the accompanying statements of activities. Donated services were also recorded for construction on a building in Uganda that is reflected as construction in progress for the year ended December 31, The total number of hours contributed to this project were 1,616. EMI valued these services at the same rates used for other projects for a total of $52,989 for professionals, $17,402 for interns, and $33,993 for one professional whose time was donated by another organization. 6. OPERATING LEASE: EMI leases office space under operating leases for their U.S. office and overseas offices. Rent expense for the years ended December 31, 2014 and 2013, totaled $94,701 and $102,752, respectively. EMI also leases a copy machine under an operating lease. Lease expense for the years ended December 31, 2014 and 2013, was $5,483 and $6,664, respectively. Future minimum lease payments are as follows: Year Ending December 31, $ $ 76,628 51,253 15,312 1, , EMPLOYEE BENEFITS: EMI has a 403(b) retirement plan that is available for all employees. There were no employer contributions for the years ended December 31, 2014 and SUBSEQUENT EVENTS: Subsequent events have been evaluated through the report date, which represents the date the financial statements were available to be issued. Subsequent events after that date have not been evaluated. -10-