Alaska Humanities Forum

Transcription

1 Financial Statements, Supplementary Information and Federal Single Audit Reports Years Ended September 30, 2017 and 2016 This report was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

2 Financial Statements, Supplementary Information and Federal Single Audit Reports Years Ended September 30, 2017 and 2016

3 Contents Independent Auditor s Report 1-2 Page Financial Statements Statements of Financial Position 4 Statements of Activities 5 Statement of Functional Expenses FY 17 6 Statement of Functional Expenses FY 16 7 Statements of Cash Flows 8 Notes to Financial Statements 9-17 Supplementary Information Schedule of Public Support and Revenues 20 Schedule of Expenditures of Federal Awards 21 Notes to the Schedule of Expenditures of Federal Awards 22 Federal Single Audit Reports Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance as Required by the Uniform Guidance Schedule of Findings and Questioned Costs 28-29

4 Tel: Fax: C Street, Suite 600 Anchorage, AK Independent Auditor's Report Board of Directors Alaska Humanities Forum Anchorage, Alaska Report on the Financial Statements We have audited the accompanying financial statements of Alaska Humanities Forum, which comprise the statements of financial position as of September 30, 2017 and 2016, and the related statements of activities, functional expenses 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. Auditor s 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit 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. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 1

5 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alaska Humanities Forum as of September 30, 2017 and 2016, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Schedule of Public Support and Revenues are presented for purposes of additional analysis and are not a required part of the financial statements, Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements, and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 15, 2018 on our consideration of Alaska Humanities Forum s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Alaska Humanity Forum s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Alaska Humanities Forum s internal control over financial reporting and compliance. Anchorage, Alaska February 15,

6 Financial Statements 3

7 Statements of Financial Position September 30, Assets Cash and cash equivalents (note 2) $ 1,009,915 $ 875,157 Investments (note 3) 749,152 - Grants receivable 546, ,670 Other receivables 52,486 3,248 Prepaid expenses and deposits 60,135 51,622 Fixed assets, net of accumulated depreciation (note 4) 5,763 8,233 Total Assets $ 2,424,116 $ 1,258,930 Liabilities and Net Assets Liabilities Accounts payable $ 308,346 $ 208,468 Payroll related liabilities 92,606 57,481 Deferred revenue (note 5) 99, ,311 Total Liabilities 500, ,260 Net Assets Unrestricted: Designated for investment in fixed assets 5,763 8,233 Undesignated 860, ,432 Temporarily restricted (note 6) 1,057,895 47,005 Total Net Assets 1,923, ,670 Total Liabilities and Net Assets $ 2,424,116 $ 1,258,930 See accompanying notes to financial statements. 4

8 Statements of Activities Temporarily Temporarily Years Ended September 30, Unrestricted Restricted Total Unrestricted Restricted Total Support and Revenue Federal grants $ 2,071,095 $ - $ 2,071,095 $ 2,573,823 $ - $ 2,573,823 State and other grants 118,334 1,323,553 1,441, ,686 60, ,686 Corporate contributions 32,698-32,698 7,680-7,680 Individual contributions 29,508-29,508 17,820-17,820 In-kind contributions 7,309-7,309 1,988-1,988 Program income 270, , , ,981 Tuition 36,600-36,600 37,100-37,100 Investment income 3,442 3,222 6,664 1,585-1,585 Other revenue 4,472-4,472 1,812-1,812 Net assets released from restrictions 315,885 (315,885) - 21,629 (21,629) - Total Support and Revenue 2,890,342 1,010,890 3,901,232 2,935,104 38,371 2,973,475 Expenses Program services 2,401,592-2,401,592 2,499,550-2,499,550 Management and general 375, , , ,795 Fundraising 82,224-82,224 48,650-48,650 Total Expenses 2,859,162-2,859,162 2,920,995-2,920,995 Change in net assets 31,180 1,010,890 1,042,070 14,109 38,371 52,480 Net Assets, beginning of year 834,665 47, , ,556 8, ,190 Net Assets, end of year $ 865,845 $ 1,057,895 $ 1,923,740 $ 834,665 $ 47,005 $ 881,670 See accompanying notes to financial statements. 5

9 Statement of Functional Expenses Year Ended September 30, 2017 Program Services Other Total Humanities Program Management Fund Education Programs Services and General Raising Totals Payroll and related expenses $ 464,469 $ 488,244 $ 952,713 $ 202,306 $ 60,027 $ 1,215,046 Contract services 383, , ,961 40,077 1, ,531 Travel and per diem 341,052 39, ,361 52,323 1, ,454 Regrants (direct payments) (note 8) - 187, , ,018 Occupancy expense 38,888 45,588 84,476 12,517 5, ,707 Office and program supplies 51,524 32,898 84,422 6,569 4,632 95,623 Public meetings and program services 12,939 23,726 36,665 22, ,429 Professional fees 3,940 6,334 10,274 44,267 1,202 55,743 Publications - 44,434 44, ,434 Dues and subscriptions 617 3,216 3,833 23,291 2,126 29,250 Telephone and website 6,111 6,527 12,638 2, ,007 Equipment, rent and maintenance leases 173 1,566 1,739 6, ,248 Postage 446 5,681 6, ,246 Insurance ,164 4, ,034 Advertising and promotional - 3,518 3, ,518 Depreciation ,470-2,470 Miscellaneous Allocation of administrative services 18,390 23,798 42,188 (45,432) 3,244 - Total Expenses $ 1,322,187 $ 1,079,405 $ 2,401,592 $ 375,346 $ 82,224 $ 2,859,162 See accompanying notes to financial statements. 6

10 Statement of Functional Expenses Year Ended September 30, 2016 Program Services Other Total Humanities Program Management Fund Education Programs Services and General Raising Totals Payroll and related expenses $ 531,936 $ 195,731 $ 727,667 $ 170,572 $ 29,042 $ 927,281 Contract services 580, , ,239 71,130 2, ,972 Travel and per diem 513,793 14, ,740 38, ,167 Regrants (direct payments) (note 8) - 129, , ,217 Office and program supplies 78,032 13,739 91,771 13,972 1, ,593 Occupancy expense 61,446 17,254 78,700 21,464 4, ,335 Professional fees 15,613 4,017 19,630 43, ,602 Public meetings and program services 20,476 17,868 38,344 19, ,542 Publications - 27,916 27, ,916 Dues and subscriptions 270 2,183 2,453 19,551 4,935 26,939 Telephone and website 13,812 5,674 19,486 3, ,553 Equipment, rent and maintenance leases ,210-7,210 Postage 4, , ,872 Insurance ,142-3,142 Depreciation ,647-1,647 Advertising and promotional Miscellaneous 3,404 2,861 6,265 9,019 1,535 16,819 Allocation of administrative services 34,196 13,827 48,023 (50,015) 1,992 - Total Expenses $ 1,857,672 $ 641,878 $ 2,499,550 $ 372,795 $ 48,650 $ 2,920,995 See accompanying notes to financial statements. 7

11 Statements of Cash Flows Years Ended September 30, Cash Flows from Operating Activities Change in net assets $ 1,042,070 $ 52,480 Adjustments to reconcile change in net assets to net cash for operating activities: Depreciation 2,470 1,647 Unrealized loss on investments 1,595 - (Increase) decrease in assets: Grants receivable (225,995) (127,630) Other receivables (49,238) 78,621 Prepaid expenses and deposits (8,513) (21,010) Increase (decrease) in liabilities: Accounts payable 99,878 14,019 Payroll related liabilities 35,125 (22,051) Deferred revenue (11,887) (37,186) Net Cash Flows from (for) Operating Activities 885,505 (61,110) Cash Flows for Investing Activities Purchase of fixed assets - (9,880) Purchase of investments (750,747) - Net Cash Flows for Investing Activities (750,747) (9,880) Net increase (decrease) in cash and cash equivalents 134,758 (70,990) Cash and Cash Equivalents, beginning of year 875, ,147 Cash and Cash Equivalents, end of year $ 1,009,915 $ 875,157 See accompanying notes to financial statements. 8

12 Notes to Financial Statements Years Ended September 30, 2017 and Summary of Accounting Policies Organization Alaska Humanities Forum (the Forum or AHF), organized in 1982, uses the wisdom and methods of the humanities to promote the civic, intellectual, and cultural life of Alaskans, by cultivating the appreciation and enjoyment of the humanities; promoting dialogue among people holding divergent points of view; applying traditional bodies of wisdom to contemporary concerns; enabling Alaskans to search for a sense of personal identity and place through history, traditions and new ideas; encouraging community-based discussions of public policy and transmitting the values, methods, and wisdom of the humanities to future generations of Alaskans. Basis of Accounting and Financial Statement Presentation The Forum s financial statements have been prepared on the accrual basis of accounting. The Forum is required to classify its net assets and its revenues, expenses, gain and losses based on the existence or absence of donor-imposed restrictions. The amounts for each of three classes of net assets permanently restricted, temporarily restricted and unrestricted are displayed in a statement of financial position and the amounts of change in each of these classes of net assets are displayed in a statement of activities. Descriptions of the three net assets categories and types of transactions affecting each category follow: Unrestricted Net Assets net assets that are not subject to donor-imposed restrictions. Items that affect this net assets category include revenues principally from the National Endowment for the Humanities grant, and program revenue and related expenses associated with the core of the Alaska Humanities Forum. The Forum receives its federal awards on a cost-reimbursement basis; restrictions typically met in the same reporting period are classified as unrestricted. In addition to these exchange transactions, changes in this category of net assets include certain types of philanthropic support, namely unrestricted gifts and restricted gifts whose donor-imposed restrictions are for current or developing programs and were met during the fiscal year. Temporarily Restricted Net Assets net assets subject to donor-imposed restrictions that will be met either by actions of Alaska Humanities Forum or the passage of time. Items that affect this net asset category are donations for which restrictions have not been met. Permanently Restricted Assets - net assets subject to donor-imposed restrictions to be maintained permanently by Alaska Humanities Forum. There are no permanently restricted assets at September 30, 2017 or Contributions are recorded as unrestricted, temporarily restricted, or permanently restricted support at the time the contribution is made, depending on the existence or nature of any donor restrictions. The Forum uses the accrual method of accounting for reporting to the National Endowment for the Humanities and tax reporting purposes. Cash and Cash Equivalents For purposes of reporting cash flows, cash includes cash held in demand deposits with financial institutions and money market accounts. 9

13 Notes to Financial Statements Fixed Assets Equipment is stated at cost, net of accumulated depreciation. Additions to equipment over $5,000, including significant betterments and renewals, are capitalized. Maintenance and repair costs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of three to seven years. Revenue Recognition The Forum is supported through corporate, foundation and private gifts, state grants, and federal grants from the National Endowment for the Humanities (NEH) and the U.S. Department of Education (DOE). Grant revenues are recognized to the extent of expenses incurred. Contributions to the Forum are recognized in the period the contribution is pledged or received. Accounts Receivable No allowance for uncollectible accounts has been deemed necessary. Management has evaluated the accounts and believes they are collectible. Fair Value Measurements The Forum measures certain items in these financial statements at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, that is, other than in a forced liquidation or distress sale. The Forum's financial assets and liabilities carried at fair value have been classified based on a hierarchy as defined in generally accepted accounting principles and are generally measured using the market approach or the income approach. Advertising Costs Advertising costs are expensed as incurred. Accrued Vacation Pay The Forum accrues vacation pay as their leave policy provides for a twelve months carry forward of unused days (a maximum of ten days) at calendar year end. Federal Income Taxes The Forum is a nonprofit corporation and is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Forum applies the provisions of Topic 740 of the FASB Accounting Standards Codification relating to accounting for uncertainty in income taxes. The Forum annually reviews its tax positions taken in accordance with the recognition standards. The Forum believes that it has no uncertain tax positions which would require disclosure or adjustment in these financial statements. 10

14 Notes to Financial Statements Allocation of Expenses Certain costs of providing general support and administrative services to the various programs of the Forum are allocated to program services. Payroll costs are allocated based on the level of effort. Other expenses are allocated based generally upon actual expenditures incurred. Additionally, various grants include specific provisions allowing for indirect general and administrative expenses. Use of Estimates 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Subsequent Events The Forum has evaluated subsequent events through February 15, 2018, the date on which the financial statements were available to be issued. Recent Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU , Revenue from Contracts with Customers (Topic 606) (ASU ). The update establishes a comprehensive revenue recognition standard for virtually all entities under U.S. GAAP including those that previously followed industry-specific guidance. The FASB issued ASU in August 2016 that deferred the effective date of ASU by a year. The guidance is effective for the Forum in fiscal years beginning after December 15, Management is in the process of assessing the impact this new standard will have on the financial statements. In February 2017, the FASB issued ASU No , Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The standard also requires lessors to treat a lease as a sale it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn t convey risks and rewards or control, an operating lease results. The guidance is effective for the Forum for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. Management is currently evaluating the impact of their pending adoption of the new standard on their consolidated financial statements. 11

15 Notes to Financial Statements In August 2017, the FASB issued ASU , Presentation of Financial Statements of Not-for- Profit Entities (Topic 958). ASU amends the current reporting model and enhances disclosures. Net assets will be reported in two categories: net assets with donor restrictions and net assets without donor restrictions, with additional disclosure of expirations of restrictions on gifts used to acquire or construct long-lived assets. If the direct method is used for the cash flow statement, the indirect method reconciliation will no longer be required to be presented. The financial statements will be required to present amounts of expenses by both their natural classification and functional classification. The standard also provides for enhanced disclosures related to board designations, appropriations, and similar actions, the composition of net assets with donor restrictions, management of liquid resources, and availability of financial assets to meet cash needs, methods used to allocate costs between functions, and additional information related to underwater endowment funds. The new standard will require the reporting of investment returns net of external and direct expenses, and no longer requires disclosure of those netted expenses. The guidance is effective for the Forum for the fiscal years beginning after December 15, Management is currently evaluating the impact of their pending adoption of the new standard on their financial statements. 2. Cash and Cash Equivalents Components of cash and cash equivalents were as follows: September 30, Carrying Bank Carrying Value Balance Value Bank Balance Demand deposits $ 521,591 $ 554,676 $ 340,047 $ 531,173 Money market accounts 488, , , ,974 Certificate of deposit , ,136 $ 1,009,915 $ 1,043,000 $ 875,157 $ 1,066,283 Accounts held in bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) to a maximum of $250,000 per financial institution. Amounts held in investment accounts that are considered cash equivalents, such as money market funds, are insured by the Securities Investor Protection Corporation up to $500,000 per financial institution. Amounts held in excess of the FDIC or SIPC limit throughout the year are neither insured nor collateralized. Of the total bank balances, $278,620 and $267,135 were uninsured at September 30, 2017 and 2016, respectively. The Forum is not party to any financial instruments with off balance sheet risk. Financial instruments which potentially subject the Forum to concentrations of credit risk are demand deposits held in excess of the FDIC insured amount. The Forum maintains its deposits with high credit quality commercial banks. 12

16 Notes to Financial Statements 3. Investments The Forum established an investment account in fiscal year 2017 for funds received under the Salmon Fellows program. Earnings on these investments are restricted for program purposes. The Board has adopted an investment policy statement describing the goals and objectives for the assets, which allows the Forum to invest in, and is restricted to, the following types of investments: a) securities of the US Treasury, US agencies (including all securities insured by the F.D.I.C.) and US Instrumentalities; this includes mortgaged-backed securities (MBS); b) certificates of deposit; those over the F.D.I.C. maximum insurance must be secured by eligible collateral as defined in Section 10.0; c) repurchase and agreements secured by obligations of the Treasury of the United States and obligations of an agency or instrumentality of the United States. A Master Repurchase Agreement must be signed with the bank or dealer, before repurchase agreements are entered into; d) commercial paper and other short-term taxable instruments that, at the time of investment, maintain the highest rating by at least two nationally recognized rating services; In addition, commercial paper will not be purchased unless the spread in interest rates is above US Agencies (Fannie Mae or Freddie Mac) by at least 25 basis points (.25%) at the time of purchase. e) obligations of a corporation or municipality if the obligations are rated AA or higher by at least one nationally recognized rating service at the time of investment; this includes asset backed securities (ABS); In addition, corporate debt will not be purchased unless the spread in interest rates is above US Agencies by at least 25 basis points (.25%) at the time of purchase. f) money market funds in which the securities of the funds consist of obligations listed in this section and otherwise meet the requirements of this investment policy. g) mutual funds, or ETFs in which the securities of the consist of obligations listed in this section and otherwise meet the requirements of this investment policy Collateralization is required on certificates of deposit over the F.D.I.C. maximum insurance and repurchase agreements. All investments shall mature in three years or less. However, the duration of the portfolio should not exceed two years. It is the policy of the Forum to diversify Forum investments and to ensure the safety and liquidity of the investments by observing the following sound investment practices: a) At least 50% of the investment portfolio shall be invested in securities of the US Treasury, F.D.I.C. insured securities, US Agencies and US Instrumentalities. b) Not more than 25% of the portfolio at the time of purchase and no more than 35% of the portfolio at any given time will be invested in mutual funds or depositary receipts. c) Investments in term repurchase agreements shall not exceed 50% of the investment portfolio at the time of purchase. d) Not more than 30% of the portfolio will be invested in corporate debt, which includes commercial paper, at the time of purchase. At any given time, not more than 40% may be invested in Corporate Debt. Not more than 5% of the portfolio may be invested in the Corporate Debt of any one issuer, at the time of purchase. 13

17 Notes to Financial Statements Investments held are as follows: September 30, 2017 Cost Basis Fair Value Investments U.S. Treasuries $ 750,747 $ 749,152 Unrealized losses of $1,595 are included in investment income for the year ended September 30, All of the Forum s investment assets are classified at Level 1, as the values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. 4. Fixed Assets Fixed assets are summarized as follows: September 30, Office furniture and equipment $ 52,838 $ 54,857 Leasehold improvements 13,330 13,330 Total fixed assets 66,168 68,187 Less accumulated depreciation (60,405) (59,954) Total $ 5,763 $ 8,233 Depreciation expense for the years ended September 30, 2017 and 2016 was $2,470 and $1,647, respectively. 5. Deferred Revenue Deferred revenue consists of the following: September 30, Deferred Revenue Magnetic North Rasmuson $ 99,424 $ 111,311 14

18 Notes to Financial Statements 6. Temporarily Restricted Net Assets Temporarily restricted net assets are restricted for the following purposes at September 30: September 30, Barbara Brown scholarships $ - $ 6,134 Atwood Foundation Scholarship Fund 10,000 10,000 Salmon Connect - 30,871 Alaska Airlines scholarships 1,000 - Salmon Fellows 965,220 - Interest earned on Salmon Fellows 3,222 - Salmon Communications 75,900 - Human Ties 2,553 - Total $ 1,057,895 $ 47,005 The Forum released the following from restrictions: Year Ended September 30, Salmon Connect $ 30,871 $ 19,129 Salmon Fellows 244,780 - Salmon Communications 24,100 - Atwood Foundation scholarships 10,000 - Barbara Brown Scholarship Fund 6,134 2,500 Total $ 315,885 $ 21, Operating Leases Alaska Humanities Forum leases office space from the Alaska Railroad Corporation in Anchorage. The amended lease expired on Oct 31, 2017, after which time the Forum was leasing the space on a month-to-month basis. In January 2018, the Forum will move into another facility owned by Alaska Railroad Corporation, under a five-year lease that expires on January 1, 2023, at a monthly rent of $11,086 for the first year, with small increases in subsequent years. Rent and lease expenses for the year ended September 30, 2017 and 2016 was $99,188 and $104,356, respectively. Future minimum required lease payments are as follows: Year Ended September 30, 2018 $ 123, , , , ,810 Thereafter 50,028 15

19 Notes to Financial Statements 8. Grants from the National Endowment for the Humanities Grants authorized by the National Endowment for the Humanities (NEH) support eligible humanities projects, program development and the administrative expenses of Alaska Humanities Forum. Regrants payable represents amounts awarded but not yet paid and is included in accounts payable. Activity related to NEH re-grantees for related project payment requests is as follows: Year Ended September 30, Regrants Payable, beginning of year $ 160,713 $ 137,757 Grants awarded 99, ,717 Adjustments to prior year grants - (11,500) Payments made (153,056) (106,261) Regrants Payable, end of year $ 106,675 $ 160, Salmon Fellows In 2017, AHF received a 3 year grant of $1,210,000 from the Gordon and Betty Moore Foundation to support a new Salmon Fellows program, with the purpose of achieving more sustainable relationships between salmon and people. The program selects 16 individuals who are proven leaders from different viewpoints. These Salmon Fellows engage in an 18 month program, focused on promoting three areas: Personal Growth, Network Growth, and Relationship Growth. Each fellow is awarded a $5,000 grant up front, and $5,000 at the end of successful completion of the program. The 3 year period allows for two cohorts of fellows. Most of the other program expenditures are related to the Salmon Fellow Gatherings. The full grant award was paid to Alaska Humanities up front, but was included in temporarily restricted revenue and is released from restriction as regrants are awarded and costs are incurred for the Salmon Fellow gatherings. A summary of the activity in the Salmon Fellows program is as follows: Year Ended September 30, 2017 Amount received from funder: Gordon and Betty Moore Foundation $ 1,210,000 Interest income earned 3,222 Awards granted (88,000) Costs incurred (156,780) Amount Available for Future Program Activities, end of year $ 968,442 16

20 Notes to Financial Statements 10. Commitments and Contingencies Generally, final expenses claimed under state and federal grants may be subject to an agency's compliance audit to determine the allowability of costs for which reimbursement has previously been granted. Adjustments of amounts received under grants could result if the grants are audited by such agencies. Management does not believe that such adjustments would be material and, accordingly, no provision for liability from such adjustments is included in the accompanying financial statements. 11. Economic Dependency During the years ended September 30, 2017 and 2016, respectively, the Forum received 72% and 88% of its revenue as grants from the federal government. A significant change in these grants and contributions could have a positive or negative effect on the Forum. 12. Subsequent Events In February 2018, the Forum contributed $25,000 to be used to seed an endowment at the Alaska Community Foundation (ACF). The original endowment transfer is permanently restricted and the Forum will not have access to these funds. However, income earned on the endowment fund is distributable to the Forum starting in calendar year

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22 Supplementary Information 19

23 Schedule of Public Support and Revenues Year Ended September 30, 2017 Temporarily Restricted Support Temporarily Balance Released Balance Restricted Unrestricted at Beginning Support from at End Support Support of Year Received Restrictions of Year Released and Revenue Total Public Support and Revenues Federal grants $ - $ - $ - $ - $ - $ 2,071,095 $ 2,071,095 State and other grants 30,871 1,323, ,751 1,054, , , ,085 Corporate contributions ,698 32,698 Individual contributions ,508 29,508 In-kind contributions ,309 7,309 Program income , ,999 Tuition 16,134-16,134-16,134 36,600 52,734 Investment income - 3,222-3,222-3,442 3,442 Other revenue ,472 4,472 Total Public Support and Revenues $ 47,005 $ 1,326,775 $ 315,885 $ 1,057,895 $ 315,885 $ 2,574,457 $ 2,890,342 20

24 Schedule of Expenditures of Federal Awards Year Ended September 30, 2017 Pass - Through Federal Entity Total Passed Total CFDA Grant Identifying Grant Through to Federal Federal Grantor/Pass-Through Grantor/Program or Number Number Number Award Subrecipients Expenditures National Endowment for the Humanities Promotion of the Humanities - Federal/State Partnership State Humanities Program Alaska FY SO $ 738,510 $ 90,485 $ 587,697 State Humanities Program Alaska FY SO ,076,730 8, ,288 Total CFDA , ,985 National Endowment for the Arts Passed through the State of Alaska Deparment of Education and Early Development - NEA U. S. Department of Education Alaska Native Education Program Creating Culture Competence A S356A ,881, ,297 Rose Cross-Cultural Exchange A S356A ,255,540-1,525 Rose Cross-Cultural Exchange A S356A ,285, ,361 Takewing Alaska A S356A ,703, ,927 Total CFDA ,127,110 Total Expenditures of Federal Awards $ 99,018 $ 2,071,845 The accompanying notes are an integral part of of this schedule. 21

25 Notes to the Schedule of Expenditures of Federal Awards Year Ended September 30, 2017 Note 1: Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule ) includes the federal grant activity of the Alaska Humanities Forum (the Forum) under programs of the federal government for the year ended September 30, The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Forum, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Forum. 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the full accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. 3. Indirect Cost Rate The Forum has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. 22

26 Federal Single Audit Reports 23

27 Tel: Fax: C Street, Suite 600 Anchorage, AK Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Board of Directors Alaska Humanities Forum Anchorage, Alaska We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Alaska Humanities Forum, which comprise the statement of financial position as of September 30, 2017, and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements and have issued our report thereon dated February 15, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Alaska Humanities Forum s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Alaska Humanities Forum s internal control. Accordingly, we do not express an opinion on the effectiveness of Alaska Humanities Forum s internal control. A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during or audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However material weaknesses may exist that have not been identified. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 24

28 Compliance and Other Matters As part of obtaining reasonable assurance about whether Alaska Humanities Forum s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Anchorage, Alaska February 15,

29 Tel: Fax: C Street, Suite 600 Anchorage, AK Independent Auditor s Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance Board of Directors Alaska Humanities Forum Anchorage, Alaska Report on Compliance for Each Major Federal Program We have audited Alaska Humanities Forum s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Alaska Humanities Forum s major federal programs for the year ended September 30, Alaska Humanities Forum s major federal programs are identified in the summary of auditor s results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of Alaska Humanities Forum s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Alaska Humanities Forum s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Alaska Humanities Forum s compliance. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 26

30 Opinion on Each Major Federal Program In our opinion, Alaska Humanities Forum complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, Report on Internal Control Over Compliance Management of Alaska Humanities Forum is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Alaska Humanities Forum s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Alaska Humanities Forum s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Anchorage, Alaska February 15,

31 Schedule of Findings and Questioned Costs Year Ended September 30, 2017 Section I - Summary of Auditor s Results Financial Statements Type of auditor s report issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X (none reported) Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major federal programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified? yes X (none reported) Type of auditor s report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR (a)? yes X no Identification of major federal programs: CFDA Number Name of Federal Program or Cluster Agency Promotion of the Humanities Federal/State Partnership National Endowment for the Humanities Dollar threshold used to distinguish between Type A and Type B programs: $ 750,000 Auditee qualified as low-risk auditee? X yes no 29

32 Schedule of Findings and Questioned Costs, continued Year Ended September 30, 2017 Section II Financial Statement Findings There were no findings related to the financial statements which are required to be reported in accordance with the standards applicable to financial audits contained in Government Auditing Standards. Section III - Federal Award Findings and Questioned Costs There were no findings and questioned costs for federal awards (as defined in 2 CFR (a)) that are required to be reported. 30