ENGINEERING MINISTRIES INTERNATIONAL, INC. FINANCIAL STATEMENTS With Independent Auditors' Report

Transcription

1 ENGINEERING MINISTRIES INTERNATIONAL, INC. FINANCIAL STATEMENTS With Independent Auditors' Report December 31, 2008 and 2007

2 Table of Contents Independent Auditors' Report 1 Financial Statements Statements of Financial Position 2 Statements of Activities 3 Statements of Cash Flows 4 Notes to Financial Statements 5 Supplemental Information Independent Auditors' Report on Supplemental Information 9 Schedule of Functional Expenses 10 Page

3 INDEPENDENT AUDITORS' REPORT Board of Directors Engineering Ministries International, Inc. Colorado Springs, Colorado We have audited the accompanying statements of financial position of Engineering Ministries International, Inc., as of December 31, 2008 and 2007, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the organization's management. 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Engineering Ministries International, Inc.'s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our 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, 2008 and 2007, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting standards generally accepted in the United States of America. Colorado Springs, Colorado May 15, 2009

4 Statements of Financial Position December 31, ASSETS: Cash and cash equivalents $ 751,578 $ 917,470 Investments 401,510 - Pledges receivable net 40,028 30,471 Prepaid expenses 20,802 53,011 Furniture, equipment and website net 51,434 15,234 Total Assets $ 1,265,352 $ 1,016,186 LIABILITIES AND NET ASSETS: Liabilities: Accounts payable and accrued expenses $ 36,342 $ 57,662 Net assets: Unrestricted: Operating 199, ,885 Equity in furniture, equipment and website 51,434 15, , ,119 Temporarily restricted: Staff support 742, ,083 Projects 195, ,851 Pledges receivable 40,028 30, , ,405 Total net assets 1,229, ,524 Total Liabilities and Net Assets $ 1,265,352 $ 1,016,186 See notes to financial statements -2-

5 Statements of Activities Year Ended December 31, Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total SUPPORT AND REVENUE: Contributed services $ 4,274,213 $ - $ 4,274,213 $ 3,606,610 $ - $ 3,606,610 Contributions 241,451 2,405,482 2,646, ,893 2,136,971 2,325,864 Conference income ,819-30,819 Interest income 18,547-18,547 26,992-26,992 Other income ,128-22,128 Total Support and Revenue 4,534,783 2,405,482 6,940,265 3,875,442 2,136,971 6,012,413 NET ASSETS RELEASED: From purpose restrictions 2,215,831 (2,215,831) - 1,948,680 (1,948,680) - From time restrictions 30,471 (30,471) - 31,723 (31,723) - 2,246,302 (2,246,302) - 1,980,403 (1,980,403) - EXPENSES: Program services 6,286,918-6,286,918 5,532,690-5,532,690 Supporting activities: General and administrative 311, , , ,350 Fund-raising 70,935-70,935 84,572-84, , , , ,922 Total Expenses 6,669,779-6,669,779 5,955,612-5,955,612 Change in Net Assets 111, , ,486 (99,767) 156,568 56,801 Net Assets Beginning of Year 140, , , , , ,723 Net Assets End of Year $ 251,425 $ 977,585 $ 1,229,010 $ 140,119 $ 818,405 $ 958,524 See notes to financial statements -3-

6 Statements of Cash Flows Year Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets $ 270,486 $ 56,801 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Depreciation and amortization 20,922 17,990 Non-cash contributions (50,974) (9,542) Changes in operating assets and liabilities: Pledges receivable (9,557) 423 Prepaid expenses 32,209 5,165 Accounts payable and accrued expenses (21,320) (5,992) Net Cash Provided by Operating Activities 241,766 64,845 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of non-cash gifts 3,744 9,542 Purchases of investments (401,510) - Purchases of furniture, equipment and website (9,892) (4,416) Net Cash Provided (Used) by Investing Activities (407,658) 5,126 Net Change in Cash and Cash Equivalents (165,892) 69,971 Cash and Cash Equivalents Beginning of Year 917, ,499 Cash and Cash Equivalents End of Year $ 751,578 $ 917,470 See notes to financial statements -4-

7 Notes to Financial Statements December 31, 2008 and NATURE OF ORGANIZATION: The mission of Engineering Ministries International, Inc., (EMI) is to glorify God by offering hope to the spiritually and physically poor. EMI's vision 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. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: EMI uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of any contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. 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. INVESTMENTS Investments consist of certificates of deposit with an original maturity greater than three months. The investments are reported at fair value based on quoted prices in active markets for identical assets, which is Level 1 of the fair value hierarchy established under SFAS No. 157, Fair Value Measurements. 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. 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 $1,000 are capitalized. Depreciation and amortization is provided on the straight-line method over estimated useful lives of three to five years. -5-

8 Notes to Financial Statements December 31, 2008 and SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued: 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. SUPPORT AND REVENUE Contributions are recorded when made, which may be when cash is received, when an unconditional promise to give is made, or when ownership of donated assets is transferred. Contributions received are recorded as unrestricted or temporarily restricted support depending on the existence and/or nature of any donor restrictions. All donor-restricted support is reported as an increase in temporarily restricted net assets. Those contributions received after year-end that were postmarked by December 31, 2008, 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. Conference income is recognized when the conference is held. Other income is recognized when it is earned. ALLOCATION OF EXPENSES The The costs costs of providing of various programs and and other other activities have have been been summarized on on a functional a 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. FOREIGN OPERATIONS EMI has field offices located in Costa Rica, India, and Uganda. As of December 31, 2008 and 2007, current assets in other countries, including cash and cash equivalents, totaled $19,403 and $13,340, respectively; and current liabilities amounted to $0 and $0, respectively. There was no support and revenue received from foreign sources during the years ending December 31, 2008 and 2007, respectively. -6-

9 Notes to Financial Statements December 31, 2008 and PLEDGES RECEIVABLE-NET: Pledges receivable consist of the following: December 31, Due in less than one year $ 39,181 $ 31,701 Due in one to two years 12,059 7,265 51,240 38,966 Allowance for doubtful pledges (11,212) (8,495) No discount was calculated due to immateriality of pledges due in one to two years. $ 40,028 $ 30, FURNITURE, EQUIPMENT AND WEBSITE-NET: Furniture, equipment and website net consist of the following: December 31, Furniture and equipment $ 169,418 $ 112,296 Website development 11,185 11, , ,481 Less accumulated depreciation and amortization (129,169) (108,247) $ 51,434 $ 15, 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, 2008 and 2007, were 63,883 and 62,258, respectively. These hours consisted of 30,860 professional hours and 33,023 intern hours for 2008, and 29,587 professional hours and 32,671 intern hours for These hours were valued at $85 and $70 per hour for professionals and $50 and $47 per hour for interns for the years ended December 31, 2008 and 2007, respectively. These hours are reflected as revenue and as expense in the accompanying statements of activities. -7-

10 Notes to Financial Statements December 31, 2008 and 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, 2008 and 2007, totaled $82,084 and $73,352, respectively. During 2008, EMI entered into a new operating lease agreement for a copy machine. Lease expense for the year ended December 31, 2008, was $2,697. Future minimum lease payments are as follows: Year Ending December 31, $ $ 54,708 6, , EMPLOYEE BENEFITS: EMI has a 403(b) Retirement Plan that is available for all employees who have completed one year of service. There were no employer contributions for the years ended December 31, 2008 and

11 SUPPLEMENTAL INFORMATION

12 INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION Board of Directors Engineering Ministries International, Inc. Colorado Springs, Colorado Our report on our audits of the basic financial statements of Engineering Ministries International, Inc., as of and for the years ended December 31, 2008 and 2007, appears on page 1. We conducted our audits in accordance with auditing standards generally accepted in the United States of America for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules of functional expenses is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Colorado Springs, Colorado May 15, 2009

13 Schedule of Functional Expenses Year Ended December 31, 2008 Supporting Activities Program General and Fund- Total Services Administrative Raising Expenses Contributed services $ 4,274,213 $ - $ - $ 4,274,213 Salaries and benefits 938, ,249 47,688 1,192,190 Travel and related expenses 652,353 6, ,942 Office expenses 85,782 18,857 4, ,999 Occupancy costs 74,456 16,367 3,784 94,607 Intern per diem 49,774 10,941 2,530 63,245 Grants 53, ,114 Payroll taxes 32,180 7,074 1,636 40,890 Information technology 24,562 5,399 1,248 31,209 Miscellaneous 23,911 5,257 1,214 30,382 Depreciation and amortization 16,465 3, ,922 Conferences and meetings 16,292 3, ,701 Professional fees - 12,497 6,538 19,035 Overseas costs 18, ,111 Language school 18, ,065 Advertising and promotional costs - 14,320-14,320 Insurance 5,346 1, ,793 Equipment 4, ,041 Total Expenses $ 6,286,918 $ 311,926 $ 70,935 $ 6,669,779 Note: Due to EMI's reclassification of expense accounts in order to conform to the 2008 Form 990, the functional expense information presented is not comparable to previous years. Therefore, the schedule of functional expenses for the year ended December 31, 2007, has been omitted. -10-