Hope for the Children of Haiti, Inc. Woburn, Massachusetts

Transcription

1 Hope for the Children of Haiti, Inc. Woburn, Massachusetts CONTENTS INDEPENDENT AUDITOR'S REPORT 1 PAGE FINANCIAL STATEMENTS Statement of Financial Position 2 Statement of Activities 3 Statement of Functional Expenses 4 Statement of Cash Flows 5 NOTES TO FINANCIAL STATEMENTS 6-10 Cocio & Richardson Certified Public Accountants

2 Cocio & 1 11 ichardson Certified Public Accountants 21 Franklin Street Quincy, MA (617) Fax (617) To the Board of Directors of Hope for the Children of Haiti, Inc. Woburn, Massachusetts INDEPENDENT AUDITOR'S REPORT We have audited the accompanying statement of financial position of Hope for the Children of Haiti, Inc. (a nonprofit corporation) as of and the related statements of activities, functional expenses and cash flows for the year 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we 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 financial statement presentation. We believe that our audit provides 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 Hope for the Children of Haiti, Inc. as of December 31, 2011 and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. fs Cocio & Richardson, CPA December 19, 2012 _ 1 -

3 HOPE FOR THE CHILDREN OF HAITI, INC. STATEMENT OF FINANCIAL POSITION Assets 2011 Current Assets: Cash $ 260,665 Cash - restricted 77,088 Cash Total (Note 1 & 3) 337,753 Other current assets 9,226 Total Current Assets 346,979 Net Property, Plant and Equipment (Note 1 & 2) 290,082 Total Assets 637,061 Liabilities and Net Assets Current Liabilities: Accounts payable $ 10,441 Total Current Liabilities 10,441 Concentrations and Contingencies (Note 6) Net Assets (Note 1 & 3): Temporarily Restricted Unrestricted Total Net Assets Total Liabilities and Net Assets 77, , , ,061 The accompanying Notes are an integral part of the financial statements. Cocio & Richardson Certified Public Accountants - 2 -

4 HOPE FOR THE CHILDREN OF HAITI, INC. STATEMENT OF ACTIVITIES For the Year Ended Earned Revenue (Note 1 & 4): School Tuition & Fees Other Income Investment Income Total Earned Revenue Unrestricted Temporarily Restricted Total $ 31,439 3, $ $ 31,439 3, , ,397 Contributed Support (Note 1, 4, 5 & 6): Contributed Services 32, ,000 Mission Teams 0 55,112 55,112 Donations 170,443 24, ,438 Child Sponsorship 0 52,595 52,595 Total Contributed Support 202, , ,145 Net Assets Released from Restrictions (Note 3): Satisfaction of Program Restrictions 144,462 (144,462) 0 Total Revenues 382,302 (11,760) 370,542 Expenses: Program Expense 349, ,450 Fundraising Expense 1, ,068 Management and General Expense 44, ,414 Total Expenses 394, ,932 Change in Net Assets (12,630) (11,760) (24,390) Net Assets - January 1, ,162 88, ,010 Net Assets - $ 549,532 $ 77,088 $ 626,620 The accompanying Notes are an integral part of the financial statements. Cocio & Richardson Certified Public Accountants - 3 -

5 HOPE FOR THE CHILDREN OF HAITI, INC. STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended Salaries Shelter Facilities Program Fundraising $ 159,523 33,242 General & Management Total $ 22,828 $ 182,351 33,242 Supplies - General 36,020 $ 1,062 37,082 Supplies - School 7,057 7,057 Mission Teams (Note 4) 56,949 56,949 Depreciation (Note 1) 11,477 11,477 Food, Water & Medical 29,447 29,447 Office Expense 7,479 9,835 17,314 Professional Fees 5,000 5,000 Travel & Transportation 5,400 5,400 Administrative - Other 1,672 1,672 Print & Publications 6 5,079 5,085 Special Events 2,856 2,856 TOTAL EXPENSES $ 349,450 $ 1,068 $ 44,414 $ 394,932 The accompanying Notes are an integral part of the financial statements. Cocio & Richardson Certified Public Accountants - 4 -

6 HOPE FOR THE CHILDREN OF HAITI, INC. STATEMENT OF CASH FLOWS For the Year Ended Increase (Decrease) in Cash and Cash Equivalents Cash Flows from Operating Activities Change in Net Assets Adjustments needed to reconcile net cash flows: Non-cash items included in income $ (24,390) Depreciation 11,477 Change in current assets and liabilities: Change in other current assets (1) Change in accounts payable (476) Net Cash Flows (Used in) Operations (13,390) Net Increase (Decrease) in Cash and Cash Equivalents (13,390) Cash and Cash Equivalents - January 1, ,143 I Cash and Cash Equivalents - $ 337,753 The accompanying Notes are an integral part of the financial statements. Cocio & Richardson Certified Public Accountants - 5 -

7 Hope for the Children of Haiti, Inc. Notes to Financial Statements Note 1: Nature of Activities and Summary of Significant Accounting Policies Nature of Activities: Hope for the Children of Haiti, Inc. (a non-profit corporation) was established in 1989 in the Commonwealth of Massachusetts to provide for the physical, emotional, and spiritual needs of neglected and abandoned children in the Caribbean Island of Haiti. The Organization's mission, to provide certain Haitian children opportunity to become well- rounded adults who are self-sufficient in Christ, is accomplished by providing healthy meals and living conditions, medical care, and an education which emphasizes scholarship, leadership and social, moral and spiritual development, so the children may achieve their greatest potential. Since 1996, the Organization has operated its program in the community of Bolosse, Port-au-Prince, Haiti. Substantially all efforts in the United States have been devoted to planning, raising support, coordinating volunteers and administration of the programs. Basis of Accounting: The financial statements of the Organization have been prepared on the accrual basis of accounting. Basis of Presentation: Financial statement presentation follows the recommendations of the Financial Accounting Standards Board within Accounting Standards Code (ASC) 958, Not-for- Profit Entities. Under FASB ASC 958, 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. 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. -6 Cocio & Richardson Certified Public Accountants

8 Hope for the Children of Haiti, Inc. Notes to Financial Statements Note 1: Activities and Summary of Significant Accounting Policies - Continued Cash and Cash Equivalents: Cash and cash equivalents include all monies in bank and highly liquid investments with a maturity of three months or less when purchased. Property and Equipment: Acquisitions of property and equipment in excess of $2,000 are capitalized. Property and equipment are carried at cost or, if donated, at the approximate fair value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful life of the assets. Revenue Recognition: Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted supports, depending on the existence and/or nature of any donor restrictions. All donor-restricted contributions are reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restrictions. When a restriction expires (that is, when a stipulated time restriction ends or the purpose of the restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Revenue is recognized within the financial statements for certain specific skilled contributed services required by the Organization and of measurable fair value. A substantial amount of services donated by its supporters, including the missions teams, have not been reflected in the financial statements since they do not meet the criteria for recognition under accounting standards for Contributions Received and Contributions Made within FASB ASC 958 Not-for-Profit Entities. Income Taxes: The Organization is exempt from federal and state income taxes under Internal Revenue Code Section 501(c) (3). -7 Cocio & Richardson Certified Public Accountants

9 Hope for the Children of Haiti, Inc. Notes to Financial Statements Note 2: Property and Equipment Property owned by the Organization as of included the orphanage and school facility in Bolosse, Haiti and over 16 acres of undeveloped land in Bon Repos, Haiti where the Organization plans to build a larger campus style facility. Land - Bolosse, Haiti $ 20,000 Land - Bon Repos, Haiti 136,750 Building - Bolosse, Haiti 95,472 Building Improvements - Bolosse, Haiti 130,362 Computer License and Other - U.S. 2, ,187 Less Accumulated Depreciation Total (95,105) $ 290,082 Note 3: Temporarily Restricted Net Assets Temporarily restricted net assets are available for the following purposes or periods: Sharon Leroux $ 19,822 Prepaid Sponsor Donations 2,027 Interns 5,239 Building / Rebuilding 50,000 Temporarily Restricted Net Assets $ 77,088 Net assets were released from donor restrictions by incurring expenses satisfying the purpose of the program restrictions specified by donors as follows: Global Therapy Group $ 13,073 Internship 6,967 Sharon Leroux 5,060 Mission Trips 56,794 Staff Christmas Fund 12,000 Sponsored Children - Basic Needs 50,568 Total Net Assets Released from Restrictions $ 144,462-8 Cocio Sz Richardson Certified Public Accountants

10 Hope for the Children of Haiti, Inc. Notes to Financial Statements Note 4: Revenues and Support The Organization reports revenues in three classifications: Earned Revenue, Fundraising and Contributed Support. Earned revenues included investment income, tuition and fees paid by private students, and certain other revenues. Fundraising income is generated by periodic special events held by volunteers. These revenues are a smaller but important portion of the total revenues. The primary source of support is contributions from individuals and churches. Many contributions are received for the general mission of the Organization and are reported as unrestricted contributions. The Organization periodically requests funds for specific special purposes. Mission teams represent another source of support of funds and volunteer services. The teams provide their own funds necessary for travel, meals, lodging and the project performed during their normal week in Haiti. The Organization receives many monthly, annual or other periodic contributions for the sponsorship of a specific child in Haiti. This contribution is understood by the donor to represent the minimum costs associated with providing the most basic needs of the child. Sponsorship revenue is therefore reported as restricted revenues. Note 5: Contributed Services The Organization recognized contribution revenue for contributed services related to operating the orphanage and school in Haiti. Contribution revenue from services was measured based on the fair value of those services. The amount recognized for the Director of Operations compensation expense and contribution revenue was $32,000. In addition, a substantial amount of both skilled and unskilled volunteer hours were provided by interns, mission teams, and others in Haiti for which no value has been assigned. - 9 Cocio & Richardson Certified Public Accountants

11 Hope for the Children of Haiti, Inc. Notes to Financial Statements Note 6: Concentrations and Contingencies The Organization relies heavily upon the goodwill and charitable gifts of its volunteers and supporters. Charitable gifts are donated based on the specific opportunity to enhance and change the lives of children in Haiti. Nearly all program services are performed in Haiti, a country which has experienced years of economic and political instability. $290,082 of property and equipment (net value) are located in Haiti. With real estate, sponsored children, and its program structure in this environment, there are potential unknown consequences for the Organization to continue its mission and raise support if foreign operations were interrupted or closed. Note 7: Subsequent Events In 2012, the Organization was notified the government of Haiti was going to exercise its right to involuntarily convert approximately 20% of the Hope for the Children of Haiti, Inc. owned land in Bon Repos to government ownership for the purpose of constructing a hospital. The hospital building appears to infringe on only about 2% of the land acreage but it consists of frontage which holds the highest value of the owned acres. The timing of the ownership transfer and the amount of compensation to be received from the government is unknown. The compensation is expected to be less than the fair market value of the real estate but any potential loss is currently not measurable. In 2012, the Organization was notified certain electricity costs received in 2012 and in prior years were either billed incorrectly or not billed at all. The actual usage and related cost is being discussed and negotiated with the supplier. The Board has authorized up to $5000 to settle the matter in full. These subsequent events are updated through the date of the auditor's report on the financial statements December 19, Cocio & Richardson Certified Public Accountants